Hungarian Government to sell Budapest Bank this year

Government intends to sell bank in an open process and no priority will be given to domestic investors

The Hungarian government will sell Budapest Bank this year, although it is yet to be decided whether it will be sold via an auction or initial public offering (IPO), Gyorgy Zolnai, the bank’s CEO told a panel discussion at the EBRD Annual Meeting last week.

“It’s definite that it will be sold back soon,” he said. “We are in the beginning phase. We work to sell the bank this year. There is no deadline.”

Agnes Hornung, State Secretary at the Ministry for National Economy, said the government intends to sell Budapest Bank in an open process and no priority will be given to domestic investors. “State ownership in the banks will be reduced,” she said in answer to a question from bne IntelliNews.

The bank’s management is pushing for an IPO, having noted the success of the float of GE Money Bank earlier this month, reports bne IntelliNews. Also formerly owned by GE, the Czech lender has now been rebranded Moneta Money Bank.

GE sold Budapest Bank to the government for 700 million USD last year, as part of a drive by the US company to offload its financial assets and return to its industrial roots. Hungary had long said it wanted to raise local ownership of the banking sector, having blamed foreign-owned banks for risky foreign exchange lending in the past.

There was speculation that the government would merge Budapest with MKB, which the state took over from BayernLB in 2014, to build a domestically-owned banking champion, despite the different profiles of the two banks. Earlier this year, the pair was earmarked to IPO on the Budapest Stock Exchange as the stars of an effort by the central bank to revive the sleepy bourse, in which it took control in November.

Instead, the country's fourth largest bank was sold last month to investment funds allegedly owned by the country’s central bank. That transaction is now under investigation by the European Commission.

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