(Adds detail, analyst comment, market reaction)
By Gergely Szakacs
BUDAPEST, June 1 Businessmen close to Prime
Minister Viktor Orban have emerged as the biggest shareholders
of MKB Bank less than a year after Hungary's fifth-largest
lender was privatised.
Holding company Konzum, partly owned by
businessman Lorinc Meszaros, an Orban ally, said on Thursday it
would acquire a 45 percent stake in MKB Bank by taking control
of private equity fund Metis.
Konzum said it planned to buy a further 4 percent stake in
MKB but did not say who from.
At 1144 GMT, Konzum shares traded 17 percent higher at 345
forints, off earlier gains of 20 percent. The Budapest blue chip
index was up 0.8 percent.
Meszaros, mayor of Orban's home village and a close friend
of the prime minister, also has stakes in the media and energy
sectors where the Hungarian premier wants to boost the influence
of local investors. Meszaros owns 19.6 percent of Konzum.
The MKB deal fits into Orban's drive to boost the share of
local investors to more than half in the bank sector, a market
dominated by foreign names such as KBC, Austrian Erste
Bank and Raiffeisen or UniCredit
and Intesa SanPaolo.
MKB, which was stripped of a large chunk of its distressed
assets under central bank resolution, made a 12 billion forint
($43.84 million) net profit in the first four months of 2017,
more than last year's total net income.
Konzum will take over the Metis fund from private equity
investor MINERVA, one of the three buyers that originally
purchased MKB at its privatisation tender last year.
The ownership structure of Metis had been unknown.
Konzum did not disclose how much it was paying for the Metis
Orban's ruling Fidesz party, which faces an election next
April, had taken issue with foreign banks not providing enough
credit to local firms as Hungary clambered out of the global
financial crisis after 2010.
"I think the issue of Fidesz-linked crony capitalism is
under-appreciated and when growth is as strong as it was in Q1
is brushed over by the market," Nomura analyst Peter Attard
Montalto said in emailed comments to Reuters.
Montalto said the government aimed to boost economic growth
by keeping up credit expansion and locally-owned banks like MKB
could help achieve this goal.
Hungarian businessman Tamas Szemerey, a cousin of National
Bank Governor Gyorgy Matolcsy, who is one of Orban's strongest
allies, announced last month he was taking a 20.2 percent
indirect stake in MKB.
MKB Chief Executive Adam Balog, a former state secretary at
the Economy Ministry under Matolcsy and former deputy governor
under Matolcsy at the central bank, took a 9.8 percent indirect
($1 = 273.73 forints)
(Reporting by Gergely Szakacs and Krisztina Than; Editing by