June 17, 2019 / 8:43 AM / a month ago

UPDATE 2-Hungarian lender MKB's shares start trading in Budapest

* MKB in closing stages of EU restructuring process

* Final restrictions on business activity to be lifted shortly

* Bank to have sixth-largest market capitalisation in Budapest (Adds detail on Meszaros holdings, more comments)

By Gergely Szakacs

BUDAPEST, June 17 (Reuters) - Hungary’s MKB Bank, which started trading on the Budapest bourse on Monday, plans to expand its business in the coming years, possibly via acquisitions or increased lending, its chief executive said.

The listing increases the stock market footprint of Lorinc Meszaros, an associate of Hungarian Prime Minister Viktor Orban, who has built a sprawling business empire with holdings in industry, media, information technology and tourism.

Meszaros controls a 48.6 percent stake in MKB, Hungary’s sixth-largest lender, according to an August 2018 disclosure.

The bank is now in the final stages of an EU restructuring, which rescued it from the brink of bankruptcy after a large stock of project loans went bust during the financial crisis.

In return for state aid received in 2015, the EU imposed curbs on business activity, including a ban on acquisitions, a limit on its balance sheet and lending risk. The final EU restrictions are to be lifted at the end of this year.

“We have wrapped up the reorganisation and all of our figures have converged with those of other players in the banking system,” Adam Balog told a news conference.

MKB, sold to three private investors for 37 billion forints ($128.76 million) in 2016, has an initial market capitalisation of more than 197 billion forints, making it the sixth-largest stock on the exchange.

Meszaros’s stock market holdings include stakes in the Opus Global conglomerate, as well as in IT company 4iG , real estate company Appeninn, and insurance company CIG Pannonia.

MKB’s main rivals include domestic OTP, units of Austrian Erste and Raiffeisen, Belgian KBC , Italian UniCredit and Intesa.

Balog, who has said Hungary would benefit from a new domestic banking group, declined comment on how MKB would expand.

“(Consolidation) is by all means necessary, but everybody thinks somebody else should make the first move,” he said.

Since taking power in 2010, Orban has overhauled the local bank sector, boosting domestic ownership to more than 50 percent in a market previously dominated by large foreign lenders.

The next milestone in the transformation in the financial sector will be the privatisation of state-owned Budapest Bank.

Orban’s government has said Budapest Bank should be sold for no less than the $700 million it paid to the financial arm of General Electric when it bought the bank in 2015.

The minister in charge of the sale is due to report to the cabinet by June 30.

KBC, Erste Group and Raiffeisen have all signalled interest in the bank, as has Takarek, a domestic savings and loans group, which is turning itself into a fully fledged bank. ($1 = 287.36 forints) (Reporting by Gergely Szakacs, editing by Louise Heavens)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below