3 Min Read
* Full or partial privatisation among options: commissioner
* Final decision on Budapest Bank to come later
* Decision will take landmark EBRD agreement into account
By Gergely Szakacs
BUDAPEST, Dec 7 (Reuters) - Hungary's government will draw up a new strategy for state-owned Budapest Bank by Dec. 15, with options including a full or partial privatisation, the government commissioner in charge of financial services told Reuters.
Since taking office six years ago, Prime Minister Viktor Orban has nationalised several banks and implemented policies to boost domestic ownership in a sector previously dominated by foreign names.
Hungary's banks, about half of which are foreign-owned, have paid one of Europe's highest bank levies under Orban since 2010.
But his government has started reducing the levy this year as part of efforts to encourage lending. Economic growth has also strengthened the banking sector.
The government bought Budapest Bank from GE Capital for $700 million in 2015 and officials have said its resale would start in 2016.
However, banking sources told Reuters the process had stalled, probably due to differences about pricing, and the government was running out of time to complete the sale before an election in early 2018.
Government commissioner Andrea Bartfai-Mager said on Wednesday that Hungary would draw up a new strategy for state development bank MFB, which owns Budapest Bank through a subsidiary, by the middle of this month.
She said that plan would set the course for Budapest Bank, Hungary's ninth-largest lender by assets, which has forecast profits worth 13 billion to 15 billion forints ($45 million to $51 million) in the coming year.
"The strategy will include several scenarios for the bank," Bartfai-Mager said in an emailed response to questions.
"These include the possibility of a full or partial sale, but the government will make the final decision regarding Budapest Bank at a later stage."
Under Orban's landmark agreement with local banks, Hungary and the European Bank for Reconstruction and Development have bought 15 percent stakes in Erste Bank Hungary from its Austrian owner Erste Group Bank to strengthen its capital base and support more lending.
The government also committed itself then to transferring all its majority stakes in local banks to the private sector within three years.
Bartfai-Mager said the final decision about Budapest Bank would take those commitments into account.
"Given that this is a bank that is performing well and also represents a substantial state asset, the decision will be made taking the interests of the Hungarian state, the business interests of the bank, as well as Hungary's agreement with the EBRD into account," she said. ($1 = 291.65 forints) (Reporting by Gergely Szakacs; Editing by Ruth Pitchford)