Hungary's central bank to hand HUF50bn to budget

By bne IntelliNews May 5, 2016

The Magyar Nemzeti Bank (MNB) will pay a HUF50bn (€159.8mn) dividend from its 2015 profit to the Hungarian budget, Governor Gyorgy Matolcsy said on May 5.

The announcement came as a surprise, as the central bank had said in February that the full HUF95bn record profit posted last year would be added to its reserves. The sudden change of course appears likely connected to the mounting pressure on Matolcsy, whose resignation the opposition has demanded due to an ongoing scandal over the MNB's use of public money.

The decision to pay the dividend was made by the MNB’s board on April 27, Magyar Nemzet claims. According to the MNB, the payout will reduce Hungary’s state debt by 0.15% of GDP. The central bank pointed out that it last paid a dividend to the budget in 2002. Matolcsy did not take up the reins at the head of the MNB from Andras Simor - a bitter enemy of the ruling Fidesz party, for whom Matolcsy was finance minister - until 2013.

In 2014, the MNB used its profits to launch six charitable foundations, granting them HUF245bn (€790mn) in funds. However, following a Constitutional Court ruling that blocked the government's attempts to remove the foundations’ spending from public scrutiny, it was revealed that they spent around HUF20bn without announcing public procurements, granting a significant amount of funds to people close to Matolcsy. 

On May 5, the MNB said in a press release that the six charitable foundations invested a total of HUF3.2bn at NHB Bank, which is owned by Matolcsy’s cousin Tamas Szemerey. It was earlier reported that Matolcsy made direct investment decisions at one of the central bank's charitable foundations, despite claims that all six are independent bodies, meaning the funds handed to them lose their designation as public.

 

Related Articles

Iran "hits impasse" in bid to set up Bank of England clearing accounts

Iran is failing to make headway with a request to the Bank of England (BoE) to set up special clearing accounts for its banks, Reuters reported on March 20. Sources said the BoE ... more

IMF delays new $1bn tranche to Ukraine due to Donbas blockade

Ukraine's main donor, the International Monetary Fund (IMF), has cancelled a board meeting scheduled for March 20 that was expected to see the release of a $1bn tranche to Ukraine, while demanding ... more

IIB’s new placement to support debt-ridden Development Bank of Mongolia

The International Investment Bank (IIB) is participating in a new placement of Mongolian international sovereign bonds denominated in US dollars alongside other international ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss