Hungary is to sell its 15% stake it holds in Erste Bank back to its Austrian parent bank.
Vienna-based Erste Group Bank AG agreed to pay HUF87.6bn (€230mn) for the stakes owned by state-owned Corvinus International Investments. The financial closure of the agreement is expected before the end of 2023, the ministry said.
Hungary acquired a 15% stake in the Austrian lender’s Hungarian unit in 2016 for HUF38.9bn but over the last seven years, the lender has paid Ft 20bn dividend to Corvinus.
The economic development ministry’s statement recalls that the memorandum of understanding signed between Erste Group and the European Bank for Reconstruction and Development (EBRD), which also acquired, and still holds a 15% stake in Erste Bank Hungary, "helped bring additional stability to the banking sector and created a balanced and stable partnership with the Hungarian state", it added
When the deal was first announced in 2015, it was said to be contingent on the Hungarian government's promise to reduce the bank levy, introduced in 2010. The government left the bank tax in place and slapped the sector with additional burdens to the sector over the years. The windfall tax in mid-2022, the interest rate moratorium and lending rate caps, dampened the profitability of the sector.
Erste Group CEO Willi Cernko said the three-party cooperation between the bank, Hungary and the EBRD in the past seven years had contributed to Erste Bank Hungary becoming one of the most dynamically growing banks in Hungary.
The objectives of the strategic agreement have been fully met, and the government will continue to regard Erste as an important partner, Economic Development Ministry Mate Loga told local media, adding that the sale was not prompted by budgetary purposes.
Hungary will use proceeds from the sale for the purchase of Budapest Airport, but the €230mn price is just a fraction of the €4bn-4.5bn needed to buy 100% of the shares of the airport operator of Liszt Ferenc International.
Hungary looks set to buy 51% of the shares and is seeking a "friendly" co-investor to purchase 49% of Budapest. According to press reports, France’s Vinci Airports, a leading global player in the airport industry, operating 65 airports in 13 countries, would be the minority owner.
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