The final price to be paid for Budapest Bank, the Hungarian subsidiary of General Electric Capital Group, is “still being debated” but it may maximum be USD 700 million, Minister for National Economy Mihály Varga told HírTV.

According to a recently published Government decree, the State of Hungary pledges guarantee for up to USD 700 million for the purchasing of Budapest Bank. The contract on the transfer of ownership was signed last Friday by Corvinus International Investment Ltd on behalf of the State of Hungary and General  Electric Capital Group.

Mihály Varga stressed that Budapest Bank has been profitable in past years, therefore “we have every reason to believe that the bank will bring profits for its new owners, among them for the State of Hungary, following reorganization or restructuring.” According to the MoU concluded with the EBRD last week, the State of Hungary committed to sell the share it owns of MKB, Budapest Bank and Erste Bank Hungary within the next three years, the Minister added.

He also said that the so-called Residence Bonds have fulfilled expectations. Last year, foreigners bought Residence Bonds worth HUF 150bn and this amount helped finance state debt. The Government is expecting that the state budget will receive an even higher amount this year, especially as the value of bonds was increased from EUR 250 thousand to EUR 300 thousand.

(Ministry for National Economy)