Hun­gary Cen­tral Bank ve­hi­cle to buy dis­tressed bank as­sets

The Pak Banker - - COMPANIES/BOSS -

The ve­hi­cle set up by the Na­tional Bank of Hun­gary to buy up bad loans from banks will start pur­chas­ing as­sets af­ter pub­lish­ing the terms and con­di­tions of the scheme later this month, the cen­tral bank said, af­ter the plan was ap­proved by Euro­pean reg­u­la­tors.

The ve­hi­cle, called MARK, is part of on­go­ing ef­forts by cen­tral bank Gov­er­nor Gy­orgy Ma­tolcsy, an ally of Prime Min­is­ter Vik­tor Or­ban, to re­vive lend­ing to compa- nies and sup­port eco­nomic re­cov­ery.

Af­ter more than a year of wran­gling over the nuts and bolts of the pro­gramme, the Euro­pean Com­mis­sion on Wed­nes­day gave the green light to MARK to buy dis­tressed cor­po­rate loan port­fo­lios, mostly com­mer­cial real es­tate, from lo­cal banks.

"One of our col­leagues had car­ried a child to birth" in the time it took to win reg­u­la­tory ap­proval for the ve­hi­cle, MARK Chief Ex­ec­u­tive Of­fi­cer Cs­aba Kan­dracs told a news con­fer­ence.

The child was named "Mark," he added. Kan­dracs said the body, launched by the cen­tral bank with an ini­tial bud­get of 300 bil­lion forints ($1.08 bil­lion), aimed to spend all of that cap­i­tal to take over the bad cor­po­rate loans that have weighed on their bank books for years.

"The past seven years, ef­fec­tively noth­ing hap­pened in this mar­ket (in terms of clean­ing out bad port­fo­lios), which jus­ti­fies the need for in­ter­ven­tion," cen­tral bank di­rec­tor Gergely Fabian said. The bank said par­tic­i­pa­tion in the scheme will be vol­un­tary, but MARK will com­mit to buy­ing all el­i­gi­ble port­fo­lios with bind­ing of­fers in a 15-month process, open to all sol­vent do­mes­tic lenders.

The plans call for MARK to ex­ist for 10 years. Kan­dracs said MARK would bid for com­plete port­fo­lios, not in­di­vid­ual as­sets, from each bank tak­ing part in the pro­gramme. "Their de­ci­sion will be sim­pli­fied be­cause they ei­ther sell us the whole lot, or noth­ing," he said. MARK will then try to sell off the as­sets, such as of­fices, ho­tels, shop­ping cen­tres, land plots or ware­houses.

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