Government to buy back savings bank

A conservative columnist welcomes the government’s plan to buy German DZ’s share in Takarékbank, a small savings bank, which carries out about 5 per cent of all banking transactions. She believes this is a first step towards a sounder ownership structure in the banking world.

The government decided last week to try and buy the 38 per cent minority share which a German bank, DZ holds in Takarékbank, a savings bank that runs an extensive network of subsidiaries in rural areas. The rest of the shares are mostly in Hungarian hands. As BudaPost reported earlier, Prime Minister Orbán would like to see at least half of the banking sector in Hungarian hands (See BudaPost, September 1st).

In Magyar Nemzet, Anna Szabó welcomes the idea and suggests that privatisation went too far in the 1990s. As far as Hungary’s banks are concerned, huge amounts of public money were spent to shore up their finances, before they were sold at extremely low prices to foreign investors. The new owners made easy profits from the unusually large interest margins they imposed, as well as from the forex based loans they made available to enterprises, local councils and private citizens alike. Public supervisory bodies were unable to keep them under control. Szabó admits that Takarékbank is just a small actor on the banking scene, but hopes the planned buy-off will be followed by further steps aimed at “creating a financial world of a new type, which will not be exclusively at the service of the banks.”

Tags: banks, privatisation