Hungary Is Likely to Seek Foreign Partners for Banks

SZIRAK, Hungary -- Hungary will probably reduce its stakes in big commercial banks by lining up foreign banks as strategic partners and selling shares to institutional and private investors, the banking minister said.

The parliamentary committees reviewing Hungary's draft banking act have agreed not to exempt the state from a clause limiting stakes in big banks to 25%, Banking Minister Katalin Botos said at a conference.

The measure would force the government to sell the majority stakes it holds in all the major banks either directly or through state-owned enterprises and cooperatives.

Ownership Restriction

Ms. Botos said Hungary would probably use capital increases to dilute its stakes in the banks to 25% over an unspecified period.

"We really are ready to change the ownership structure of Hungarian banks," she said. "We want to privatize them as quickly as possible."

She said Hungary would seek foreign banks as partners to bring the technology, management skills, and training needed by the country's profitable but inefficient banking system.

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