Hungary cbank plans to launch manager of bad assets

Budapest, November 12 (MTI) – Hungary’s central bank plans to set up an agency to buy up 300 billion forints (EUR 975m) of distressed assets over the next 10 years.

The body to be known by its Hungarian acronym MARK will offer buy a “significant amount” of commercial real estate loans from banks to “facilitate portfolio cleansing in a way that creates a market for these assets which is economically accessible for international investors too”, according to the proposal outlined in the biannual Financial Stability Report.

MARK plans to purchase project loans related to commercial properties, including plots, included on banks’ balance sheets during foreclosure. The loans must be overdue for longer than 90 days or already restructured. The properties must have been on the balance sheet since a certain date to be defined later.

MARK will not sell the assets immediately and cheaply as this would undermine market prices, the bank said. Rather, it will wait for the “appropriate market environment” in which it can sell at a “fair price”, it added. In the meantime it will ensure “optimum management” and “reorganisation and restructuring”, where possible.

Source: http://mtva.hu/hu/hungary-matters