Monday, March 23, 2015
Prospects for the banking sector.
The government is buying a 30% stake in the Austrian lender Erste Bank under a memorandum of understanding (MoU) with the European Bank for Reconstruction and Development (EBRD). The MoU signifies a volte-face by Prime Minister Viktor Orban, whose relationship with foreign-owned banks has been fraught with difficulties since the imposition of a levy on financial institutions in 2010 that drove down earnings and achieved notoriety as one of the highest taxes of its kind in Europe. The government has pledged to reduce the bank tax during 2016-19.