Objective achieved
Andrea Mager, Minister Without Portfolio for National Asset Management, points to the bill, and the general rationale on which it is based is that the integration of cooperative credit institutions is now strengthened. On October 31, 2019, the merger of 11 savings cooperatives and two banks
TAKARÉKBANK ZRT. The name that has been expanded through its extended branch network to fill the role of any Qatari bank.
As a result of these operations, the atypical institutional system established by law in 2013 was dismantled, and the measure can be considered in the public interest in terms of the stable long-term operation of the credit institution sector, and the country’s financial infrastructure reads.
remaining members
Integration Organization website As a result of the mergers, the organization currently has only 5 members:
“KMF” Central Hungarian Development Ltd.
MTB Magyar Takarékszövetkezeti Bank Zrt.
Takarékbank Zrt.
Takarék Mortgage Bank Plc.
United Savings Cooperative Society
Among them, Takarékbank Zrt. It is the largest integrating institution operating as a global commercial bank, which not only incorporated savings cooperatives but also the crucial part of the activities of the former FHB banks. MTB Magyar Takarékszövetkezeti acts as the central bank remaining from the previous cooperative integration, and Takarék Mortgage Bank acts as a mortgage refinancing financier and issues mortgage bonds within the group. The Takarék United Co-operative was established as the only remaining co-operative (ownership of the Savings Co-operative shareholders who were unable or unwilling to acquire a direct stake in Takarékbank Zrt. during the mergers).
Issuance of bank bonds
According to the detailed explanation, when the merger was created, the goal of the public interest was to reduce the operational risks of the cooperative savings sector, which was facilitated by the fact that the assets of the integrating organization acted as private funds.
However, the gradual removal of this element of atypical capital from the Hungarian financial system is also justified, given that the merger process has now been consolidated. In order to achieve the objectives of the merger, the law provides for this
Issued by the parent company of a financial holding company of a member state that exercises controlling influence over a member of the integration organizationmeets the conditions set forth in this provision To be invested in bonds until January 31, 2022, and the parent company of a financial holding company of a member state to issue bonds of the value specified in the application of the integration organization based on this provision.
The bill does not explicitly state, but it is likely that this is an issuance of the Magyar Takarék Bankholding Bond, which was set up in the summer as Magyar Bank Holding transferred its stake in Takarékbank and Takarék Jelzálogbank to this subsidiary according to the announcement in mid-October. Issuance of bonds regulated by law may explain the role of Magyar Takarék Bankholding, which recently emerged as an intermediary owner.
The purpose of this provision is to ensure that members of the credit institution of the merger organization steadily comply with EU and Hungarian legislation on long-term precautionary requirements. The bill states that The proceeds from the underwriting of the bonds shall be used to increase the equity of the members of the credit institution of the integrating organization or other credit institution under the unified supervision with them, which shall include the possibility of increasing the equity of each of the members of the credit institution. of the integration organization and members of the integration organization. Together, the equity of other credit institutions subject to uniform supervision will increase.
The bill also provides for the obligation of persons who have a direct or indirect controlling interest in a member of the integration organization in connection with the transaction.
They break the organizational system of integration
In order to break the regulatory regime of integration, the bill provides for the mandatory resignation of members of the credit organization of the integration organization, as well as for:
The integration organization ceases to exist without a legal successor in the event that all members of the integrated credit organization withdraw.
In this case, the tasks of the integration business management organization established by law, as well as the rights and obligations arising from them cease, and the joint and individual responsibility of the members of the integration organization ceases.
In the event of termination of the integration organization Its assets, including the ownership of the bond portfolio underwritten, are transferred to the Hungarian State in view of the financial compensation it previously provided to the sector through the Integration Fund of Cooperative Credit Institutions. (The latter means an infusion of state capital in the amount of 136 billion HUF when creating the Integration Organization – ed.).
The objective of the regulation, which enhances the long-term stability of the financial intermediation system, is finally achieved by the fact that credit institutions that are part of the domestic financial intermediation system remove atypical capital elements from their capital structure, as stated in the bill. .
The law enters into force on the eighth day after its issuance.
