The government has decided to invest HUF 100 billion (EUR 337.81 million) in the reorganisation and unified branding of savings cooperatives, cabinet spokesman András Giró-Szász announced this week. Last year the state acquired 38 per cent of Takarékbank, which is essentially the umbrella corporation of 1,600 savings cooperatives throughout the country. According to the proposal, Takarékbank will remain the central company for the banking functions but the state will establish a background institution – called the Integration Organisation – to develop the prudential rules and handle the protection of cooperatives’ clients in case there are financial problems.
The move was not unexpected: Prime Minister Viktor Orbán has said a number of times that the government wants a larger role in lending to directly boost growth by offering favourable loans for small and medium companies, and savings cooperatives seem to be the perfect way to go. The 1,600 branches is twice the amount that the country’s largest bank, OTP, has, and with the acquisition the state saves a significant amount of money, time and effort required to establish a brand-new financial institution.
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