Economy minister would oust several foreign banks from Hungary, named those that can remain

Hungary’s National Economy Minister Márton Nagy has signalled plans to shrink the country’s roster of major banks to just five, naming four frontrunners and leaving a solitary vacancy. Days ago, in a speech, Prime Minister Orbán suggested that at least one foreign bank should leave the country.

Economy minister would oust foreign banks

Speaking at a conference hosted by the Ludovika University of Public Service on Monday, the minister endorsed OTP, MBH Bank, K&H and UniCredit to continue serving Hungarian customers, declaring the “fifth spot up for grabs”.

This is not the first occasion on which Nagy has aired such views. Just a day earlier, he reiterated that Hungary should cap its big banks at five—explicitly OTP, MBH, K&H and UniCredit, with that final place open to competition.

According to the Hungarian National Bank, seven large banks currently dominate the market. Alongside those named by Nagy are Erste and Raiffeisen, both Austrian-owned, and CIB, which is Italian-controlled. K&H and UniCredit are also Italian, while OTP and MBH are domestic outfits—the latter aligned with the interests of Lőrinc Mészáros, Hungary’s richest man and a close associate of Prime Minister Viktor Orbán, who collected most of his fortune under the Orbán government.

News website 444.hu reported that PM Orbán, in his recent State of the Nation address, branded Erste the “tax collector of death”—a barb suggesting the Austrian lender is unlikely to claim the contested slot.

Swedish, Austrian examples

In a Facebook post shared today, Nagy argued that fewer big banks are needed to drive down costs in the sector. He said a leaner industry with fewer institutions would be more size-efficient, while also spurring greater competition. Nagy cited international examples in support: Austria and Sweden each have fewer than five major banks.

Notably, he made no mention of the extra taxes imposed by the Hungarian government on the banking sector as a drag on efficiency or profitability.

Budget deficit ‘under control’

Nagy brushed aside accusations of “fiscal alcoholism”, pointing out that the general government deficit had narrowed to 4.7 per cent of GDP last year under European Union accounting rules. He attributed much of the shortfall to debt-servicing costs, while stressing a stable primary balance, a current-account surplus and the pressing need to reverse rising state debt.

The minister touted government successes in elevating domestic ownership of strategic sectors, though he conceded foreign investors still predominate in telecommunications, IT and building materials. A slip in retail from 41 per cent to 40 per cent domestic ownership was, he said, “distressing”.

He praised the banking sector’s steady performance and noted that the National Bank of Hungary’s international reserves had hit a record €60 billion.

Price caps deemed ‘necessary’

Nagy defended sectoral taxes as a means to distribute the public burden more equitably, revealing that levies on banks, energy firms and retailers had generated HUF 17,000 billion (£35 billion) in revenues from 2010 to 2026. He forecast a further HUF 2,000 billion from sectoral and windfall taxes this year.

Government-imposed price restrictions, he insisted, were a “necessary step” against inflation—measures dismissed by critics as “unorthodox” but replicated elsewhere in Europe.

If you missed our previous articles in the issue:

• Major change in banking in Hungary: You can now withdraw twice as much cash for free!
• Hungarian currency guide: Everything visitors and expats need to know about money in Hungary
• Tisza Party’s economy expert shares when Hungary could adopt the euro