By Margit Feher

BUDAPEST--Hungary has no interest in establishing a large presence in the banking sector, Prime Minister Viktor Orban said Friday, a day after the economy minister said state owned development bank MFB will buy GE Capital's Budapest bank for an undisclosed sum.

The purchase of the unit will take the state's total stake in the banking sector well above 50%. Earlier this year, Germany's state-controlled lender BayernLB sold its Hungarian unit MKB Bank Zrt for 55 million euros ($67.84 million).

But Prime Minister Viktor Orban on Friday told state radio that his government isn't to build a banking "mammoth."

"The question now is for how long we will keep it [Budapest Bank] in state ownership, whether we'll merge it, [or] if we make it private, what technique we'll use to do that," Mr. Orban said. "The government's goal is not building an enormous [banking] mammoth with a majority state ownership but establishing a banking system belonging to Hungarian interest sphere, Hungarian owners."

The majority of retail banks operating in Hungary are owned by foreign companies, but central bank officials have said they expect the banking sector to consolidate after some of the current owners exit the country as a result of grave losses over the past few years and banking sector regulations.

Write to Margit Feher at margit.feher@wsj.com

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