Hungary's state-owned development bank MFB Zrt. is in talks with German shareholder DZ Bank AG regarding the takeover of Takarekbank, MFB Chief Executive Laszlo Baranyay told Hungarian weekly Heti Valasz in an interview published Thursday.

The Hungarian government is looking for ways to enhance lending in order to kick-start growth in the ailing economy. Hungarian banks, mostly foreign-owned, have been under deleveraging pressure amid severe losses imposed by a government scheme to reduce the stock of household foreign currency mortgages and a hefty tax on the financial sector.

"It is not the MFB group's job to move instead of commercial banks. But there are times when--for a transitionary period--we need to take their place," Baranyay said.

Baranyay said negotiations with Takarekbank's owners would yield an outcome soon and no further acquisitions were planned for the time being.

Takarekbank is a savings cooperative, with DZ Bank owning 37% of its shares. The remaining ownership is divided among member institutions.

The development bank's plans are in line with the government aim to raise ownership in strategic companies. The cabinet has closed transactions on raising its stake in Hungarian oil company MOL Nyrt.(MOL.BU) and the takeover of automotive manufacturer Raba Nyrt. (RABA.BU).

 
   Newspaper website: www.hetivalasz.hu

-Budapest Bureau, Dow Jones Newswires; +361-267-0622

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