Hungary: Propping up Postabank

State bail-outs for indebted, inefficient and over-politicized banks were supposed to be a thing of the past in Hungary. Not so. As its rivals rake in profits - transforming Budapest into the financial hub of eastern Europe - the country's second-largest financial institution, Postabank, has limped back to the warm milk of public funds for yet another capital increase as the government makes yet another push to find a buyer for the troubled bank.

But even with a Ft24 billion ($114 million) injection last month, following a Ft7 billion capital increase in June, will any buyer step forward if the current management remains? "That's the question," says Larry Pelleccio, a senior vice-president for Moody's Investors Service based in Cyprus. "How much control can a strategic investor get and how much will management resist?"

Robert Muranyi, deputy chief executive of Postabank, likes to...