Nagy said the asset manager, which will buy up commercial real estate loans from banks on a voluntary basis, will start operating once its internal rules are defined, based on consultations with the bank sector, the EU and the ECB.

Nagy also said that more banks might land in state hands, after the government last year agreed to buy MKB Bank and Budapest Bank. [

"Further bank purchases by the state cannot be ruled out, but currently there are two banks, MKB and Budapest Bank, whose situation needs to be handled by the government and the central bank," Nagy told Reuters.

(Reporting by Krisztina Than; Editing by Michael Shields)

Stocks treated in this article : KBC GROEP, Raiffeisen Bank International AG, UniCredit SpA