Business 28 March 2025, 8:53am

Hungarian state may sell its stake in MBH Bank, share issue may follow

Portfolio

Preparations have started for a possible share issue of MBH Bank Plc with the participation of Citigroup advisers, Bloomberg reports, which said the Hungarian state may also exit the bank. MBH Bank has been planning to strengthen its stock market presence since its creation, and the state has now gradually reduced its stake to 20%, so none of this news comes as a surprise.

MBH Bank has been listed on the stock exchange since the shares of its predecessor, MKB Bank, were listed on the BSE in June 2019, as required by the European Commission, but trading in the shares has been extremely low until now, and the market for the securities cannot be considered liquid.

Bloomberg now reports that

preparations have begun for a possible share issue with advisers from Citigroup Inc. and that a deal could be launched as early as this year,
but discussions are still at an early stage and there is no guarantee that the issue will go ahead,
and that the state is considering exiting the bank.

Most recently, in December, the ownership structure of MBH Bank changed significantly, after Magyar Bankholding ceased to exist and its owners became direct owners of MBH Bank. Based on the changes at that time,

the stake held by Corvinus BHG Asset Management Zrt., which is indirectly owned by the Hungarian state, decreased from 28.26% to 20.01%,
the stake held by Zenith Asset Management Zrt., which is linked to gas fitter-turned pro-government billionaire entrepreneur Lőrinc Mészáros, decreased from 25.79% to 24.84%,
and the treasury stock of MBH Bank itself increased to 7%.

MBH was created by the merger of MKB Bank, Budapest Bank and Takarékbank in 2023, making it Hungary's second largest credit institution with assets after OTP Bank. The state, as the owner of Budapest Bank, initially held a 31% stake in the bank, which has now fallen to 20%.

The bank's share price stands at HUF 6,600, giving it a market capitalisation of HUF 2,129 billion,

so the state's stake could currently be worth almost HUF 430 billion.

Last week MBH Bank reported impressive growth figures, especially in the retail business, in which the acquisition of Fundamenta, which closed last year, played a significant role, but organic growth was also very strong. To give two examples, the bank's retail loan book grew by 37% and its market share in residential lending quadrupled in 2024. Although revenues were slightly hit by the decline in the interest rate environment, the company's adjusted profit after tax was still almost at the same level as a year earlier: HUF 236 billion last year