Bulletin: Merger Intention Can Be A Game Changer For Magyar Takarekszovetkezeti Bank

FRANKFURT (S&P Global Ratings) May 28, 2020--Budapest Bank's announcement that it is discussing a merger with Magyar Takarekszovetkezeti Bank Zrt. (MTB; BB/Stable/B) and MKB Bank signals that MTB's creditworthiness could alter if the deal goes ahead. The strategic cooperation between the three banks is to prepare the framework for a new domestic banking group, possibly creating the second largest lender in Hungary. The new group would serve 1.9 million customers with a combined balance sheet of Hungarian forint (HUF) 5,800 billion (about $18.3 billion), and account for half of the country's bank branch network.&P Global Ratings believes the potential merger could bring benefits for MTB if the combined group manages to leverage on its increased scale and diversification. At

...May 28, 2020 FRANKFURT (S&P Global Ratings) May 28, 2020--Budapest Bank's announcement that it is discussing a merger with Magyar Takarekszovetkezeti Bank Zrt. (MTB; ##/Stable/B) and MKB Bank signals that MTB's creditworthiness could alter if the deal goes ahead. The strategic cooperation between the three banks is to prepare the framework for a new domestic banking group, possibly creating the second largest lender in Hungary. The new group would serve 1.9 million customers with a combined balance sheet of Hungarian forint (HUF) 5,800 billion (about $18.3 billion), and account for half of the country's bank branch network. &P Global Ratings believes the potential merger could bring benefits for MTB if the combined group manages to leverage on its increased scale and diversification. At the same time, executions risks are likely to be very material, given the banks' different focus and since MTB has just completed its restructuring. The difficult operating environment adds to the risks...

Bulletin