MBH Investment Bank Co. Ltd.

The positive outlook reflects our view that MBHI will continue its transformation as part of the MBH group over the next 12 months, generate healthy organic revenue growth, and maintain leading positions in its core businesses while sustainably strengthening its capitalization and improving its asset quality. Our ratings on MBHI currently do not encompass expected additional loss-absorbing capacity buildup. Although unlikely, we could also take a positive rating action if the combined group were to build up material additional loss-absorbing buffers while maintaining its incremental stand-alone creditworthiness. We expect MBHI will maintain its integral importance to the group. We could upgrade MBHI if the MBH group continues to successfully execute the merger, with the group becoming more efficient and profitable

...S&P Global Ratings views MBH Investment Bank Ltd. (MBHI) as a core subsidiary of Magyar Bankholding (MBH) and expects MBHI to receive support from the group under any foreseeable circumstances. Our view reflects, among other things, high integration and reputational links with the group and the fact that strategy and risk management are controlled by MBH's board of directors, which comprises members of all three banks in the group. We believe that execution risks have decreased as MBH has made substantial progress on its merger with MBHI, combining its brand marketing and transforming its IT. The group has completed most of its planned restructuring measures in recent years. In particular, MBH's combined brand marketing and IT infrastructure consolidation has made substantial progress. We project that MBH will sustainably improve its earnings, enabling the group to continue its transformation. We will closely monitor whether the involvement of government associates or the government itself,...

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