MTB Magyar Takarekszovetkezeti Bank Zrt.

The stable outlooks reflects our view that MTB will remain a core subsidiary of MBH and continue its path toward creating a combined banking group in the next 12 months. We believe that synergy effects from the merger will start to materialize at the individual and group level over time, boosting performance and its market position. We could raise the ratings on MTB if we believe the expected merger would result in material synergies--beyond our current expectations--for MTB, enhancing the group's profitability and efficiency and ultimately benefiting its business position. We could also take a positive rating action if MTB and the new bank holding strengthen their capitalization and show a sustainably resilient earnings structure. We currently do not include

...S&P Global Ratings views MTB Magyar Takarekszovetkezeti Bank Zrt. (MTB) as a core subsidiary of Magyar Bankholding (MBH) and we expect MTB to receive support from the group under any foreseeable circumstances. The subsidiary's strategy, risk management, and resource allocation are approved and monitored by MBH's board of directors, which comprises members of all three partnering institutions. Our ratings on MTB are currently not constrained by our assessment of the group's credit profile. We acknowledge material improvements in the group's organizational setup and risk profile and expect this to continue. We recognize that the TakarTk Group underwent restructuring measures in recent years, such as the merger of its remaining savings cooperatives into one entity and the adoption of a new organizational structure. Still, we view the group's legacy governance structures as complicating the transformation and see substantial risks that the entity can be utilized for political purposes or government-directed...

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