The ratings on Hungary-based Magyar TakarTksz÷vetkezeti Bank Rt. (Bank of Hungarian Savings Co-operatives Ltd.; TakarTkbank) are based on its relatively humble position in an increasingly competitive market; concentration risks; poor, albeit improving, profitability; and vulnerability to market risk in a volatile economic environment. The ratings also reflect the potential for tighter cohesion among the 159 savings cooperatives that are members of the National Association of Savings Co-operatives (OTSZ) and the National Savings Co-operative Institutional Representative Fund (OTIVA). Closer integration with the savings cooperatives, which gained a majority stake in TakarTkbank in April 2004, could benefit TakarTkbank's commercial and financial profiles. TakarTkbank is considered by Standard & Poor's to be a strategically important component within the cooperative banking sector. The ratings
