The ratings on Hungary-based Magyar Takarékszövetkezeti Bank Rt. (Takarékbank; Bank of Hungarian Savings Cooperatives Ltd.) reflect the low capitalization, modest profitability, and the challenges facing both the bank and the weakly united Saving Cooperative (SC) sector of operating in a highly competitive environment. Positive rating factors include the bank's key position with the Hungarian SC network, strong liquidity, and adequate risk management combined with robust asset quality. The long-term rating on Takarekbank is one notch higher than its stand-alone creditworthiness to reflect its ownership structure and central position within the SC sector. With total assets of Hungarian Forint (HUF) 275.5 billion ($1.5 billion at HUF182.6 to $1) at June 30, 2007, Takarekbank is a midsize Hungarian Bank. The ratings are
