The ratings on Hungary-based Magyar Takarékszövetkezeti Bank Rt. (Takarékbank; Bank of Hungarian Savings Cooperatives Co. Ltd.) reflect the bank's low capitalization relative to its concentrated credit risk profile, which is still largely untested throughout a cycle; increasing pressures on its modest and volatile profitability; and mounting macroeconomic and industry risks in the Republic of Hungary (BBB+/Watch Neg/A-2). The ratings are based on the bank's integration with its majority shareholder, the savings cooperatives (SC) sector, as well as expected ownership support. This grants Takarékbank a one-notch uplift from its stand-alone creditworthiness. Positive rating factors are the bank's strong funding and liquidity profile as a central bank for the SC sector and its relatively robust asset quality in difficult operating conditions. Standard
