MBH Bank (MBHBANK) H1 2024 earnings summary

Executive summary

• Adjusted profit after tax reached HUF 139.0 bn in 1H 2024, down 2.2% year-over-year, with adjusted ROE at 26.1% and accounting ROE at 20.4%.

• Accounting profit after tax rose to HUF 108.8 bn in 1H 2024, up 28.4% year-over-year, mainly due to lower risk costs and reduced extra profit tax.

• EPS was 325 Ft in H1 2024, up from 255 Ft year-over-year.

• Total assets increased to HUF 11,727.1 bn at the end of 2Q 2024, up 11.8% year-over-year.

• The acquisition of a 76.35% stake in Fundamenta-Lakáskassza expanded consolidation scope and contributed to asset and loan growth.

Financial highlights

• Net interest income in 2Q 2024 was HUF 129.7 bn, a 6.1% decrease year-over-year; net interest margin fell to 4.4%.

• Net fee and commission income for 1H 2024 was HUF 49.3 bn, up 14.6% year-over-year.

• Operating expenses in 1H 2024 were HUF 137.0 bn, up 9.8% year-over-year, with a cost-to-income ratio of 43.4%.

• Total equity increased to HUF 1,109.6 bn from HUF 1,023.4 bn at year-end 2023.

• Cash and cash equivalents at period end were HUF 1,172.7 bn, down from HUF 1,347.9 bn at year-end 2023.

Outlook and guidance

• Management is considering strategic options to increase free float on the stock exchange within 24 months.

• Further base rate cuts are expected in 2H 2024, with the forint projected at 392.5 vs the euro by year-end.

• Annual GDP growth forecast for 2024 was revised down to 1.9% due to weak industrial performance.

• The bank expects to meet prudential and capital requirements for the remainder of 2024.

• The impact of recent regulatory changes, including transaction tax and extra profit tax modifications, is expected to be manageable.