MBH Bank (MBHBANK) Q1 2025 earnings summary

Executive summary

• Adjusted return on equity (ROE) reached 20.5% in 1Q 2025, reflecting high profitability, though adjusted profit after tax (PAT) declined 27.4% year-over-year to HUF 57.6 bn due to higher operating costs and taxes.

• Accounting PAT was HUF 18.2 bn, down 62.9% year-over-year, mainly due to extra profit and banking taxes and lower margins.

• Total assets reached HUF 12,824.4 bn, up 8.8% year-over-year and 2.6% quarter-over-quarter, supported by deposit and loan growth.

• Loan-to-deposit ratio at 76.4%, LCR at 145.2%, and NSFR at 134.3%, all well above regulatory minimums.

• Capital adequacy ratio at 20.0% and CET1 at 18.5%, significantly above regulatory requirements.

Financial highlights

• Net interest income was HUF 121.2 bn, down 12.4% year-over-year; net interest margin stable at 3.9%.

• Net fee and commission income rose 1.6% year-over-year to HUF 21.5 bn, but declined 28.5% sequentially due to seasonality.

• Operating expenses increased 18.4% year-over-year to HUF 76.2 bn, with cost-to-income ratio rising to 53.9%.

• HUF 2.7 bn in provisions and impairments were released, reflecting improved portfolio quality.

• Total adjusted comprehensive income was HUF 43.8 bn, down 30.5% year-over-year.

Outlook and guidance

• Management expects continued strong capital and liquidity positions, with further focus on cost control and portfolio quality.

• The strong start to 2025 provides a solid basis for achieving annual targets.

• Inflation is expected to average 4.5% in 2025, with economic growth forecast at 1.1%.

• Regulatory changes and new government measures may impact municipal deposits and fee structures going forward.