MBH Bank (MBHBANK) Q3 2024 earnings summary

Executive summary

• Achieved strong profitability with adjusted ROE of 23.1% for 9M 2024, supported by robust cost efficiency, capital adequacy, and liquidity.

• Adjusted profit after tax for 9M 2024 was HUF 189.0 bn, down 19.6% year-over-year, mainly due to lower revenues.

• Total adjusted comprehensive income for 9M 2024 was HUF 187.1 bn, a 29.3% decrease year-over-year.

• Total assets reached HUF 12,228.3 bn (+13.9% y/y), driven by deposit and loan growth, including the impact of the Fundamenta acquisition.

• Retail and corporate segments showed significant annual growth in both loans and deposits.

Financial highlights

• Gross operating income in 3Q 2024 was HUF 139.1 bn, down 14.4% year-over-year, driven by a 14.4% drop in net interest income.

• Net interest income for 9M 2024 was HUF 388.7 bn, down 9.3% year-over-year, with net fee income at HUF 72.9 bn, up 8.2% year-over-year.

• Operating expenses for 9M 2024 were HUF 217.4 bn, up 13.9% year-over-year, with a cost-to-income ratio of 47.8%.

• Risk costs for 9M 2024 were HUF 16.0 bn, with negligible charges in 3Q.

• Accounting profit after tax for 9M 2024 was HUF 158.8 bn, 12.2% lower year-over-year.

Outlook and guidance

• The bank expects inflation to rise above 4% by year-end 2024, with average inflation at 3.7% for the year and 3.8% in 2025.

• Household lending is projected to grow by 9% by year-end, while corporate lending growth is expected to remain below 4%.

• Regulatory and economic policy changes, including the continuation of the extra profit tax in 2025 and increased transaction fees, will impact future results.

• The government’s economic action plan and regulatory adjustments may influence consumption, real estate, and construction sectors in 2025.

• The bank expects continued strong capital and liquidity positions, with ongoing focus on cost efficiency and portfolio quality.