‘In the long term, a country’s economic potential is determined by entrepreneurial attitude and innovation, with the entrepreneurial attitude relying on expertise but also encompassing aptitude. If a country, a nation, possesses these qualities, then the long-term prospects are positive,’ said the Minister of Finance Mihály Varga at a reception held in Budapest on Monday, on the occasion of the launch of MBH Investment Bank.
Mihály Varga pointed out that the government and its economic policies also play a role in innovation. ‘Because if we take an inspiring approach to innovative initiatives and encourage them from an economic policy perspective, the fusion of the market and the state can occur much more easily,’ the minister expressed. He said that the Hungarian banking system excels in this regard by fulfilling its role, connecting market entrepreneurial and innovation processes with state economic policy, thereby reinforcing each other’s impact on economic growth.
He emphasized that the Hungarian banking system is stable, and credit rating agencies can confirm this. Various indicators and international comparisons support this view, such as the persistently low ratio of non-performing loan portfolios at below 4 per cent, an 18 per cent capital adequacy ratio for the banking sector, twice the regulatory minimum. The 139 per cent net stable funding ratio is also well above the legally required 100 per cent level, he noted.
Varga highlighted that it is a welcome development that
the combined market share of MBH and OTP, Hungary’s two largest banks, now far exceeds the share of foreign banks operating in the country.
He expressed his hope that these two major players in the Hungarian banking market will also move towards internal cooperation. Regarding the event, he noted that another significant milestone has been reached in the history of MBH with the establishment of MBH Investment Bank, which sends an important message to the domestic banking system and the entire Hungarian economy.
‘This bank was established in a ‘strange time,’ said Varga, and looking at the past 3 to 4 years, it is evident that the Hungarian banking system has faced new and unique challenges that were not seen before. These include the COVID-19 pandemic, followed by high inflation, surging energy prices, and explosive changes in food prices. These challenges are compounded by the ongoing war in neighbouring regions and the consequences of the current situation in the Middle East. With the formation of MBH Investment Bank, an internal, local response is given to external challenges, according to the minister, who also indicated that this bank establishment is an important element of ‘standing on our own feet.’ Varga expressed his confidence that MBH Investment Bank will be a market player that further strengthens and enhances competitiveness.
MBH Investment Bank President Zsolt Barna explained that Hungary’s new universal mega-bank, MBH, was established on 1 May 2023, with its balance sheet total of more than 11 trillion forints, over 2 million clients, and a branch network covering the entire country. The bank was created through the merger of MKB Bank, Budapest Bank and the Takarék Group.
At the end of the event, Mihály Varga, Zsolt Barna, MBH Investment Bank CEO Szabolcs Brezina and MBH Deputy CEO Levente Szabó ceremoniously launched MBH Investment Bank.