MBH Bank 1Q26 Review
Adjusted net income increased by 11.8% QoQ to 54Bn in 1Q26, reflecting a gradual business expansion, however due to the lump sum accounting of the extra profit taxes, the accounting profit turned negative 19Bn.
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Adjusted return on equity (ROE) was 17.7% in 1Q26 (4Q25: 17.5%, 1Q25: 20.6%), relatively flat QoQ and decreasing YoY due to the lower net income and higher shareholders' equity.
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During the December 2025 share issuance, 22 577 074 shares were sold, of which 20 320 846 shares were transferred to retail investors (2 970 forint / share) and 2 256 228 shares to institutional investors (3 300 forint / share). The net cash proceeds from the share sale amounted to 66Bn.
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The General Meeting (2026.04.27) resolved that no dividends to be paid following the 40Bn package proposed (124 / share) in regards to the 2025 results, and that the distributable profit is to be transferred to retained earnings.
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Our 12-month target price is 3 854 forints with Buy recommendation, considering the closing price of 2 510 on 2026.05.26. The current P/B ratio of 0.67x (based on 3 781 book value / share) is well below the expected 1.0x in our model. Growth continues to be supported by market expansion in domestic mortgage and personal loans, but integration costs related to the 3 banks merger still elevated.
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Mid-term (2030) management guidance points toward: annual business volume growth of 10%+ CAGR for 2025-2030; ROE >15%; Cost / Income ratio <55%; Risk Cost Ratio <0.6%; and Dividend Payout Ratio ~50%.