Budapest Bank and MKB will merge under MKB Bank Plc. name in the spring of 2022

The first step of the merger timetable of Hungarian Bankholding has been approved, Budapest Bank and MKB will merge under MKB Bank Plc. in the spring of 2022.

Public information

On 15 December, the highest authorities of MKB Bank, Budapest Bank and Hungarian Takarék Bankholding – which owns Takarék Group – have approved the first step of the merger schedule of Budapest Bank, MKB Bank and Takarék Group.

Accordingly, the two member banks of the banking group, Budapest Bank and MKB Bank will merge on 31 March 2022. As part of the fusion of the two commercial banks, Budapest Bank will merge into MKB Bank. The Takarék Group will join the merger by the end of the second quarter of 2023, while the Hungarian Bankholding Group will continuously unify its operations. The merged bank, which will be established on 31 March, will temporarily continue to operate under the name of MKB Bank Plc. The final brand of the integrated financial institution is planned to be introduced in early 2023.

Based on the five-year strategy approved in March for the merger of the member banks of Hungarian Bankholding, the full operational fusion of the three credit institutions is planned to be concluded in 2023. The goal of the banking group is to introduce client-centric, attractively priced, internationally leading digital solutions, products and services, by building on all the strengths, values and best practices of the three separately strong domestic commercial banks. The integration of the three member banks – primarily due to its complexity and size – is unique not only in Hungary, but also in the financial markets of the region.

A key element of the strategy of Hungarian Bankholding is digital orientation, which means the future introduction of internationally leading fintech solutions. Our goal is to radically change the customer experience related to the financial services – for this purpose we will introduce flexible, fast solutions and products that can be combined with each other.

Hungarian Bankholding group is an exceptionally stable, strong, and dominant player in the domestic financial sector. It is currently the second largest banking group in Hungary in terms of balance sheet total, and also has the largest branch and ATM network. The superbank is a market leader in a number of areas like the lending corporate clients, and to the micro, small and medium-sized enterprise sector as a key aspect of the national economy, and the leasing market. With an overall market share of 25%, the business unit serving the agriculture and food industry sectors is among the leading players on the market; the group also has a strong position in the private banking market: it manages over HUF 1,000 billion in assets for around 6,000 clients.

We hereby inform you that currently you do not have any action to be taken regarding this announcement, you may continue to forward your questions and needs to your usual bank contact and the staff of your bank branch.

Hungarian Bankholding pays special attention to ensure that the steps of the merger process occur smoothly for clients, at the usual high standards of service.

In addition, our goal is to provide you with even better solutions during the transformation, so the merger process is accompanied by significant IT developments. Hungarian Bankholding is currently building a new digital banking platform that will change the era in terms of both technology and customer experience. The first products of the new platform are expected to be launched in the fourth quarter of 2022, which will address the day-to-day banking needs of retail clients. Through the digital developments, the opportunities for clients are also significantly expanding. The transition between individual products and their combination will be much simpler, and instruments will become even more customizable by the full operational merger, which is planned to be concluded in 2023.

Frequently Asked Questions

What happened at the General Meeting of MKB Bank held on 15 December?

On 15 November 2021 the member bank of Hungarian Bankholding, MKB Bank, listed on the Budapest Stock Exchange, published the proposals of the company's General Meeting announced for 15 December 2021, after the professional management of Hungarian Bankholding submitted the proposals regarding the merger of Budapest Bank, MKB Bank and Hungarian Takarék Bankholding (which owns Takarék Group). In the framework of the General Meeting held on 15 December 2021, MKB Bank discussed and approved the following agenda items:

1. Decision on the amendment of the Articles of Association of MKB Bank
2. Decision on advance payment of dividends
3. Decision on the merger of Budapest Bank Ltd. and Hungarian Takarék Bankholding Ltd.

What is the current status of the integration progress?

In the months since the announcement of the five-year strategy of Hungarian Bankholding in March, an intensive planning work has taken place with the involvement of more than 1,000 employees. Our goal was to create a detailed timetable and implementation plan covering all areas of banking, with specific dates and tasks, along which we can successfully achieve our professional goals by the end of 2023, as well as a triple bank merger with unparalleled market opportunities, the merger of Budapest Bank, MKB Bank and Takarék Group. On 15 November 2021, we concluded this phase of the merger work and submitted the plan to the owners.

On 15 December, the general meeting of MKB Bank, listed on the Budapest Stock Exchange, and the highest authorities of HBH, Budapest Bank and Hungarian Takarék Bankholding – which owns Takarék Group – approved the proposals published on 15 November regarding the merger of Budapest Bank, MKB Bank and Hungarian Takarék Bankholding. The owners have thus confirmed the merger process, which is in accordance with the strategy previously announced. This is the first actual step towards the establishment of the superbank with a key role in the Hungarian financial market.

With the now approved decisions, the planning phase of the merger will be finally complete, which is of historical significance not only in the Hungarian banking sector, but unique in the region as well. In parallel, the merger of the three separate banking groups can begin. The merger process is progressing successfully and as planned. Our set purpose, confirmed by the highest authorities, is to create a bank that looks to the future and aims to serve the Hungarian people and businesses in the best ways possible.

The first step of the merger process will be taking place with the permission of the MNB, the related supervisory procedure of which is currently pending.

What are the elements of the merger schedule of Hungarian Bankholding? At what pace and through what steps will the planned merger of the three banks take place?

As a result of the intensive planning work of recent months, a targeted timetable for the triple bank merger has been established, with which the banking group will successfully lay the foundations for a unified operation. The goal was to create a detailed schedule covering all areas of banking operations, along which the merger of the triple bank merger, the Budapest Bank Group, the MKB Bank Group and the Takarék Group will be successfully completed in 2023.

According to the plans of Hungarian Bankholding, Budapest Bank and MKB Bank, the two member banks of the banking group will merge on 31 March 2022, thus creating the basis for the unified operation of the banking group. As part of the fusion of the two commercial banks, Budapest Bank will merge into MKB Bank, and the merged banks will temporarily continue to operate under the name MKB Bank Plc.

The Takarék Group will join the merger by the end of the second quarter of 2023, while the Hungarian Bankholding Group will continuously unify its operations.

On 15 December 2021 the decision was made on the first step of the two stage fusion plan. The first step of the merger process will be taking place with the permission of the MNB, the related supervisory procedure of which is currently pending.

With the implementation of the plans outlined in the fusion timetable, the merger and transformation of the three banks and the banking group can be successfully completed, which is a unique professional task at the international level as well.

In 31 March 2022, Budapest Bank will merge with MKB Bank. When will the Takarék Group join?

The Takarék Group is scheduled to join the joint merger of Budapest Bank and MKB Bank by the end of the second quarter of 2023, by which time the Hungarian Bankholding Group will continuously harmonize its internal operations.

One of the first steps was taken on 15 November, when the Deputy CEOs and Managing Directors of Hungarian Bankholding adopted the professional and employment law management of Budapest Bank, MKB Bank and the Takarék Group. This move has established a unified organizational governance structure, which will help to improve the operational efficiency of member banks and to simplify the management of the companies.

As of 1 December 2021, Hungarian Bankholding took further steps to establish a unified management. Dr. Zsolt Barna, Chairman of the Board of Directors of the bank group, has taken over the position of CEO and will manage Bankholding as the Chairman and CEO of the company from 1 January 2022. Levente Szabó, Deputy Chief Officer of Bankholding for individual services, the current Deputy Chief Executive Officer of MTB Ltd. And Takarékbank Ltd. will also hold the position of Chairman and CEO of MTB Ltd. holding a position in a holding company.

The unified group management complies with the provisions of the strategy for the merger of member banks of Hungarian Bankholding, the main goal of which is to achieve the full operational merger of the three financial institutions by 2023.

Is this a legal, technical or a service merger? When can we talk about a full operational merger?

The merger of Budapest Bank and MKB Bank qualifies as a legal merger, during which the host legal entity of Budapest Bank will be MKB Bank Plc.

What is expected between the completion of the full operational merger on 31 March 2022 and 2023? What are the further steps and plans defined in the merger schedule of Hungarian Bankholding?

In this phase of the merger, the focus will be on preparing for the milestone on 31 March 2022, when the merger of Budapest Bank and MKB Bank will take place.

In connection with the merger schedule steps following 31 March 2022, the banking group shall inform the parties concerned of each stage of the merger in a timely and transparent manner.

Since MKB Bank Plc. is a company listed on the Budapest Stock Exchange, it will publish the information concerning the bank to be disclosed in a timely manner in accordance with the rules of the capital market transparency.

What will and what will not be completely unified after the merger of Budapest Bank, MKB Bank and the Takarék Group? What about e.g. the basic systems, the existing product structure, the parallel areas of the back office, mid office and front office, the different brands?

According to the five-year strategy regarding the merger of member banks of Hungarian Bankholding, which was approved in March, the full operational merger of the three credit institutions will take place in 2023, after which the residents and businesses of Hungary will be served by a single financial institution.

Regarding the IT issues, the basic system is no longer the key element in a bank, but rather the digital channels and the customer experience are the main issues. We are no longer trying to implement these digital platforms and next-generation banking solutions as close to the back end, but as close to the front-end as possible. Not all features and products will be on a singular system, nor will it be perfectly integrated into a monolithic unit, nor is that the goal. Rather, our goal is to offer the best customer experience from the very first day. That doesn’t mean figuring out in advance what clients will need, but being able to respond immediately based on their feedback and deliver what they want.

In terms of product range, the superbank resulting from the merger of the 3 banks will aim to serve the full market spectrum and all segments, with a strong emphasis on a new range of modern products and services for retail, micro, small and medium-sized enterprises and agricultural clients.

During the first step of the merger, Budapest Bank will merge into MKB Bank Plc., and the merged banks will continue to operate under the MKB Bank Plc. name. The final brand name of the single financial institution is scheduled to be introduced in early 2023.

What will happen to Budapest Bank and MKB Bank after 31 March 2022? Will the scope of activities of the financial institution change after the rebranding?

During the merger, the hosting legal entity of Budapest Bank will be MKB Bank Plc. Until the introduction of the large banking brand under development, the two banks will continue to operate under the name MKB Bank Plc.

As the merger of Budapest Bank and MKB Bank qualifies as a legal merger, the scope of activities of the two financial institutions will not change. Prior to the merger on 31 March 2022, existing clients of Budapest Bank and MKB Bank will be able to handle matters related to banking products and services based on current, customary channels and processes.
Following March 31, mutual service for retail and corporate clients will be ensured: in addition to their usual bank branches and administration channels, clients of Budapest Bank and MKB Bank will be able to manage their finances in new locations and in a larger branch network.

For the time being, the existing clients of the Takarék Group are not affected by these steps.

In the case of all three member banks, the previously concluded contracts will remain unchanged until 31 March. The terms and conditions relating to the products and services are set forth in the applicable business rules; we inform our clients about the changes regarding these in due time and through the appropriate channels.

Hungarian Bankholding pays special attention to ensure that the steps of the merger process take place smoothly and at the usual high level of service for clients. The bank group makes every effort to inform clients regarding the steps of the merger process in a timely, proactive manner and to the fullest extent possible.

How will the merger affect the clients of Budapest Bank / MKB Bank / the merged banks? Will they get a new account number or will their loan agreement, deposits and investments change? Will the usual net banking interface change, how will they be able to access it?

For the time being, member bank clients have no further action to take in connection with the announcements.

As the merger of Budapest Bank and MKB Bank qualifies as a legal merger, the scope of activities of the two financial institutions will not change.

Prior to the merger on 31 March 2022, existing clients of Budapest Bank and MKB Bank will be able to handle matters related to banking products and services based on current, customary channels and processes. The account numbers of clients and the usual net banking interfaces do not change. The usual services can still be accessed without restriction.

Following 31 March, mutual service for retail and corporate clients will be ensured: in addition to their usual bank branches and administration channels, clients of Budapest Bank and MKB Bank will be able to manage their finances in new locations and in a larger branch network.

In the case of all three member banks, the previously concluded contracts remain unchanged for the time being. The terms and conditions relating to the products and services are set forth in the applicable business rules; we inform our clients about the changes in them in due time and through channels.

Hungarian Bankholding pays special attention to ensure that the steps of the merger process take place smoothly and at the usual high level of service for clients. The bank group makes every effort to inform clients regarding the steps of the merger process in a timely, proactive manner and to the fullest extent possible.

In addition, our goal is to provide you with better and better solutions during the transformation, so the merger process is accompanied by significant IT developments. Hungarian Bankholding is currently building a new digital banking platform that will change the era in terms of both technology and customer experience. The first products of the new platform are expected to be launched in the fourth quarter of 2022, which will address the day-to-day banking needs of retail clients. Through the digital developments, the opportunities for clients are also significantly expanding. The transition between individual products and their combination will be much simpler, and the instruments will become even more customizable by the full operational merger, which is planned to be concluded in 2023.

Hungarian Bankholding will continue to inform clients about further developments.

How do member bank clients find out about mergers? Where, on what surfaces can they get detailed information?
In connection with the merger of Budapest Bank and MKB Bank and the merger process controlled by Hungarian Bankholding in general, the companies are obliged to provide prior information to clients in accordance with the provisions of the applicable legislation. The banking group shall inform the parties concerned of each stage of the merger in a timely and transparent manner.
Since MKB Bank Plc. is a company listed on the Budapest Stock Exchange, it will publish the information concerning the bank to be disclosed in a timely manner in accordance with the rules of the capital market transparency.
Clients can obtain further detailed information on the merger process of Hungarian Bankholding on the websites of Budapest Bank, MKB Bank and Takarékbank, in our member bank branches, as well as through the prospectuses posted there and through the telephone customer services.

Is it expected that banking services will be temporarily unavailable as a result of the merger?
The banking group will inform clients and the public in a timely manner about bank holidays and possible service outages during the merger process. The banking group makes every effort to ensure that the steps of the merger process do not cause any disruption to clients.

When is the coordination of member bank products and services expected? When are the first joint products planned to be launched?
Budapest Bank, MKB Bank and Takarék Group, which play an important role in the Hungarian banking sector, entered into cooperation in May 2020 with the aim of joining forces to create the second largest banking group in Hungary. Over the past year and a half, in addition to its own banking products, Hungarian Bankholding and its credit institutions have actively participated in the mediation of state-discounted schemes such as the Funding for Growth Scheme Go!, Széchenyi Leasing GO! or in of FGS Green Home Program.
With the unified business management of the three banks, new avenues opened up; where customer service is stronger or the business process is of a higher standard, we can, in many cases, transfer it to the other two banks. One such example is the provision of the MKB SZÉP (Széchenyi Recreation) Card, which was joined by Budapest Bank and Takarékbank in November 2021. Takarék Leasing provided car leasing only to a very minimal extent, but thanks to the group operation, the clients of Takarékbank has access to the group's retail car leasing opportunities since November 2021. Our plan is to adapt more and more of these product options from one bank to all three.
The aim of the banking group is to introduce client-centric, low-priced, internationally leading digital solutions and products and services, building on all the strengths, values and best practices of the three strong domestic commercial banks. To this end, we strive to provide you with better products and services during the transformation.
The harmonization of member bank products and services will be a gradual process lasting several months and will primarily affect new clients. Existing clients will continue to be able to use and access their regular products and services.

Why is it necessary to merge banks? Why will it be good for clients to enjoy the benefits of the merger?
By adopting the relevant proposals on 15 December 2021, the companies confirmed the objectives of the strategy for merging member banks of Hungarian Bankholding, according to which the full operational merger of the three financial institutions will take place in 2023. As a result of the merger, the second largest commercial bank of Hungary will be established, after which Hungarian residents and businesses will be served by a single financial institution. The aim of the two-stage merger is to move from the current group-level operation to a full operational merger in such a way that the banking group takes into account the needs of its member bank clients and their smoothest possible service.
The goal of the banking group is to introduce client-centric, low-priced, internationally leading digital solutions and products and services, building on all the strengths, values and best practices of the three strong domestic commercial banks. To this end, we strive to provide you with better products and services during the transformation.
The clients of the banking group will be able to manage their daily finances in several locations and in a larger branch network than before.

Will Budapest Bank's clients be able to withdraw cash from MKB Bank ATMs after March 31 on the same terms as from the ATMs of Budapest Bank? And vice versa?
Yes, the withdrawal will be available to both member bank clients on the same terms.

Will the transfer between the two banks be considered intra-bank after 31 March?
Yes, transfers between MKB and BB will be considered as intra-bank transfers.

Do customers have to re-enter into credit or bank account agreements with Budapest Bank after 31 March?

All previously concluded credit and bank account agreements continue to be valid, thus there is no need for clients to renegotiate.

What can clients not wanting to be a client of MKB Bank do?

Clients have the option to terminate currently valid contracts (e.g. bank account contracts) and to replace (credit agreements) them. We recommend that our clients get acquainted with the products and services provided by MKB Bank before making a decision, and review them with their personal advisor.

If any of our clients decide that they do not wish to use the services of the merging bank, they may notify our colleagues through the branch, telephone or client contacts, who will inform them of what to do, taking into account the currently utilized products of the clients.