MBH Bank : Flash Report on 1Q 2024 results and investor presentation

MBH Bank Nyrt.

Flash Report on 1Q 2024 results

Budapest, 30 May 2024

________________ REPORT ON THE 1Q 2024 RESULTS OF MBH BANK

Table of Contents

1 MBH Group 1Q 2024 Results - overview		3
2 Management Report on the 1Q 2024 Results of MBH Group	9
2.1	P&L development		9
2.1.1	Adjusted profit after taxation		10
2.1.2	Total comprehensive income		10
2.1.3	Net interest income		10
2.1.4	Net fee and commission revenues		11
2.1.5	Profit/loss on financial transactions (FX and FV result)	11
2.1.6	Other results		11
2.1.7	Operating expenses		11
2.1.8	Risk costs		11
2.1.9	Corporate income tax		12
2.2	Balance sheet		13
2.2.1	Loans		13
2.2.2	Securities		14
2.2.3	Financial assets		14
2.2.4	Other assets		14
2.2.5	Deposits and C/A		14
2.2.6	Interbank liabilities		14
2.2.7	Issued debt securities		14
2.2.8	Capital		15
2.2.9	Off-balance sheet exposures to customers		15
2.3	Capital adequacy		15
2.4	Presentation of business segment results		16
2.4.1	Corporate and institutional customers		16
2.4.2	Retail customers		19
2.4.3	Leasing		23
2.4.4	Investment services and Treasury activities		24
2.5	ESG strategy of MBH Group		26
2.6	Awards and recognitions		28
3 Financial figures		31
3.1	Correction factors 1Q 2024		31
3.2	Consolidated, non-audited financial statements of the MBH Group according to IFRS	33
Company name:	MBH Bank Nyrt.	Phone:	[phone]
Address:		1056 Budapest, Váci u. 38.	E-mail address:	[e-mail]
Sector:		Other monetary activity
Reporting period:	01.01.2024-31.03.2024	Investors' contact person:	Gergely Gózon
		1

________________ REPORT ON THE 1Q 2024 RESULTS OF MBH BANK

3.2.1	Income statement	33
3.2.2	Balance sheet	34
3.2.3	Shareholders' assets	35
3.3	Individual, non-audited financial statements of MBH Bank Nyrt. according to IFRS	36
3.3.1	Income statement	36
3.3.2	Balance sheet	37
3.3.3	Shareholders' assets	38
3.4	Other information	39
4 Annexes	.........................................................................................................................................	41
4.1	Financial indicators	41
4.1.1	Adjusted KPIs on profit&loss	41
4.1.2	KPIs on profit&loss as in financial statement (unadjusted)	42
4.1.3	Volume KPIs	43
4.2	Summary of the methodology underlying the 1Q 2024 report	44
4.3	Abbreviations	45

Company name:	MBH Bank Nyrt.	Phone:	[phone]
Address:	1056 Budapest, Váci u. 38.	E-mail address:	[e-mail]
Sector:	Other monetary activity
Reporting period:	01.01.2024-31.03.2024	Investors' contact person:	Gergely Gózon

2

________________ REPORT ON THE 1Q 2024 RESULTS OF MBH BANK

1 MBH GROUP 1Q 2024 RESULTS - OVERVIEW

Main components of P&L and balance sheet, key performance indicators

Main components of P&L (in HUF million)			Period					YTD
1Q 2023	4Q 2023	1Q 2024	P/P	Y/Y		1Q 2023	1Q 2024	Y/Y
TOCI accounting (Total Comprensive Income)	24,139	30,638	32,790	7.0%	35.8%		24,139	32,790	35.8%
Other comprehensive income	1,799	28,373	-16,356	-157.6%	-		1,799	-16,356	-
Consolidated Profit after tax (accounting)	22,340	2,264	49,146	-	120.0%		22,340	49,146	120.0%
Adjustments total on PAT	68,463	5,505	30,190	-	-55.9%		68,463	30,190	-55.9%
Adjusted TOCI	92,602	36,142	62,982	74.3%	-32.0%		92,602	62,982	-32.0%
Adjusted Other comprehensive income (OCI)	1,799	28,373	-16,356	-157.6%	-		1,799	-16,356	-
Adjusted Consolidated Profit after tax	90,803	7,769	79,338	-	-12.6%		90,803	79,338	-12.6%
Profit before tax (adjusted)	107,859	15,092	92,819	-	-13.9%		107,859	92,819	-13.9%
Gross Operating Income (adjusted)	167,640	165,002	163,145	-1.1%	-2.7%		167,640	163,145	-2.7%
Net Interest Income (adjusted)	150,044	140,932	138,703	-1.6%	-7.6%		150,044	138,703	-7.6%
Net Fee Income (adjusted)	21,010	26,446	23,068	-12.8%	9.8%		21,010	23,068	9.8%
Net Other Income (adjusted)	-3,413	-2,376	1,375	-157.9%	-140.3%		-3,413	1,375	-140.3%
Operating Expenses (adjusted)	-60,418	-87,746	-61,593	-29.8%	1.9%		-60,418	-61,593	1.9%
Provision for losses on loans (adjusted)	636	-62,165	-8,733	-86.0%	-		636	-8,733	-
Main components of Balance sheet (in HUF million)		Volumes at the end of period			YTD average
1Q 2023	4Q 2023	1Q 2024	P/P	Y/Y		1Q 2023	1Q 2024	Y/Y
Total Assets	10,446,808	11,107,048	11,784,740	6.1%	12.8%		10,455,082	11,445,894	9.5%
Customer Loans (net)	4,677,573	4,901,416	5,357,287	9.3%	14.5%		4,589,167	5,129,352	11.8%
Customer Loans (gross)	4,927,444	5,170,578	5,643,120	9.1%	14.5%		4,764,385	5,406,849	13.5%
Provision for Customer loans	-249,871	-269,161	-285,833	6.2%	14.4%		-175,217	-277,497	58.4%
Deposits & C/A	6,421,763	6,957,100	7,588,548	9.1%	18.2%		6,307,450	7,272,824	15.3%
Subordinated debt	112,704	108,341	108,436	0.1%	-3.8%		90,850	108,388	19.3%
Shareholders' Equity	831,707	1,023,371	1,074,246	5.0%	29.2%		731,584	1,048,808	43.4%
KPIs			Period					YTD
based on adjusted and unadjusted PAT (%)	1Q 2023	4Q 2023	1Q 2024	P-P	Y-Y		1Q 2023	1Q 2024	Y-Y
ROAE (Return on Average Equity - accounting)	11.0%	0.9%	18.8%	18.0%-pt	7.8%-pt		11.0%	18.8%	7.8%-pt
ROAE (Return on Average Equity - adjusted)	44.9%	3.1%	30.4%	27.4%-pt	-14.5%-pt		44.9%	30.4%	-14.5%-pt
ROMC (Return on Minimum Capital - adjusted)	72.5%	5.2%	47.5%	42.3%-pt	-25.0%-pt		72.5%	47.5%	-25.0%-pt
ROAA (Return on Average Assets - adjusted)	3.5%	0.3%	2.8%	2.5%-pt	-0.7%-pt		3.5%	2.8%	-0.7%-pt
TRM (Total Revenue Margin - adjusted)	6.5%	6.0%	5.7%	-0.3%-pt	-0.7%-pt		6.5%	5.7%	-0.7%-pt
CIM (Core income margin - adjusted)	6.6%	6.1%	5.7%	-0.4%-pt	-0.9%-pt		6.6%	5.7%	-0.9%-pt
NIM (Net Interest Margin - adjusted)	5.8%	5.1%	4.9%	-0.2%-pt	-0.9%-pt		5.8%	4.9%	-0.9%-pt
NFM (Net Fee Margin - adjusted)	0.8%	1.0%	0.8%	-0.2%-pt	0.0%-pt		0.8%	0.8%	0.0%-pt
C/TA (Cost to Total Assets - adjusted)	2.3%	3.2%	2.2%	-1.0%-pt	-0.2%-pt		2.3%	2.2%	-0.2%-pt
CIR (Cost Income Ratio - adjusted)	36.0%	53.2%	37.8%	-15.4%-pt	1.7%-pt		36.0%	37.8%	1.7%-pt
Risk% (Risk cost rate - adjusted)	0.0%	4.2%	0.7%	-3.5%-pt	0.7%-pt		0.0%	0.7%	0.7%-pt
GOI/RWA (RWA efficiency - adjusted)	16.5%	14.6%	13.3%	-1.4%-pt	-3.3%-pt		16.5%	13.3%	-3.3%-pt
EPS (Earning Per Share - adjusted)	0.3	0.3	0.3	0.0	0.0		0.3	0.3	0.0
Volume KPIs (%)			Period					YTD
1Q 2023	4Q 2023	1Q 2024	P-P	Y-Y		1Q 2023	1Q 2024	Y-Y
Provision/Total Assets	2.4%	2.4%	2.4%	0.0%-pt	0.0%-pt		2.4%	2.4%	0.0%-pt
CAR (Capital Adequacy Ratio)	19.7%	22.2%	18.9%	-3.3%-pt	-0.8%-pt		19.7%	18.9%	-0.8%-pt
RWA/Total Assets	39.3%	42.6%	43.9%	1.3%-pt	4.6%-pt		39.3%	43.9%	4.6%-pt
LTD (Loan to Deposit)	76.7%	74.3%	74.4%	0.0%-pt	-2.4%-pt		76.7%	74.4%	-2.4%-pt
DPD90+ rate	2.0%	1.9%	1.8%	0.0%-pt	-0.2%-pt		2.0%	1.8%	-0.2%-pt

The report is based on "Adjusted" figures presenting the indicators of the underlying business performance, the list of correction factors is included in Chapter 3.1. In order to comprehensive present the financial performance of the MBH Group, all data in the report and in the investor presentation are - unless otherwise indicated - alternative performance measurement indicators (Alternative Financial Indicator - APM).

For definition and calculation methodology of alternative performance measurement indicators used to depict the underlying business performance please refer to the Report for 1Q 2024 chapter 4.1 - Financial indicators.

Fundamenta transaction closed on 27th March 2024. 1Q 2024 consolidated balance sheet closing figures include Fundamenta volumes, while profit & loss and average volumes for the period are not impacted.

KPIs are calculated retrospectively using the actual number of days.

Company name:	MBH Bank Nyrt.	Phone:	[phone]
Address:	1056 Budapest, Váci u. 38.	E-mail address:	[e-mail]
Sector:	Other monetary activity
Reporting period:	01.01.2024-31.03.2024	Investors' contact person:	Gergely Gózon

3

________________ REPORT ON THE 1Q 2024 RESULTS OF MBH BANK

MBH Bank Group achieved an excellent result for the first quarter, with robust profitability, strong cost efficiency, stable capital adequacy and liquidity positions, coupled with sound portfolio quality.

In 1Q 2024 the following main factors were instrumental:

• The Bank has signed a share purchase agreement with Bausparkasse Schwäbisch Hall AG (Germany) and with Bausparkasse Wüstenrot AG (Austria) as well as with Wüstenrot & Württembergische AG (Germany) in order to purchase a total of 76.35% stake of Fundamenta-
  Lakáskassza Lakás-takarékpénztár Zrt. The closing of the transaction was on 27 March 2024.
• Inflation moderated to 3.6% by the end of 1Q 2024.
• Benchmark one-day deposit tender interest rate was cut from 10.75% to 8.25% in the 1Q.
• Home Renovation Program: The government encourages the energy modernization of homes with preferential loan schemes and non-refundable subsidies. The total amount of the program is HUF 108 billion. The program will be effective on June 3, 2024.
  The consortium of MBH Bank, Gránit Bank and OTP Bank won the tender for the development of the MFB Pont Plusz residential network. Home renovation program will be available here, in addition to the programs that will also be launched later with EU funds.
• Interest margin reduction: Commercial banks voluntarily undertake, with regards to new corporate HUF loan agreements (including current account, working capital and investment loans for which the disbursement will start this year) for the first 6 months of the loan term, a reduction of the interest margin above BUBOR to 0%. The promotional period lasted from February 1 to May 1, 2024.
• The government has changed the crediting mechanism of one of the banks' special taxes. As year 2024 is dropped from calculation, banks will receive back the epidemic special tax in 20% instalments in 2025 and 2026, in addition to 2021, 2022, and 2023.

The main performance indicators of 1Q 2024:

• HUF 11,785 bn total assets (+12.8% y/y; +6.1% p/p) partially supported by the boosting deposit portfolio (+9.1% p/p) and gross loan (+9.1% p/p).
• HUF 79.3 bn adjusted profit after taxes (-12.6% y/y) in 1Q 2024 and exceptionally high 30.4% adjusted ROE (24.2% based on adjusted total comprehensive income), mainly driven by high net interest income in 1Q 2024.
• 1.9% y/y cost increase, C/I of 37.8% in 1Q 2024.
• HUF 8.7 bn risk cost (provisions and other impairments) was charged in 1Q 2024.
• Sound capital position: 18.9% capital adequacy and 17.3% CET1 ratio at the end of 1Q, significantly above the regulatory requirement.

Main business events/developments in 1Q 2024:

• Retail segment:

Company name:	MBH Bank Nyrt.	Phone:	[phone]
Address:	1056 Budapest, Váci u. 38.	E-mail address:	[e-mail]
Sector:	Other monetary activity
Reporting period:	01.01.2024-31.03.2024	Investors' contact person:	Gergely Gózon

4

________________ REPORT ON THE 1Q 2024 RESULTS OF MBH BANK

Significant annual (+30.4% y/y) and quarterly (+27.3 p/p) growth in the retail loan portfolio and substantial boosting in deposit volumes (+23.7% y/y, 19.6% p/p) partially thanks to Fundamenta acquisition.

Product modernisation processes have been launched for retail account products, which will contribute to enhancing the customer experience.

Attractive growth in the personal loan portfolio, supported by active online campaigns.

• Corporate segment:
  3.4% y/y increase in loan portfolio, 16.8% y/y increase in deposit volumes.
  In the SZKP MAX+ programme which has been launched in January 2023 and is still running, MBH Bank has a 26% market share1 of the number of loan applications in the Corporate business line, including micro and small companies.
• Leasing segment:
  Leasing volume of MBH Group amounted to HUF 563.9 bn at the end of 1Q 2024 which means an increase of 9.5% compared to 1Q 2023.
  The leasing group has a national network and a market share of more than 25%2 based on the newly placed, aggregated leasing stock, making it the number one player in the leasing market.

MBH Group's unadjusted total comprehensive income was HUF 32.8 bn (HUF +8.7 bn y/y) in 1Q 2024, as a result of y/y increasing profit after tax (1Q 2024: HUF 49.1 bn, HUF +26.8 bn y/y) and decreasing other comprehensive income (1Q 2024: HUF -16.4 bn, HUF -18.2 bn y/y).

In 1Q 2024 the adjusted total comprehensive income (TOCI) was HUF 63.0 bn (HUF -29.6 bn y/y), including HUF +30.2 bn profit adjustment. The adjusted profit after tax was HUF 79.3 bn (HUF -11.5 bn y/y), adjusted other comprehensive income amounted to HUF -16.4 bn (HUF -18.2 bn y/y) in 1Q 2024.

Total assets amounted to HUF 11,784.7 bn (+6.1% p/p; +12.8% y/y) by the end of 1Q 2024. The Group's customer deposits portfolio was HUF 7,588.5 bn by the end of 1Q (HUF +631.4 bn p/p; HUF +1,166.8 bn y/y) thanks to the Fundamenta acquisition. Gross customer loans portfolio increased to HUF 5,643.1 bn (+9.1% p/p), the annual growth amounted HUF +715.7 bn, in which the Fundamenta transaction played a role. Securities portfolio together with trading portfolio increased by 10.6% y/y (+1.3% p/p). In 1Q 2024 the loans to deposits ratio reached 74.4% (+0.04%-pt p/p) by the end of the period. The shareholders' equity increased from HUF 1,023.4 bn at the end of 4Q 2023 to HUF 1,074.2 bn. Capital adequacy ratio was steadily high, at 18.9% (-0.8%pt y/y), while MBH Group's adjusted return on shareholders' equity (ROE) was 30.4% (the unadjusted ROE was 18.8%) in 1Q 2024. ROE on adjusted total comprehensive income reached 24.2% compared to 45.8% in 1Q 2023.

Post-closing events:

Post-closing events cover the period until 15 May 2024.

• MBH Bank Plc. held its Annual General Meeting on 29 April 2024. The General Meeting approved the Board of Directors' report on the 2023 business activities and, accepts - being aware of the reports of the Supervisory Board and the Auditor - its proposal for the separate (non-consolidated)

1. KAVOSZ
2. Hungarian Leasing Association

Company name:	MBH Bank Nyrt.	Phone:	[phone]
Address:	1056 Budapest, Váci u. 38.	E-mail address:	[e-mail]
Sector:	Other monetary activity
Reporting period:	01.01.2024-31.03.2024	Investors' contact person:	Gergely Gózon

5

________________ REPORT ON THE 1Q 2024 RESULTS OF MBH BANK

and consolidated financial statements for 2023 prepared in accordance with the International Financial Reporting Standards as well as the proposal concerning the distribution of profit and the payment of dividends. The General Meeting of MBH Bank Plc. decided to pay dividend of HUF 24,5 bn to the shareholders of the Company for the year 2023.

• The General Meeting elects Ms Andrea Mager from 01 September 2024 or, if the authorising decision issued by the NBH concerning the member of the Board of Directors has not been issued by 01 September 2024, from the date on which the authorising decision issued by the NBH concerning the member of the Board of Directors is issued and the member of the Board of Directors accepts her election in writing, for a fixed term of office until 31 August 2026.
• The General Meeting elects Zsigmond Járai as a member of the Audit Committee for a definite term from 29 April 2024 to 31 December 2025.
• On 27 March 2024, the transaction for the majority stake in Fundamenta was officially closed, which implied the introduction of a new corporate governance model and the necessary changes in the management bodies. As of 1 May 2024, László Morafcsik will be the new CEO of Fundamenta, following the resignation of Bernadett Tátrai, CEO of Fundamenta, from her position as Chairman of the Board of Directors, as well as from her membership on the Board of Directors and as CEO, effective 30 April 2024. She will continue to provide her experience and advice to the Board of Directors in the coming period.
• The upper limit of the obligations that can be undertaken to provide subsidies within the framework of the Széchenyi Card Program has increased by HUF 300 billion to HUF 1,700 billion. The government also decided to expand the Agrár Széchenyi Card: it will provide an additional HUF 45 billion until 2026, which will allow it to support the sector with an additional HUF 420 billion in loans.
• The international credit rating agency Standard & Poor's affirmed its investment-grade rating of
  'BBB-/A-3' on Hungarian government debt obligations in foreign and local currency in the short and long term. The outlook was kept at stable.
• Base rate cut: MNB has cut the base rate by 50 basis points to 7.75% in April 2024 and by 50 basis points to 7.25%, effective from 22 May 2024.
• From 1 April 2024, the deposit interest cap, which applied to corporate, financial institution and retail bank deposits above HUF 20 million, was abolished, and the interest rate freeze on SME loans was also lifted on 1 April, leaving only retail mortgage loans with mandatory interest rate restrictions (currently until 30 June).

Macroeconomic outlook and financial indicators of the Hungarian banking sector:

The US Federal Reserve has kept the benchmark US interest rate at 5.25-5.50% since September 2023. Inflation started to rise again in the first quarter, with the US consumer price index rising to 3.2% in February and 3.5% (YoY) in March. However, core inflation, which excludes food and energy prices, has been on a downward path since April 2023, falling to 3.8% by the end of the first quarter this year. Furthermore, core PCE inflation, which is more closely monitored by the Fed, has been on a disinflationary trend since January 2023 and was already within the Fed's target range by December 2023.

Even after the Fed's March rate decision, the Fed indicated that inflation has not been defeated, but they are confident that disinflation will continue, and the Fed chairman hinted that a strong labour

Company name:	MBH Bank Nyrt.	Phone:	[phone]
Address:	1056 Budapest, Váci u. 38.	E-mail address:	[e-mail]
Sector:	Other monetary activity
Reporting period:	01.01.2024-31.03.2024	Investors' contact person:	Gergely Gózon

6

________________ REPORT ON THE 1Q 2024 RESULTS OF MBH BANK

market will not be a barrier to rate cuts. They indicated that they would continue to base their decisions on incoming macro data. Fed policymakers forecast in March a 75-basis point rate cut for this year, while the median of expected rate cuts for the coming years was pushed up amid more favourable growth expectations.

Since October 2023, the ECB has kept the benchmark interest rate for the euro area at 4.0-4.5%. At its April rate-setting meeting, the ECB paved the way for rate cuts, but indicated that it would not commit to a specific interest rate path in advance, and that future decisions would depend on macroeconomic developments.

Inflation in the euro area continued to ease in the first months of 2024, with the latest data for March showing annual inflation in the euro area falling to 2.4%. Core inflation, which is more important for the ECB, came down to 2.9% in March, the lowest level in more than two years. The disinflation trend for this indicator has been unbroken since July 2023. The European Central Bank is linking the possible timing of the first rate cut mainly to developments in wage data. Wage growth is gradually moderating, but the ECB President confirmed that more data on internal inflation (mainly wages and profits) are needed to assess developments. The result of these data will only be clearly visible in June.

The Hungarian National Bank has continued to cut interest rates this year, with the base rate falling from 10.75% at the end of 2023 to 8.25% in March (7.75% by the end of April). Between the 75 basis point rate cuts in January and March, the Monetary Council decided on a 100-basis point rate cut at its February meeting. In addition to lower-than-expected inflation in January, favourable developments in the country's risk perception was an additional factor that allowed for a temporary acceleration of the rate cut in February.

In the first months of this year, disinflation continued, but slowed down substantially, with monthly price changes reflecting a more subdued early-year repricing dynamic than seen in the past two years. Consumer prices rose by 3.6% in March, the lowest inflation rate since February 2021. The disinflationary process was helped by the base effect, and the significant increase in food prices, which represent a large weight, also continued to moderate. However, disinflation was slowed by the persistence of services inflation, which remained around 10%. By the end of this year, the rate of inflation is expected to rise to around 5%, with an average inflation rate of 4.1% expected for the year as a whole.

FX market: During the first quarter, the domestic currency showed some volatility, with the forint exchange rate against the euro fluctuating between a local minimum of 377 and a local maximum of

398. The weakening was influenced by significant risks related to the unwinding of EU funds, which may arrive in Hungary later than expected, to which markets reacted by selling the forint. At the beginning of the year, the market was expecting a 150 bp Fed rate cut, but since then investors have reduced their expectation to a cut of no more than 50 bp by the year-end. Higher interest rate expectations are associated with dollar appreciation, rising bond yields and thus a deterioration in risk appetite, which also weakens the forint. In our view, the market has become overly pessimistic, with the US economy already starting to show signs of cooling, and we maintain that the Fed could implement three 25bp rate cuts this year, which would also be positive for the forint. The impact of domestic rate cuts and the continued moderation in the attractive interest rate spread will be offset by a marked improvement in the external balance and current account balance - the balance could exceed a 1% surplus of GDP this year - implying a net forint buying position.

Public finances: The central budget recorded a deficit of HUF 2,321.4 billion in the first three months of 2024, more than 92% of the initial target. The first three-month deficit was HUF 232 billion higher than in the same period of 2023. The budget balance is worsened by the fact that interest payments

Company name:	MBH Bank Nyrt.	Phone:	[phone]
Address:	1056 Budapest, Váci u. 38.	E-mail address:	[e-mail]
Sector:	Other monetary activity
Reporting period:	01.01.2024-31.03.2024	Investors' contact person:	Gergely Gózon

7

________________ REPORT ON THE 1Q 2024 RESULTS OF MBH BANK

amounted to HUF 1,241 billion by the end of March, which is HUF 604 billion higher than in the same period last year. Based on preliminary data released by the Hungarian Central Statistical Office, the budget deficit in 2023 was 6.7% according to the EU methodology. The government revised its original 2024 deficit target of 2.9% of GDP to 4.5% in March. Achievement of the increased deficit target would be highly doubtful in the absence of measures. However, the government recently made a decision to postpone investments of HUF 675 billion, which exceeds 0.8% of GDP expected for this year. Given our current economic growth forecast for 2024, we consider the government's new fiscal deficit target for 2024 to be achievable. The government debt ratio has resumed its downward path from 2022 onwards, reflecting the moderating financing needs and a substantial pick-up in nominal growth, and could fall from 76.8% of GDP in 2021 to 74.1% in 2022, 73.5% by end-2023 and 72.7% in 2024.

Labour market: In the three months between January and March 2024, the number of employed persons (aged 15-74) was 4 million 725 thousand. The employment rate in the 15-64 age group (a priority in EU methodology) increased to 74.7% between January and March. A year ago, the indicator stood at 74.3%, and 74.6% in the previous three months. The average number of unemployed was 229,000 in the three months under review, an annual increase of 30,000. The unemployment rate, calculated according to international methodology, stood at 4.6% between January and March, compared with 4.1% a year earlier.

Despite the easing of labour market tightness seen over the past year, the state of full employment is not too far away. As economic growth could become stronger in the second half of the year, this could put pressure on inflation, which could rise year-on-year anyway due to the base effect and very high real wage growth. It would therefore be particularly important for companies to focus more on efficiency and productivity gains and to carry out investments, especially capital-intensive investments, which have not been carried out so far due to the lack of sufficient labour, or would otherwise not have been profitable.

GDP: Economic output grew by 0.8% in the first quarter of this year compared with the previous quarter, with which the domestic economy remained in an expansion phase for the fourth quarter after a multi-quarter downward trend seen previously. The Hungarian economy grew by 1.1% year- on-year, according to raw data, while seasonally and working day adjusted growth was 1.7%. The adjusted figure was higher due to the fact that there were two fewer working days in the first quarter of this year than in the same period in 2023.

Economic performance was boosted most by real estate and information and communication, while the decline in the value added of industry held back the economy. The poor performance of the sector is mainly due to weak demand in export markets. Industry, which accounts for around a quarter of the economy, should start to recover in the second half of this year, thanks to buoyant domestic and external demand, and the sector's annualised growth could exceed 3% this year. Moreover, it could benefit significantly this year and in the coming years from the high levels of working capital investment. In the first quarter of this year, consumption could be supported again by real wages at around 10%. This year, consumption should start to pick up, which fell short last year due to sharply higher consumer prices and the resulting strong fall in real wages. However, the recovery in consumption will be gradual, as households first try to recoup their savings instead of spending their increased salaries.

Company name:	MBH Bank Nyrt.	Phone:	[phone]
Address:	1056 Budapest, Váci u. 38.	E-mail address:	[e-mail]
Sector:	Other monetary activity
Reporting period:	01.01.2024-31.03.2024	Investors' contact person:	Gergely Gózon

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________________ REPORT ON THE 1Q 2024 RESULTS OF MBH BANK

2 MANAGEMENT REPORT ON THE 1Q 2024 RESULTS OF MBH GROUP

2.1 P&L development

MBH Group

	Consolidated, IFRS P&L (in HUF million)			Period					YTD
	1Q 2023	4Q 2023	1Q 2024	P/P	Y/Y		1Q 2023	1Q 2024	Y/Y
	TOCI accounting (Total Comprensive Income)	24,139	30,638	32,790	7.0%	35.8%		24,139	32,790	35.8%
	Other comprehensive income	1,799	28,373	-16,356	-157.6%	-		1,799	-16,356	-
	Profit after tax (accounting)	22,340	2,264	49,146	-	120.0%		22,340	49,146	120.0%
	Adjustments total on PAT	68,463	5,505	30,190	-	-55.9%		68,463	30,190	-55.9%
	Banking tax	15,480	34	17,464	-	12.8%		15,480	17,464	12.8%
	Extra profit tax	57,498	4,642	12,725	174.1%	-77.9%		57,498	12,725	-77.9%
	Extra OBA fee expenses	-4,756	0	0	-	-100.0%		-4,756	0	-100.0%
	Integration costs	241	829	0	-100.0%	-100.0%		241	0	-100.0%
	Badwill	0	0	0	-	-		0	0	-
	Adjusted TOCI	92,602	36,142	62,982	74.3%	-32.0%		92,602	62,982	-32.0%
	Adjusted Other comprehensive income (OCI)	1,799	28,373	-16,356	-157.6%	-		1,799	-16,356	-
	Adjusted Profit after tax	90,803	7,769	79,338	-	-12.6%		90,803	79,338	-12.6%
	Adjusted Profit before tax	107,859	15,092	92,819	-	-13.9%		107,859	92,819	-13.9%
	Gross Operating Income (adjusted)	167,640	165,002	163,145	-1.1%	-2.7%		167,640	163,145	-2.7%
	Net Interest Income (adjusted)	150,044	140,932	138,703	-1.6%	-7.6%		150,044	138,703	-7.6%
	Interest Income (adjusted)	306,417	307,020	284,841	-7.2%	-7.0%		306,417	284,841	-7.0%
	Interest Expense (adjusted)	-156,374	-166,088	-146,139	-12.0%	-6.5%		-156,374	-146,139	-6.5%
	Net Fee Income (adjusted)	21,010	26,446	23,068	-12.8%	9.8%		21,010	23,068	9.8%
	Net Other Income (adjusted)	-3,413	-2,376	1,375	-157.9%	-140.3%		-3,413	1,375	-140.3%
	FX and FV result	-6,239	4,198	3,098	-26.2%	-149.7%		-6,239	3,098	-149.7%
	Other Income (adjusted)	2,826	-6,574	-1,723	-73.8%	-161.0%		2,826	-1,723	-161.0%
	Operating Expenses (adjusted)	-60,418	-87,746	-61,593	-29.8%	1.9%		-60,418	-61,593	1.9%
	Personnel Expenses (adjusted)	-30,422	-44,242	-30,547	-31.0%	0.4%		-30,422	-30,547	0.4%
	Operating Expenses (adjusted)	-23,110	-30,721	-22,647	-26.3%	-2.0%		-23,110	-22,647	-2.0%
	Amortisation and depreciation (adjusted)	-6,886	-12,782	-8,399	-34.3%	22.0%		-6,886	-8,399	22.0%
	Provisions (adjusted)	636	-62,165	-8,733	-86.0%	-		636	-8,733	-
	Banking tax	0	0	0	-	-		0	0	-
	Corporate income tax (adjusted)	-17,056	-7,323	-13,481	84.1%	-21.0%		-17,056	-13,481	-21.0%
	KPIs			Period					YTD
	based on adjusted PAT (%)	1Q 2023	4Q 2023	1Q 2024	P-P	Y-Y		1Q 2023	1Q 2024	Y-Y
	ROAE (Return on Average Equity - adjusted)	44.9%	3.1%	30.4%	27.4%-pt-14.5%-pt		44.9%	30.4%	-14.5%-pt
	ROAA (Return on Average Assets - adjusted)	3.5%	0.3%	2.8%	2.5%-pt	-0.7%-pt		3.5%	2.8%	-0.7%-pt
	TRM (Total Revenue Margin - adjusted)	6.5%	6.0%	5.7%	-0.3%-pt	-0.7%-pt		6.5%	5.7%	-0.7%-pt
	CIM (Core income margin - adjusted)	6.6%	6.1%	5.7%	-0.4%-pt	-0.9%-pt		6.6%	5.7%	-0.9%-pt
	NIM (Net Interest Margin - adjusted)	5.8%	5.1%	4.9%	-0.2%-pt	-0.9%-pt		5.8%	4.9%	-0.9%-pt
	NFM (Net Fee Margin - adjusted)	0.8%	1.0%	0.8%	-0.2%-pt	0.0%-pt		0.8%	0.8%	0.0%-pt
	C/TA (Cost to Total Assets - adjusted)	2.3%	3.2%	2.2%	-1.0%-pt	-0.2%-pt		2.3%	2.2%	-0.2%-pt
	CIR (Cost Income Ratio - adjusted)	36.0%	53.2%	37.8%	-15.4%-pt	1.7%-pt		36.0%	37.8%	1.7%-pt
	Risk% (Risk cost rate - adjusted)	-0.01%	4.20%	0.66%	-3.5%-pt	0.7%-pt		0.0%	0.66%	0.7%-pt

The presentation of financials in this report is based on Total Comprehensive Income ("TOCI"), which is an IFRS category aimed at presenting the economic impact for the given period by incorporating "fair value through other comprehensive income" (FVTOCI) results. Based on the fact that MBH Bank holds a large securities portfolio, part of which is valued against capital (FVTOCI), and hedges its interest risk position with IRS transactions, TOCI figures should only be used to evaluate the results.

Company name:	MBH Bank Nyrt.	Phone:	[phone]
Address:	1056 Budapest, Váci u. 38.	E-mail address:	[e-mail]
Sector:	Other monetary activity
Reporting period:	01.01.2024-31.03.2024	Investors' contact person:	Gergely Gózon

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