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Hungary’s MKB restructures around digital

Can the combination of core banking system replacement and a pioneering fintech programme help re-privatized lender MKB Bank leapfrog its rivals in the Hungarian market in the race for technological supremacy?


Hungarian prime minister Viktor Orbán (right) and central bank governor György Matolcsy at a news conference in Budapest in December 2014, regarding the safety net being drawn around recently acquired MKB Bank

MKB Bank is an unlikely candidate for digital leadership. Three years ago it was still in public ownership after being bailed out by the Hungarian government and was so far behind in technological terms that it didn’t even have a mobile app. 

Yet today MKB is positioning itself as one of Hungary’s rising digital banking stars, following the replacement of its core banking system last summer. 

The project was part of a comprehensive restructuring initiated by the Hungarian central bank, which took over the management of MKB in late 2014. The troubled top-five lender was bought by the state from its former owner, BayernLB, earlier that year after the German group failed to find a private-sector bidder. 

At the time, policymakers were optimistic that the bank could be turned around without the need for further state aid. It quickly became apparent, however, that the financial problems caused by MKB’s pre-crisis penchant for lavish lending to commercial real estate firms and other risky ventures required more drastic remedy.

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