Hungary is considering selling its 20% stake in MBH Bank as the country's second-largest lender is planning a stock market listing.

"The Hungarian state would do well to divest its stake in the bank holding," National Economy Minister Marton Nagy told Index.hu website, suggesting that an IPO could provide an opportunity to offload state ownership. His comments come as MBH Bank accelerates preparations for a possible listing, with Citigroup Inc. advising on the process.

According to Bloomberg, which first reported the development, discussions remain at an early stage, and there is no guarantee that the IPO will materialise this year. However, if the transaction proceeds, it would strengthen MBH Bank's public market presence while allowing the state to gradually exit its minority position. The lender has long expressed interest in expanding its footprint on the Budapest Stock Exchange. 

Since its establishment, the government has steadily reduced its stake to 20%, making a full exit a logical next step.

MBH Bank was formed from the merger of Budapest Bank, MKB Bank and Takarekbank in 2023 in a three-year process. The merger of two state-owned banks (BB and Takarekbank, created from small savings co-ops) was part of a government-supported drive to consolidate the banking sector and create a national champion and  a rival to market leader OTP, boosting the share of domestic ownership in the banking sector to over 50%.

State ownership and the lender's alignment with businesses close to the ruling party have been flagged as potential risk factors if Fidesz loses the 2026 election. Some analysts speculate that the bank’s portfolio is heavily burdened with preferential loans granted to Orban’s associates, businesses owned by his family and best friend, Lorinc Meszaros, who is also part-owner of the bank.

The bank has also come under scrutiny abroad for illicit campaign financing. Spain's public prosecutor has recently launched an investigation into a €9.2mn loan to the far-right Vox party before the 2023 municipal and parliamentary elections. In a similar case, MBH's predecessor MKB lent €11mn to Marine Le Pen's Rassemblement National party three years ago.

While MBH Bank declined to comment on its plans for a possible IPO when approached by independent Valasz Online, the prospect of a state exit aligns with broader efforts to shift ownership of major financial institutions into private hands. 

A successful listing would also test investor appetite for Hungarian financial stocks at a time of elevated economic uncertainty and shifting market dynamics. 

The after-tax profit of MBH Bank rose 12% to HUF206bn (€510mn) last year on the back of strong lending activity. Retail loans jumped 37% to HUF2.4 trillion and corporate lending stock rose 7% to HUF3 trillion. Total assets grew 13% to HUF12.5 trillion.