History
The legal predecessor of HDB was the Hungarian Investment and Development Co. (Magyar Befektetési és Fejlesztési Rt.) which was formed on 27 November 1991. MBFB was established by three state-owned institutions, Hungarian Asset Management Co. (Állami Vagyonkezelő Rt.), Hungarian Asset Management Agency (Állami Vagyonügynökség) and Hungarian Development Institute Co. (Állami Fejlesztési Intézet Rt.)
MBFB was not a bank at the time of its establishment. On 1 July 1993, it was transformed into an investment bank, from which time it was called Hungarian Investment and Development Bank Co. (Magyar Befektetési és Fejlesztési Bank Rt.). MBFB was involved in the provision of Japanese, German and EU loans in Hungary from 1995, and also acquired interest in regional development companies and subsequently in Rákóczi Bank. In the same year, MBFB took over the Bank Centre (Pénzintézeti Központ) from the Ministry of Finance and became a shareholder in Investbank.
In 1997, the bank became the MFB Zrt. It played an active role in the consolidation and improvement of Hungarian financial institutions in the second half of the 1990s. Between 1996 and 1998, MFB Zrt. grew into a complex banking group having among its members a broker company, specialized banks in addition to being regional development companies.
In 2000, strategic activities serving economic policy priorities were separated from the MFB Zrt. activities performed at its own business risk. That same year, six SME funding programs were launched and a funding product targeting family farms was introduced.
Another turning point was Act XX of 2001 on the Hungarian Development Bank, which has been the legislative framework for the operation of the Bank ever since. The strategy developed in 2002 and adopted by the Government in 2003 made a difference by positioning the bank as a classic development bank. This strategy set the main directions of operation until 2008, which were subsequently adjusted in the light of the changes in international and domestic conditions in 2007, outlining a set of objectives and a toolkit for the period until 2013. Commercial banking activities were terminated by selling Konzum Bank (2003/2004). The strategy developed in 2002 prescribed the structure and activities necessary for the performance of classic development banking activities and ensured adaptation to the principles of Hungarian economic policy. It promoted preparation for EU accession as well as compliance with the international requirements to be met by the bank. This strategy provided the basis for the organization of a single banking group – a system with a "cleaned up" profile – around MFB in 2006. In order to clearly identify the structure and functions within the banking group, MFB and its owner, the Hungarian State, jointly decided on the improvement of the strategy and its extension to the period 2007–2013.
However, the 2008 financial crisis led to a change in plans. Borrowing to invest practically stopped in the Hungarian financial market, and commercial banks were virtually unable to access funds. Corporate and household lending decelerated and became expensive, and subsequently sovereign debt management reached a critical state, which was followed by a rapid and significant depreciation of the forint. In the situation, MFB's role appreciated in the field of lending to both companies and local authorities showing a highly increased demand for short-term working capital loans as well as for long-term funding. By 2009, MFB had ultimately become a key crisis management institution.
Amid the deepening crisis, MFB's role fundamentally changed in 2010. In parallel with the in-depth transformation of the Hungarian State, the Government entrusted MFB with two tasks: the management of public assets worth some HUF 8 trillion (US$40 billion) and performing due diligence on its own portfolio while continuing the performance of development banking activities. After completing the due diligence process conducted from a financial, legal and IT perspective in respect of the assets entrusted to it, MFB put the company on track towards responsible management and cleaned up its own portfolio. As a result of these efforts, MFB closed the first two quarters with a positive balance in 2013.
The financial institution played a key role in facilitating access to of EU financial instruments by establishing a network of MFB Points in partnership with commercial banks. By the end of 2017, this network was accessible to businesses and retail customers at 642 locations.[6] During the EU programming period from 2021 to 2027, businesses and retail customers can access financing through EU-funded loan programs via the MFB Pont Plus network of financial intermediaries.[7]
Dr. Levente Sipos-Tompa was appointed CEO of the Hungarian Development Bank, effective April 1, 2019.[8]
The bank's balance sheet and loan portfolio grew significantly during the COVID-19 pandemic and the energy crisis following the Russo-Ukrainian War, driven by its countercyclical policy.[9]
At the end of 2021, MFB Zrt.'s capital was increased by HUF 45 billion,[10] with an additional HUF 70 billion added in 2022 following a decision by the Minister of Economic Development.[11] The current total share capital stands at HUF 519.9 billion. [12]
