FHB has announced that it obtained a license for a commercial banking unit from the Hungarian Financial Supervisory Authority (PSzÁF) yesterday.
Our view: We see the news as positive for the bank but it was widely expected by the market. Given the government’s privatisation plans (sale of a 50% stake + 1 share to a strategic investor), the commercial banking licence could also have value for the potential buyer. We do not expect a significant market reaction on the back of that news. Speculation that privatisation could lead to a minority buyout is likely to continue to support the stock price but we continue to see FHB as fundamentally overvalued and maintain our Sell rating.