Gránit Bank is dreaming big and continuing its success story on foreign soil. Not literally, though; its presence in Romania doesn’t require a brick-and-mortar facility. The expansion is taking place purely in the digital space.
It was ever thus for the bank. The recognition of the super-fast growth of smartphone penetration became a key driver for the company at the time of its foundation in 2010.
“We knew we’d have to focus on digital channels: it’s cost-effective, offers great pricing options and user experience, and since Hungary is a very competitive market, we thought that’s how we could stand out of the crowd,” co-founder and CEO Éva Hegedűs, who has just been recognized with the EY Entrepreneur of the Year Award 2024, explains to the Budapest Business Journal.
Legendary investor Sándor Demján asked her to draw up the strategy for the bank, of which she became co-owner. Betting on digital was just one part of the customer acquisition equation. While retail banking brings stability, building it up is lengthy and costly.
Hence, the idea was to give a push to corporate banking “where our highly professional core banking team could draw key clients through personal contacts, credibility and a reputation for top-notch expertise,” Hegedűs notes. Word spread fast that the bank’s team was building a reputation for making quick, fact-based decisions.
The market standard is to turn a newly founded bank profitable in around seven years. It took Gránit four. Its strength continues to be reflected by critical indicators such as the balance sheet total of more than HUF 1.2 trillion. Gránit is ranked as the eighth largest universal bank in Hungary with more than 200,000 customer accounts and a non-performing loan ratio of 0.2% (June 2024). The market average is 2.1%.
“This showcases that our credit portfolio is truly high-quality, which also has to do with the fact that our lending policy is more conservative than the market average.”
Gránit’s growth in terms of retail and business deposits and lending both surpass the industry average. The total operational cost/balance sheet and the cost/revenue figure top the list among the top eight banks in the country. Return on equity accounted for 29% last year. These numbers tell a tale of the solid finances that will pave the way for a public listing soon.
“We put together a 10-year business plan based on historical data and market projections. The projections have been reviewed by a Big Four firm; our bank can look forward to steady growth,” Hegedűs says.
Team spirit and creativity are crucial in keeping the upward trajectory on track in the long run. But more importantly, an innovation-driven approach is needed. AI opens up immense opportunities for personalization and takes operational efficiency to a new level.
“In customer relations, it means an enhanced user experience; on the operational level, it entails huge cost savings,” Hegedűs notes. Gránit Guru, a newly launched generative and agentic AI-based solution under testing, will tap into this potential and help raise the ratio of automated banking processes from around 40% to closer to 90%. The virtual assistant relies on Open AI’s large language model and Intuitech’s agentic AI-based framework to serve tailor-made customer needs 24/7.
Gránit’s track record of success in Hungary has laid the groundwork for seeking new horizons abroad.
“The intention behind this is to make a digital mobile application widely accepted and loved by consumers in Hungary available in the countries of the European Union. Gránit is the first Hungarian bank to launch a cross-border service in Romania, the EU’s sixth most populous country, where retail customers have a high level of digital affinity and where we can offer a wide range of retail digital banking services without a physical presence,” the CEO says. The service portfolio will be gradually widened in line with the Hungarian operation: credit card and brokerage services are also in the pipeline.
“As a result, we will be the only bank in Hungary licensed for cross-border services that cover the full spectrum of daily retail banking tasks and brokerage services in one mobile app on the Romanian market,” she says.
Competitive pricing and customer service in Hungarian, Romanian and English aim to offer high-quality banking services.
“It may be a highly regulated sector, but customers want to get things done simply and conveniently. We are confident that the user experience we offer will convince many customers to choose us,” Hegedűs adds.
This development occurs in a challenging market environment where the banking sector carries a significant extra burden. However, Gránit is determined to grow even in these conditions.
Gránit Bank’s desktop and mobile user interfaces enable smooth navigation in a slick graphic environment in typical fintech fashion. A few clicks will allow you to buy government bonds, open a securities account, place a bank deposit, or set up a direct video banking connection. The mobile app also keeps track of spending based on categories and helps prevent fraud. Customers can verify with a built-in function whether the bank made a particular call or if fraudsters are in action. Even exchanging money is made effortless: for example, in the case of euro-forint exchange, the exchange rate may be cheaper than the competitors up to HUF 10 million per month (during working hours, between 9 a.m. and 5 p.m.) All this might explain why, in the first eight months of 2024, Gránit saw the most retail accounts opened in Hungary at 50,000, or 38% of the total for the country.
The bank has earned more than 60 prizes domestically and abroad, but two stand out. In 2015, Mastercard’s Banker of the Year title, chosen by the banking CEOs of the country, was presented to Éva Hegedűs. It recognized the extraordinary performance of an emerging entity. A more recent top award is Mastercard’s Bank of the Year 2024, which was shared with OTP and picked by independent experts. “It is a great honor considering OTP is CEE’s leading bank,” the CEO says.
Those prizes are deeply connected with the innovation Gránit has been a frontrunner in since its launch. One of the first European video banking services, launched by Gránit in 2012, marked the beginning of a new era. Gránit was also the first in Europe to introduce the latest generation of mobile pay, based on bankcard digitalization, for Android on its banking platform. A built-in eco calculator is another one-of-a-kind novelty that keeps track of your spending-based carbon footprint. Customers can offset that footprint with the click of a button, given that Gránit plants trees from such donations.
Gránit Bank Zrt. (Gránit Bank) draws attention to the fact that this communication constitutes (securities) advertisement within the meaning of Regulation (EU) 2017/1129 of the European Parliament and of the Council and Commission Delegated Regulation (EU) 2019/979. Furthermore, this communication does not constitute a prospectus as defined in Act CXX of 2001 on the Capital Market, nor an investment recommendation, investment research (analysis) or investment advice as defined in Act CXXXVIII of 2007 on Investment Firms and Commodity Dealers, and the Regulations Governing their Activities. For all investors, all relevant information regarding the listing and public offering of Gránit Bank’s shares is included in the prospectus which will be published on the website of Gránit Bank (www.granitbank.hu/befektetoknek), the Budapest Stock Exchange (www.bet.hu) and the Hungarian National Bank (www.kozzetetelek.hu) [as well as on the websites of the distributors participating in the public offering, Equilor Befektetési Zrt. (www.equilor.hu), MBH Befektetési Bank Zrt. (www.mbhbefektetesibank.hu) and MBH Bank Nyrt. (www.mbhbank.hu)] after its approval by the Hungarian National Bank. Gránit Bank draws attention to the fact that the approval of the prospectus by the National Bank of Hungary should not be understood as an endorsement of the securities to be admitted to trading on a regulated market. Gránit Bank recommends all potential investors to make any investment decision concerning the bank only after reading and being in full knowledge of the content of the prospectus.
GRÁNIT Bank Zrt. (GRÁNIT Bank) draws attention to the fact that this communication constitutes (securities) advertisement within the meaning of Regulation (EU) 2017/1129 of the European Parliament and of the Council and Commission Delegated Regulation (EU) 2019/979. Furthermore, GRÁNIT Bank draws attention to the fact that this communication does not constitute a prospectus as defined in Act CXX of 2001 on the Capital Market, nor an investment recommendation, investment research (analysis) or investment advice as defined in Act CXXXVIII of 2007 on Investment Firms and Commodity Dealers, and the Regulations Governing their Activities. For all investors, all relevant information regarding the listing and public offering of GRÁNIT Bank’s shares is included in the prospectus which will be published on the website of GRÁNIT Bank, the Budapest Stock Exchange and the Hungarian National Bank [as well as on the websites of the distributors participating in the public offering, Equilor Befektetési Zrt., MBH Befektetési Bank Zrt. and MBH Bank Nyrt.] after its approval by the Hungarian National Bank. GRÁNIT Bank draws attention to the fact that the approval of the prospectus by the Hungarian National Bank should not be understood as an endorsement of the securities to be admitted to trading on a regulated market. GRÁNIT Bank recommends all potential investors to make any investment decision concerning GRÁNIT Bank only after reading and being in full knowledge of the content of the prospectus.
This article was first published in the Budapest Business Journal print issue of November 4, 2024.
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