Erste Bank Hungary to lay off staff, close branches


Erste Bank Hungary will lay off around 15% of its staff, or approximately 400-450 people, in the early months of 2012 and is expected to close down 43 branches, the bank said on Friday.

The bank said the lay-offs were required by its limited revenue outlook resulting from the economic crisis, the decline in lending as well as the government’s bank levy and early final repayment scheme.

The combination of the adverse external economic developments, the slowdown in the banking market and the substantial increase in risk-provision obligations has made it unavoidable to restructure Erste Bank’s Hungarian unit and streamline its branch network, CEO Radovan Jelasity said in the statement.

Conditions for long-term sustainable operations can be created only through cutting expenses and tight cost management, Mr Jelasity said.

Radovan Jelasity emphasised that parent company Erste Group continues to maintain its commitment to the Hungarian market and customers, however, due to the slowdown on the banking market, it needs to reassess its mid-term outlook in Hungary and restructure its business strategy accordingly.

The restructuring process comprises more than just lay-offs and will include a comprehensive renewal from strategy through customer relations to risk management. The lending-based growth of earlier years will be replaced by banking operations focusing on raising liabilities and based on the efficient exploiting of customer relations. The main goal is for Erste to become the main bank for its close to 900,000 Hungarian customers, the statement said.


CIG Pannónia Board Proposes HUF 18-per-share Dividend Figures

CIG Pannónia Board Proposes HUF 18-per-share Dividend

Hungarian Lawmakers Ratify Finland's NATO Accession Parliament

Hungarian Lawmakers Ratify Finland's NATO Accession

IBS Reaches 50-50% Gender Ratio in Management HR

IBS Reaches 50-50% Gender Ratio in Management

Sümeg Castle Reopens History

Sümeg Castle Reopens


Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.