Budapest Bank profit drops, total assets rise in H1


Hungaryʼs state-owned Budapest Bank groupʼs first-half after-tax profit dropped 29% to HUF 9.9 billion, while total assets rose 5% to HUF 968 bln at the end of June, unaudited, consolidated figures under Hungarian Accounting Standards show, the bank told state news wire MTI on Monday.

Acting CEO Viktor Tóth said he expects after-tax profits to reach or exceed HUF 10 bln by the end of 2017, the bank announcement said. The bank will pay special attention to the development of digital services in the second half, he added.

The profit figure dropped from a high base, raised by one-offs, the announcement said, noting that write-offs on the improving retail portfolio fell, while corporate and retail lending has been rising since H2 2016. Steadily low interest rates and the reduced retail portfolio narrowed by the settlement of FX loans dampened profits.

The consolidated return on assets dropped to 2.02%, down from 2.96% in H1 2016, while return on equity dropped from 21.17% to 14.75%. The capital adequacy ratio slipped from 11.8% to 11.4%.

Net receivables from clients rose 11% to HUF 603 bln in one year, while net liabilities to clients rose 4% to HUF 632 bln.

Operating costs rose 1% in twelve months to just over HUF 19 bln.

The business loan division, which focuses on small and medium-sized enterprises, increased its lending stock by 8% to HUF 509 bln, while the stock of current account and fixed deposits rose 17% to HUF 369 bln. The groupʼs leasing portfolio expanded by 38% in twelve months to HUF 89 bln.

BBʼs retail outlays also rose, with its gross retail loan stock rising by 0.7% year-on-year to HUF 321 bln.

The stock of retail current account and fixed deposits rose 1%, while total assets managed by subsidiary Budapest Fund Management rose 3.6% to HUF 547 bln. The latterʼs share in the market of open funds dropped to 8.33% from 8.7% a year earlier.

Budapest Bank was acquired by the state of Hungary in June 2015, when Corvinus Nemzetközi Befektetési, a unit of the state-owned Hungarian Development Bank group, paid USD 700 million to General Electric Capital Group for 100% of the bankʼs shares.


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