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K&H group announces after-tax profit of HUF 15.9 bln in H1

Telco

Kereskedelmi és Hitelbank group (K&H), owned by KBC Bank of Belgium, had first-half after-tax profit of HUF 15.9 bln, compared to a HUF 40 bln loss in the same period a year earlier, when the lender had to pay compensation to clients under borrowers relief legislation, K&H CEO Hendrik Scheerlinck said yesterday, Hungarian news agency MTI reported. 

Revenue is up, while risk and operating costs are down, Scheerlinck said. Asked whether K&H planned to set up a mortgage bank to comply with regulatory changes being introduced by the National Bank of Hungary (MNB), he said the lender would make a decision on what path to follow in about six weeks.

K&H disbursed new loans worth HUF 102.6 bln in H1 2015, up 85% from a year earlier, Scheerlinck said, adding that loans provided to SMEs rose 12%. The bank disbursed mortgage loans of HUF 25.4 bln, holding a 15.9% market share of new disbursements. He said K&H remains an active participant in the Funding for Growth Scheme, signing loan contracts worth HUF 162.1 bln in the second phase of the program, thereby controlling 20.7% of the market.

Client deposits and assets managed in investment funds rose by HUF 300 bln. As a result, the bank had a 12.3% share of the market for retail savings, up from 10.9%. Also in the retail segment, K&H controlled 9.1% of the total lending market, up slightly from a year earlier.

In the corporate segment, the bank had a market share of 9.8% in terms of loans and 12% of deposits. The NPL ratio fell by 1 percentage point to 15.1% and the loan/deposit ratio fell to 52.4% from 62.9%.

CFO Attila Gombás said the bankʼs operating revenue fell by 9.7% to HUF 72.8 bln from a year earlier, with net interest revenue falling by 11.1% to HUF 36.9 bln. He noted the bankʼs return on equity of 17.8% as outstanding on the Hungarian market. Operating expenses rose by 1% to HUF 41.6 bln, partly due to the higher transaction duty and partly to the higher contributions to the Investor Protection Fund and the Bank Bailout Fund.

The latter two items came to around HUF 600 mln in the first half, Gombás added. Deputy CEO of insurer K&H Biztositó Attila Kaszab said the insurance company had profits of HUF 1.2 bln in Q2 2015, down 12% from a year earlier. Revenue from premiums on non-life insurance policies rose 21% from a year earlier to HUF 12.3 bln, he said, adding that the number of mandatory vehicle insurance policies came close to 900,000.

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