Are you sure?

Budapest Bank profits slip because of expansion costs

Budapest Bank, a member of GE's financial services division, had consolidated Hungarian-accounting-standards after-tax profit of Ft 7.492 billion in 2006, gaining more than 30,000 new customers, the bank said on Tuesday.

Chairman-CEO Mark Arnold put off the decline in profits to the cost of expanding the bank's branch network and marketing expenses. Along with expanding its network, the bank increased its staff number by 10%, Arnold said.

The bank's operating costs rose to Ft 39.3 billion in 2006, he said. Budapest Bank had total assets of Ft 695.1 billion on December 31, 2006, up 23% from twelve months earlier. The bank's pre-tax profit decreased to Ft 9.34 billion from Ft 9.57 billion. Stock of client loans increased to Ft 590.89 billion from ft 469.30 billion, and stock of client deposits rose to Ft 542.72 billion from Ft 429.50 billion.

Retail loans increased 37% to Ft 278.1 billion, while retail deposits grew 50% to Ft 195.9 billion. Stock of mortgage loans increased 71% to Ft 84.1 billion. Corporate loans increased 10% to Ft 233.8 billion, including a 15% increase of SME loans to Ft 157.4 billion and an 8% rise in stock of corporate leases to Ft 55.5 billion. The bank issued 168,000 bank cards in 2006.

Arnold said Budapest Bank would hire another 350 people to staff its service center in Békéscsaba, south east Hungary by 2008. The bank has already invested Ft 1 billion at the center, which employs 156 people.