Hungary's K&H Bank Nyrt will accelarate the expansion of its retail network and will open 150 new branches by the end of 2009, bank CEO Marko Voljc announced on Thursday.
The bank earlier planned to add 30 new branches to its existing 170 branches in the period. The retail banking segment is before significant growth, and although the number of internet banking clients is rising, the traditional personal contact is still the most efficient way to access clients, Voljc said. At present the bank is servicing 61,000 clients per branch and the expansion could cut the number to 30,000. K&H is 99.6% owned by KBC Bank of Belgium.
K&H Bank will have 170 branches by year-end. K&H Bank's retail segment is about to undergo massive development, Voljc said. He added that, although the number of internet banking clients has grown, most clients still prefer to do business at a bricks-and-mortar bank branch. K&H Bank's branches serve 61,000 clients apiece on average. With the planned expansion, this number could fall to 30,000, but the bank still expects to attract more clients in the coming three years.
Currently, the bank has about 500,000 clients. K&H Bank aims to reinforce its position as the second-biggest bank on Hungary's retail market and attract clients which it is currently unable to serve efficiently, opening branches in cities with populations under 20,000, Voljc said. KBC, K&H Bank's Belgian owner, plans to expand in the region as well, opening 120 new branches in Poland and adding more branches in the Czech Republic and Slovakia as well. Voljc said the effect of the government's austerity measures would be the greatest in 2007, after which the situation would "normalize". K&H Bank had IFRS consolidated total assets of Ft 2,118 billion at the end of September 2006. Nine-month consolidated after-tax profit came to Ft 13.9 billion. (Mti-Eco)