Best bank: K&H Bank
Despite the overbearing presence in Hungary of national champion OTP – and the emergence in 2023 of a much larger government-owned lender in the form of MBH Bank – international firms continue to compete in the domestic market. The biggest of these international players is K&H Bank, owned by Brussels-based group KBC.
K&H reported exceptionally strong growth in earnings in 2023, with profit after tax coming in at Ft108 billion ($290 million), a 60% rise over 2022. Return on equity, meanwhile, reached 22%.
The bank says this exceptionally good performance is due, above all, to rising customer numbers – it grew to almost one million clients – thanks to a steady increase in corporate financing, and to an encouraging bounce in retail lending in the second half of the year despite a sluggish housing market. Revenues grew by 12.6% because of this, while costs grew by less – 11%, excluding the country’s bank windfall tax.
K&H notes that its total loan portfolio grew by 10% year on year, compared with only 3% for the system. The non-performing loan ratio, at the same time, decreased from 2.3% to 1.9%.
Meanwhile, K&H reports record inflows on the fund management side, much higher than the wider market. The bank’s assets under management reached a record Ft1.35 billion in 2023. Income from wealth and asset management has been a particular focus for growth, with private-banking client numbers growing by 15% in the first half of 2023 alone.
K&H is encouraged by data showing how many new customers come thanks to personal recommendations, notably for its digital offering. It points to an artificial intelligence-powered personal financial assistant (called Kate); leadership in terms of introducing digital payment solutions such as Google Pay and Xiaomi Pay; and the ability to purchase public transport tickets via its app.
Best digital bank: K&H Bank
In 2023, K&H Bank increased its digitally active clients by 9%, processed five million monthly contactless payments (27% of all transactions) with digitized bank cards, and initiated 48% of new regular investments through its mobile app. Around 55% of retail accounts were opened digitally, a 50% increase from the previous year, while the digital processing of cash loans rose to 68%, up by 26% year on year.
Since October 2023, all K&H Bank clients have transitioned to the new app. It includes an insurance dashboard accessed for policy management and supports insurance premium payments via bank card. Its investment functions have also been expanded.
In 2023, the bank digitized the SZÉP card, a Hungarian ‘cafeteria’ product with tax benefits, integrating it into clients’ mobile wallets. It also introduced the Beyond Banking cashback offer.
Best bank for ESG: CIB Bank
CIB Bank’s sustainable credit portfolio grew in 2023, reaching 17.2% of its retail loan book and 4.7 % of total corporate loans by the end of the year.
This was driven by several new products. For retail customers, the bank offered interest rate reductions for properties meeting stringent energy efficiency criteria. CIB Bank also incorporated environmental sustainability criteria into its client acquisition processes.
The bank offers a range of products for corporates engaged in projects aligned with climate objectives. These included circular economy and green plafond loans, alongside the bank’s sustainable S-Loan facility.
CIB Bank remained actively engaged in social initiatives throughout the year. It continued its longstanding support for non-profits and community groups, and encouraged employee participation in local community events such as blood donation drives and food collection weekends.
In February 2023, the bank also launched a fundraising campaign among its customers to aid earthquake victims in Turkey.
Best bank for corporate responsibility: OTP Bank
OTP Bank expanded its support for social and community initiatives in 2023, particularly in education and volunteering.
In 2023, OTP Group increased its donations to Ft5 billion ($13.7 million), a 27% rise from the previous year. Financial education received 23% of these funds, with another sizable portion allocated to the social sector. The increase in environmental aid was driven by a Ft840 million pledge to mitigate the Slovenian flood damage.
The bank’s foundation, Fáy András Alapítvány, expanded its reach through increased partnerships focused on education. Training sessions saw participation from over 37,000 individuals, marking a 27% annual increase. By the end of 2023, the foundation offered over 100 training materials, with two-thirds available in digital format.
Employee-led initiatives raised Ft1.1 million for Hegyközi Elementary School and its member schools on Family Day, matched by the bank, to improve infrastructure. A year-end campaign raised a record Ft3.5 million, further boosted by the bank and the Humanity Social Foundation to support 150 families and three kindergartens.
Best bank for corporates: OTP Bank
In 2023, OTP Bank participated in several state-subsidized lending schemes and its corporate lending reached Ft2.6 trillion ($7.1 billion). Corporate deposits remained steady at Ft4.6 trillion year on year.
The bank lent through the Széchenyi Card MAX+ and Baross Gábor loan programme. Under the Széchenyi Card MAX+ scheme, OTP signed loan agreements totalling Ft494 billion, while the Baross Gábor loan programme recorded loan applications amounting to Ft202 billion by year-end. OTP now has a 23% market share in subsidized lending products.
OTP Bank also participated in the Széchenyi Investment MAX and MAX+ and the EXIM Baross Gábor reindustrialization green investment loan schemes. These initiatives focused on financing for energy efficiency upgrades and renewable electricity projects.
