|K&H Banking Group closed the year 2010 with an after-tax profit of HUF 27.2 billion. The extra bank tax amounted to HUF 15 billion. The 2010 result was positively influenced by an increase in interest income and a number of one-off positive items. Costs were reduced and credit losses, albeit high, remained well within expectations. Year over year the share of non-performing loans increased from 5.5% to 8.6%. K&H Insurance recorded a profit of HUF 0.7 billion in 2010 compared to HUF 4.2 billion a year before.|
„K&H Banking Group closed the year 2010 with a net profit of HUF 27.2 billion. The increase in income resulting from higher interest income and one-off items. Non-performing loans are still increasing, their share grew from 5.5% to 8.6% year over year. Credit losses remain high but are within expectations.” – announced Hendrik Scheerlinck, CEO of the K&H Group.
The economic outlook for 2011 remains fragile, and as a result hereof loan activity is expected to remain subdued, which will negatively impact operating income. Economic expectations, credit costs and the amount of the bank tax forces K&H to continue its cost containment measures. Hence, as a component of the rightsizing K&H has decided to optimize its retail branch network, by closing eight small units and serve their clients in the nearby larger branches of the affected regions.
„Our operating income grew by 10%, while operating expenses decreased by 3% as a result of strict cost control measures. The deposit portfolio continued to decrease, which is partly offset by the strong demand for investment funds. Our mutual funds portfolio grew by HUF 100 billion during the year 2010. Our share of the market of capital protected funds reached 50%. By the end of December, our loan-to-deposit ratio reached 93.7%, still the best in the Hungarian market by the standards of the major banks. Our total assets exceed last year’s figure by 5%, primarily driven by FX impact.” – said Attila Gombás, CFO of the K&H Group.
K&H’s unaudited, consolidated results according to International Financial Reporting Standards (IFRS) were as follows:
|HUF billion||31 Dec, 2009||31 Dec, 2010||var (y/y)|
|profit after tax||10.0||27.2||+171.2%|
|operating profit before provisions and bank tax||64.0||80.4||+25.7%|
|lending to non-bank clients||1,711||1,787||+4.5%|
|deposits from non-bank clients||1,664||1,591||-4.4%|
|AuM in mutual funds||529||629||+18.9%|
|quality of loan portfolio|
|capital and liquidity|
|loan to deposit ratio||91.1%||93.7%|
|solvency ratio (insurance)||255%||182%|
|return on equity||4.8%||12.3%|
K&H Insurance recorded a profit of HUF 0.7 billion in 2010 compared to HUF 4.2 billion a year before. The decline is due to the financial sector tax (HUF 1.3 bln), storms claims of an exceptional level, and strong price competition in non-life.
Luc Cools, CEO of K&H Insurance added: “In non-life business line number of policies increased and reached 575.000 till the end of the year. This evolution is mainly driven by the motor business lines - our mtpl campaign was successful, we have contracted 362,000 new policies. Due to the catastrophic weather events on a yearly basis 24.4% more claims were reported compared to 2009 causing 1 billion HUF higher incurred loss. In life business line we realized strong growth in regular savings. The annualized premium income of new savings was 2.5 times higher than in previous year.”
K&H Group is one of the leading financial service providers in Hungary. It offers both banking and insurance solutions to meet the financial needs of customers, enabling them to opt for smart solutions best suited to their specific needs. The Group’s product range includes conventional retail and corporate banking products (account management, investments, savings, credits, bank guarantees, bank card services, custody management, treasury, project finance, etc.), premium banking services, investment fund management, leasing, life insurance, property and liability insurance, health and pension fund services and securities trading. With 243 retail branches nationwide, as well as through almost 600 local representatives selling insurance products the K&H Group offers hundreds of financial services.
KBC is one of the leading financial groups in Europe. It is a multi-channel bancassurance group with a geographic focus on Europe. The Group occupies significant, even leading positions in its core home markets of Belgium and Central and Eastern Europe (Czech Republic, Slovakia, Poland, Hungary and Bulgaria), catering mainly to retail customers, small and medium-sized enterprises and local midcaps.
KBC is one of the major Belgian companies and is listed on Euronext Brussels.
As on Dec 31, 2010:
Shareholder’s equity (IFRS consolidated, non-audited): HUF 219 billion
Total assets (IFRS consolidated, non-audited): HUF 3,223 billion
Pre-tax profit (IFRS consolidated, non-audited): HUF 36.1 billion
After-tax profit (IFRS consolidated, non-audited): HUF 27.2 billion
As on Dec 31, 2010:
Shareholder’s equity (IFRS consolidated, non-audited): HUF 8.4 billion
Total assets (IFRS consolidated, non-audited): HUF 102.2 billion
Insurance technical profit (IFRS consolidated, non-audited): HUF 0.7 billion
Pre-tax profit (IFRS consolidated, non-audited): HUF 0.8 billion
After-tax profit (IFRS consolidated, non-audited): HUF 0.7 billion
Tel.: 328 9181
Fax: 328 9220