As a consequence of the government measures to mitigate the effects of the crisis for the households and businesses K&H Bank and Insurance recorded HUF 55 billion extra cost

As Guy Libot, CEO of K&H Group explained: “The income of the first three quarters of the year was primarily driven by higher loan, deposit and transactional volumes. However, the various government initiatives to protect households and businesses from the effect of the crises have significantly burdened our results totalling an extra cost of HUF 55 billion. Our retail customer base reached 782,000 in 2022, of which 530,000 are regular payroll transfer clients. Thanks to our innovative developments, Kate, the digital personal assistant has arrived, from November it’s available in K&H mobile bank. Beside digital transformation sustainability also remains in our focus; we introduced specific, measurable targets for reducing future CO2 emissions. The KBC Climate Report published early October, outlines our vision and ambitions for climate targets in the area of lending and asset management throughout the Group in the years ahead.”

Financial results in the first three quarters of 2022

K&H Bank and Insurance recorded HUF 55 billion extra cost including new windfall taxes for the bank (HUF 26 billion) and for the insurance company (HUF 3 billion), extra OBA payment due to the voluntary liquidation of Sberbank Hungary (HUF 8.9 billion), interest cap for variable rate mortgages and agri moratorium (HUF 17 billion). On top of that, the new measures of interest rate cap for SMEs and home mortgage 3-5 years interest period will bring significant additional burden on the profit in Q4. K&H Bank's profit after tax decreased by 48% to HUF 31 billion in the first 9 months of 2022 from HUF 59 billion in the corresponding period of 2021. The total loan portfolio increased by 24% year-on-year to HUF 2562 billion, and the volume of new loan production reached HUF 517 billion in Jan-Sep 2022. Deposits increased by 14% year-on-year, reaching HUF 3 710 billion.

"Our corporate loan portfolio including large SMEs as well increased by 35% yoy. On the corporate side, we saw active participation in the state-subsidized advantageous credit programs following strong SME demands. K&H managed to improve its market position in both retail and corporate lending in Q3 with market share 9.4% in corporate and 13% in retail new production.  K&H Széchenyi Card GO contracted volume closed above HUF 70 billion, but we have also a promising pipeline for K&H Széchenyi Card MAX products. On the retail side, the loan portfolio increase was 10% yoy, which already shows a decline in demand in the market. We reached a market share of 12% in the National Bank’s Green Mortgage Loan Program, and contracts were concluded in the value of HUF 35.4 billion. Also, K&H was the first in the market in August to introduce our own new green home loan product for customers who want to reduce their energy consumption and it is not only available for new constructions, but also for upgrading a second-hand home. Baby boom loans new production reached HUF 45 billion in the first three quarters of 2022 with an increasing market share of 13.8 % in Q1-Q3 2022 (11,8 % in 2021). We have adapted our product offerings to the given economic situation of high inflation on the investment side we offer capital protected and guaranteed yield funds as well,” - explained Attila Gombás, CFO of K&H Group. 

Nik Vincke, CEO of K&H Insurance, said the following: ’In 2022 net profit dropped to HUF 1.8 billion compared to HUF 4.8 billion last year due to the extraordinary windfall tax. In Non-Life, premium income grew 11% yoy to reach HUF 44.7 billion.  Most dynamical growing business lines were Casco, Home and SME. Life brought strong business performance with a 24% yoy growth in regular unit-linked business and 10% yoy growth in regular risk life products. In terms of digitization our service is permanently improving Kate, our AI based, personal digital assistant has been able to help customers in insurance matters in our mobile bank.”

Digital transformation and innovation

“K&H is clearly a leader in digital transformation, always offering new digital solutions for the convenience of clients. The most novel such solution is the introduction of Kate, which is an AI driven digital personal assistant that any mobile bank customer can use as out of the box feature, based on customers’ context. Kate will analyse all available data, will send relevant and valuable message, helping us, the customers saving time and money. We want all our clients to meet Kate as much as possible with a personalized message. The aim is to focus on bank and insurance but also to familiarize ourselves with the customer, hence, we will offer “small talk”. All in all, Kate helps make banking faster, more convenient and easier with a personal aspect”, - announced Balázs Németh, Head of Innovation at K&H Group.

K&H has 635,000 digitally active customers, while 492,000 are active mobile bank users. K&H has 120,000 active digital bank cards.  K&H reached the 50 000 e2e onboarding account opening since its launch in February 2021. In August K&H crossed the level of 3 million transactions per month paid by customers with Apple, Google, Xiaomi and Garmin Pay. The number of virtual public transport tickets sold in K&H+ this year exceeded 100,000 by the end of September. This represents a significant increase of 45 % compared to the same period last year.

Sustainability

KBC's Climate Report contains analyses and targets for the energy, real estate, transport, agriculture, construction and metals sectors, some of which have been broken down into sub-sectors for the Group.

”We have set specific and measurable targets for these sectors and aim to achieve those targets by 2030 and 2050. By 2030, 75% of the Group’s energy portfolio financed is planned to be in renewable energy. The energy sector is responsible for 28% of the EU's total greenhouse gas (GHG) emissions and therefore deserves priority. In other sectors within our portfolio, we are also planning to significantly reduce GHG emissions, such as the real estate sector, which accounts for 40% of total EU energy consumption and 13% of GHG emissions, or the transport sector, which is responsible for around a third of GHG emissions in the EU.  Beside the green mortgage loan product mentioned earlier, we also introduced Green Car Leasing, which can be used for second-hand or new electric cars through a HUF-based leasing scheme, which we already contracted in the value of HUF 1,4 billion to date. At the end of September, the assets in Responsible investments reached HUF 100 billion, doubling the amount compared to a year ago. Nearly 13% of our total investment volume is now invested in Responsible Future Funds" - explained Guy Libot, CEO of K&H Group.

K&H's unaudited, consolidated results under IFRS (International Financial Reporting Standards) were as follows: