K&H Bank’s 2020Q1 results decrease by 47% yoy to HUF 6.5 billion due to one-off impact of COVID-19 pandemic

K&H Insurance reaches HUF 2.5 billion net profit in 2020Q1 K&H Bank’s capital and liquidity position remains strong

  • K&H Bank’s net result including one-off impact (HUF 8.4 billion) of COVID-19 pandemic decreased by 47% yoy,  recording a  HUF 6.5 billion after-tax-profit in 2020Q1. Excluding the one-off impact income grew by 7.7%, and net result by 17.4%.
  • K&H Insurance reached HUF 2.5 billion net profit in 2020Q1
  • K&H Bank remains a stable financial institution with  a strong capital and liquidity position with  HUF 1000 billion liquidity surplus, by April 30  LCR:  187%,  almost double the regulatory minimum and a capital ratio of 16.5% (31 March, 2020)
  • K&H successfully ensured full digital and physical service provision for clients during the restrictions. Use of digital channels accelerated. K&H now has 477 000 digitally active clients (+13% yoy). 
  • Despite a significant slowdown in March as a result of the COVID-19 pandemic, underlying business activity also remained solid in 2020Q1 where lending grew by 16% yoy, and assets under management by 5%

Financial Results in 2020Q1

K&H is recording a HUF 6.5 billion net profit, a 47% decrease yoy including COVID-19 impact (HUF 8.4 billion pre-tax whereof impact of the moratorium is HUF 6.0 billion). Excluding the one-off negative items K&H reached HUF 14.2 billion underlying net profit, a 17.4% increase yoy and income grew by 7.7%. Cost/income ratio improved from 52.6% to 52.2% yoy.

Despite a significant slowdown in March as a result of COVID-19 pandemic, underlying business activity also remained solid in the first quarter of 2020 where new loans reached HUF 156 billion (a 42% yoy growth), new mortgage loan disbursement increased by 31% (HUF 32 billion). New cash loan production has nearly tripled yoy (50% of the new production is related to Baby Boom loans). New loans to corporates increased by 27% and reached HUF 98 billion in 2020Q1. On the savings side our assets under management (mutual funds) grew by 5% yoy (to HUF 839 billion). Total deposits grew by 11% yoy and amounted to HUF 2679 billion.

By May 13, the opt-out ratio of credit moratorium at K&H is 50%.

K&H Bank’s capital and liquidity position remains solid with cash and cash equivalent liquid assets surplus of appr. HUF 1000 billion at its disposal, by April 30 LCR: 187%, almost double the regulatory minimum and a capital ratio of 16.5% (31 March 2020).

In 2020Q1 K&H Insurance net profit reached HUF 2.5 billion. In non-life, premium income reached HUF 16.7 billion, growing by 6% yoy. Life insurance brought strong business performance with a 67% yoy growth in regular unit-linked pension and 23% yoy growth in individual risk products.

Uninterrupted operations and service to clients, smooth transition thanks to earlier investments in digital strategy

All K&H Bank’s branches remained open all through the COVID-19 pandemic. Throughout that period, HQ functions were fully functional, with some 3000 of staff working fully online from home. Following the easement of the restrictions in Budapest and Pest county HQ staff is back in the office in split teams since 19 May.  

Since the outbreak of the epidemic, digital activities have accelerated:

  • The number of digitally active clients grew by 13% yoy to 477 000 and registered mobile bank users number one-third more to 417 000. 
  • Clients paid cheques nearly 36,000 times through the e-bank platform and more than 50,000 times through the mobile bank app, almost doubling between mid-March and mid-April.
  • The number of bank transfers from the mobile bank app increased by 31%, on average to more than 19,000 per day.
  • For online card payments, a very dynamic 55% increase is seen in March 2020 compared to the same period last year, and the value of online payments increased even more dramatically, by 70% compared to March 2019.  
  • The digital Insurance Client Portal usage, number of registered policies grew by 10% within 6 weeks. 

Continued proactive business approach, commitment to future innovations

The COVID-19 pandemic situation accelerated development of remote sales capabilities.  This week K&H introduced its new, additional services in its mobile-bank whereby  clients can now follow their investment and loan portfolios on their phones and can also take out home and travel insurances in their mobile banking application. 

While working remotely K&H has been developing its processes to provide further remote services such as contracting for e-bank and mobile bank usage, remote investment advice and insurance and single visit mortgage loans.

K&H extended its robotized processes in non-life insurance and claim administration by making 70% more transactions by robots since 2019Q4.

K&H is actively participating in the new government guarantee programs and started offering the Funding For Growth (NHP) Hajrá to Corporate and SME clients.

“The corona crisis is hitting society and the economy particularly hard. Many people have lost their jobs and many businesses have had to close down or have seen their activity plummet. Despite the government measures and bank sector’s efforts, it is clear our economy will suffer. This impact is already visible in K&H’s 2020Q1 results, which have been hit by moratorium and market volatility. The full cost of the crisis - the write-downs on credit, the consequences of slowing economic growth, reduced business confidence and consumption - will only be seen in the coming months.  

In spite of the COVID-19 situation we have been able to provide uninterrupted service to our clients . We could do so thanks to our digital readiness, and the outstanding commitment of our staff as well as the accelerated uptake of our digital solutions by our clients. Going forward we intend to continue to play our role as financial intermediary in the economy, providing loans and access to state schemes for our private, SME and corporate customers, as well as keeping our investment in innovation and digitalization. Thanks to our solid capital and liquidity position, we can do this. As one of the bankers is often quoted these days whereas in 2008 banks were part of the problem, now banks can be part of the solution,” – said David Moucheron, CEO of K&H Group.

K&H Bank’s unaudited, consolidated results according to International Financial Reporting Standards (IFRS) were as follows:

HUF billion 31 March, 2019 31 March, 2020 variance

net profit (excl. exceptionals)

12,1 14,2 +17%

net profit

12,2 6,5 -47%

loans to clients

1,501 1,747 +16%

deposits from clients

2,405 2,679 +11%

AuM in mutual funds

800 839 +5%

operating income excluding exceptional gain on sale of investments

39,3 42,4 +8%

operating expenses incl. FTL paid

23,6 25,2 +7%
quality of loan portfolio      


5,5% 3,6% -1,9%

credit costs

0,0% -0,2% -0,2%
capital and liquidity      

capital adequacy (banking group)

16,3% 16,5% 0,2%

loan to deposit ratio

62,8% 65,6% 2,8%

solvency ratio (insurance)

220% 230,2%  

cost/income ratio (incl. bank tax) 

63,5% 62,9% -0,6%

cost/income ratio (excl. bank tax)

52,6% 52,2% -0,4%


15,8% 7,2%  

contact person

K&H Communications Directorate

  • sajto@kh.hu