K&H Bank reports a net profit of HUF 42.3 billion and K&H Insurance a HUF 8.3 billion in 2020
Strong market share increase in loans in all segments
K&H continued delivering its innovations in the banking mobile app with the launch of the K&H+ mobility solution on mobile and a unique instant account opening service.
K&H Bank had resilient financial results in 2020, recording HUF 42.3 billion net profit, a 6% increase yoy on underlying basis excluding the HUF 12.7 billion negativ pre-tax impact of exceptional items. In 2020 K&H Insurance reached a profit after tax of HUF 8.3 billion.
- in 2020 K&H granted a total of HUF 620 bln new loans in 2020 (a 23% increase yoy), the total loan portfolio reached HUF 1900 bln and increased by 18% in 2020 driven by strong second half of the year
- Strong market share increase in loans in all segments. Retail loans new production market share increased to 13.3% in Q4.
- Corporate loan portfolio increased by 19% in 2020. K&H contracted a total amount of 173 bln for the Funding for Growth Hajrá! scheme by 31 December, representing a market share of 11% in outstanding.
- Transactional turnover by the last quarter of 2020 recovered from its bottom in Q2. Strong business volumes were driven by the economic rebound of 2020 second half despite second wave of Covid-19.
- K&H continued its innovations in the banking mobile app by launching K&H+, offering a mobility solution available to 485 000 mobile bank users and a unique in the market instant account opening service.
Financial results, 2020
In 2020, K&H Bank posted a net profit of HUF 42.3 billion, which also includes HUF 12.7 billion negative pre-tax impact of exceptional items: HUF 4.4 billion modification loss related to the payment moratorium, HUF 19.7 billion IFRS9 impairment on the expected future credit losses due to the pandemic and a pre-tax gain of HUF 11.4 billion related to the transfer of activities/operations of K&H Fund Management to the Hungarian Branch of KBC Asset Management. This operation will be delivering synergies for the KBC Group while clients will continue to enjoy the same high standard of services as before.
David Moucheron, CEO, K&H Group highlighted: “2020 was a year like no other. In spite of the difficult circumstances, K&H achieved resilient financial results driven by strong market share increase in loans in all segments. K&H continued delivering its market leading innovations in its mobile app, such as our K&H+ services and the instant account opening service. This shows that Covid-19 did not slow us down and K&H remains strong in crises.”
K&H’s underlying positive net profit increased by 6% yoy in 2020 thanks to the growing business volumes – especially in the second half of the year due to the economic rebound - and good cost control. Regarding the economic activities of K&H clients, following the bottom in Q2 the incoming account turnover of Corporates and Micro SMEs started to increase by the end of 2020 despite 2nd wave of Covid-19. Corporate account turnover is now above pre-pandemic level while Micro SME turnover didn’t t reach the pre-crisis level in Q4.
"K&H Bank keeps playing an active role in financing the Hungarian economy, houesholds, small businesses, large corporations and the public sector. In 2020 we granted a total of HUF 620 billion new loans (a 23% increase yoy) and our total loan volume increased by 18% yoy, reaching HUF 1,900 billion. Retail loans new production market share increased to 13.3% in Q4. Retail loans new production reached HUF 235 bln in 2020, growing by 21% yoy. Including baby boom new production HUF 58 bln representing 12.4% market share in Q4 2020. Corporate loan portfolio increased by 19% in 2020. K&H contracted a total amount of 173 bln for the Funding for Growth Hajrá! scheme by 31 December, representing a market share of 11% in outstanding. The government bonds’ volume in our balance sheet reached HUF 1,078 billion by the end of 2020, representing a 23% growth yoy“, said Attila Gombás, CFO, K&H Group.
Bank is in your pocket
The coronavirus pandemic has accelerated the usage and affinity of clients towards digital banking and insurance solutions.Today 82% of K&H clients are digitally active, meaning 570 000 clients. K&H mobile bank client number grew by 28% yoy to 485 000. Over the past year customers on average used their mobile app 3 times a week.
"We keep focusing on mobile service’s development for banking and insurance. In 2020 we started offering non-banking services to our clients and we launched K&H+ in our mobile app. This mobility solution is automatically available to 485 000 mobile bank users Our clients can now purchase over 1000 types of city and intercity public bus tickets and passes in 70 cities, in just a few clicks without even needing to enter credit card details. K&H is also the only one in the Hungarian banking market to offer travel, home, and MTPL insurance in banking mobile app. Finally, since last year clients can see details of their loans, deposits and investments in the K&H mobile bank and make use of several advanced bankcard management functions. Our next innovative feature, instant online account opening service becomes available as of today. The number of digitally active client continues to strongly increase as most of the core banking and insurance services and functions are now available on the mobile phone. The K&H mobile app is a platform where insurance, investments, wallets, and even transport tickets can be handled all together. As a K&H client you literally have your bank is in your pocket.” – Balázs Németh, Chief Innovation Officer, K&H Group added.
Nik Vincke, CEO, K&H Insurance, announced the following: "In 2020 our net profit reached HUF 8.3 billion. In Non-Life, premium income reached HUF 51.2 billion, growing by 4% yoy. Life brought strong business performance with a 41% yoy growth in regular unit-linked pension, 38% yoy growth in regular unit-linked non-pension and 22% yoy growth in individual risk products. Our digital service is permanently improving: More than 40 000 customers visited our pension insurance calculator in 2020. Hundreds of thousands of our customers will receive their green cards in digital format from 2021.”
K&H Bank’s unaudited, consolidated results according to International Financial Reporting Standards (IFRS) were as follows:
HUF billion |
31 Dec, 2019 |
31 Dec , 2020 |
variance |
---|---|---|---|
net profit (excl. exceptionals) |
50.9 |
53.8 |
+5.7% |
net profit |
50.9 |
42.3 |
-16.9% |
loans to clients |
1618 |
1903 |
+18% |
deposits from clients |
2630 |
3260 |
+24% |
AuM in mutual funds (supernet) |
663 |
669 |
+1% |
operating income excluding exceptional items |
167.5 |
177.0 |
+5.7% |
operating expenses incl. FTL paid |
-102.1 |
-101.8 |
-0.3% |
quality of loan portfolio |
|
|
|
NPL |
4.1% |
2.3% |
|
credit costs |
0.0% |
1.1% |
|
capital and liquidity |
|
|
|
capital adequacy (banking group) |
18.7% |
19.2% |
|
loan to deposit ratio |
61.9% |
58.7% |
|
solvency ratio (insurance) |
186.6 |
245.0% |
|
efficiency |
|
|
|
cost/income ratio (incl. bank tax) |
64.3% |
60.8% |
|
cost/income ratio (excl. bank tax) |
53.4% |
49.9% |
|
ROE |
15.2% |
11.2% |
|
contact person
K&H Communications Directorate
- sajto@kh.hu