K&H Bank reports a net profit of HUF 12.6 billion and K&H Insurance a HUF 2.6 billion net profit in 2021Q1

• in 2021Q1, K&H granted a total of HUF 134 bln new loans, the total loan portfolio reached HUF 1,936 bln and increased by 11% yoy
• K&H delivered strong growth in retail lending and retail loan market share grew in all major segments, retail loans new production market share increased to 14.7% in Q1
• subsidized renovation loan enjoyed a strong start after launch with HUF 3.1 billion worth of applications till the end of the first week of May
• K&H contracted a total amount of HUF 177bln for the Funding for Growth Hajrá! scheme by 31 March
• K&H continued its innovation program by launching:
  • a unique instant account opening service
  • regular investment service in its mobile bank app
  • Google Pay , a smartphone-based payment solution
  • immediate electronic green card for MTPL customers

K&H Bank results

In 2021Q1, K&H Bank posted a net profit of HUF 12.6 billion, which corresponds with a 19% growth compared to Q1 2020 on an underlying basis (excluding the impact of exceptional items: modification loss related to payment moratorium in Q1 2020 and changes in the fair valuation of the financial instruments).

Guy Libot, CEO, K&H Group highlighted: “In the first quarter of the year in spite of the difficult circumstances, K&H Bank continued its profitable operations. K&H achieved its financial results driven by strong increase in loan volumes, resulting in rising market shares in all segments, too. K&H continued delivering market leading innovations such as instant account opening service and Google Pay. In line with KBC Group’s Sustainable Finance Program K&H reviewed and created credit and investment strategies with sustainability focus for the most impacted industries and raised awareness and engagement within the organization and among the clients alike about the topic.Sustainability is embedded in our organization which is also proven by good examples in the first quarter of the year like K&H is one of the market leaders in renewable energy financing with HUF 70 bln financing volume by the end of Q1 2021 and 25% of new fund sales is already Socially Responsible Investment (SRI) at K&H.“

‘K&H Bank keeps playing an active role in financing the Hungarian economy, households, small businesses, large corporations and the public sector. In Q1 we granted a total of HUF 134 billion new loans and our total loan volume increased by 11% yoy, reaching HUF1,936 billion. K&H delivered strong growth in lending. Retail loans new production market share increased to 14.7 % in Q1. Retail loans new production reached HUF 70 bln , growing by 21% yoy. Within that baby boom new production reached HUF 17 bln representing a 12.8% market share in Q1. K&H was among the first in the Hungarian banking market to launch subsidised housing renovation loan and enjoyed a strong start: the bank has already accepted applications from customers in the value of HUF 3.1 billion till the end of the first week of May, the average disbursed amount is HUF 5.2 M HUF. The popularity of renovation loans is also growing in the non-subsidised personal loan segment, with more than one third of new applications for renovation loans. K&H contracted a total amount of HUF 177 bln for the Funding for Growth Hajrá! scheme, in EXIM Compensation Loan program HUF 45 bln was contracted by the end of Q1 2021. The government bonds’ volume in our balance sheet reached HUF 1,125 bln, representing a 15% growth yoy‘ - said Attila Gombás, CFO, K&H Group.

Bank in your pocket

‘K&H continues delivering its innovative services to its customers, we did not allow Covid-19 to slow us down. In February 2021, the online account opening service was launched, which allows customers to open a fully functional bank account and receive an instant digital card in about 10 minutes on their mobile. From April, clients can easily set up regular investments on mobile: they can open a securities account, and set up a monthly purchase transaction of funds In April we also introduced the smartphone-based payment solution Google Pay in Hungary as first among the Hungarian banks, giving another boost to bankcard payments. Both the number and total value of payments executed by smartphones are expected to keep rising at a considerable rate. The number of the bank’s digitally active customers has been growing steadily as well, now counting 592 000. And from now on all digital personal loan clients can ask for repayment protection insurance (PPI), a new service launched one month ago. Micro SME customers are digitally very active too, digital penetration of microSME customers reached 63% in the first quarter ‘ – Balázs Németh, Chief Innovation Officer, K&H Group added.

Sustainability at K&H

In line with KBC Group’s Sustainable Finance Program K&H reviewed and created credit and investment strategies with sustainability focus for the most impacted industries and raised awareness and engagement within the organization and among the clients alike about the topic. Sustainability is embedded in the organization which is also proven by the following examples in 2021Q1:

• K&H is one of the market leaders in renewable energy financing with HUF 70 bln financing volume by the end of Q1 2021. K&H Bank financed approx. 242 MW of solar power installations in Hungary by the end of 2021Q1, which is more than 15% of the total capacity volume developed in the country.
• 85% of K&H Bank’s core commercial real estate credit exposure (cca HUF 50 bln) to office projects is granted to green-certified/precertified buildings
• 25% of new fund sales is already Socially Responsible Investment (SRI) at K&H, meaning that every 4th investment fund sold at K&H is an SRI fund. The volume of SRI funds increased by 50% in the first quarter compared to 31 December 2020.

K&H Insurance results

Nik Vincke, CEO of K&H Insurance, said the following: ’In 2021Q1 net profit reached HUF 2.6 billion. In Non-Life, premium income reached HUF 16.9 billion thanks to dynamically growing Casco (13% yoy), Home (11% yoy) and SME (9% yoy) business lines. Life brought strong business performance with a 15% yoy growth in regular unit-linked pension, 20% yoy growth in regular unit-linked non-pension and 10% yoy growth in individual risk products. Our digital service is permanently improving, and the usage of insurance digital solutions has continued to grow tremendously: users of Customer Portal grew by 60% year on year. More and more Customer Portal functionalities are automated, serving customers instantly, for example more than 1 million of our MTPL customers can have immediate electronic green card and coverage certificate in case they request it through the Customer Portal.”

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

*Q1 result includes the FY banktax