K&H Bank reports HUF 106.6 billion net profit for the first nine months of 2024

According to Guy Libot, CEO of K&H Group: „Our financial performance was strong in the first 9 months of 2024, the after-tax profit of our core financial activities increased by 16 percent compared to last year without the effect of government measures.  K&H achieved double-digit growth in deposits and investments. The third quarter sales result of HUF 63 billion of investment funds is one of the highest quarterly figures in recent years. After more than five percent rise compared to September 2023, the total number of banking customers has crossed 1 million by the end of Q3 2024.  The number of clients whose income is regularly transferred to K&H accounts also exceeded 623,000, six percent higher than a year earlier. Our market share in the 18–29-year-old youngster segment increased from 16 percent to 18 percent (2024 H1 vs. 2023 H2). I am also proud to mention that we won the best real estate finance bank in 2024 by EuropaProperty in this quarter.”

financial results in the first 9 months of 2024

K&H Bank reported a HUF 106.6 billion after-tax profit. The Bank’s income increased by 13 percent:  deposits expanded by 10 percent yoy, the total loan portfolio grew by 8 percent year-on-year to HUF 2992 billion, while the volume of new corporate and retail loans reached HUF 425 billion in January-September 2024. Due to pressure on costs caused by inflation and expenditures on new digital solutions operating costs (without bank taxes) rose by 15 percent compared to last year.

„Corporate loan demand in the banking sector remained subdued, with its 5 percent yoy volume growth K&H was able further strengthen its market position in corporate lending.  K&H remains actively involved in state-subsidised financing schemes that support the daily operation and development expenditures of businesses: we have concluded contracts worth almost HUF 270 billion in total under the Széchenyi Card Program (for closed and running programs). We can also be really proud that our leasing portfolio has exceeded HUF 100 billion by the end of September this year.”- said Attila Gombás, Chief Financial Officer of K&H Group. „We achieved double-digit growth in retail deposits. Retail deposits expanded by 13 percent, exceeding the 10 percent average growth in the banking sector. While the retail loan portfolio increased by 8 percent in the banking sector overall, K&H registered 12 percent growth compared to last year. The volume of retail mortgage disbursements was about three times higher than this time last year. Despite the tightening of the age criteria for baby boom loans, the amount of loans disbursed increased compared to last year: HUF 27 billion was disbursed in September 2024 (+ 17 percent).  In the first 9 months, we disbursed HUF 9.4 billion green housing loans, which is 6.4% of total housing loan disbursements. On the savings side the volume of deposits placed by customers reached HUF 3833 billion, 10 percent higher than in the previous year. Thanks to the positive performance of investment funds, by the end of September we had more than HUF 1660 billion in client assets, an increase of 35 percent compared yoy.  The third quarter sales result of HUF 63 billion is one of the best quarterly figures in recent years, reflecting stable demand even in a declining yield environment. In addition to the growth in assets under management the number of clients who invest regularly also showed a steady increase during the period, with more and more of them moving towards balanced investment funds.”

Nik Vincke, CEO of K&H Insurance, said: “In the first 9 months net profit reached HUF 1.2 billion. In the corresponding period of 2023, as a result of the entire year’s windfall tax HUF 0.1 billion net profit was recorded.  In non-life, premium income grew 11 percent yoy to reach HUF 39.8 billion and all business lines are growing permanently. Life also brought strong business performance in targeted product lines and increased 14 percent yoy driven by regular unit-linked pension and regular risk business lines.”

digital transformation and innovation

After a 7 percent yoy increase, the number of digitally active K&H clients reached 735 000, and almost 60 percent of total new retail accounts are now opened online. The number of digital payments is increasing, and the share of physical card purchases is decreasing. While in September 2023, physical card purchases accounted for 73 percent, in 2024 they were 66 percent.

„ K&H mobile bank is the most popular mobile app in the domestic market as the Digital Innovator UX Award was presented for the first time this year by Visa and it was won by K&H Bank. The range of services that are available digitally is expanded continuously: we have launched the parking function within K&H+, which allows clients to start and stop public parking across the country. A new feature has been added to K&H's mobile banking service: the income and expenditure monitor provides a quick and easy overview of the financial balance of a given period, thus helping more conscious financial planning. K&H is the only issuer in the market that offers digital SZÉP cards which can be used for payment with a mobile phone and other smart devices, just like a bank card. We replaced the existing card design as well. The number of digital SZÉP cards has reached 75 000 and they are accepted at more and more sales points.”- said Balázs Németh, Head of Innovation at K&H Group.” In one year, more than one million conversations and six thousand transfers per month are made with Kate, the country’s only voice and chat-based digital financial assistant powered by artificial intelligence, which already knows two hundred functions. A tenth of mobile banking customers already use it regularly. More than 90 percent of K&H’s mobile banking customers have already contacted Kate, and more than half of them have talked to the bank’s AI-based digital financial assistant. Kate’s most popular function is viewing the PIN code.”

“In terms of digitization insurance service is permanently improving as well: customers can acquire green card and insurance coverage certificate for their insurance policies in our mobile bank with the assistance of Kate and documents are available instantly for the customers in our mobile bank.  Following the launch of risk life insurance in our mobile bank last year, K&H's latest digital innovation, the digital pension insurance, became available in September. This is unique in Hungary. Kate sends push notification messages to customers who have due insurance premium and customers can pay their premium in our mobile bank only with a few taps. “- adds Balázs Németh.

sustainability

“We became a top player in the Hungarian green financing market: K&H corporate green loan outstanding by MNB taxonomy reached HUF 120 billion meaning above 20 percent market share. To agricultural customers – both plant farmers and animal breeders we provide an internally developed CO2 calculator online. The Business Council for Sustainable Development in Hungary (BCSDH) has awarded the Sustainable Future Award to this joint solution of K&H and the Institute of Agricultural Economics recently. In the area of savings, more than 50 percent of client assets under management are managed in responsible investment funds, demonstrating the commitment of the whole group to the green transition.   “- said Guy Libot, CEO of K&H Group.

„Our sustainability efforts are not only about our commitment to the environment, but also about contributing to a society,”- continued Guy Libot. “With our new K&H Fit for Life program, we help young people in foster care who are embarking on a challenging path to independent living. With the right coaching and training, they have the chance to achieve their dreams. Our current and future clients can also contribute to the program: K&H will set aside HUF 2,000 from its own income for each new account opened, and our existing clients can double that support by activating the K&H cashback function."

K&H’s unaudited, consolidated results according to the international financial reporting standards (IFRS):