Hungarian Banks Shut 94 Branches in 1st Half of Year -Report

BUDAPEST--Hungarian banks closed a total of 94 branches in Hungary in the first half of the year, as declining profitability and a souring economic outlook called for austerity measures, business daily Vilaggazdasag reports Wednesday.

Hungarian banks have been downscaling branch networks for the past three years after a boom in lending raised the number of branches by close to 50% to 1,596 in 2009.

Hungarian banks closed 31 branches in 2010 and a further 60 in 2011, Vilaggazdasag reported citing its own survey of 14 commercial banks.

In the first half of this year alone, Erste Bank Hungary Zrt., the Hungarian arm of Austria's Erste Group Bank AG (EBS.VI) shut down 40 branches, or 22% of its previous network, as part of efforts to streamline operations after sustaining a 157 billion forint ($694 million) loss in 2011.

UniCredit Bank (12), AXA Bank (10), CIB Bank (9), FHB Bank (9) and MKB Bank (8) were also among banks to trim their networks.

Hungary's market leader by asset volume, OTP Bank Nyrt. (OTP.BU), continued to have the widest network, with 396 branches at the end of June.

Hungarian banks' profitability has been hit significantly over the past two years by large-scale government taxing, a state scheme to help households with foreign currency loans and deleveraging pressure from foreign owners.

 
   Newspaper website: www.vg.hu 
 

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