Sberbank plans to close 13 of its branches in Hungary, the state-controlled Russian giant announced on December 14.
The downsizing would see nearly a third of Sberbank’s branches in the central European country closed. The bank had 47 branches at the end of 2014, according to information on its website.
The closures, however, do not mean Russia’s largest bank is considering an exit from Hungary, Index.hu reports. “Optimising the branch network is one of the elements of long-term growth,” the bank told the news portal. The decision is also related to the fact an increasing number of clients are showing interest in the bank’s online solutions instead of going personally to a branch.
Reports in the Hungarian media suggested over the past few months that Sberbank is looking to sell its Hungarian unit. Other EU subsidiaries are also thought to be up for grabs, as the Russian bank struggles under sanctions to find the funding to grow them.
Meanwhile, several foreign lenders have quit Hungary over the past 18 months as years of harsh treatment have pushed them into losses.
Potential suitors for Sberbank’s local unit reportedly included the Hungarian government, which has been seeking to boost local ownership in the sector. Over the past year, the government bought the country’s fourth-biggest lender MKB, as well as Budapest Bank. It is currently in the process of buying a 15% stake in Erste’s local unit under a deal brokered in February.
Now with skin in the game, the government is offering some relief to embattled banks after years of punitive policies. It has pushed through a bill that will see the country's high banking tax gradually fall starting next year. It is also mulling additional tax breaks for banks that increase their lending. Data continues to show lending outside the central bank’s 'lending for growth' programme remains effete.
The major motivation for Budapest is to convince the battered banks to boost credit to the economy which is set to slow down to below 3% in 2015 from 3.7% last year.
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