Russia’s Sberbank to cut branch network in Hungary

By bne IntelliNews December 14, 2015

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, 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. 

Related Articles

Azerbaijan's IBA sees assets fall 29% y/y in 2017 after debt restructuring

The assets of the International Bank of Azerbaijan (IBA), the largest lender in the country, contracted by 28.9% y/y to AZN8.7bn ($5.1bn) in 2017, the state-controlled bank reported on January 10. ... ... more

IMF sees economic recovery in Iranian non-oil sectors but urges shoring up of banking system

Iran’s economy is starting to recover more rapidly from years of international sanctions but the country urgently needs to shore up its banks, a senior International Monetary Fund official told ... more

Kazakhstan’s Bank of Astana SPO to be first ever placement of foreign bank on Moscow Stock Exchange

Kazakhstan’s Bank of Astana (Astana Banki) plans to conduct a secondary offering of shares (SPO) on the Moscow Stock Exchange, RNS news agency reported last week. Bidding will begin on December 14. ... more