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, 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. 

Related Articles

Blow for Russian stocks as Kremlin backs away from higher dividend payouts

Russian stocks are facing a serious setback after it emerged that the Kremlin may be backing out of a decree to force state-owned companies to pay dividends worth 50% of their earnings. The ... more

Ukraine central bank slams PwC over PrivatBank audit

The National Bank of Ukraine (NBU) has accused PricewaterhouseCoopers, PrivatBank's auditing firm, of providing an inadequate evaluation of collateral under loans provided by the çountry's ... more

Turkish central bank releases $500mn of liquidity via new deposit swaps market

The Turkish central bank on January 18 provided around $500mn of liquidity with a maturity of one-week to Turkish lenders at the first auction held under the scope of the newly launched FX ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss