In 2006, MKB achieved solid growth in all key banking indicators: Tier 1 capital rose by 8.3%, total assets increased by 12.2% and net profits were up by 24%, producing a healthy RoE of 17.3%.
Following the expansion strategy of its major shareholder, the BayernLB Group, MKB Bank (formerly the Hungarian Foreign Trade Bank) managed two successful acquisitions: one of MKB Unionbank in Bulgaria, a small bank that is expected to expand its branch network by 10 this year to 57; and the other of MKB Romexterra Bank in Romania, a larger bank that is expected to expand its 60-branch network to 95 by end-2007.
Although these banks are quite small and have market share targets of less than 3%, MKB has succeeded in creating an organic banking group in the central European region based on integrated business and operational mechanisms. It also managed to establish a new green-field insurance company, a leasing company and a fund management company, all providing a more comprehensive set of financial services for its clients.
In the past year, MKB launched 12 new investment funds, enlarged its electronic services with corporate internet-based and mobile functionality, and increased its market share of the new mortgage market from 7% to 15% – overall a successful year.
“This award is a great honour for MKB Bank: a recognition of our systemic efforts to increase shareholder value and the standards of the bank’s high-quality tailored services,” says CEO Erdei Tamas. “In addition to preserving our leading position in corporate and project finance business, we have been growing in the retail market in 2007 at the fastest rate among all major competitors. Our key strength lies in the personalised lifetime relationship with our customers. MKB Group serves 60,000 corporate and 900,000 retail clients in Hungary, Romania and Bulgaria through 201 branches, multiple electronic channels and group members in pension, health, insurance and car finance businesses.”
