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K&H BANK Ltd.
Vigadó tér 1
Budapest H-1051
Phone: (36-1)-328-9000
Fax: (36-1)-328-9696
Home-page: www.khb.hu
E-mail: khbinfo@khb.hu
About:
The founders of the Bank were the Hungarian State and some of the Bank’s long-standing clients, which included companies in the fields of agriculture, the foodstuffs industry, trade and tourism. In the period leading up to 1992, the Bank expanded its profile and clientele, launching new services and dynamically increasing the number of its branches. During this time, the position of many clients deteriorated along with the prevailing economic trends in Hungary, and the Bank’s portfolio of poorly-rated credit increased substantially as a consequence. This situation and plans for continued growth necessitated a consolidation of the Bank, which involved an increase of capital in addition to subordinated debt financing. Thus strengthened, our financial institution merged in 1996 with IBUSZ Bank, our subsidiary specialised in retail services. This merger marked the beginning of a major universal bank, which boasted of the second largest branch network in the country. In the same year, K&H Bank joined VISA and Europay (now MasterCard), and began developing a bankcard product range that remains one of the most versatile in this country.
As the first step towards bank privatisation in 1997, the European Bank for Reconstruction and Development (EBRD) took part as a financial investor and extended subordinated credit for the sum of USD 30,000,000 to the Bank, thus shoring up the Bank’s capital. The tender was won by a consortium of Kredietbank of Belgium and the Irish insurance company Irish Life, which at first acquired a package of 9.6% of the Bank’s shares. It then implemented a capital increase, investing USD 60,000,000. A further change in ownership structure ensued when EBRD’s subordinated credit was converted into shares. As a result, the Bank’s strategic investors, Kredietbank and Irish Life, each acquired shares of 23.1%, while EBRD’s share accounted for 18.2%. The capital increase produced a bank that met all international standards with respect to the strength of its reserves and its capital adequacy, and retained the potential for further growth.
The Belgian owner KBC Bank and Insurance Group merged the Bank with the Hungarian affiliate of ABN AMRO of Holland in 2001. This merger extended to the subsidiaries of the banks, with the exception of Argosz Insurance (KBC’s non-life insurance company), LeasePlan (ABN AMRO’s car fleet management company), and Mébit Insurance (ABN AMRO’s insurance company).
In accordance with the agreement concluded with ABN AMRO Bank, KBC took advantage of its option agreement and bought out Irish Life’s 17.9% and Espirito Santo Asset Administration’s 7.33% share packages in February 2001, thereby increasing its shareholding in K&H Bank to 98.51% before the merger. The shareholders of the banks approved the merger at their simultaneous general meetings held on 27 April 2001. Following the approval of the Hungarian Financial Supervisory Authority and the Competition Authority, the Court of Registration registered the merged K&H Bank as of 1 July 2001, with KBC Bank holding a 59% share and ABN Amro Bank a 40% share.
The merger resulted in one of the largest financial institutions in Hungary, with a balance sheet total of HUF 1,145 billion, a market-leading position in corporate banking, and second place in retail banking. A year later, K&H Bank successfully completed all merger-related tasks that were still outstanding and launched a new unified account management system in its retail branch network.
In 2002, K&H Bank was the first to issue a microchip-based card in Hungary. This technology is much more secure than magnetic strip cards, since in addition to storing data, it allows for updates and can serve as personal identification. However, the most important news of the year was the introduction of a guaranteed money market fund, another first in Hungary. Subscription was successful, with the portfolio of the K&H Fix Plusz investment fund reaching over HUF 3.5 billion. K&H Fix Plusz 2, issued in February 2003, was received with similar enthusiasm. The roaring success of the two investment funds has made K&H Fund Manager the third largest fund manager on the market. Its business activities have been expanding year after year, and its profits are increasing dynamically.
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