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About GRANIT Bank

GRANIT Bank provides online financial services to small and medium-sized enterprises. It is based in Budapest, Hungary.

GRANIT Bank Headquarter Location

Lechner Ödön fasor 8.

Budapest, 1095,

Hungary

Latest GRANIT Bank News

From the beginning, the goal was digital operation: Granit Bank was launched ten years ago

Dec 21, 2020

Portfolio Signature for Christmas too! Key analytics and exclusive content under the tree. You can even give someone a last minute gift with a one-year Portfolio Signature subscription. And if you buy an annual subscription for several friends, friends and family at the same time, you can also get a quantity discount. So in addition to making a useful gift for the holidays, you can even support the production of quality economic content. Gránit Bank started its business in May 2010, when it was founded by Sándor Demján with a balance sheet total of just over HUF 7 billion. At the end of last year, the bank’s balance sheet total was almost HUF 400 billion, in the first half of 2020 the balance sheet total exceeded HUF 420 billion, and at the end of November it was already HUF 500 billion. The bank closed last year with a pre-tax profit of nearly HUF 1.5 billion, while continuously increasing the number of its retail and corporate customers, its deposit and loan portfolio. “Of course, our basic goal was to differentiate ourselves from other players in the market, and in 2010, assessing the situation in the banking sector, we saw that the bank should be structured differently than before, and since we were private investors, the return was not incidental,” he said. Éva Hegedüs, President and CEO of Gránit Bank, majority owner. Therefore, the shareholders were already thinking about an innovative business model at the outset, which can create new business needs in the Hungarian market, exploit the growing business potential, and thus put the bank on a profitable path as soon as possible. From the 2010s onwards, net banking services had already begun to transform people’s banking habits, internet penetration had developed rapidly and a growing proportion of consumers were receptive to digital solutions and wanted simply, conveniently, quickly, but at no extra cost. to use a financial service. In addition to the corporate segment and the medium-sized segment of the SME sector, the bank also deliberately built on the retail segment, marking the need to build a diversified deposit portfolio as a strategic goal. “The post-2008 crisis has shown quite clearly that the banks that have been most resilient to the crisis have had a diversified funding structure, predominantly retail deposits and have not financed themselves from bonds, corporate deposits,” the CEO added. The digital-based business model resulted in different and innovative operating solutions at the bank, initially they did not open an account, worked with agent networks, and created net banking solutions in which the customer service process was placed on a completely digital basis. VideóBank was launched and Gránit Bank became the first Hungarian financial institution where an account could be opened without a physical presence. Due to the legal background at the time, in the initial process, the customer opening the account immediately received a bank account capable of receiving transfers, however, a transfer from the account could only be initiated after personal customer identification had taken place. This, of course, has been a process that can be done in minutes on VideBank in minutes. “From the beginning, we knew that in addition to corporate lending, it was necessary to build a retail business in order to create a customer base with a diversified deposit structure, on the basis of which we could start cross-selling other products in the future. Pre-2010 foreign currency lending and the economic downturn have been a challenge for many businesses, and for those who have successfully weathered the crisis, partnership, trust and quick decision-making have been particularly important. Based on this and providing these capabilities, we focused primarily on the medium-sized segment of the SME sector, ”said Éva Hegedüs. With this model, Granite Bank has been able to generate a profit since the fourth year, which is a rarity in a greenfield bank. According to Éva Hegedüs, the newly established challenger banks in the international arena focus more on payment services and / or specifically standardized lending, ie there are few financial institutions in the global market that operate in a business model similar to Granite Bank. Today, Granite Bank manages more than 70,000 accounts, the growth is dynamic, with an annual average increase of more than 50 percent in the balance sheet total over the past 10 years. The bank has a 2.5 percent market share in corporate lending, which is already a remarkable size in the Hungarian market, considering that the leading banks in corporate lending do not have a share of more than 13-14 percent. “We find that there is a growing number of retail customers who are receptive to digital solutions, who want to bank simply and conveniently, and for whom the Granite Bank, which appears every year with new innovations, is sympathetic to them. A significant part of our retail customers not only use us as a transaction bank, as is the case with some fintech companies, but their regular income also arrives at the bank and their savings are deposited at Gránit Bank, ”says Éva Hegedüs, who said that the virus situation has only confirmed customer confidence in the financial institution. The bank typically opens more than 500 retail accounts per month, which rose to 800 in March, 90 percent of which was made via video banking. Éva Hegedüs emphasized that the digital business model also provides a significant cost advantage compared to traditional banks: at Granite Bank, the ratio of operating expenses to the balance sheet total is 0.9 percent, which is a significant efficiency advantage compared to the banking system’s average of 2.3 percent. In addition to efficient operation, the bank places special emphasis on corporate customer service, with corporate placements exceeding HUF 200 billion. In the quarter following the launch of the MNB’s FGS Hair Loan Program, Granit Bank issued the largest volume of FGS Hair Loans, for which the MNB awarded the bank with the Excellence Award. In the area of ​​corporate lending, the bank applies conservative risk management standards, thanks to which the quality of the loan portfolio is excellent (NPL ratio 0.1%). According to Éva Hegedüs, it is now basic for every bank to have a mobile phone application and for their customers to be able to manage their finances using digital solutions. In the market today, they see slogans similar to those used to promote Granite Bank ten years ago, but even then a part of the profession smiled. At the same time, the chairman and CEO also acknowledges that a construction bank can innovate much more boldly at the start, because larger financial institutions already have an established business and operational structure, a branch network, which makes it difficult to change business models. He added that there is no question that digital platforms are the future and that sooner or later all banks will move in this direction. The original of the article is published by the Budapest Stock Exchange, a BÉT50 appeared in. The media sponsor of BSE50 is the Portfolio Group. Cover image: BSE50

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