April 28, 2011
Citibank Hungary closed 2010 with positive results in a very challenging environment. Performance was well balanced across all businesses with good momentum being carried into 2011 across the Consumer, Commercial and Corporate Bank business segments. Focus remained on effectively managing the cost of credit and risks across the franchise while a solid liquidity position was maintained.
After-tax profit of Citibank Europe plc Hungarian Branch Office for 2010 was HUF 10.45 billion, including the special bank levy charge. This profit resulted in a return on assets (ROA) of 1.64 percent on total assets of HUF 628.60 billion.
Batara Sianturi, Citi Country Officer for Hungary said, “We have successfully navigated through a very challenging 2010. We delivered positive results and created good momentum into 2011. In 2011we are celebrating the 25th anniversary of serving our clients and the community in Hungary. We would like to thank our clients for their trust and confidence in us that have made our success possible in the last quarter of a century. We remain committed to continue to be an active and supportive member of the community in Hungary.”
“We are proud of the many outstanding achievements and innovations that we have accomplished during the 25 years to benefit our clients and the community in Hungary and also, of the key role that we have been playing in contributing to the economic development and modernization of Hungary. In serving our customers in Hungary we continue to build on Citibank’s unmatched global footprints and expertise and further leverage on the fact that none of our competitors in Hungary has a worldwide presence or platform approaching the scale of Citibank. This offers our clients access to world-class products and services, and banking innovations available from around the world,” added Mr. Sianturi.
Recognitions from Clients and Industry Leaders
The commitment to increase service levels and enhance technology continued to be recognized by clients through record high satisfaction results in client and industry awards.
Citibank’s Zero Fee Bank Account for the third consecutive year was voted the "Best Deposit Account Award" in the 2010 MasterCard – Bank of the Year competition, a recognition that no other financial institution received for a single product over the 5-year history of MasterCard's industry competition in Hungary. The bank’s long-term commitment to financial education and social enterprise building was also recognized for the third year in a series by winning in 2010 the third place in the "Best Bank for Corporate Social Responsibility" award category.
Citibank Hungary received the "Best Consumer Internet Bank" and “Best Corporate/Institutional Internet Bank” Awards by Global Finance Magazine for the fifth consecutive year and was granted the “Best Foreign Investment Bank” Award in the emeafinance magazine’s Bank Achievements competition. The Citibank Hungary franchise was voted the “Best Global Cash Management Bank” in Hungary as well as in Central and Eastern Europe in Euromoney's 2010 Cash Management Poll, and it gained “Top Rated” status in Global Custodian magazine’s Emerging Markets Survey in the “leading clients” category.
Corporate Banking Business
The Corporate Banking business continued to deliver a well balanced performance in 2010 across all businesses.
FICC
FICC offers a wide range of Treasury products to corporate clients to help them effectively conduct their day-to-day activities and manage their business related risks. In 2010 the functionalities of the online FX trading and market information platform, CitiFX Pulse was redesigned and further enhanced which attracted an increasing number of active clients and resulted in growing trading volumes. Hungary's FICC managed to maintain its leading position in derivatives trading on the local market.
Securities & Fund Services
The Securities and Fund Services business further grew in 2010 in every aspect. The returning investors' interest in the Hungarian market helped the business achieve a double-digit increase both in assets under custody and transaction volumes on a year-on-year basis. As a result the team maintained the profitability of this business and strengthened their market position as top-tier service provider. Product offering was enhanced targeting clients with potential for organic growth. Broadening of the product scale and the client base put Citibank in a strong position to efficiently manage the expected changes in the markets.
Global Subsidiaries Group
Serving subsidiaries of global partners remained a focus area in 2010. The relationships with these multinational clients were strengthened and enhanced by bringing them Citi's Global Commercial Charge Card program and the WorldLink Global Payments solution as an enhancement to the world-class products and services available to clients in Hungary and around the globe. The increased focus of large Hungarian and multinational corporations on supply chain management were addressed by offering comprehensive receivables finance programs enabling them to effectively mitigate risks, optimize cash-flow and strengthen their competitiveness.
Top tier local corporates and the public sector
Citibank's professional team in the global banking business specialized in serving large Hungarian corporations, financial institutions, the government and major public sector institutions remained focused on supporting the strategic business and financial efforts of these clients. Leveraging on Citi's global platforms clients based in Hungary have access to funds and liquidity from international capital markets. In addition to various structured financing solutions, equity capital markets and investment banking services, the bank also offers market-leading global transaction services to their clients in the areas of treasury, trade finance and liquidity management. Citi's global footprint, knowledge and experience made the Hungary team a trusted partner for these clients in supporting their international expansion efforts, including identifying target locations and market analysis in the strategic planning phase and offering financial solutions in the execution phase including international cash pooling or centralized treasury services.
Consumer and SME Business
In 2010 Citibank’s team effectively leveraged the good momentum that they have built over the last two years and achieved well balanced results in their Cards, Wealth Management, Loans and SME businesses. The distribution strategy was strengthened focusing on further developing the branch network especially in high traffic locations of the capital, the internet, telephone and direct sales agents.
Credit Cards
In 2010 the Cards business continued to be successfully developed. A number of high value promotions were run to boost the acquisition efforts, including the repetition of the popular Malév-Citibank co-brand card summer promotion in which every new cardholder meeting the promotion criteria received a complimentary airline ticket, and a HUF10,000 cash back promotion to new Shell-Citibank card members. Many card usage stimulation campaigns were organized including special, seasonal preferential offers from merchant partners as well as unique shopping and cash back opportunities for the customers. The enhanced credit card related services extended to automatic settlement option from Citibank or other bank accounts or Loan On Phone opportunities.
Wealth Management
Citibank's market leading Zero Fee Bank Account was for the third year voted the #1 in the MasterCard - Bank of the Year 2010 Competition in the "Bank Account of the Year" category, a recognition that no other financial institution received for a single product over the 5-year history of MasterCard's industry competition in Hungary. As a result of marketing and sales efforts the number of the new Zero Fee Bank Account customers increased by over 50 percent in 2010. Several promotions were organized during the year to facilitate account openings, including a Summer promotion with a new Alfa Romeo car as the main prize and a number of special merchant promotions in partnership with the credit cards business with special offers and discounts for customers. Last year the chip debit card was launched for new customers while the migration of the full portfolio to chip cards representing an expanded security feature was started.
With the recent stabilization of Hungary's economy and a positive shift in the economic outlook and market expectations, Citibank recognized that a number of affluent customers in Hungary were looking for extended opportunities to manage a part of or their full wealth internationally in secure markets. In response to these customer needs last Summer in cooperation with Citibank London the services of Citi International Personal Bank was launched in Hungary. Unique to this service is that local customers do not need to travel to London to get access to the Citi International Personal Bank services, but are receiving investment advice in person from a Hungarian speaking Relationship Manager in Budapest who is backed up by a professional team located in London. Products and services on offer include more than 200 mutual funds, international brokerage services with equities and bonds in 25 countries, a wide variety of structured notes and FX volatility management opportunities, lending, secure time deposits with competitive interest rates and a bank account kept in London UK.
Citibank also launched the Long-term Investment Account to allow customers to benefit from the tax advantages available through this account for their long-term savings and investments in local currency time deposits and mutual funds. 15 new HUF denominated, Luxemburg domiciled mutual funds were introduced in 2010 to support customers' opportunities with Citibank's new Long-term Investment Account. The investment offering increased to a total of 169 mutual funds from 11 asset management and fund houses, including equity, bond, real estate, money market, and other funds. Further portfolio diversification initiatives in 2010 included offering a high number of principal protected structured notes denominated in HUF, EUR and USD.
In 2010 the exclusive Citigold Club privilege program available for Citigold customers was further enhanced. This program designed to meet the affluent customers' lifestyle needs allows them to select from a wide range of preferential offers by Citibank's exclusive world brand partners from the area of fashion, entertainment and travel. With last year's extension gastronomy services were included under the brand of Citigold Club Culinaria. Around one hundred restaurants, cafés and wine houses among the best of Hungary's gourmet world have partnered with Citibank to offer a discount from 15-20 percent to Citigold customers around the country. Restaurants like Gundel, Callas, Chateau Visz, Onyx, Enoteca Corso, Aranyszarvas and Ráspi are now a member of Citigold Club Culinaria, just to mention a few. The Culinaria Club will continuously be expanded with customers' most preferred places and will regularly present additional unique offerings and event invitations by club members to Citigold customers.
Insurance products
In response to the growing customer demand, Citibank and ING Insurance jointly developed a regular premium-payment capital-guaranteed facility, the KRONOSZ Guaranteed Euro Income Life Insurance product, distribution of which started last year through Citibank's distribution network. This product is primarily advertised as a retirement savings solution that besides all the advantages of a unit-linked insurance facility, offers customers a unique investment opportunity and security from many perspectives. Last year Citibank extended the distribution of Chartis Europe Hungary's Positive Care cancer protection insurance earlier offered to cardholder customers to Citibank's Wealth Management customers.
Personal Loans
Beginning last November Citibank's customers can receive a record fast Citibank Personal Loan in as short time as within 24 hours if approved applications are submitted in any of the Citibank branches. In 2010 Citibank continued to offer their customers various preferential rate personal loans, including for internet applications or the Citibank Useful Loan with a 2-3 percent discount rate under specific criteria.
SME Business
Serving the customers in the SME business continued with a reenergized focus and the relationship management team and the branch presence were further strengthened. Due to the consistent risk management approach the team successfully maintained the portfolio quality. In this business Citibank is offering SME customers posting up to HUF 50 billion net annual sales a wide range of cash management, transactional as well as financing, trade and treasury services. Citibank regards its educational efforts as one of the major priorities in building partnership with customers. Part of this endeavor was the ongoing country-wide Treasury Roadshows and informal roundtable events organized last year to discuss with customers the current economic challenges and opportunities as well as areas where Citibank can help them in achieving their business and financial goals. The SME educational website at www.haszonkulcs.hu was further enhanced increasing the profile of this platform and attracting many new visitors.
Corporate Social Responsibility Programs
Citibank is committed to being an active and supportive member of the communities in which they do business. In line with Citi's global corporate social responsibility strategy Citibank Hungary's primarily focus is on financial education and building social enterprises. They partner with NGOs in order to enhance the impact of their community programs by leveraging their partners' expertise and long-term experience. Citibank employees are volunteering their time and knowledge to support the beneficiaries of their CSR programs.
Citibank's key achievements in the major long-term CSR programs:
More than 130,000 students in 310 elementary schools across Hungary served with technology-based teaching materials in the Citibank Financial Education School Program started in 2001 in partnership with Junior Achievement Hungary
Around 1,000 university students impacted in the long-term partnership with Corvinus University of Budapest that was launched in 2004 to continuously increase the level of financial education through the Series of Citibank Lectures, the Citibank Case Study Competition and the Citibank Best Graduating Student Award
More than 50 civil organizations and small businesses participated in the Social Enterprise Development Programs initiated in 2007 in partnership with NESsT
37,000 trees planted for Citibank's customers who switched from printed to paperless e-Statements, in the Plant-a-Tree Program launched in 2008
17 young business professionals supported in their postgraduate studies through the András Felkai Academic Award Fund co-founded by Citibank in 2002
More than 600 underprivileged or disabled children are living and studying in an improved environment due to the work done by Citibank's local volunteering teams on the annual Citi Global Community Days since 2005
Thousands of children across the country benefited from the Children Health Care Support Program started in 1998
Hundreds of young Hungarian music students have enjoyed Citibank's support in building their talent through the partner program with the Association of Friends of Franz Liszt Music Academy since 2001
Major financial data for Citibank Europe plc Hungarian Branch Office (as of December 31st, 2010, according to Hungarian Accounting Standards)
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