Budapest Business Journal 3206

Banking

Good Numbers but Hungarian Banking System Under Pressure

Government interventions, the urgency to digitize and the need to comply with new regulations: the local banking sector is under a lot of pressure. Yet, the numbers still look rosy.  14

R34DY: Building Blocks for Core Banking Systems

The company’s name reminds you of a robot from Star Wars, and it has been pronounced in the wildest possible ways. But R34DY draws banking experts’ attention for something much more remarkable: its expertise in core banking systems, pushing a long overdue paradigm shift to the fore.  18

SOCIALITE

Hungarian Art & Business: 1 Year On

Growing its collection of significant Hungarian artists, acquiring work by heavyweight international names, and being visited by a growing number of art lovers, Hungarian Art & Business (HAB) goes from strength to strength.  21

Empowering Women in Business

AmCham Hungary

China in Hungary: Growth in the Books

According to Chinese tradition, the Year of the Dragon promises prosperity. This positivity also seems to apply to investment relations between Hungary and China, which are thriving more than ever. Insights from the Hungarian Investment Promotion Agency shed light on the specifics.  12

CEO Írisz Lippay-Nagy and U.S. Ambassador David Pressman have signed the “Empower Her” initiative, an international movement promoting women-led entrepreneurship, into force in Hungary.  9

Disinflation Continues, but not for Long

Inflation slowed further in February, remaining in the central bank’s 2-4% target band. However, analysts warn that the generally favorable inflation picture cannot be maintained in the long term.  3

EDITOR-IN-CHIEF: Robin Marshall

EDITORIAL CONTRIBUTORS: Luca Albert, Balázs Barabás, Zsófia Czifra, Kester Eddy, Bence Gaál, Gergely Herpai, David Holzer, Gary J. Morrell, Nicholas Pongratz, Gergő Rácz.

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THE EDITOR SAYS

BATTING FOR COMMUNITY, DIVERSITY AND HUNGARY

Depending on when you read this, we are either preparing to name our 10th Expat CEO of the Year Award winner or have just done so: the Black-tie gala event will be held at its usual venue of the Corinthia Hotel Budapest on an unusual day, for us, a Saturday. We will also present the Community Award for the second time to a business leader demonstrating social commitment, diversity and ethical leadership. It seems impossible that we will be making the award for the 10th time, and yet, as I have had the privilege of hosting each event, I know it to be a fact. When we launched the title, presented for the first time in 2015, we wanted to underscore that the best expat bosses add real value to Hungary’s economy.

The most successful expat CEOs are also ambassadors, both for their home country here and, perhaps more importantly, for Hungary when they sit down at the boardroom table back in their headquarters, wherever that may be. If you want a good way of measuring how business-friendly a country is, look for the standout FDI projects it can attract. Think of the BYD factory under construction in Szeged or the CATL plant going up in Debrecen, not a hundred miles from the BMW site, which is due to see EVs rolling off the production line in 2025. Those are here in no small measure due to the work of the Hungarian Investment Promotion Agency, and you can read more about that in the context of Chinese companies on page 12.

But another measure of success is reinvestment. Having decided to invest once, more than satisfied with the quality of the workforce and happy with the level of government and municipal support, you might think it is easier to reinvest. But it is a competitive world out

there. I have spoken with countless CEOs who talk of having to convince the board to invest again (and a few who have had to accept they will have to wait a while before they can get more money). Hipa, again, has a role to play here, but the opening batter for Hungary is always the local CEO. Think of Mercedes: its first factory at Kecskemét was, at the time, a record-breaking greenfield investment for Hungary and a rare piece of good news for the country in the aftermath of the 200708 financial crisis. The first cars rolled off the production line in 2012, three years before our first gala. The groundbreaking ceremony was in 2009. A crucial role in convincing the Daimler board in Stuttgart to continue to invest in Hungary was played by the expat CEOs who worked here. And the same is true for pretty much every other multinational with a Hungarian interest. We always hoped the Expat CEO would demonstrate diversity over time. Not including the 2024 results (because I genuinely do not know who the winner will be at the time of writing), six men and three women (the first in 2019) have won the award. There have been three Germans (one of whom is half-Brazilian) and one each from the Czech Republic, the Netherlands, Finland, Italy, Spain and the United Kingdom. One woman and two men are on this year’s shortlist, representing Denmark, Germany, and Italy. That’s not a bad mix. Congratulations to all our past winners and all three candidates this year. Any one of them would be a deserving winner.

Robin Marshall Editor-in-chief

THEN & NOW

The black-and-white photograph, shot from the steps of the Hungarian National Museum and taken from the Fortepan public archive, shows a scene from the 1952 March 15 celebrations at Budapest’s Museum Garden. The national holiday marks the anniversary of the outbreak of Hungary’s 1848-1849 Revolution and War of Independence against Habsburg rule. The color photo from state news agency MTI captures a moment from the performance on the steps in front of the National Museum during this year’s celebrations.

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Photo by Magyar Rendőr / Fortepan

Photo by Szilárd Koszticsák / MTI

1News

Disinflation Continues, but not for Long

Inflation slowed further in February, remaining in the central bank’s 2-4% target band. However, analysts warn that the generally favorable inflation picture cannot be maintained in the long term.

Inflation in EU Member States (February 2024)

12-month change in consumer prices, February 2023-February 2024

Inflation in Hungary continued its downward trend, standing at 3.7% in February. Compared to the same month last year, a price increase of 2.2% was recorded for food, according to the latest report released by the Central Statistical Office (KSH). Electricity, gas and other fuels became 9% cheaper, service prices went up by 10%, while alcoholic beverages and tobacco prices rose by 5.3% on a year-on-year basis.

From the previous month, prices were up by 0.7% on average. Food became 0.2% more expensive on average, while electricity, gas and other fuels became 0.6% more expensive. In the latter group, motor fuels were 6.7% more expensive.

Analysts were surprised by the betterthan-expected February inflation data, but many are warning of the possibility of reflation due to the repricing of services.

According to ING senior analyst Péter Virovácz, February saw a slowdown in the previously extremely fast disinflation, as the consumer price index rose by only 0.1 of a percentage point to 3.7%, compared to January. Although this was close to ING Bank’s preliminary expectations (3.9-4%) and to the consensus of

3.9-4%

on an annual basis in the market, the data can be evaluated as a small positive surprise.

In his outlook, Virovácz emphasizes that the monthly exchange rate will probably be slightly weaker in the next period, and the annual consumer price index will be around 3.3-3.5%.

He points out that the inflation in the cost of services may still be the most significant driving force, and the rise in fuel prices may further strengthen the monthly repricing. However,

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the generally favorable inflation picture cannot be maintained long-term, and ING still expects two rounds of reflation.

Downside Risk

According to Virovácz, the first round is expected in May, with the second in October. As a result, ING’s inflation forecast for December 2024 is in the range of 5.56% and currently closer to the top end of the range. For the second half of the year, however, the analyst sees downside risks in the inflation outlook due to the weakness of economic performance, the easing of labor market tightness, and the slight improvement in consumer confidence.

The better-than-forecast CPI data creates a complicated situation for the Hungarian National Bank (MNB); if it persists with 100 basis point interest rate cuts, support for the forint exchange rate may weaken.

According to Péter Kiss, investment director of Amundi Fund Management, the lower-than-expected February inflation data will strengthen the MNB in continuing to cut interest rates. However, the phasing out of the base effects and a euro-forint exchange rate of nearly 400 might complicate the situation.

Kiss says the interest rate cuts may continue at a rate between 75 and 100 basis points, with a mid-year inflation target of 6-7%.

The stability of the capital markets and the European Central Bank’s statements

Source:

referring to an interest rate cut favor the larger 100 basis points cut. However, by the middle of the year, due to the continuously decreasing domestic interest rate and the stagnation of the European base rate, Kiss believes support for the exchange rate may weaken.

Orsolya Nyeste, Erste’s chief analyst, emphasized that the core inflation rate had slowed, which is a positive surprise. Food prices rose slightly, and with the decrease in fuel prices contributed to the reduction in the inflation rate. The cost of clothing fell while services rose in price.

“We continue to expect the current rapid disinflation to peter out in the spring. In the coming months, the annual reference rate should be between 4-5.5%,” says Nyeste.

Budget Consolidation

According to her, the expected improvement in internal demand and the strong need for some kind of budget consolidation may cause additional inflation risks in the second half of the year. Erste Bank expects the inflation rate will stabilize consistently within the MNB’s tolerance limit only in 2025.

According to the Ministry of National Economy, however, the government has already won the battle against inflation. As Minister of National Economy Márton Nagy wrote in a press release, the significant decrease

in inflation is due to the targeted and effective measures of the government.

The minister said the introduction of the online price monitoring system and mandatory promotions supported the continuous moderation of inflation. He emphasized that real wages have been rising since September and that the minimum wage and guaranteed minimum wage increases in December, as well as the teacher wage increase and the general wage dynamics, may further strengthen this trend.

In light of persistently low inflation and reasonable wage offers, a real wage increase of 5-6% is expected in

2024,

according to the minister. Having successfully suppressed inflation, the government is now focusing on the main challenge of 2024, restoring economic growth. For this, it is necessary to increase the mobilization of domestic labor reserves further, encourage a high investment rate, and restore household consumption by strengthening consumer confidence and removing caution, Nagy claims.

Indeed, the minister recently admitted at a conference that this year’s 4% growth target is unrealistic. This was the first acknowledgment by the Minister of National Economy that the original macroeconomic target of the 2024 budget is no longer tenable.

ZSÓFIA CZIFRA

Hungarian Investment Markets Awaiting Price Correction

The conventional wisdom is that there will not be a recovery in the Hungary investment market until at least next year as a re-pricing process needs to be gone through, writes Budapest Business Journal real estate editor Gary J. Morrell.

Hungarian asset owners need to re-access pricing to become an attractive investment destination again. Essentially, real estate investment trends in Central Europe are 12 months behind Western Europe, and there is a further time lag between Hungary and the remainder of the established Central European markets, according to Mike Edwards, head of capital markets at Cushman & Wakefield Hungary.

A bounce back in Western European markets by the end of this year would make a recovery in Hungarian investment possible next year.

“There is a need to be more realistic in pricing in relation to Western Europe,” Edwards said at the second Cushman & Wakefield Hungary Market Outlook Breakfast at the Café Gerbeaud, attended by around 80 Hungarian and international property professionals.

Cushman & Wakefield traced EUR 630 million in investments for Hungary in 2023, representing a 43% fall in year-onyear activity. The consultancy recorded about

EUR 5 bln

in investment volume across the region (Hungary plus Bulgaria, the Czech Republic, Poland, Romania,

Real Estate Matters

A biweekly look at real estate issues in Hungary and the region

and Slovakia), representing a 55% fall in year-on-year activity. The investment volume for Hungary represents 11% of this total. Poland and the Czech Republic are the leading Central and Eastern European destinations.

According to the consultancy, 65% of transactions in Hungary were undertaken by domestic investors, marginally up from 2022, when domestic capital accounted for 63% of investment activity. Traditionally, the country has always had a high proportion of local players. It is a trend that may be spreading.

Significant Shift

“In 2023, Central Europe’s commercial real estate market saw a significant shift in the source of capital, with a marked increase in local investment share

amidst a decrease in Western capital inflow. This transition reflects a broader trend of regional investors playing a more pivotal role in sustaining market liquidity and driving investments,” comments Cushman & Wakefield.

Yields for Hungary are put at 6% for prime office, 6.75% for prime industrial and 7% for prime high retail and shopping centers. The market anticipates further yield adjustments.

The retail sector currently has the most positive indicators, with retail sales improving in addition to rental growth, particularly outside of the capital. Some 35

new brands have entered Hungary since 2019. This includes Primark, due to open its first store in Hungary. The country has the lowest density of shopping center space in CEE, and no major shopping centers are in the pipeline.

There are significant opportunities in the industrial sector, with stock well below the CEE average and strong take-up. Vacancy stands at a comparatively low 8% despite the unprecedented supply over the past five years. The market has also moved from being almost entirely Budapest-centric to more countrywide, as in other Central European markets. From a supply perspective, development trends have moved from a speculative to a built-to-suit basis.

Take-up in the office market is still down on pre-pandemic levels with a significant drop in requirements for large corporations,

2023.

“In 2023, Central Europe’s commercial real estate market saw a significant shift in the source of capital, with a marked increase in local investment share amidst a decrease in Western capital inflow. This transition reflects a broader trend of regional investors playing a more pivotal role in sustaining market liquidity and driving investments.”

although 90% of relocations of 1,000plus sqm are to new buildings. With ESG issues and quality having come to the fore, there is now a clear distinction between newer and older buildings. Vacancy stands at 13%. Several office projects are available for investors if a price can be agreed.

Ilya Nikitin from Morgan Stanley argued that a clear pricing distinction between Hungary and Western Europe needs to be established for the country to attract international investors. Edwards estimates investment volume for Hungary in 2024 to EUR 500 mln-750 mln mark.

The H2Office development was a significant investment deal in the Budapest market in

Ukraine

U.S., Hungary Exchange Barbs Over ‘Difficult’ Relationship Roundup Crisis

Prime Minister Viktor Orbán met with former U.S. President Donald Trump in Florida on March 8. Afterward, Orbán told TV news channel

M1 that if Trump were reelected, he would end the war in Ukraine by depriving the country of support from the United States.

“He will not give a penny into the Ukraine-Russia war, and therefore, the war will end as it is obvious that Ukraine on its own cannot stand on its feet,” Orbán said. “If the Americans do not give money and weapons, and also the Europeans, then this war will be over,” he continued, “and if the Americans do not give money, the Europeans are unable to finance this war on their own, and then the war will end.”

Orbán has been a longtime supporter of Trump, who is once again the presumptive Republican nominee for this November’s U.S. presidential election. The Hungarian PM broke with precedent in meeting with Trump and not the sitting head of state, President Joe Biden, with whom the Hungarian PM has a much frostier relationship.

Asked whether he was concerned about Orbán meeting with Trump, Biden replied, “If I’m not, you should be.” At a campaign event, Biden said to his supporters of Trump: “You know who he’s meeting with today down in Mar-a-Lago? Orbán of Hungary, who stated flatly he doesn’t think democracy works, he’s looking for a dictatorship,” Biden said, adding, “I see a future where we defend democracy, not diminish it.”

Ambassador Summoned

In response, Minister of Foreign Affairs and Trade Péter Szijjártó said that he had summoned U.S. Ambassador David Pressman to his ministry to answer for the comments made by the President.

Szijjártó said the ambassador was asked to provide the quote Biden had referred to regarding Orbán’s disbelief in democracy.

“Obviously, no such statement was made, so no substantive response of any kind was forthcoming,” Szijjártó added. “We’re not obliged to tolerate such lies from anyone, even if that person is the President of the United States.”

The American position that Hungary was “building a dictatorship” was making bilateral relations “extremely difficult,” the foreign minister said, adding that questioning the democratic choice of Hungarian voters is an “insult.”

At a U.S. Embassy event on March 14, marking the 25th anniversary of Hungary joining NATO, Pressman said that despite being a longtime friend and ally, Hungary has been doing things that undermine trust and friendship, raising concerns among NATO allies that, he said, “cannot be ignored.”

Such concerns include a government “that labels and treats the United States an ‘adversary’ while making policy choices that increasingly isolate it from friends and allies,” Pressman said.

‘Cannot Understand’

The United States “cannot ignore the speaker of Hungary’s National Assembly claiming that [Russian President Vladimir] Putin’s war in Ukraine is in fact ‘led by the United States,’” Pressman added. “We cannot understand or accept that the prime minister identifies the United States as the ‘main adversary’ of [….] Hungary.”

The ambassador also noted that Hungary’s expanding relationship with Russia raised “legitimate security concerns.”

In addition to celebrating the 25th anniversary of its accession to NATO on March 14, Hungary commemorated the start of its 1848-49

Revolution and War of Independence against Austrian Habsburg rule on March 15. In a busy international calendar, Russia held its presidential election between March 15-17.

At a rally in Budapest on March 16, Yulia Navalnaya, the widow of Russian opposition leader Alexei Navalny, who recently died under suspicious circumstances in prison, issued a statement against Vladimir Putin.

“He will not give a penny into the Ukraine-Russia war, and therefore, the war will end as it is obvious that Ukraine on its own cannot stand on its feet. If the Americans do not give money and weapons, and also the Europeans, then this war will be over.”

“In every speech I make, I emphasize one thing: Putin is not Russia. Russia is not Putin. And Hungary is not Orbán either. This is what you prove here today. Democratic and free Hungary has allies, tens of millions of my fellow citizens who also want to live in a democratic and free Russia.”

Putin subsequently won a fifth term as President of Russia in an election widely considered neither free nor fair. The presidential term is now six years, and under the current system, Putin could stand for one more term, meaning he could be in power until 2036.

NICHOLAS PONGRATZ

In this photo released by the Prime Minister’s Press Office, Viktor Orbán (left) and former U.S. President Donald Trump talk before their sit-down meeting at Trump’s residence in Mar-a-Lago, Florida, on March 8. Photo by Zoltán Fischer / MTI / Prime Minister’s Press Office.

Hungarians Unhappy With Salaries, Saving Wherever They Can

As in most HR Matters columns, we start this month with the GKI Economic Sentiment Index, composed of two elements: business confidence and consumer confidence. In the most recent report at the time of writing, released on Feb. 26, GKI notes that Hungary’s industry and construction sectors saw a “noticeable negative change,” although there was a better situation in trade and services.

Activity Rate on the Labor Market by Sexes

HR Matters

A monthly look at human resource issues in Hungary and the region

part-time or expanding the number of jobs that can be done from home office.”

As for the difference in revenues between men and women, this is partly explained by the fact that women are overrepresented in jobs that pay poorly, like caretaking, sales, and education. It is also more common for women to temporarily pause their careers to deal with family-related activities, such as caregiving. Regarding job seekers, about 23% of women registering with Trenkwalder are from the

41-50

the situation in the labor market before 2020, when any job seeker could easily find a job, will not return any time soon.

According to the respondents, 59% say finding a job fitting their skills is more challenging than last year. In 2023, this rate was 53%. As for how high a salary raise would make them more satisfied in their current jobs, 49% would not expect more than 20%, and only 29% would hope a raise higher than that but below 30%.

Hope vs. Expectation

The good news for job seekers and employees is that the employment intentions of companies did not change significantly compared to the previous month. Consumers, however, were not motivated: after a rise in January, household expectations “deteriorated significantly” last month. Respondents saw the economic outlook for the country over the next 12 months as much less positive compared to January, GKI says.

This is reflected in a survey conducted in early February by staffing company Trenkwalder, showing that more than half, 54%, of respondents expect their financial situation to deteriorate compared to last year. This is similar to 2023, meaning that the employees do not yet perceive any improvement in macroeconomic figures.

Half are unsatisfied with their current salary level, and almost two-thirds, some 63%, are considering leaving their jobs if a better opportunity arises. On the other hand, the survey shows that the employees are aware that

So much for their wishes, but what do the employees realistically expect? According to a survey by Hays Hungary, 43% of employees expect raises between 5-10%. Based on the responses provided by 2,600 employees and employers, tensions remain in the labor market. The number of jobseekers is higher than in previous years, but their skills are insufficient, and salary expectations are too high.

“Reaching a higher rate of female activity can be done by hiring part-time or expanding the number of jobs that can be done from home office.”

Despite that, the majority of the companies say they do not need or do not want to hire foreign workers. Counterintuitively, they do not want to spend too much on retaining the existing labor force either. Most employers are willing to raise salaries between 5-10%

this year. This should cover inflation this year, forecasted between 4 and 6%. However, the majority of employees would like to see a raise between 10-20%, and a quarter of them, even higher.

A somewhat more optimistic image is projected by staffing company Manpower, which published its forecast for Q2 2024. Almost one-third, 31%

of companies plan to expand their staff, 43% would keep their headcount unchanged, and 22% are eying layoffs in Hungary.

Primarily, it is the larger companies of 5,000 or more employees that would reduce their staff, especially in the automotive and logistics sectors. IT, real estate and financial services companies are more likely to hire.

Women seem to be gaining more traction on the market. In 2023, 72.4% of active-age women were present in the labor market, the highest rate yet registered. The bad news is that their average gross salary was HUF 524,000, 15% less than men at HUF 620,000. Meanwhile, in the last 10 years, the number of jobless women has shrunk from 200,000 to 94,000.

Societal Differences

The difference between women and men regarding the employment rate is 9-10%, which in part can be attributed to social characteristics. Women are more likely to stay at home with children for several years and either retire before the age of 65 or only ever work as a housewife.

Trenkwalder sales manager József Nógrádi says, “Reaching a higher rate of female activity can be done by hiring

age group, the company says.

Finally, a word about how employees handle their finances, both men and women. According to a survey conducted in Europe by Intrum, inflation and high interest rates are making planning expenses and saving money more challenging. There are generational differences: Gen Z has problems paying utility bills and tracking monthly costs, while Baby Boomers are more likely to handle these tasks efficiently.

In all, respondents were most pessimistic about their ability to pay utility bills in Greece (20%), the United Kingdom (16%) and Hungary (15%). About two-thirds of Hungarians (68%) are trying to reduce their expenses by shopping in discount stores and choosing cheaper branded products, Intrum says.

Editor’s note: For more on women in the workforce, see “Economic Empowerment for Women: Increasing Equality in Hungary” on page nine.

Mental Health

Deteriorating Among the Young

Workers in their early 20s are more likely to be absent from work due to illness than workers in their early 40s, according to research from the U.K.-based independent think-tank the Resolution Foundation. In the past, the opposite was the case. According to the findings, the mental health of young people is getting worse, which can hinder their education, meaning they can only find lower-paying jobs or become unemployed. The survey showed that in 2023, 5% of young people were inactive due to their health. In 202122, 34% of 18 to 24-year-olds reported suffering from a mental disorder and experiencing symptoms of depression, anxiety or bipolar disorder. In 2000, this rate was only 24%.

BALÁZS BARABÁS

Mercedes-Benz Manufacturing Hungary CEO Introduced

Jens Bühler became director and CEO of Mercedes-Benz Manufacturing Hungary in Kecskemét this January.

Bühler, who has held various management positions at the company for 21 years, is responsible for the ongoing expansion of the plant and the integration of future models of the Mercedes-Benz Modular Architecture and MercedesBenz Electric Architecture Midsize platforms into production.

After studying mechanical engineering, Bühler joined the company in 2003 as a production processes and materials technology specialist at Mercedes-Benz’ Sindelfingen plant. After various roles in process design, he took over the management of production planning for the GLC and E-Class at the Beijing Benz Automotive Company plant in Beijing in 2014 and played a significant role in the construction of the plant’s expansion. Later, he was responsible for the design of the Kecskemét plant expansion project and, from 2018, for developing the strategic direction and management model of Mercedes-Benz operations.

In 2021, he became the global factory planning area leader at Mercedes-Benz. In this position, he played a major role in transforming Mercedes-Benz cars’ production planning functions and laid down the design guidelines for Mercedes-Benz AG’s future factories.

“It is a great honor to be appointed as director at the head of a factory I was previously responsible for expanding. Thanks to the ongoing expansion, Kecskemét will become one of the world’s most important

Mercedes-Benz plants. The coming years will bring exciting challenges with the introduction of future ‘Made in Kecskemét’ models, and I am counting on the great team at Kecskemét to help me achieve this,” said Bühler.

Bühler took over the management of Mercedes-Benz Manufacturing Hungary from Christian Wolff, who managed the plant for eight years.

Bence Barta Named Partner at Andersen

Bence Barta , the former director of Andersen Adótanácsadó Zrt.’s indirect taxation business, was appointed a partner at the company from Jan. 1.

Barta has gained nearly one and a half decades of experience in the field of taxation and tax consultancy. During his career, he has primarily focused on indirect taxation, particularly VAT and environmental product charging, but he also has a proven professional reputation in customs consultancy. Over the past year, he has also covered Extended Producer Responsibility and Carbon Border Adjustment Mechanism, which are at the intersection of taxation and ESG and has successfully helped Andersen build its competence.

He joined the company as a senior manager in February 2020 and was promoted to director of the indirect taxation business in January 2021. Under his management, sales revenue tripled, and Andersen Adótanácsadó Zrt. ’s above-average market growth in recent years is partly thanks to this.

The prestigious international tax magazine International Tax Review has recognized this performance in recent years. In addition to the “Tax Advisor of the Year in Hungary” award, the company won ITR’s “VAT Advisor of the Year in Hungary” title in 2022 and 2023. Two years

ago, the organization recognized Barta’s outstanding professional work by nominating him as one of seven European tax advisers for the Indirect Tax Rising Star title.

In addition to his merits, Károly Radnai, Andersen’s managing partner, attributes Barta’s promotion to his human qualities.

“He has the entrepreneurial spirit that is indispensable to the management of a rapidly growing company. With his innovative approach, he has developed several new and tax-efficient operating solutions for our customers in recent years. His competence and commitment have made him a true role model for his colleagues,” says the expert.

Tibor Tatár Made Deputy CEO at Wing

Tibor Tatár took over as the head of the Hungarian residential and office development business of Wing, one of the leading real estate development and investment groups in the Central European real estate market, on Jan. 10.

In this specially created position, he is responsible for implementing Wing’s Hungarian residential and office development strategy, managing the business, and preparing, executing, and supervising projects in these areas.

Tatár has worked in real estate for more than 30 years and has unique experience in implementing and managing developments and investments in Hungary, using his own capital and with the involvement of external capital partners. He was CEO of Futureal Development for almost 20 years, where he played a significant role in the domestic and regional growth of the group. Before that, he worked for five years as head of KPMG Property Services in international real estate advisory and was managing partner of TND Real Estate Advisory and Financial

Consulting, where he provided property and privatization advisory services.

He completed his studies at the Faculty of Architecture of the Budapest University of Technology in 1990. Later he completed a twoyear postgraduate course at the Budapest University of Economics and Business Administration, and in 1999 he obtained a Master’s degree in Real Estate at the Nottingham Trent University. He is a member of RICS, a U.K.-based real estate professionals association.

With his arrival, Wing’s management team gains a recognized professional with decades of experience who will play a key role in boosting the group’s domestic residential and office development. Tatár will be supported by Gábor Angel, deputy CEO of Wing Offices, and János Martin, deputy CEO of Wing and director of residential development at Living.

International Partner Appointed at Mazars

International audit and advisory firm Mazars announced that Dávid Szegő, the head of its outsourcing business, has been named an international partner effective from the end of 2023 in recognition of his many years of professional service.

Before joining Mazars in 2018, Szegő acted as accounting and reporting manager at Sony. At Mazars, he first worked as the deputy head of the company’s outsourcing division before taking over its leadership in June 2021.

Under his leadership, Mazars says the company’s outsourcing space has grown significantly in efficiency, scale, professionalism, and profitability. As an international partner, he will focus on developing the business’ professionals and maintaining close client relationships while applying innovative solutions and streamlining processes.

WHO’S NEWS Do you know someone on the move? Send information to news@bbj.hu

Jens Bühler

Bence Barta

Tibor Tatár

Dávid Szegő

2 Business

OECD on Hungary and Productivity: Impediments Must be Removed

The latest OECD survey delves into Hungarian productivity issues, including barriers to new market entrants, excessive regulation of professions and corruption.

Contrary to the impression created by the never-ending supply of upbeat government press releases on economic development, labor productivity in Hungary is not in good shape.

Indeed, after peaking at some 61% of the average productivity of the G7 just before the Great Financial Crisis in 2008, it then fell on average by 0.2% percentage points per annum to bottom out at around 51% in 2016, according to the latest OECD survey of Hungary, published on March 5.

Granted, since then, it has climbed back to close to 65% in 2022, but as the survey notes, despite growing at an annual average of just 3% since 2016, “labor productivity growth remains lower than before the GFC.”

The upshot of the intervening years is that, as of 2022, Hungary is the poorest performer in Central Europe in productivity, lagging Slovakia, the regional leader, by some eight percentage points.

As the OECD stresses in its introduction to the subject: “Labor productivity growth is the key to sustaining living standards. This is particularly important in the context of an aging population. Hungary’s working-age population is set to decline from 60% to just above 50% of the total population between 2020 and 2070 […]. This will weigh on GDP per capita unless productivity can be increased to compensate for this trend.”

In other words, Hungary must address productivity growth as a high priority, but how? The survey’s authors admit several hopeful developments, notably Hungary’s ability to attract foreign direct investment.

Automotive Transition

“The entry of new firms on a market facilitates the diffusion of innovations and can be an important source of future growth,” the authors argue. In particular, the influx of investment related to electric mobility will contribute to the transition of this sector to green technologies.

“Nevertheless, it is still too early to assess to what extent they will increase domestic value added and productivity in the long term,” the OECD cautions. The ultimate benefit to the economy will depend on the ability of domestic SMEs to contribute to the new value chains.

But aside from such potentially bright spots as electric mobility and auto manufacturing in general, the survey warns that business entry rates in Hungary are lower than in other OECD countries in

almost all economic sectors, particularly in telecommunication and IT services.

Worse still, in most sectors, these lower-than-average entry rates are compounded by lower-than-average survival rates of new entrants in the first five years after their arrival.

True, the survey notes that administrative burdens relating to start-ups are low by OECD standards, with one-stop shops informing businesses about their license and permit issues, thereby cutting costs and establishment times. However, in some sectors, excessive regulation creates barriers to competition and market entry.

“The number of regulated professions in Hungary is the highest in any European country. For example, stringent regulations affect competition in legal professions such as lawyers and notaries, as well as water and road transport,” the survey stresses.

Indeed, it identifies more than 400 regulated professions in Hungary, twice the average within the European Union and four times more than Lithuania and Estonia, the EU’s least regulated countries.

The Absence of Pressure

The implication is that, protected by these barriers, incumbent operators in Hungary are under little pressure to innovate and reduce prices or improve competitiveness, to the detriment of long-term economic development.

By way of an example, the survey cites the case of the household retail electricity market in Hungary, where both the “strong presence of state-owned enterprises” along with current regulations and the uncertain regulatory environment “tend to hinder the entry of competitors.”

Moreover, the regulated prices (while politically useful for the government) “discourage competitors from entering the market as their return on investment would be insufficient” to justify their investment while simultaneously preventing new entrants from winning customers from incumbents by offering lower prices, the survey argues.

Not for the first time in its surveys on Hungary, the OECD recommends replacing blanket price caps on energy with targeted cash transfers to vulnerable households, arguing this would both increase the attractiveness of the Hungarian retail electricity market for new investors, contribute to efficiency gains and reduce the cost of targeted cash transfers for the government.

These barriers to entry inhibiting new market entrants contribute to another metric where Hungary performs poorly, namely the dominance of sectors by a small number of players. Indeed, when market dominance was measured on a scale of one (worst) to seven (best) at the World Economic Forum in 2019, Hungary scored just over three. This was significantly below the OECD’s average of 4.4, making Hungary the worst performer among the 38 countries assessed. (Chile headed the list, with a score of 5.8, followed by Japan on 5.6.)

As the OECD concludes: “The low entry and survival rates of new businesses are likely related to the dominant position of a few firms in Hungary. This, in turn, limits competitive pressure on incumbent firms and probably contributes to the fact that both innovation activities and businessfinanced research and development are low compared to other EU and OECD countries.”

Behind the Initials

G7: The Group of Seven consists of seven significant economies (Canada, France, Germany, Italy, Japan, the United Kingdom and the United States, plus the European Union) working as an informal forum of heads of state and government. It was formerly known as the G8 until the expulsion of Russia in 2014 following its annexation of Crimea.

OECD: The Organization for Economic Cooperation and Development is an intergovernmental organization consisting of 38 members that works, in its own words, “to build better policies for better lives.” Hungary, together with the Czech Republic, joined the OECD in 1996. In February 2023, the OECD formally recognized Ukraine as a prospective member, committing to an initial accession dialogue designed to increase its adherence to OECD standards and participation in OECD bodies. Accession discussions were opened with Bulgaria, Croatia, and Romania (alongside Argentina, Brazil and Peru) in January 2022.

KESTER EDDY

Economic Empowerment for Women: Increasing Equality in Hungary

Initiatives and research programs across Europe are highlighting both issues of gender disparities within the workplace and the benefits that come from inclusivity and equality between genders in economic settings. Hungary has risen among the ranks for decreasing inequality in aspects such as the wage gap disparity and funding of women-led startups, a familiar story across Central and Eastern Europe.

Apart from initiatives promoting gender equality and empowerment for women in the workplace, research on these topics is crucial to show that such efforts can make a difference.

In recent years, an increasing number of initiatives working towards the economic equality of women have been founded across Europe, with one of the most recent movements in the country being AmCham Hungary’s “Empower Her” initiative, dedicated to promoting women-led entrepreneurship and equality within international trade.

The initiative is a joint effort between the U.S. Department of Commerce’s Commercial Service, the American Chamber of Commerce to the European Union (AmCham EU), and AmChams in Europe (ACE). It was introduced to the country, signed and put into motion by AmCham Hungary in March 2023, with continuous efforts for equality within the workplace.

The movement’s long-term goals include working towards gender equality in international trade, urging American and European companies to diversify their workplace, and supporting women-owned businesses with the necessary tools and services. The initiative also hopes to increase female entrepreneurs’ awareness of trade, investment, and export-related services.

In honor of the 35th anniversary of the foundation of AmCham Hungary this year, the organization hopes to collect 35 additional institutional signatures on the Empower Her declaration by the end of 2024.

PwC’s 2024 Women in Work Index delved into the gender pay gap issue across OECD countries, ranking various nations based on five indicators: the country’s gender pay gap, women’s labor market participation rate, the difference between men’s and women’s labor market participation rates, women’s unemployment rate and the full-time employment of women.

Hungary Improves

Luxembourg was placed first in the index, followed by Iceland and, intriguingly, Slovenia. The index highlighted the improvement of Hungary’s ranking, as the country rose one place in 2022 (the year for which the latest information is available) into the top 15 from 16th place in 2021.

Hungary’s score rose by three, from 68.1 to 71.1, due to factors such as the labor market participation of women rising by 1.2

percentage points to 72.4%, and the domestic gender wage gap decreasing from 17.3 to 16.1%.

“While this is still a long way from gender equality, improving indicators suggest that corporate efforts to achieve this are beginning to show results,” says Márta Reguly, head of PwC Hungary’s HR consulting team responsible for collecting the domestic results.

region and more developed parts of Europe. Spearheaded by EIT Health, Europe’s leading network of healthcare innovators, the initiative recognizes the specific challenges faced by health and life science startups in CEE.

The consortium’s partners represent business acceleration service providers and investor networks from Hungary, Poland, Slovakia, and Slovenia, as well as innovation hubs from Belgium and the Netherlands.

Huge Funding Disparity

According to the organization, only one percent of Central Eastern Europe startup funds go towards companies founded by women, with more than 94% of funding distributed amongst companies led solely by men. Despite that disconnect, its data shows that increased funding of women-led startups would be economically beneficial.

The “Funding in the CEE Region” report highlights that companies founded by women generate almost twice as much revenue per euro of funding received at

96%

than those established by men.

“Diverse teams have been shown to be more innovative and effective, leading to better business outcomes. Therefore, addressing gender diversity is not only a matter of fairness but also a strategic imperative for fostering a vibrant, innovative healthcare ecosystem,” explains Magda Krakowiak, EIT Health director of business creation.

“Examples [of efforts] include company programs that support women’s career development or practices regarding the reintegration of mothers with young children and flexible forms of employment,” Reguly adds.

Issues of gender wage gaps and lack of labor participation by women are usually the most often referred to examples of gender inequality within an economic system. However, women also face disparities in many other work areas, such as entrepreneurship and team-leading opportunities.

Recent research published Healthy Investment Central Eastern Europe (HiCEE) sheds light on these pressing issues regarding gender inequality throughout Europe. Many health disparities stem from social determinants including gender disparities. Increasing diversity in the corporate world and beyond can facilitate collaboration between stakeholder groups and lead to better access to resources, and a better healthcare ecosystem

The organization aims to narrow the investment gap between the

Research on the disparity between genders within the workplace is just as relevant in Hungary as they are in much of Europe. According to the Hungarian Startup Report 2022, only a quarter of domestic startup companies have at least one female founder. The report also highlights a significant gender imbalance in access to financing from venture capital and angel investors.

“I see many more brilliant women than female founders, and it’s bad. This way, we lose the innovative power of many talented women. We should change it for our own sake,” says Péter Csillag, president of the Hungarian Business Angel Network.

The good news in the wake of International Women’s Day on March 8 is that there are an increasing number of programs within Hungary promoting the recognition and equality of women, not only within the workplace but in education, research and leadership opportunities in various fields. The next challenge is making sure women know about them and are able to make use of them.

Visa Relaunches’ She’s Next’ in Hungary

Visa is relaunching its international “She’s Next” program in Hungary to support the development of women-led SMEs. Building on the success of last year’s program, female entrepreneurs will again be able to apply for five grants of HUF 2 million each. Winners will also receive business

development mentoring for a year to help them grow. Applications can be submitted by April 30 using a simple form. Hungarian women entrepreneurs are most likely to seek knowledge-transfer support in the areas of marketing (44%), finance (30%), and digitalization (26%), Visa says.

LUCA ALBERT

AmCham Hungary CEO Írisz Lippay-Nagy signs the “Empower Her” initiative, alongside U.S. Ambassador David Pressman. Photo courtesy of U.S. Embassy.

‘Money Week’ Celebrates 10 Years of Educating Kids

For the 10th time, the Pénz7 (Money7) Finance and Entrepreneurship Week was organized nationwide from March 4-8 to raise awareness of the importance of developing financial literacy, entrepreneurship and business skills among primary and secondary school students.

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More than 200,000 students from 1,250 schools nationwide participated in Pénz7 2024 through 15,000 lessons given by 650 volunteer tutors.

The 10th edition of the thematic week also attracted experts from associations representing the insurance sector, including the Hungarian Association

of Insurance Consultants (MBTSz), founded only this January, which delivered “Financial Life Lessons” in three educational institutions.

Under a strategic agreement between the Pénziránytű Foundation, the co-organizer of the week, and the Association of Hungarian Insurance Consultants will coordinate awareness-raising activities and work together implementing financial awareness campaigns.

The experts of the MBTSz have transformed unconventional lessons for primary and secondary school students

News Company

Kermann IT Solutions Cleared for NATO Deliveries

The Ministry of Defense has cleared Hungary’s Kermann IT Solutions for NATO deliveries, the company, listed on the Budapest Stock Exchange’s Xtend platform for SMEs, said in an announcement on the bourse’s website on March 18. The firm was cleared after a vetting process by the ministry. The measure allows Kermann to participate in NATO tenders at the “not certified” and “limited certification” levels. Its status will be reviewed every year.

Gundel Targets 20% Revenue Rise

The operator of the Gundel Restaurant, a culinary landmark in the capital, will target a 20% revenue rise this year, managing director Jenő Magyary told state news agency MTI. Last year, the restaurant’s turnover reached

HUF 1.5 billion, Magyary said. The establishment’s profit margin was 8-10%, he added. He said the restaurant welcomed almost 57,000 guests in 2023 and expects to serve 70,000-75,000 this year.

Audi Revenue up 8% Last Year

The revenue of the local unit of German automaker Audi rose 8% to EUR 9.102 billion last year, Audi Hungaria said in a press release on March 19. The aftertax profit of the unit edged up 3% to EUR 354 million. Capex reached EUR 343 mln as the company invested in series production of the new Premium Platform Electric drives and the EA888 R4 Otto drives. Since its establishment in 1993, Audi has plowed EUR 12.5 bln into its operations in Hungary. Audi Hungaria chairman Michael Breme said economic challenges had had “a major impact” on the 2023 business year but added that the company had

Among other things, they discussed the details of savings, borrowing and interest calculation, and the importance of insurance as students become actively involved in finance at an ever earlier age.

“As an economist and a financial professional, I believe it is important to raise young people’s financial awareness, and I focused on this during my presentation,” said Koppány.

“The Pénz7 event clearly proved that any opportunity we dedicate to educating young people finds fertile ground,” added Martonosi. “For me, it is of the utmost importance that in the information society, when this age group is exposed to an incredible amount of impulses, one should not only be a ‘money user,’ but a fully conscious money manager.”

Edina Szojka was also impressed with her students. “I gave a presentation to sixth and eighth graders, and I was surprised to see how knowledgeable and professional the younger age group is about finance,” she said.

into instructive financial life lessons. One of the volunteers was economist and monetary expert Péter Koppány, who gave a combined lesson to students of the Ferenc Nádasi Gymnasium and College of the Hungarian University of Dance Arts.

Edit Martonosi, chair of the MBTSz committee for customer education, lectured to students of the Szent István Ciszterci Gimnázium in Székesfehérvár. Edina Szojka, chair of the MBTSz committee for training and certification, taught students of the Mátyás Hunyadi Elementary School in Budapest.

continued to be a “particularly important player” in the Hungarian economy. Audi Hungaria will start production of the Cupra Terramar model this year and continue preparing for the next generation of its MEBeco electric drives.

AutoWallis Secures Exclusive Farizon Rights in 8 Countries

Hungary’s AutoWallis has secured exclusive distribution rights in eight countries in the region for the Farizon brand of commercial vehicles manufactured by China’s Geely, the listed auto retailer announced on the website of the Budapest Stock Exchange on March 14. AutoWallis will distribute the vehicles in Austria, the Czech Republic, Croatia, Poland, Romania, Slovakia, and Slovenia, in addition to Hungary. Geely launched the Farizon brand in 2016 and has expanded sales to South America, the Middle East and Southeast Asia. The vehicles are being rolled out in Europe in 2024. AutoWallis will start distribution in H2 2024, beginning with the V6E and SuperVan models. AutoWallis CEO Gábor Ormosy noted that his company had been among the first to conclude partnerships with Chinese brands such as BYD and MG.

“I feel it is my personal mission to be involved in this and to pass on my knowledge about insurance to young people and young adults.”

Another longstanding guest lecturer is Minister of Finance Mihály Varga, who was presented with the Financial Support Volunteer Award at the opening event of the Pénz7 week at the Supervisory Conference Center of the Hungarian National Bank on March 5.

Editor’s Note: For plenty more banking and financing news, see our Special Report, pages 8-20.

MOL Boosting Share of Low-carbon Capex

Hungary’s MOL will raise its share of spending on low-carbon investments to 30-40% of total capex in 2025-2030, according to an update of the oil and gas company’s strategy for diversifying away from fossil fuels published on the website of the Budapest Stock Exchange. “MOL is committed to continue working towards climate neutrality along a smart transition path, also keeping an eye on energy supply security and economic competitiveness, besides sustainability,” the company said after its board approved the update of the “Shape Tomorrow” strategy. The firm aims to leverage the cash generation of its upstream business to fund its group-level transformation, targeting average daily production of upwards of 90,000 barrels of oil equivalent with unit direct production cost of USD 6-8/boe in 2025-2030. The main focus of the upstream business in the region will be to optimize production and infrastructure while enhancing hydrocarbon recovery to contribute to supply security.

Minister of Finance Mihály Varga Mihály holds a lesson on financial awareness during the Pénz7 week at the Sándor Kőrösi Csoma Bilingual Baptist High School in Budapest on March 5. Photo by Attila Kovács / MTI.

Good Hungarian Representation at Mipim 2024

Against a background of a challenging economic and geopolitical environment, more than 20,000 real estate and investment professionals from 90 countries attended the 32nd edition of Mipim at thePalais des Festival in Cannes.

GARY J. MORRELL

“The global urban festival brings investors, political leaders and the real estate community together to facilitate relationships and find solutions to the challenges facing the built environment,” said Reed Midem, the organizer of the annual four-day event. In general, market sentiment was less bright than the sunny spring weather on the Côte d’Azur last week.

“With a growing number of stands and pavilions (340) taking more space (19,500 sqm), Mipim demonstrated that there are still a significant number of opportunities amid geopolitical, environmental and socio-economic uncertainty,” Reed Midem added.

As one of the leading international meeting points for developers and city and regional representatives, Mipim was attended by

70%

of the top asset managers who manage more than EUR 4 trillion of assets, according to Reed Midem.

The debates and private discussions over a glass of wine at Mipim reflect the themes and concerns prevalent in the real estate markets at a given time. In the EU in 2024, these are, essentially, when will the investment markets make a come-back and how do the real estate industries face the challenge of the need for sustainable and EU Taxonomy-

compliant features throughout the real estate cycle from financing to planning to construction to letting to property management and, finally, to an exit strategy.

Views over when there will be an upturn in the investment markets in CEE differ, as analysts have a range of opinions on when the recovery will begin, from the beginning of this year to at least two years. An upturn in activity in Western Europe would be followed by Poland, the Czech Republic and then Hungary.

According to CBRE figures, Central and Eastern European investment volumes fell by 49% year-on-year for 2023. Around EUR 6.7 billion was invested in CEE, with Hungary taking EUR 440 million of that.

When to Return

Investors are waiting for the right time to return to the CEE markets, with the industrial sector potentially the most favored destination. The office markets could take longer, with a return in two years, according to Norbert Schőmer, country director at Atenor Hungary.

This country, along with the Czech Republic, has the cushion of a strong presence of domestic funds, which are lacking in Poland, albeit it is considered the number one CEE investment destination for international investors.

“Tenants, landlords and investors in all CEE countries are increasingly focusing on the quality of buildings. The gap between older/outdated and modern/efficient buildings is becoming increasingly wider in terms of a multitude of factors, from rents to attractiveness for tenants and occupancy rates to capital values,” said Colliers of the impact of ESG on the industry.

“In turn, we view this as a decisive factor in pushing for more retrofitting of older buildings which may become viable. Timing-wise, these changes are coming at a bad time, as the green push is coming in a difficult

context for the market, given how high interest rates are. Furthermore, we need to acknowledge how relevant the green characteristics are on the financing side, as banks need to take into account not just the value of the building itself, but how efficient and future-proof it is,” added the consultancy, which had a strong presence at Mipim.

“We need to acknowledge how relevant the green characteristics are on the financing side, as banks need to take into account not just the value of the building itself, but how efficient and future-proof it is.”

Mike Edwards, head of capital markets at Cushman & Wakefield Hungary, sees a possible turnaround in Western European investment markets in the second half of this year, with a recovery in Poland early next year and Hungary to follow that.

Hungary and several leading Polish cities had a strong presence with promotional stands, reflecting the perceived need for companies, cities, regions and country promotion agencies to promote their home markets and investment opportunities to international developers, investors and lenders.

Prime Location

The 80 sqm Hungary stand had a prime location with a terrace overlooking the harbor and the old city of Cannes. Several panel discussions moderated by Gábor Borbély, head of research

for CEE and Hungary at CBRE, discussed the investment markets in Hungary and the region.

Among other things, these reflected the view that the industrial market is seen as a “driving force” in attracting FDI across Hungary. Notable developers promoting themselves at the stand were HelloParks, Infogroup and Wing Industrial. The latter also had a presence at the Poland stand through its ownership of the Polish developer Echo Investment and its promotion of the Towarowa 22 project in central Warsaw in partnership with AFI Europe.

A further feature of the Hungary stand was the promotion of secondary Hungarian cities such as Debrecen (some

222 km

east of Budapest by road), Kaposvár (187 km southwest) and Békéscsaba (211 km southeast), which have been particularly successful in attracting industrial inward investment.

“The aim of Békéscsaba is to promote industrial parks and target industrial developers with the sale of industrial space, with whom we have had business meetings,” said Tamás Varga, deputy mayor of the town. Potential clients include suppliers to BMW.

Wing, IGParks, HelloParks, the Belgium-based developer Atenor, and Gránit Asset Management sponsored the stand. CBRE was a content provider, and the Hungarian Investment Promotion Agency participated in the organization. The three provincial cities were also sponsors. The organizers aim to continue to promote Hungary with a similar stand at Expo Real in Munich from Oct. 7-9.

Mipim will return to the Palais des Festivals from March 11-14 in 2025, when participants look forward to improving markets.

The Hungary stand had a great location and drew plenty of visitors. Photo by Expo Group event management.

3 Country Focus

China

Chinese Investments in Hungary: Growth Written in the Books and the Stars

According to Chinese tradition, the Year of the Dragon promises prosperity. This positivity also seems to apply to investment relations between Hungary and China, which are thriving more than ever. Insights from the Hungarian Investment Promotion Agency shed light on the specifics.

Three trillion Hungarian forints: that’s the revenue of the local battery manufacturing ecosystem hit in 2023, according to the Hungarian Battery Association. This is up 50% year-on-year and is equivalent to 4% of Hungary’s exports. The sector has been catapulted up to the secondlargest manufacturing segment.

Hungary has enormous expectations for the battery industry, which is expected to help growth rebound to the 3-4% range this year. And Chinese stakeholders will assume a crucial role in the process. In 2023 alone, three related mega projects were announced by EVE Power, Sunwoda and Huayou Cobalt. Needless to say, battery-focused endeavors go hand-in-hand with EV-related projects, and remarkable activity was also detected on that front.

The crown jewel of Hipa’s project catalog in that department is the BYD deal. The Chinese behemoth, which became the leading manufacturer of both plug-in hybrid and electric-only vehicles in 2023,

will invest billions of euros in setting up its first European EV plant in Szeged (175 km south of Budapest by road).

Hungary is no uncharted territory for BYD. It already operates an electric bus factory and a battery assembly plant and manufactures electronics parts in Komárom, Fót and Páty, respectively. Nevertheless, the newly announced investment takes the country’s strategic importance to a new level.

“The idea is to replicate the success of Hungarian automotive so that an equally

thriving ecosystem is created in the EV segment from suppliers to research and development,” Hipa CEO István Joó says. Chinese companies are doing their part to make it happen. Just to name two recent projects, Evoring Kft., a Shuanghuan Driveline company, will invest EUR 104.4 million to make shafts and gear for EVs, while PEX Automotive’s new plant, worth EUR 15 mln will make EV parts, among other things.

Anniversary Celebrations

The Hungarian Government’s Eastern Opening policy fuels the abovementioned investor activity. Relations between the two countries have never been closer than this year, which marks the 75th anniversary of the establishment of diplomatic relations.

Last year, two high-level diplomatic encounters occurred (one in each

country), and Hipa’s top management consulted with several critical would-be investors in China earlier this year.

As Joó highlights, an attractive business environment, the strength of the automotive ecosystem and the dedicated support of the Hungarian Government and Hipa boost the country’s reputation with Eastern stakeholders as an excellent investment location.

That mutual trust resulted in EUR 8.5 billion in investment volume, 33 projects and the creation of well over 13,000 jobs

by Chinese investors in the past five years alone, a total that does not include the above-mentioned mega projects.

China not only became the largest national investor last year for the second time after 2020, but it also broke the record for the biggest capital pledge (EUR 7.6 bln) a country has made in Hungary in any given year to date. This volume represented nearly two-thirds of the 2023 total; overall, China ranks eighth in terms of its share of the total FDI stock. The country is Hungary’s ninth most important trade partner, accounting for 4% of the total foreign trade volume.

Hungary received the second most capital investments in the CEE region under the One Belt, One Road Initiative, which aims to expand China’s global economic footprint.

“The trust that Chinese investors place in our economy is unbroken, and no change is in sight in that regard,” the Hipa CEO notes. “We continue our business talks about potential new projects, and the prospect of such eventual partnerships drove Hipa to meet with several automotive stakeholders in China in January, which went very well.”

BorsodChem Leads the Way

There are more than 400 Chinese companies in Hungary that employ around 20,000 staff, the largest of which is by far BorsodChem, with revenues of nearly HUF 1.2 trillion. It is now owned by Wanhua Chemical Group, a leading global supplier of innovative chemical products.

With Hipa’s support, it has been conducting its most intensive investment period since 2019. The development program, which amounts to close to EUR 1 bln, focuses on production capacity increases, upstream integration, and securing utility supply and industrial infrastructure.

“In 2023, these projects reached an important milestone when a new industrial site and new production plants with cutting-edge safety technology, environmental protection and the best available technical standards were handed over and put in operation,” a company statement shared with Hipa explains.

“As a result of these investments, the company expanded its headcount through the past five years by more than

300 people, reaching a total employment of 3,200,” the statement adds.

Celebrating the 75th anniversary of its operations, BorsodChem plays a pivotal role in the group’s corporate strategy as it will “become the most competitive polyurethane manufacturing base in Europe.” It “serves as Wanhua’s operational headquarters on the continent, encompassing investments, logistics and financing functions.”

BorsodChem’s example showcases that Chinese investor commitment is not restricted to the automotive sector and that a Hungarian presence can be prioritized in global operations. All signs point in the same direction as far as general Chinese investor sentiment is concerned.

On top of that, the Year of the Wood Dragon began on Feb. 10. In Chinese tradition, it symbolizes power, nobility, honor, luck, and success. According to one Chinese horoscope website, it “marks the beginning of a new 12-year cycle, which will bring opportunities for growth and change.” Hence, 2024 is forecast to bring lots of opportunities, as told by experts and, apparently, the stars alike.

BYD Szeged Promises Ecosystem Development and a Significant Economic Boost for the Area

The Szeged factory plans announced just before Christmas by Chinese electric automaker Build Your Dream include an ambitious timeline for production to start, as well as proposals for the longterm economic benefits for Hungary and the infrastructural development planned around the factory’s location.

When it came to the final decision for BYD’s new factory site, the choice was between Hungary and Germany, with the EV company finally settling on Hungary after 224 rounds of negotiations with the Hungarian Investment Promotion Agency, according to About Hungary, the official blog of the Cabinet Office of the Prime Minister.

The decision was announced in December 2023, when BYD ended speculation that had been circulating for some time by publicly naming Szeged (175 km southeast of Budapest by road) as its newest location for the production and assembly of fully electric and hybrid vehicles.

The European publication specializing in the electric transport industry, Electrive, shared the reasoning behind the company’s ultimate decision to buy land in Szeged.

“BYD already has a strong presence in Hungary, having established a hightech eBus production facility in Komárom [93 km northwest of the capital] since 2016. This has led to BYD’s further investment in Hungary, prompting the announcement in December

2023

that it would construct an electric car manufacturing plant in Szeged, bringing a new wave of technological innovation to Europe.”

“The city of Szeged and BYD both believe in the same values: knowledge, sustainability, and environmental protection,” said Mayor of Szeged László Botka, when he first announced the plans for the factory in his university city.

Since the announcement of the new factory, development of the building has been steadily progressing; BYD signed the preliminary land agreement on Jan. 31, agreeing to purchase nearly 300 hectares of land. The factory itself is already under construction.

“The investment is worth billions of euros and will create thousands of new jobs,” emphasized Minister of Foreign Affairs Péter Szijjártó during the signing of the preliminary land allocation contract at his ministry.

Infrastructure Dividend

According to Minister of the Prime Minister’s Office Gergely Gulyás, “The government will spend HUF 47 billion-48 bln (EUR 122 million-125 mln) on infrastructure development” around the factory site.

Szijjártó added, “The Hungarian Government will, of course, provide financial support for [the investment], the extent of which will be finalized during negotiations with the European Commission.”

The Hungarian unit of the electric vehicle company has been registered with a share capital of

HUF 192 bln,

twice the city’s annual budget. The yearly group-level revenue of BYD is nearly three times as much as Hungary’s annual GDP, according to Hungary Today.

The company has announced plans to start production within the next three years, with the goal that the first autos will roll off the assembly line in late 2025. More detailed production plans have not been shared to date.

Apart from the direct manufacturing and sales of electric and hybrid vehicles, the BYD investment also highlights a promising outlook for the Hungarian economy.

During the first Hungarian customer delivery ceremony for BYD EVs on Feb. 23, Szijjártó promised that “BYD’s investment in Szeged would be a longterm guarantee for keeping Hungary’s economy on the path of growth.”

He added, “Chinese companies had brought the most foreign direct investment to Hungary in 2020 and again in 2023.”

Electrifying FDI

With the investment in the BYD factory, Hungary expects a significant increase in FDI, up to double the current amount, by the end of the decade, according to Bloomberg.

“The jump in Hungary’s FDI stock by 2030 from the current level of

EUR 100 bln

will be mainly in EV and battery investments,” explained Minister of Economic Development Márton Nagy in Shanghai, China, last November.

BYD has promised that the Szeged manufacturing plant will “create

thousands of local jobs,” and not just in the factory itself. In a press release after the announcement was first made, BYD vowed it “would use [its] expertise in integrated vertical supply chains to create a local green ecosystem.”

Plans regarding this commitment have already been put into motion. The city and BYD plan to invest in developing the Homokhátság settlements in southern central Hungary.

“We are working to make every resident of Szeged and Homokhátság a winner of BYD’s major investment.”

“We are working to make every resident of Szeged and Homokhátság a winner of BYD’s major investment,” wrote Béla Mihálffy, an MP for the governing Fidesz-KDNP (Christian Democratic People’s Party), on his Facebook page.

Szeged City Hall and the Hungarian Government are collaborating on a regional development package for Homokhátság. Mihálffy declared that the package “will include, in addition to infrastructural developments, educational and training institutional developments, transport developments and agricultural and water management developments.”

Szijjártó highlighted another positive effect of BYD establishing its newest factory location in Hungary.

“This investment also underlines Hungary’s leading role in the technological revolution. It has been a long time since Hungary has been at the forefront of such a fundamental global technological innovation, and now it is happening.”

A Seal model EV at the BYD auto handover ceremony at the Puskás Arena in Budapest on Feb. 23, 2024. The Chinese company is now the world’s largest manufacturer of fully electric and hybrid EVs. Photo by Zoltán Balogh /MTI.

Chinese Ambassador to Hungary Gong Tao (left), Mayor of Szeged László Botka, and Minister of Foreign Affairs Péter Szijjártó at the signing of the pre-purchase agreement for the site of the future BYD factory on Jan. 30. Photo by Zoltán Máthé / MTI.

4Special Report

Banking

Despite Good Numbers, Hungarian Banking System Feels Under Pressure

Government interventions, the urgency to digitize and the need to comply with new regulations: the local banking sector is under a lot of pressure. Yet, the numbers still look rosy.

It’s been some ride for the Hungarian banking sector. The extra profit tax meant to be abolished last year has stretched well into 2024, interest rate caps on existing loans were extended, and a “voluntary” interest cap was introduced for new loans.

Tough times call for tough measures may well have been the motto of the recent past, given sky-high inflation, a slowing economy and the resulting gloom among households and enterprises alike.

Accordingly, analysts weren’t surprised to see the home mortgage market halved and total retail lending fall by one-third in 2023. In nominal terms, the volume of home mortgages and the total retail lending segment hit seven- and fiveyear lows, respectively.

However, it was a telling sign that the personal loans that normally finance consumer spending exceeded

2022 levels.

On the other hand, business lending was rescued from a complete collapse only by

Riding the Digital Wave

The “Fastest Growing Digital Bank in Hungary” in 2023. That’s just one of the awards Gránit Bank received based on its performance last year. Apart from the title, courtesy of the renowned British financial journal Global Banking and Finance Review Magazine, Gránit also shared the “Bank of the Year” title with OTP and finished first in three additional categories at Mastercard’s annual awards.

The magic HUF 1 trillion balance sheet total threshold was surpassed in 2022, which moved the lender to

cheap foreign exchange-denominated loans and state-subsidized programs.

According to the report of the National Bank of Hungary (MNB) on the sector’s 2023 performance, published in early March, total credit volume was up 6.2% year-on-year, and the net consolidated earnings after taxes doubled compared to 2022.

The latter jump is mainly due to the interest-driven income, up 30%. Lending was boosted as year-end was nearing from dropping interest rates and the last-minute rush for certain state-subsidized family loans.

End of the Tunnel

Market players can’t wait to see the end of the tunnel, though, especially regarding government interventions. The 2024 extra profit tax can be

mid-sized. Uninterrupted growth now translates into 140,000-plus customers, over 90% of whom use digital channels.

Betting on digital has been part of the company’s DNA since its foundation. Minimizing the number of brick-and-mortar branches and offering cutting-edge e-solutions were critical factors that helped Gránit stand out of the crowd and keep costs low. Hence the remarkable cost/ revenue share of 32.2%, compared to the market average of 41.9%.

Gránit has also, as a result, assumed a pioneer’s role: it was

reduced by up to 50%, but only if substantial amounts of government bonds are purchased.

Voluntary interest caps on business loans will be gone as of April 1, but the retail loan interest caps are due to stay through June 1, subject to further review. Since last October, credit institutes have been obliged to commit themselves to a mortgage lending cap in line with the government’s ambition to put lending back on a growth path.

The Hungarian Banking Association has repeatedly expressed its concerns about the distorting and damaging effects of such measures. Stakeholders would prefer to see more regulation on the digitization front, which would cut costs and benefit all.

Several steps have been taken in this field, but a new detailed roadmap

the first lender to introduce video banking in Europe and led the charge in Android-based payments in Hungary. One of its novelties is that a popular statebacked loan available for couples planning or expecting children could be taken out remotely and within 30 minutes.

As CEO Éva Hegedüs pointed out in an earlier interview, the bank aims to provide high customer experience, grow profitably, and give back to the clientele from the gains that emerge due to the abundance of digital services.

Cross-border Power

OTP is deemed an agile player on the European level, and recent activities have only further strengthened this image. Its organic evolution has seen two acquisitions in Slovenia and Uzbekistan. The former move took the lender to the marketleading position in Hungary’s southwesterly neighbor, while the latter purchase in the Central Asian country marked OTP’s debut in a region that promises a vast market.

The company is rumored to be in the hunt for Ukraine’s Sense bank, which, if merged with OTP’s existing local branch, would give it the fourth largest bank in Ukraine. Moving in the opposite direction, OTP is leaving the Romanian market after it sold its share in Banca Transilvania.

With its balance sheet total exceeding EUR 100 billion, up to 66% of OTP’s total profitability now comes from its foreign subsidiaries’ performances. In no small part thanks to this diverse portfolio, it was rated as the fourth most stable bank in the EU, according to the European Banking Supervision stress test in 2023.

has now been drawn up. It outlines how to make day-to-day banking more efficient through digital tools and what it will take to introduce fully digital consumer lending and a

15-minute

mortgage application approval, an unparalleled eventual European invention.

Meanwhile, stakeholders are busy meeting compliance requirements. Phase 2 of the new Instant Payment Scheme went live as of Feb. 1, with an obligation to use uniform data entry standards.

Developments are underway to join the Central Fraud Filter System and embrace the government’s data wallet-based Digital Citizenship Program. AI is also banging on the door, with Erste Bank’s innovative digital banking service “George” personalizing investment portfolios and K&H’s “Kate” handling voice command transactions.

All in all, 2024 is expected to bring about falling revenue because of the more modest interest rates, although costs may push up as a spillover effect of the past year’s high inflation. It won’t be all quiet on the banking front any time soon, for sure.

UniCredit Looking to Conquer Hungarian Investors With Onemarkets Fund

The Budapest Business Journal talks with Giacomo Volpi, deputy CEO at UniCredit Bank Hungary, and Réka Vörös, head of the bank’s retail division, about the essential features of the bank’s cuttingedge onemarkets Fund investment portfolio, recently made available to clients in Hungary.

BENCE GAÁL

BBJ UniCredit has made its onemarkets Fund available to clients in Austria, Germany, Bulgaria, the Czech Republic, Romania, Slovakia, and Hungary. How is the client feedback so far, especially in Hungary?

Giacomo Volpi: The idea behind the onemarkets Fund investment portfolio is simple: to provide our clients with a wide range of tailored investment solutions so they can always find the best possible product matching their investment needs and “appetite.” What makes our solution unique on the market is that we developed it (and continue to do so) by combining our deep knowledge of our clients with the knowhow of the best asset managers in the world, among others, Amundi, Allianz Global Investors, BlackRock, Fidelity, J.P. Morgan, Pictet, and Pimco.

Réka Vörös: The portfolio was introduced in Hungary last November, following a successful year-long distribution period in Germany and Austria. At our launch event, representatives of strategic partners and our in-house experts presented the benefits, specialties, and shortand long-term plans of the new portfolio to our colleagues who will market the products. Since then,

the demand for onemarkets Fund products has been strong; what’s more, it has been higher than expected. We started with products denominated in EUR at the end of November 2023, followed by two HUF funds in January this year. All in all, we can see already that the onemarkets Fund is a success story for us.

BBJ: Talking about those two Hungarian forint funds, what motivated you to launch the Hungarian-focused products?

RV: The motivation behind adding the two further Hungarian-focused funds was to make our investment offer more varied, flexible, and attractive to Hungarian clients. The Hungarian investment fund market is dominated by short bond and bond funds as a rational solution for conservative customers. As the salaries and wealth of our clients are in HUF, most of our clients’ savings are also denominated in the local currency. So, we decided to offer our customers an even more comprehensive range of investment opportunities. By introducing these HUF bond funds, clients can invest in Hungarian local bonds, where interest rates are higher than in the eurozone.

BBJ: You have a large variety of options ranging from conservative bond funds to more dynamic alternatives, such as a fund

that focuses on investments in emerging markets. Which do you think will be especially popular in Hungary this year?

RV: As we see it, this year will be very similar to 2023, when bond investments dominated among our customers.

“The idea behind the onemarkets

Fund investment portfolio

is simple: to provide our clients with a wide range of tailored investment solutions so they can always find the best possible product matching their investment needs and ‘appetite.’”

We expect some differences, though, and that is in the duration factor: bond funds with a higher duration can offer a higher potential yield, as interest rates are expected to decrease during the year. We believe these funds will have a higher ratio in the investment “pie chart;” we’ll see the exact data at the end of the year, of course.

BBJ: How does UniCredit ensure the sustainability and ethical considerations of investments made through the onemarkets Fund portfolio?

GV: Sustainability and overall ESG are the core parts of our UniCredit Unlocked strategy, which was introduced at the group level at the end of 2022. I can safely say that no company today can have business success without taking ESG into consideration, regardless of market. At UniCredit, we keep sustainability in focus when creating our products: we offer ESG-focused funds to our customers, managed by one of the most experienced asset managers, Amundi.

BBJ There are different investing styles; how do you help your customers find the best solutions for themselves?

GV: Every client has different needs, and that’s why our relationship managers take the time to discuss the best personalized solution with each one of our clients. In general, there are three critical insights in investing that we want all investors to know: stay invested for the long run; choose your investment asset class based on your time horizon and your risk tolerance; and invest regularly, every month. We are happy to discuss how these insights fit with the goals of each customer.

Réka Vörös and Giacomo Volpi

ELTE-OTP CyberLab: Students Explore Cyber Defense in Renewed Environment

Students of the Faculty of Informatics of Eötvös Loránd University (ELTE) can now research the prevention of financial fraud in the modern environment of a renovated research lab set up in partnership with OTP.

The financial institution will use the results to improve its own security systems. Could banking be made safer in the future as a result?

GERGELY

The security research development laboratory was established last year at ELTE in cooperation with OTP Bank and uses scientific methods to investigate means of preventing financial abuse. OTP says it attaches great importance to imparting high professional knowledge to the younger generation, and this initiative is one of its pillarsto do just that.

The renovation of the offices at the ELTE-OTP CyberLab faculty, which was established last December, has just been completed.

The lab focuses on researching the risks of the digital world. Its main objective is to investigate possibilities for preventing financial fraud and OTP Group’s own protection solutions. Engineers and staff from the bank will assist in the research, while university lecturers will also be involved in the project.

As part of the collaboration, OTP Bank experts will also give guest

lectures on banking and cybersecurity at the university. In the second semester of this academic year, 18

students are working in the lab on 11 research topics. Master’s and doctoral students are the main participants, although undergraduates also show increasing interest.

Research topics include phishing, one of the most well-known and common topics in cybersecurity. The student researchers will also analyze the positive and negative aspects of using artificial intelligence and large language models in the sector.

Cybersecurity is Business Security

“Cybersecurity is paramount,” emphasized Gábor Bucsek, managing director of OTP Bank’s IT and Bank Security Directorate. “Identifying and managing cyber risks are crucial aspects of any organization’s operations; it’s no longer solely an IT concern but should be embedded within an organization’s broader business strategy,” he explained.

“Continuous assessment of external vulnerabilities and weaknesses in IT systems that support core business and operational activities

Leveraging Potential

“Not only does it integrate industry needs into education and research, but CyberLab also leverages the innovative potential of interdisciplinary collaboration between the university’s faculties, including informatics and law,” Borhy noted.

“Cybersecurity and financial system security are rapidly evolving and highly challenging fields. To create a safer and more predictable world for all, harnessing the university’s knowledge base, from fundamental research to applied research and IT development, is crucial,” the rector added.

“Protecting entrusted customer data and assets while ensuring resilience against cyber threats is a top priority for OTP Group. We believe involving young programmers in this research

and integrating their findings into our developments holds immense value.”

According to Roland Kovács, the head of cybersecurity at OTP, the main goal of the cooperation is to ensure a longterm supply of IT security specialists. The aim is to focus on researching topics that will bring business benefits to the financial institution.

is essential,” Bucsek said. “Protecting entrusted customer data and assets while ensuring resilience against cyber threats is a top priority for OTP Group. We believe involving young programmers in this research and integrating their findings into our developments holds immense value,” he added.

The financial institution says it considers it a critical issue to involve even the youngest programmers in research in these areas. Moreover, it would like to incorporate the results of this research into future developments, provided that they are carried out on an appropriate sample and validated.

At ELTE’s Faculty of Informatics, computer programming students can join the research as a credit-bearing subject, thus learning about the challenges facing banking infrastructure and financial informatics. As part of the collaboration, OTP has also offered scholarships for up to six of the most talented students per semester.

“ELTE embodies the rich tradition of research excellence within Hungarian higher education,” stated Rector László Borhy. “Our ability to innovate and adapt to social needs and advancements has been instrumental in our enduring success for centuries. The ELTE-OTP Bank partnership exemplifies this perfectly,” he said.

Kovács added that social responsibility is essential to OTP, which is why it is trying to improve the cyber and banking security situation as much as possible.

“For the time being, it is a domestic cooperation, but the program may later grow into an international one,” Kovács hinted.

From left, Roland Kovács, the head of cybersecurity at OTP Gábor Bucsek, managing director of OTP Bank’s IT and Bank Security Directorate.

in Brief News Banking

MFB Sells HUF 10.8 bln of Green Bond

The state-owned Hungarian Development Bank (MFB) sold HUF 10.8 billion of a green bond, its first, at an auction on the Budapest Stock Exchange on March 18. Investors bid for HUF 106.4 bln of the five-year securities. MFB had planned to offer HUF 5 bln of the bond. The average yield was 6.93%. In unrelated news, the National Bank of Hungary (MNB) has fined MFB HUF 28.5 million for failing to fully comply with the rules on enterprise management, calculating credit risk, and IT security, the central bank and financial market watchdog said in a release on its website on March 12. The MNB gave MFB a deadline to take remedial measures.

Bank Card Payments Climb 10% in Q4

The value of payments in Hungary made with locally-issued bank cards climbed 10% year-on-year to HUF 3.973 trillion in the fourth quarter, according to data released by the National Bank of Hungary (MNB) on March 18. The value of cash withdrawals made with the bank cards fell 10% to HUF 2.251 tln. The bank cards

were used to make HUF 640 billion worth of purchases abroad, climbing 20% from the same period a year earlier. The number of brick-and-mortar businesses with POS terminals in Hungary stood at 151,680 at the end of December, up 9% from 12 months earlier. The number of online firms with POS terminals rose 21% to 50,718.

MNB Fines MBH Bank HUF 10 mln

The National Bank of Hungary (MNB) has fined MBH Bank HUF 10 million for failing to fully comply with rules on trustee transactions, according to a release on the central bank’s website.

Gov’t Discusses Amendments to MNB Act

The government discussed proposed amendments to the Central Bank Act at a cabinet meeting on March 13, Minister of Finance Mihály Varga said on his Facebook page on March 14. Varga said a “detailed and thorough” consultation with the National Bank of Hungary (MNB) on the draft legislation will occur before its submission to lawmakers. He noted that the European Central Bank

Revolut Irresolute About Hungarian Subsidiary

In recent weeks, Revolut has introduced several new features for its Hungarian customers, prompting online business daily Világgazdaság [Global Economy] to ask whether the financial institution would establish a subsidiary bank in Hungary. Although Revolut CEO Nikolay Storonsky “did not rule out the opening of a physical branch” in January, Revolut told the portal that opening a branch was only an idea. “It is still an open question whether the idea will be realized, whether the establishment of the

had weighed in on the draft earlier.

“The goal is clear: regulation is necessary that further ensures the independence of the central bank while strengthening the transparency of the National Bank of Hungary and the frugal operation expected of state offices,” he added.

OTP Bank Q4 Profit up 15%

The consolidated fourth-quarter aftertax profit of OTP Bank, Hungary’s most significant commercial lender, was muted as acquisition and divestment costs weighed. However, full-year profit soared due to improved operating results and lower risk costs, according to an

Smart FX With Gránit Bank: Anytime, Anywhere, via Mobile App

Vacation season will soon be upon us, and many people are already planning trips abroad. But logistics aren’t the only thing to worry about; there is the financial side, too, including how you will pay during your trip.

It is wise to consider how you will finance this trip, as paying with a HUF bank card in another country can sometimes be costly. One solution for lowering banking fees can be owning a bank card in a foreign currency, like the euro.

For this, bank customers will need a foreign currency account, available without an account maintenance fee at Gránit Bank until May 31, 2025. Customers can choose from four currencies: The euro, the United States dollar, the Great British pound, and the Swiss franc. New customers can open such an account alongside a Hungarian forint account with a selfie or through

the video bank solution. Existing customers, meanwhile, can open a foreign currency account with just a few taps in the Gránit eBank application. Currencies can be exchanged costfree at a mid-market rate, and the foreign exchange can be done easily and conveniently in the bank’s app, which provides an option better than many popular FinTechs, as they often offer this service for a fee and don’t have an option for true mid-market rates.

Free Exchange

Gránit Bank allows customers to exchange currencies free of charge up to HUF 550,000 between 9 a.m. and 5 p.m. on banking days. Outside of this time or beyond the limit, the bank exchanges currency at a favorable current account conversion rate, still free of charge. Customers can request a foreign currency debit card from the bank to spend EUR or USD. If the bank card is asked for between Feb. 15 and May 7 this year,

experimental physical branch will be successful, whether we should also open a new one, or whether we will test the concept in other markets,” Revolut said in its statement.

earnings report released on the Budapest Stock Exchange website on March 8. The Q4 after-tax profit increased 15% year-onyear to HUF 132.6 billion. OTP booked a negative HUF 59.5 bln from the sale of its Romanian unit during the quarter, although the agreement on the transaction was concluded in February 2024. An adjustment of badwill related to its recently acquired Uzbek unit, Ipoteka Bank, had a negative profit and loss impact of HUF 17.8 bln. OTP said management expected normalizing risk costs at the Uzbek unit, an improved operating result and a stable or increasing market share. OTP’s after-tax profit jumped 185% for the full year to HUF 990.5 bln.

it will be free of charge for the first two years. If the customer already has a related account, it is easy to request a card in the app with just a few taps, and the card will be instantly available for mobile payment.

Unlike paying with a HUF card abroad, these currencies provide the opportunity for low-cost foreign exchange before the trip, when customers can follow the current rates on a graph in the app and choose the best moment for conversion. If you pay with a forint card, the best exchange rate cannot be selected.

Currencies can be exchanged cost-free at a mid-market rate, and the foreign exchange can be done easily and conveniently in the bank’s app, which provides an option better than many popular FinTechs, as they often offer this service for a fee, and don’t have an option for true mid-market rates.

It is a financially responsible decision to prepare for a trip abroad, and not just with a foreign currency account or bank card, but with a term deposit as well. The money you exchange to prepare for the trip can be tied down this way from one to 12 months, and it also provides one of the highest interest rates on the market at Gránit Bank.

FX is free and easy with the Gránit Bank app.

Photo by mundissima / Shutterstock.com

R34DY: Connecting the Building Blocks for Core Banking Systems

The company’s name reminds you of a robot from Star Wars, and it has been pronounced in the wildest possible ways. But R34DY draws banking experts’ attention for something much more remarkable: its expertise in core banking systems, pushing a long overdue paradigm shift to the fore.

BBJ STAFF

Ever more intelligent chatbots and roboadvisors, seamless remote loan applications and a sophisticated architecture to serve instant payments. These are the tech features most often discussed by the public when it comes to the latest banking tech. You will hear a lot less, in the mainstream media, at least, about the reinvention of core banking systems, the backend processes that move banking transactions around the various branches of a bank.

We are talking about a very hot topic, though. Founder and CEO of R34DY Zrt. Márk Hetényi tells the  Budapest Business Journal that it all started when Oracle charged it with implementing its core banking solution, Flexcube, a finance service and banking management app that helps businesses build multiple portfolios of products.

“We saw that small- and mid-sized banks and fintech companies built their product and sales competencies, but they lacked the deep business expertise necessary for a Flexcube implementation,” he explains.

“Our combined expertise in banking, IT and business came in handy for customers so that they could get the most out of Flexcube,” Hetényi says. Clientele also showed interest in benefiting from the system’s functions as a service. That’s how

R34DY’s own Core-Banking-as-aService (CBaaS) solution came about. The origin of the market uptake lies in the complexity of banking architecture. As Hetényi notes, lenders tended to put all the complex functionalities into their core banking system, but guard access to it very closely. As a result, it became an oversized hornet’s nest that nobody wants to kick; a paradigm shift has been long overdue.

New generational developments have triggered an evolution in which a black box set-up is replaced with a sandbox approach.

Lego Flexibility

“Now we are experiencing a modular structure instead of a single massive one, which provides more flexibility. The system can also be extended more easily,” the expert says. “You can have a thousand Lego bricks, and you will need to learn how to put them together,” he says. But if these individual services, some of which are pretty small, are connected well, a fantastic package will emerge.

In the IT architecture, an orchestration of layers is created

that aims to ensure those Lego pieces stick together. The complexity has not disappeared but lives on in a different, more useable form. At the same time, standardizing services is critical as it paves the way for going to market much faster, Hetényi adds.

His company’s CBaaS solution offers flexibility on another front: it is available in on-premises, hybrid and cloud forms. The cloud enables customers to build better scalable systems that can be operated more efficiently.

Furthermore, R34DY provides the option of one-off or continuous services. The former typically includes more extensive projects such as migrations or system implementations, whereas the latter concerns day-today activities, reporting needs or preparing business specifications.

Small- and mid-sized banks can, therefore, use Flexcube without necessarily having to build core system competencies. As the R34DY motto goes, “Core banking does not need to be your core competency.”

The company aims to place less functionality in core systems and instead focuses on orchestration

and middleware layers. Again, this is beneficial for small- and midsized banks in particular, as they don’t have the resources or expertise to develop and maintain their own core banking systems. Instead, CBaaS allows them to adopt cuttingedge banking technologies without making substantial investments, while updates and maintenance come from the provider.

AI Potential

AI helps integrate third-party services and thus serve various use cases. Although Hetényi was initially skeptical about artificial intelligence, he now sees enormous potential.

“We saw that smalland mid-sized banks and fintech companies built their product and sales competencies, but they lacked the deep business expertise necessary for a Flexcube implementation.”

“After the probabilistic world of generative AI, I became a profound believer in RAG models and their potential, and now I am genuinely excited by the world of agents and AI chains,” he notes. For the uninitiated, RAG, or retrievalaugmented generation, is the process of optimizing the output of a large language model so it references an authoritative knowledge base outside of its training data sources before generating a response, as Amazon Web Services explains it.

“I really enjoy breaking down a process, whether business, cognitive, decision or other, into sub-parts with the team and finding the right AI model for the smaller sub-parts, and slowly but surely (or quickly but surely!), we are moving towards solutions,” Hetényi says.

The evolution of R34DY’s solution is expected to lead to a move beyond the current CBaaS model and build an integration platform through which complete pre-integrated use cases (such as know your customer requirements, anti-money laundering, or fraud management) will be made available to banking partners, the expert adds.

R34DY’s goal is to eventually turn its solution platform into an orchestration service provider by connecting various third-party service providers.

“We plan to develop a mechanism through which customers can build their services in a plug-and-play manner using the Lego elements available on our platform, either on their own or by using R34DY competencies,” Hetényi adds.

Márk Hetényi, founder and CEO of R34DY Zrt.

Top Three Winners Announced in 1st Hungarian Visa Top Shop Competition for SME Stores

The awards for the first Hungarian Visa Top Shop competition have been presented. The evaluation criteria included the store’s design, uniqueness, presentation of goods, use of innovative technologies, the attitude of the staff, and the application of modern payment methods.

BENCE GAÁL

Since the competition’s launch in October 2022, one store from a different part of Hungary has been added to the list of finalists each month. A 10-member professional jury decided the overall ranking.

“We are delighted to announce the winners of the Visa Top Shop competition. These businesses exemplify the innovative power of small- and medium-sized enterprises, which function as the engine of our economy, strengthening local communities,” said Bence Sármay, Visa’s country manager responsible for Hungary.

“Digital payments transform the available payment methods for businesses, open the way to new customers, enable the simple acceptance, tracking, and control of expenses, enhance security and efficiency, thus fostering growth,” he said.

“By expanding sales channels, small businesses can increase their opportunities from [an] exclusive local presence to serving a national or even international customer base. With the Visa Top Shop competition, we aim to showcase numerous customer-centric businesses to Hungarian consumers and assist retailers in improving the shopping experience based on best practices,” Sármay added.

Bookstore Winner

The first-place winner of the competition was Bartók Pagony. Dóra Sárdi, the bookstore owner, expressed her gratitude after receiving the recognition.

“Thank you for the acknowledgment. We are proud to have won the Visa Top Shop award. The enthusiastic team at Bartók Pagony has been working towards satisfied customers for 10 years; that’s why this award is an important confirmation for us. It shows that, regardless of age, the customer is truly the most important to us,” she said.

“Our goal is that anyone who comes to us not only leaves with quality children’s books and exciting games but also experiences, knowledge, and the feeling that they are understood, valued, and appreciated. As parents and individuals interested in culture, we welcome and look forward to our customers not only with books and games but also with programs and a café because we value the little ones and their parents too,” she added.

Second place went to Györgytea Miskolc, with third awarded to NekedTerem. Györgytea is named after György Szabó, who is known throughout the country as the herbalist of Bükk. The store’s design and style successfully combine the atmosphere of a classic pharmacy with a modern retail store. Knowledgeable salespeople with expertise in folk medicine provide helpful suggestions and usage tips to visitors.

“By expanding sales channels, small businesses can increase their opportunities from [an] exclusive local presence to serving a national or even international customer base. […] We aim to showcase numerous customercentric businesses to Hungarian consumers and assist retailers in improving the shopping experience based on best practices.”

NekedTerem [Room for You]

distributes and delivers quality products from domestic producers (ranging from groceries to eco-friendly household items) to customers. Its trademark is mindset-changing communication, with which it has built a growing community, aiming to meet the diverse needs of its clientele flexibly.

Special Prize

A special prize was also presented during the competition, awarded to the Harrer Csokoládéműhely chocolatier workshop by Visa Hungary employees.

The confectionery and sweets shop’s setup faithfully reflects the Harrer family’s business philosophy. The competition organizers noted that the elegant, meticulously selected furniture and accessories complete the experience for their guests. As part of its chocolate-tasting program, customers can learn about the ingredients used and the process of making the sweets.

“We believe that it is worth continuously improving the businesses and services of players in the retail sector to provide the highest possible shopping experience,” emphasized Zsuzsanna Csukás, a leader at Instore Consulting EU Hungary, which organizes and conducts the competition.

“We contribute to this by showcasing outstanding examples. In the first year of the competition, every finalist store excels in something. Our trained colleagues evaluate the entered stores through secret shopping, taking into account eight key criteria. Among them, the possibility of digital payments, which has become crucial in serving customers in recent years, is essential. Therefore, we are pleased that our competition’s namesake partner is Visa,” she added.

In addition to the top three winners and Harrer Csokoládéműhely, the other finalists of the Visa Top Shop competition were Bio-Barát Biobolt, Eglo, EtúHome, Fokt motor, Lachmann, Moai Jungle, Mountex, Platán Tata, Sasplant, Szemes Optika, and Vasas Szerszám Központ.

Representatives of the Visa Top Shop winners. From left, Györgytea Miskolc, Bartók Pagony, NekedTerem and Harrer Csokoládéműhely. Photo by Visa Hungary.

Commercial Banks

7

5

Group Bank

(70), Európai Újjáépítési és Fejlesztési Bank (15)

S.p.A. (100)

International BankHolding AG (100)

Pannónia Nyugdíjpénztár (7.20), TiberisDigital Kft. (44.80), employees (36), MKB Nyugdíjpénztár (5.50), other (6.50)

Radován Jelasity ––

Balázs Tóth Nevena Nikse –

György Zolnai ––

Pál Simák

Éva Hegedűs ––

1138 Budapest, Népfürdő utca 24–26. (40) 222-221 erste@erstebank.hu

1054 Budapest, Szabadság tér 5–6. (1/20/30/70) 325 3200 info@unicreditgroup.hu

1054 Budapest, Akadémia utca 6. (40) 484-848, (1) 484-8484 info@raiffeisen.hu

1027 Budapest, Medve utca 4–14. (1) 423-1000 cib@cib.hu

1095 Budapest, Lechner Ödön fasor 8. (1) 235-5900 info@granitbank.hu 9

Citibank Holdings Ireland ltd. (100)

ING Bank N. V. (100)

Veronika Spanarova Márk Szentpáli Beáta Smid

Tibor Bodor Gyula Réthy –

1133 Budapest, Váci út 80. (1) 374-5000 citibank.magyarorszag@ citi.com

1068 Budapest, Dózsa György út 84/B (1) 235-8700 communications.hu@ ingbank.com 11

Paribas S.A (100)

FR-Invest Kft. (75),

Pierre Bonin ––

1062 Budapest, Teréz körút 55–57. (1) 374-6300 info.hu@bnpparibas.com 12

Zsolt Fáy, János Salamon –

1062 Budapest, Andrássy út 98. (1) 428-8844 info@magnetbank.hu

13

1062

4090

5 Socialite Hungarian Art & Business: 1 Year On

Growing its collection of significant Hungarian artists, acquiring work by heavyweight international names, and being visited by a growing number of art lovers, Hungarian Art & Business (HAB) goes from strength to strength.

Launched in June 2023, Hungarian Art & Business is supported by MBH Bank and the MBH Bank Art Foundation.

HAB’s mission is, as its website says, to “contribute to the development of Hungarian contemporary art, the socialization of art and the creation of dialog through art.”

Intended to be a hub, as its acronym implies, HAB offers cultural and social programs for visitors, exhibitions, workshops, residencies, and scholarships for artists.

I recently caught up with Délia Vékony, art director of HAB, who I last spoke to just before it opened. Today, she can reflect on a year that has soared beyond all expectations.

HAB has purchased pieces by established Hungarian names, younger Hungarian artists, and international superstars in the past

12 months.

New acquisitions include works by Hungarian artists such as Gergő Ámmer,

Tibor Iski Kocsis, Attila Szűcs and Luca Sára Rózsa. As for the superstars, HAB has acquired an important photograph by Philip-Lorca DiCorcia and a sculpture by Johan Tahon.

Vékony tells me that DiCorcia is a true photography heavyweight. New York’s MoMA describes his work as straddling “truth and fiction by combining real people and places – but not necessarily people and places that naturally go together.” DiCorcia is represented by David Zwirner, one of the world’s leading contemporary art galleries.

Tahon, Vékony says, “is very solid in Europe. He was made an honorary citizen of Menen, Belgium. His work is part of the Vatican collection.”

Bold Strategy

There’s a clear and bold strategy at work regarding acquisitions. The betterknown Hungarian artists have a strong position, not just artistically but in terms of the market. They have a local and international collector base. From the bank’s perspective, they’re good and safe investments. That is also the guiding principle with younger Hungarian artists.

by Hantaï, which stands three meters high, was a particular challenge.

Unique Artworks

“We had to build it into the exhibition space because it wouldn’t fit through the door,” Vékony says, smiling. “But it was worth it. We’re always trying to show great, important names as well as unique artworks that visitors haven’t seen before.”

The public certainly seems to be responding to HAB’s efforts. Its last exhibition, which ran from October to January, was visited by 6,300 people, pleasing numbers for an art center of its size. On an average weekday, between 60 and 70 people come to view the exhibition and do some sort of activity. From Friday to Sunday, that number rises to between 200 and 300 people daily. On a recent Saturday, 380 people were in the space. This, Vékony says, is “pretty impressive.”

“We pick young artists already known in the market who either have gallery representation and/or a collector base,” Vékony explains. “So, we’re as certain as we can be that they’ll carry on making art, and their work will become more attractive to the market. With younger artists, the risk is a little higher, so we pay less than we do for more mature artists.”

Apart from its investment value, acquiring work by DiCorcia and Tahon is part of an initiative to position HAB’s collection internationally without losing its local, national flavor. Vékony’s logic is that “if we include international names, our collection will gain a place in the international art market. This gives us a better opportunity to introduce Hungarian artists globally and position them not only in a national context.”

For those of us unaware of the machinations of the art market, the great thing about HAB is the sheer diversity of work and the myriad opportunities it offers to enjoy contemporary art.

“We’re very, very busy with all kinds of activities,” Vékony tells me. “Our third exhibition is on view now. ‘New Start. Masterpieces by 25

Pioneering Artists’ is based on one of the most significant private art compilations in Hungary, the AntalLusztig collection. It features Hungarian superstars like Simon Hantaï and Judit Reigl and pieces from huge international names such as Damien Hirst, Joseph Beuys and Gerhard Richter.”

As HAB’s gallery is not the largest of spaces, exhibiting the impressive piece

“We’re in the process of giving more than HUF 3 million to one artist to realize a single artwork they have planned rather than one which is finished. The fact that we’re offering a prize to one artist rather than several for just one artwork and not a series makes it unique in Hungary.”

The director is clearly pleased that the inclusive events HAB offers are proving such a success.

“Our art education studio is really popular,” she says. “HAB Days, when families are invited to view an exhibition and then make art, fill up now in one or two days without any advertising. Our graphic design studio is also beginning to be very active.” Looking ahead, Vékony is keen to mention HAB’s support for Hungarian artists.

“We’re in the process of giving more than

HUF 3 million

to one artist to realize a single artwork they have planned rather than one which is finished. The fact that we’re offering a prize to one artist rather than several for just one artwork and not a series makes it unique in Hungary. We also have five open calls for artists to work with us running simultaneously and we’re getting a great response. In addition, we have, on average, about four events of various kinds weekly open to visitors to come and engage with cutting-edge artistic content and activities.”

For full details of what’s happening at HAB in the coming months, go to www.arthab.hu.

DAVID HOLZER

Work from the Hungarian Art & Business exhibition “New Start.” Photo by Vanessza Kósa.

Cry God for UNICEF and St. George This April 24 Culture Matters

The organizers of the annual St. George’s Day party, to be held on Wednesday, April 24, in support of UNICEF, have issued a last call for early bird tickets to the charity fundraiser.

XpatLoop.com publisher Stephen Linfitt promises “an evening full of excellent English-related entertainment, social networking and free-flowing refreshments” hosted in the Etele Cinema’s Premium Section. the main sponsor is B+N Referencia Ltd.

“You’ll be in good company with friendly expats and cosmopolitan locals from Hungary’s business, diplomatic and cultural circles at this popular annual gathering to mark the Patron Saint of England, also known as Szent György,” Linfitt tells the Budapest Business Journal

Early-bird tickets cost HUF 16,500 per person and can be bought via the xpatloop.com website. A limited number is available, sold on a first-come, firstserved basis. On-the-spot tickets will be HUF 30,000 per person; prior reservation is required, with payment on arrival.

Although the evening has a very English feel in honor of St. George (for all that it is challenging to deal in absolutes with historical figures,

A regular look at culture issues in Hungary and the region

he wasn’t English but probably a Cappadocian Greek from Anatolia who served in the Roman Pretorian Guard), every nationality is welcome.

Attractions include a red carpet reception featuring fine wine tasting, international street food, a screening of the Amy Winehouse biopic “Back to Black,” and a musical afterparty with an expat DJ playing English hits. A prize auction hosted by TV star Zsuzsa Demcsák will raise funds for UNICEF Hungary.

Master of Ceremonies (and Budapestbased actor, coach and artistic director of Scallabouche Theater Company) Alexis Latham will get things started with a “short yet powerful” Shakespeare Recital. St. George’s Day in England is celebrated on April 23 (generally accepted as the

in Brief News Culture

‘Evita’ Returns to the Margaret Island Theater

“Evita,” one of the most successful and popular musicals by composer Andrew Lloyd Webber and lyricist Tim Rice, will be the highlight of this year’s season at the Margaret Island Open-Air Theater. “Evita” tells the true story of a unique life and an extraordinary career and is a powerful musical experience. The play had its first Hungarian premiere in 1980 at the Margaret Island Open-Air Stage. This new production is a joint project of the Margaret Island Theater and the Győr National Theater. It will premiere on July 5 on Margaret Island

and be performed again on July 6 with a different cast. The leading roles will be played by Mónika Horváth, Anita Gadó, János Szemenyei, Ádám Pesák, Attila Csengeri, Balázs Nagy and Dénes Kocsis.

Hungarian Wins Oscar for Best Production Design

Zsuzsa Mihalek won the 2024 Academy Award for Best Production Design at the Oscars ceremony broadcast by American broadcaster ABC on March 10. Mihalek won the acknowledgment for set decoration, along with James Price and Shona Heath for production

day the saint died), which is also both the birthday and the date of death of English playwright William Shakespeare. “Back to Black” will be shown in the Etele Cinema Premium rooms, where guests can enjoy the movie from super-comfortable and adjustable luxury reclining armchairs. On either side, DJ Woods will play English classical music hits (from Elgar, Purcell, and Handel), followed by English soul, pop and rock hits during the afterparty.

Guests of honor for the evening include Paul Fox, Ragnar Almqvist, and Désirée Bonis (the ambassadors of the United Kingdom, Ireland and the Netherlands), Antónia Mészáros (executive director of UNICEF Hungary) and Georgina Szilágyi, country director of the British Council Hungary.

“I was delighted to attend the St George’s

design, for their work on director Yorgos Lanthimos’ feature “Poor Things.” The movie, filmed at Origo Studios in Budapest, picked up four Oscars at the awards ceremony in Hollywood on Sunday: in addition to the nod for production design, it also scooped the Oscar for Best Actress (Emma Stone), Best Costume Design, and Best Makeup and Hairstyling.

MNB Issues Kincsem Commemorative Coin

According to an announcement on the central bank’s website, the National Bank of Hungary (MNB) issued a commemorative coin on March 12 to honor Kincsem, the recordbreaking Hungarian thoroughbred racehorse foaled 150 years ago. The coin is available in silver, with a face value of HUF 15,000, and in a non-ferrous metal version,

Day celebration in Budapest in previous years, and I am grateful to XpatLoop.com for organizing these events,” Ambassador Fox commented.

The XpatLoop.com St. George’s Day Event will be held at the Etele Cinema Premium Level (Hadak útja 1, 1119 Budapest) on Wednesday, April 24. The welcome reception starts at 6 p.m., and the event runs until midnight. Dress Code is smart casual, with an option to wear party outfits and a prize for the best Amy Winehouse costume. For full details and links to early-bird tickets and more, visit xpatloop.com.

with a nominal value of HUF 3,000. Kincsem won 54 races from 54 starts, a record that still stands today.

Posta Collects HUF 12.3 mln for Hungarian Interchurch Aid

Hungary’s state-owned Magyar

Posta Zrt. collected more than HUF 12.3 million in donations left in boxes in post offices for Hungarian Interchurch Aid last year, which it handed over in a ceremony at the organization’s national aid center in Csepel. According to a press release, the cooperation between Magyar Posta and Hungarian Interchurch Aid goes back more than a decade. The company has been cooperating with the aid organization since 2012; since 2014, a separate framework agreement has strengthened the partnership relationship.

BBJ STAFF

Chamber of Commerce Corner

British Chamber of Commerce in Hungary (BCCH)

The BCCH is organizing a morning seminar jointly with Raiffeisen Bank and featuring its head of research, Zoltán Török, at Raiffeisen Bank. “The Hungarian Economy: High Pressure, High Risk?” will cover a lot of ground. The energy crisis is over, and Hungary’s external account improved dramatically last year. The public budget deficit increased in 2023, and fiscal consolidation is becoming increasingly challenging for the government. EU funds have been partially released, but the remainder is still frozen. After the recession in 2023, the economy is set to recover, but the government’s plans are unlikely to come true. What are the factors limiting economic growth? What is the “high-pressure economy” the government talks about? What is the outlook for the interest rate and the HUF?

• When: Thursday, April 18, 9:30-11:30 a.m.

• Where: Raiffeisen Bank Offices, Agora irodaház, Tower 2, Váci út 116-118, 1133 Budapest. • Fee: Participation is free of charge but subject to prior registration.

Hungarian-French Chamber of Commerce and Industry (CCIFH)

The CCIFH business breakfast and roundtable discussion

“Electric Cars and Charging” will investigate how to maximize ROI for companies in 2024. What financial advantages will electric vehicle purchases provide for enterprises? Discover the first-hand calculations of opinion leaders from the sector about what constitutes a profitable move in 2024. The speaker is Deputy State Secretary for Energy Transition Viktor Horváth of the Ministry of Energy. The roundtable participants are Gábor Várkonyi, moderator and auto market expert; Attila Fésűs, executive director of Equans Hungary Kft.; László Károlyi, CEO of Legrand Zrt.; Gabriella KelemenTüz, CEO of Mobilize; Balázs Vihari, PR manager for Renault; Louis-Jérôme Villa, executive director of Evergy Car Charging Kft.; and László Fata, founder of Cafeteria Trend Magazine. The event is open to the press, and the language will be Hungarian. • When: Wednesday, April 17, 9 a.m.noon • Where: D50 Hotel és Rendezvényközpont, Damjanich utca 50, 1071 Budapest. • Fee: HUF 12,500 (+VAT).

Belgian Business Club in Hungary (Belgabiz)

Belgabiz, in cooperation with Euroatlantic Consulting, will host a networking event called “Preparing for the Hungarian EU Presidency.” Belgium and Hungary hold the EU presidency consecutively, which means that Hungary will continue working on matters launched in the first half of 2024. The presentation will provide the participants with a general understanding of the policies that are on the table in 2024, tangible knowledge, and practical advice on the Hungarian EU Presidency and beyond, from EU business lobbying to funding opportunities. The official program will be followed by networking with refreshments. • When: Thursday, March 21, 6-9 p.m. • Where: Create26, Király u. 26, 1061 Budapest. • Fee: Members free; non-members HUF 18,000.

Hungarian-Norwegian Chamber of Commerce (HNCC)

Students of the Mihály Károlyi Vocational Secondary School of Economics, participating in an Erasmus exchange program with the Nydalen Videregående Skole, visited the Embassy of Norway, Budapest, before their journey to the Scandinavian country. They were provided valuable insight into Norway’s economic, social and cultural history by deputy head of the mission Herman Baskår. The event was part of the recently established collaboration between the HNCC and the secondary school.

Swiss-Hungarian Chamber of Commerce (Swisscham)

On March 7, Swisscham organized an event with speakers from Progress Consult Ltd. on the actualities and opportunities of corporate digitalization, with several presentations about what tools can help company leaders consciously manage corporate digitalization while also developing employee competencies. Andrea Magdolna Nagy spoke about the challenges of digital space from the corporate and consumer aspects, the so-called dark patterns in online commerce, and the rules of online shopping. Tamás Barathi introduced the Blue Colibri platform, which allows companies to consciously build HR processes, internal communication, and digital systems.

Swisscham’s next event is “How to Start Working With AI.” • When: Thursday, April 4, 9 a.m-noon • Where: Ericsson House, Magyar Tudósok Körútja 11, 1117 Budapest • Fee: Members free; non-members: HUF 14,900 / person

The Italian Chamber of Commerce for Hungary (CCIU)

The CCIU is a member of Assocamerestero, a network that includes 86 Italian Chambers of Commerce Abroad (ICCAs), with about 20,000 members and an estimated 300,000 business contracts. One of the primary objectives of this network is promoting “Made in Italy” products, which is also the case in Hungary. On March 7 and 8, the Italian chamber participated in the Europe and Mediterranean Area Meeting, held in Rome at Palazzo Montecitorio. The meeting, entitled “Working Together on the Future: ICCA Close to Businesses around the World,” was attended by CCIU president Bernardino Pusceddu and vice president Francesco Alleva. The main focus of the meeting was how ICCA plays a vital role in internationalization. They are essential in economic diplomacy, which is critical to globalization. This involves utilizing new technologies like AI and promoting the green economy. In addition, demonstrating the strengthened collaboration between Italian entities in Hungary, Pusceddu was invited to the SIRHA event in Budapest on March 5. This is the leading international trade fair dedicated to hospitality, gastronomy, and retail in Central and Eastern Europe.

German Hungarian Chamber of Industry and Commerce (DUIHK)

The DUIHK is organizing a workshop in English and Hungarian with simultaneous translation with renowned experts from Magyar Telekom, PwC, Audi and B.Braun on upskilling in finance. In today’s highly competitive talent market and rapidly changing business landscape, finance departments, financial services and FinTech firms must upskill their employees to stay relevant. Apart from existing employees, recruiting skilled university graduates is also increasingly important for these firms, so upskilling plays a crucial role in the Hungarian education system, particularly at top universities. New technologies, shifting

market demands, and a constantly evolving regulatory environment are just a few factors driving change in financial services in different industries. The workshop provides answers to the following questions: What are the skills that will keep finance organizations relevant? Where are the specific skill gaps? What are company best practices? What role can companies and universities take in upskilling? After this kickoff workshop, the chamber plans follow-up events and working group assignments.

• When: Monday, March 25, 1:30-6 p.m.

• Where: House of German-Hungarian Economy, Lövőház u. 30, 1024 Budapest. www.ahkungarn.hu/Veranstaltungen

Canadian Chamber of Commerce in Hungary (CCCH)

At a recent business breakfast event co-hosted by CCCH and Telcotrend, the firm’s sales manager, Eszter Jacobs, and senior business consultant, Lóránt Tóth, led an enlightening discussion on the critical role of front-end applications. They emphasized how these are a vital link between customers and complex backend IT systems. Amidst the multitude of backend data, success hinges on presenting information seamlessly to customers and frontline employees, especially during backend system changes. Jacobs and Tóth explored strategies to ensure business continuity amidst backend transformations, focusing on enhancing user experience and resilience. Attendees discussed leveraging innovative technologies and agile frameworks to fortify front-end applications and optimize outcomes. This collaborative event showcased the power of knowledge exchange in driving business innovation. By prioritizing robust front-end applications, enterprises can enhance customer experiences and maintain a competitive edge in today’s dynamic marketplace.