REPORT ON THE
COMMUNITY ACTIONS OF
MAGNET BANK

2016

10 FACTS

YOU SHOULD KNOW ABOUT MAGNET BANK

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WELCOME

OF THE PRESIDENT ON THE YEAR 2016

On a personal level and as the President of the Bank, from the numerous events of 2016, there is one important tendency that particularly struck me: it seems to me that in our ever-changing world affected regularly by crises, human solidarity and the capability to take joint actions in positive social matters are emerging. Changes in values give greater scope to such ambitions which aim at making our world more liveable and combat inequalities, social exclusion, as well as environmental disasters effectively. It has become perfectly natural that all of us collect waste selectively, try to use fewer plastic bottles or stand up for important environmental issues (e.g. Standing Rock).

MagNet Bank is in the front line of this world transforming process in Hungary. By its financial products, banking instruments, general operating principles, the Hungarian Community Bank endeavours to offer a responsible alternative to those who – just like us – believe that the world can be transformed for the better by our conscious decisions.

MagNet does not sell bank cards, deposits or loans, but changes people’s relation to money. It links the participants. It makes the money flow and individual decision alternatives more transparent, thus making personal impacts visible and noticeable. It provides the opportunity to take responsibility, thus creating healthier connection to money. How? We contribute by way of our Mentor/Sector deposit and loan products, Pay as much as you like account management, bank cards supporting social issues and helping programs, a donation program involving the clients, a balanced profit approach of the owners and conscious and transparent dividend policy.

MagNet Magyar Közösségi Bank Zrt. (predecessor in title: HBW EXPRESS Bank Zrt.), since its change in its name and strategy in 2010, has been committed to offering, for the seventh consecutive year, a value-based community banking alternative in Hungary and endeavours to show a good example how the world and Hungary can be changed through conscious management of finances. Exponential growth in size of the clientele and a wide professional recognition in the period since its reorganization, all demonstrate that clients call for innovative thinking and responsible and conscious banking.

Not only domestic awards, but an international recognition also show MagNet Bank’s success: in 2016, our Bank was accepted as a member in GABV, the international association of value-based banks (Global Alliance for Banking on Values, www.gabv.org).

As part of its financial education mission, each year MagNet Bank calculates the specific amount by which a given client has contributed to the Bank’s annual profit and provides information to the client to raise financial awareness. In 2010 the Community Donation Program (CDP) was introduced, within the framework of which, year after year, clients are annually given the opportunity to dispose over 10% of their contribution to the bank’s profit and to decide for which foundation purposes it may be used. Over the last 7 years, our clients disposed of the allocation of EUR 552 000 in total, and granted support to app. 220 different foundations and nonprofit organizations working inter alia in the fields of healthcare, environmental protection, education, equal opportunities, medicine and culture.

Nowadays in Hungary, it is trendy to worry about democracy. At MagNet Bank, we are confident that one of the most important factors of democracy anywhere in the world, is a – both on a human and financial level – independent and strong civil sector. We strongly believe that if, following the example of MagNet Bank, all other large enterprises (banks and insurance undertakings) allocated 10% of their annual profit to the civil sector not on the basis of the decision made by their management but on the votes of their clients, people would not have to worry about democracy.

In 2016, the independent professional jury of MasterCard awarded us with its “Socially Responsible Bank of the Year” prize to acknowledge our commitment for the sixth consecutive year.

We thank and are grateful to our clients for recognizing the power of joined efforts and for supporting the conscious and responsible management of finances. Thus, Hungary and in a broader sense the world itself can be transformed for the better. This is what we believe in!

The world around us is built on loans, therefore financial institutions have great responsibility over which sectors are prospering and which are stagnating. Besides the classic indicators, the level of social utility is considered very important among the credit scoring factors of MagNet Bank.

In 2016, MagNet Bank raised the overall amount of its corporate credits
from the EUR 116 million of 2015 to EUR 149 million.

COMMUNITY DEPOSITS AND LOANS

We not only inform our clients on the objectives financed from their savings, but actively involve them into the decision-making process by the help of our MENTOR and SECTOR community products. By this, our borrower clients can reduce their loan burden, while our deposit owners can be sure that their savings serve a good cause of their choice.

In 2016, our MENTOR community loan product won the Best Retail Loan
Product of the Year award at the MasterCard – Best Bank of the Year Competition.

Clients financed by the Mentor and Sector community loans can be supported by the deposit owners of the bank with the help of their savings, while obtaining an interest at the market rate of interest in respect of their deposits. In case of Mentor loans, deposit owners support a specific borrower client with their savings, while in case of Sector loans, a specific group of clients (Sector) as a whole is aided based on the nature of activity.

Deposit owners can determine the rate of the interest paid on their deposit within a specified range: they may even choose an interest lower than the market interest if they wish the specific recipient’s loan to have even more favourable conditions. Thus, by choosing the Mentor and Sector deposits, our clients are influencing the interest level of the credits the Bank places with respect to the specific fields.

In 2016, the savings amounting to EUR 38 million of 2 539 deposit owners helped 30 Mentor and Sector loan borrowers to reduce the annual cost of their Mentor/Sector community loans by EUR 19 812.

In the meantime, the total amount of deposits of MagNet Bank increased by EUR 35 million, from EUR 246 million in 2015 to EUR 282 million.

DISCOVER THE AMOUNTS OF SAVINGS

ACCUMULATED BY EACH SECTOR IN 2016 WITH THE HELP
OF OUR DEPOSIT OWNER CLIENTS:

Join the new Mentor-Sector Plus Program with your MagNet loan and take advantage
of the discounts offered by the community deposit owners!

PAY AS MUCH AS YOU LIKE ACCOUNT MANAGEMENT

Retail clients of MagNet may decide themselves for the sixth consecutive year how much fee they would like to pay for their account management. By way of the PAUL system account management, the Bank aims at making its conscious clients aware that there is a direct connection between the fair value of services and the payment of due cost prices.

In 2016, app. 50% of our clients chose a higher fee than 0 Hungarian Forints.

Set the amount of the monthly fee that you would like to spend on your account management.

Thank you for supporting
our purposes!


In 2016, as in previous years, MagNet Bank increased its current account portfolio dynamically. The portfolio consisting of over 40 thousand current accounts shows us that our clients have recognized and embraced the values of community banking.


If you would like to support the social efforts of the Bank, set your pay as much as you like system
account management fee to an amount higher than its cost price. Thank you!

We are extremely proud of the fact that the NetBank system and the related mobile application implemented by our own development team gained notable success not only among our own users but also in the opinion of the professional jury.

MagNet won the Best Banking Mobile Application of the Year prize in 2016, while according to a former independent survey, clients of MagNet Bank rated our Community NetBank Services as the best in the market

Reacting promptly to PSD2 Directives, the Bank implemented and partly opened its API for its NetBank interface to its cooperating partners already in 2016. As a result of cooperation, innovative services are planned to be introduced by the Bank at the beginning of 2017.

In 2016, the Bank created a demo interface in order to enable its clients to freely try out the online banking services of both the NetBank and the Mobile Application.

During the year, the bank also implemented a so-called Community Impact Measurement System which informs every retail client of the positive impact it had on the community and shows their individual contribution to achieving social purposes.

Download our mobile application and manage your finances anytime and anywhere you are.

With our financial services, we work day by day towards the establishment of a transparent, value-centric society. In his process, a significant role is played by Hungarian civil initiatives, which we support actively by the involvement of our clients.

COMMUNITY
DONATION
PROGRAM

In the spirit of transparency, each year MagNet Bank shares the information with its clients on its profit and the amount of their yearly contribution. Within the framework of the Community Donation Program (CDP), this year for the seventh time they had the right and opportunity to dispose of 10% of their contribution to this profit.

In 2016, the clients of MagNet Bank had the opportunity to allocate a record amount of EUR 150 974 in favor of nearly 80 public benefit purpose entities which support important social issues.

SUPPORTIVE BANK CARD

Clients support the nonprofit organization of their choice from the Bank’s
money each time when using their bank cards for their purchases.

In 2016, within the framework of the Supportive Bank card Program.

CORPORATE INCOME TAX

In 2016 we decided that, similarly to the CDP Program, we would initiate a social dialogue with our clients and our community in order to decide on the apportion of MagNet Bank’s corporate income tax.

On the basis of 16 646 votes received, we distributed more than EUR 325 thousand support between 23 organizations

If You have not yet done so, set today which entity you wish help with your bank card and support
good causes at no cost to you!

As a community bank, MagNet places great emphasis on making its personal meetings with its clients sensational, friendly and informal. The newly established physical spaces and service model are working towards that goal as well.


After the success of our downtown fair trade café and banking office in 2015, MagNet Bank continued to establish its uniquely friendly community places. Our location in Székesfehérvár, open since November 2016, beyond its banking functions, operates as a community office as well, where local entrepreneurs, nonprofit organization may work, hold meetings or exchange views with each other. By this, the Bank stepped out of the catchment area of Budapest for the first time and enabled community banking in the provinces as well.


In 2016, MagNet Bank operated its branch offices at 12 locations, which are all fully accessible and dog-friendly.


HIf you happen to be downtown, try our selection of fair trade coffees at our Community Point
in Balassi Bálint Street.

You can find the details of our financial data at www.magnetbank.hu

Keep an eye on your mailbox, as in spring you will also be informed on the amount that has
contributed to our profit of 2016, and do not forget to exercise your right of disposal in the
Community Donation Program of 2017. We count on you

The year of 2016 brought numerous prestigious professional recognitions to MagNet Bank, which indicate that in the opinion of the public, both from a professional and social perspective, our joint work towards financial awareness is necessary and important.

JOINING GLOBAL ALLIANCE FOR BANKING ON VALUES

Not only domestic awards, but international recognition also show MagNet Bank’s success, as in 2016, our Bank was accepted as a member in the GABV, the international association of value-based banks (Global Alliance for Banking on Values, www.gabv.org). After a two-year-long observer status, MagNet is already a full member of the international umbrella organization, by the help of which is introduced to the best practices of international community banks.

THE BEST MOBILE APPLICATION OF 2016

MagNet Bank was awarded with The Best Mobile Application of the Year prize in 2016. On the basis of objective criteria, Bankmonitor.hu awarded the best products and digital innovations of the banking sector. When granting the award, the jury took into account not only the quality and quantity of services, but also customer satisfaction.

MASTERCARD - BEST BANK OF THE YEAR COMPETITION 2016

We won the Socially Responsible Bank of the Year title this year for the sixth consecutive time, which shows us that the market values a responsible core business more than high CSR spendings.

In 2016 MagNet Bank won the Best Retail Credit Product of the Year with its MENTOR community lending facility, which is important to us because this product carries and represents the most basic community values.

MILESTONES OF OUR HISTORY

2016

MagNet Bank acquires Korona Kredit Jelzáloghitel Zrt., by which it strengthens its capital intensive and 21 years of profitable operation. We open our first Community Point in the provinces in Székesfehérvár, which operates also as a community co-working space and branch office.

2015

We open our first sensational branch office, the Downtown Community Point, which also operates as a fair trade café.

2014

For the purpose of expanding its financing solutions for small and medium size businesses, MagNet purchases CE Faktor Zrt. MagNet wins the Disabled Friendly Workplace title.

2013

MagNet becomes a bank in 100% Hungarian private ownership again.
Buyout of the Spanish community bank portion (30%) + purchase of Banco Popolare Hungary Zrt.

2011

MagNet wins An Indeed Responsible Corporation Award from KÖVET Association and, this year for the first time, the Socially Responsible Bank of the Year title from Mastercard, which has been awarded to us for sixth consecutive years ever since.

2010

The first community deposit and loan products and the Community Donation Program are implemented.

2009

The management decides to establish the first Hungarian Community Bank by further development of the traditional bank model. The most important principles, values are laid down and finally the products are developed.

2008

MagNet’s legal predecessor, HBW Express Takarékszövetkezet (Savings Cooperative) is transformed into a bank with the assistance of the Spanish Caja Navarra savings bank. The Spanish community bank represents 30 percent in the ownership structure, while the Hungarian owners continue to represent 70 percent thereof.

2000

Introduction of the NetBank service among the first market operators in Hungary.

1995

Establishment of MagNet Bank’s legal predecessor, HBW Express Takarékszövetkezet (Savings Cooperative).