Bbj 2505

HUNGARY’S PRACTICAL BUSINESS BI-WEEKLY SINCE 1992 | WWW.BBJ.HU

HUF 1,250 | €5 | $6 | £3.5

BUSINESS JOURNAL BUDAPEST

VOL. 25. NUMBER 5

MARCH 10 – MARCH 23, 2017

SPECIAL REPORT

Banking

www.

t Business Budapes

Journal

| March

10 – March

bbj.hu

23, 2017

rt l Repo SpeBacnkia ing

3

d14 ion Ahea ing16 9 Digitalizat orate Bank Wallet1 tion and to Corp Mobile Consolida Diversity Live the Value and is Dead: Long Adding et ile Wall The Mob

try that An indus public d ancial suffere larity, fin unpopu and heavy is ip hardsh ent taxation r times m rn bette gove king at finally loo

A Licence to Build NEWS

Award-winning TriGranit CEO Árpád Török talks SOCIALITE about his management style, the fundamentals Voyage From Bosnyák of the Hungarian economy, and the CEE developer’s Market to Lukács Baths excitement at returning to construction in BUSINESS Turning urban recorder and Budapest for the first time “flâneouring” around the streets – PwC Reveals Hungarian since 2011.  6 and some of the less well known areas – of Budapest in search of some insight into the soul of Hungary’s capital city. 29

BBJ_2505_news.indd 1

CEOs mindset

Confirming recent reports, the sixth PwC survey of Hungarian CEOs, which was published yesterday (March 9), found that the growing skills shortage is the single biggest concern for company bosses, much more so than their global counterparts. 9-11

NEWS

Cutback in German Orders may Take its Toll At first sight, there was a significant improvement in Hungary’s industrial output in January, but when you look at the working day-adjusted data, the increase comes to only 1.6%. 3

2017. 03. 08. 20:37

www.bbj.hu

Budapest Business Journal | March 10 – March 23, 2017

BBJ

THE EDITOR SAYS

EDITOR-IN-CHIEF: Robin Marshall NEWS EDITOR: Christian Keszthelyi EDITORIAL STAFF: Zsófia Czifra, David Holzer,

Levente Hörömpöli-Tóth, Gary J. Morrell, Claudia Patricolo, Rob Smyth, Sarah Sunday, Ágnes Vinkovits.

LISTS: BBJ Research (research@bbj.hu) NEWS AND PRESS RELEASES:

Should be submitted in English to news@bbj.hu LAYOUT: Norbert Balázs PUBLISHER: Business Publishing Services Kft. CEO: Tamás Botka ADVERTISING: AMS Services Kft. CEO: Balázs Román SALES: sales@bbj.hu

CIRCULATION AND SUBSCRIPTIONS: circulation@bbj.hu

Address: Madách Trade Center 1075 Budapest, Madách Imre út 13-14., Building A, 8th floor Telephone +36 (1) 398-0344, Fax +36 (1) 398-0345, www.bbj.hu SUBSCRIPTIONS: Budapest Business Journal 1 year 6 months 3 months

HUF 27,500+VAT HUF 13,750+VAT HUF 6,875+VAT

News Services Hungary A.M., Energy Today, Regional Today 1 year, from HUF 179,000+VAT 6 months, from HUF 104,900+VAT 3 months, from HUF 58,900+VAT Book of Lists 2016-2017: HUF 19,120+VAT DigiBOL HUF 39,900+VAT Call +36 1 398-0344 or email circulation@bbj.hu What We Stand For: The Budapest Business Journal aspires to be the most trusted newspaper in Hungary. We believe that managers should work on behalf of their shareholders. We believe that among the most important contributions a government can make to society is improving the business and investment climate so that its citizens may realize their full potential.

I

have never thought of myself as being especially prescient.

It is true that in 1993 I returned to the U.K. from a holiday seeing friends in Gothenburg insisting that a band called Ace of Base, then little known outside of Sweden, would have a massive worldwide hit with their single “All That She Wants”, but I always considered that something of a one hit wonder.

Little did I think, therefore, when I wrote in last issue’s editorial that I suspected Hungary’s burgeoning labor shortage “will become a recurring theme…. throughout the year”, that I would return to it quite so soon.

But return I must, for it came up from two quite different sources in the intervening two weeks, both reported in this issue. First there was the AmCham business forum at which Minister for National Economy Mihály Varga spoke (see our report on this on page four), during which he talked about the challenges produced by bringing down unemployment, meaning there are now “67,000 vacant positions in the Hungarian economy”, including 7,000-8,000 cleaners. The problem is, he acknowledged, “sector neutral”.

That was followed yesterday by the publication of the PwC’ sixth annual Hungarian CEO Survey (see pages 9-11 for our reporting on its findings), which revealed: “Skills shortages, which are at an all-time high, are the single most important barrier to growth, and affect practically every business in Hungary.” Indeed, 92% of CEOs said they saw availability of skills as a threat to growth, up from 85%. It is a concern globally, too, but markedly less so at 77%.

That said, 51% still plan on increasing headcount this year, and given that it is perhaps not surprising that,

among the list of things CEOs in Hungary want from the government, “high levels of employment” has fallen from being a priority for 20% of bosses last year to just 9% this year, while “providing a skilled and adaptable workforce” is now demanded from 91%, up from 83% last year.

As I said in our previous issue, there are no quick fixes for this problem, but nor is there anywhere for government to hide. Hungary’s CEOs will be understanding of the challenges involved, but they will also expect coordinated action that takes in education, training, mobility allowances and more.

The government is working on all of those areas, it must be noted, but if it is to deliver on its promises of sustainable growth, it will need to find success.

PwC was not the only member of the Big Four professional services networks releasing an important Hungarian industrial survey this week: EY also revealed its annual M&A Barometer yesterday (you will find our coverage of this on page 12). Looking back at the figures for 2016, it found fewer deals done (2015 was an exceptional year, however), but the value of those deals up. This confirms the general upbeat mood music coming from many sectors now.

As EY partner Margaret Dezse notes: “The share of inbound transactions has been continuously increasing for three years; this is clear evidence that we have attractive and healthy companies that do tempt foreign investors.” There is much that could be better about Hungary, but from a business perspective, there is also much that is positive.

Fortepan.hu / UVATERV

MTI / Zsolt Czeglédi

The Budapest Business Journal, HU ISSN 1216-7304, is published bi-weekly on Friday, registration No. 0109069462. It is distributed by HungaroPress.

Reproduction or use without permission of editorial or graphic content in any manner is prohibited. ©2017 BUSINESS MEDIA SERVICES LLC with all rights reserved.

OLD CHESTNUTS and New Truths

BBJ-PARTNERS

THEN & NOW Hungarian police officers hand over a gift to a woman driver in celebration of International Women’s Day on March 8 in Debrecen. Hungary celebrated women’s day in 1911 for the first time. The slogan in the poster from 1950 reads: “Long live March 8, the celebration of peaceable women”.

VISIT US ONLINE: WWW.BBJ.HU

BBJ_2505_news.indd 2

2017. 03. 08. 20:37

1

News

1 News | 3

///macroscope

Cutback in German Industrial Orders may Take its Toll

At first sight, there was a significant improvement in Hungary’s industrial output in January, but when you look at the working dayadjusted data, the increase comes to only 1.6%. While that is still higher than last year’s average 0.9%, analysts identify several risk factors for this year, although they have better hopes for 2018.

ZSÓFIA CZIFRA

A

lthough raw data shows that Hungary’s industrial output grew 6.5% on a yearly basis in January, when looking at the working day-adjusted data, the rise is only 1.6%, recently published figures by the Central Statistical Office (KSH) reveals. When compared to the previous month, working day- and seasonally adjusted figures show that production was down by 0.1% in the first month of the year. This basically fits in with the stagnating trend the industry saw through 2016. One of the reasons is Audi’s setback in production that obviously hits Hungary’s industry, but the general ailment of the global economy does not help either. In Germany, a massive, 7% drop in industrial orders – the steepest rate since 2009 – was just published, a setback which might shadow the optimistic outlook

Increased employment in the manufacturing sector, paired with the low basis of last year and the deployment of new capacities in the food and the tire industry could cause an average of 3.5% growth in Hungary’s industrial production this year.

BBJ_2505_news.indd 3

Given a cutback in production, Audi has not been quite the engine of growth many had hoped in recent times. Photo by Anne-Irene Leino.

for Hungary, too, as the country’s industry largely depends on German orders.

Analysts expect the trend to turn for the better in the coming months, however, they also warn for downward risks.

ING Bank senior analyst Péter Virovácz projects that full-year industrial output will be below 2%, noting that the plunge in German industrial orders will weigh on Hungary’s industrial sector.

Continued Increases Erste Bank analyst Gergely Ürmössy said the pickup in growth was smaller than expected, but Hungary’s purchasing manager index (PMI) points to a continued increase in the coming months. He foresees an increase of 3-4% in industrial output for 2017.

According to Takarékbank analyst Gergely Suppan, industrial output might accelerate in the coming months, due to the improving macro data both in Hungary and Europe, however, Audi’s decrease in production could still have a weakening effect. Increased employment in the manufacturing sector, paired with the low basis of last year and the deployment of new capacities in the food and the tire industry (Apollo Tyres will soon complete a HUF 150 billion development in Gyöngyöshalász) could cause an average of

3.5% growth

in Hungary’s industrial production this year.

However, adds Suppan, notable acceleration might only come in 2018.

Last year’s weak industrial performance also contributed to the poor performance of the economy in 2016: the KSH published its second reading of GDP data, confirming that the Hungarian economy

grew an unadjusted 2% last year, and 1.8% according to seasonally and working dayadjusted data. In the fourth quarter of 2016, according to seasonally and calendar adjusted data, the performance of the economy increased by 0.4% compared to the previous quarter.

Besides stagnating industry, the construction sector also hindered growth last year: the sector output fell 18% in 2016.

On the other hand, agriculture closed a good year, its 17% expansion giving a push to the GDP. The services sector, agriculture and industry added 1.6, 0.6 and 0.2 percentage points to GDP growth, respectively, while construction lowered growth by 0.6 of a percentage point.

EU Average The Ministry for National Economy emphasized in a statement commenting on the KSH data that the Hungarian economy had grown at a faster clip than the average of the other European Union member states over the past few years.

However, it is worth noting that, in a regional comparison, Hungary’s growth was among the lowest in 2016: Romania, Slovakia, Czech Republic and Poland all performed better in 2016. According to the latest (seaonally-adjusted) Eurostat data, over the whole of 2016, GDP rose by 1.7% in the euro area and by 1.9% in the EU28, compared with 2% and 2.2% respectively in 2015. The ministry predicts the economy will grow by 4.1% this year on the back of wage rises and government subsidies as part of its home creation scheme. Also, the uptake of EU funding is set to accelerate and industrial output is again improving, the ministry said.

The KSH also published inflation data for February on March 8. Basically in

line with expectations, consumer prices were up by 2.9% on average compared to February 2016, and were 0.4% higher than in January 2016. Core inflation was 1.8% up on a yearly basis.

On a year-on-year basis, food prices rose by 1.9%. The cut in value-addedtax also reflects in the CPI, as the price of poultry meat was cut by 17.4% and that of eggs by 7.2% in February, compared to the same period of last year.

A higher-than-average price rise of 8.7% was recorded for other goods (pharmaceutical products, motor fuels, household products and recreational goods) and, within this, consumers paid 19.9% more for motor fuel. An average price rise of 2.8% was measured for alcoholic beverages and tobacco, 1.5% for services and 0.6% for clothing and footwear, while the price of electricity, gas and other fuels increased by 0.3%.

Consumer durables cost 0.4% less for consumers.

Numbers to watch in the coming weeks The KSH will publish the first estimates of the external trade figures for January today. On the March 14, detailed industrial production data will come to light. A few days later, KSH will reveal how the construction sector performed in January. Statistics for earnings and accommodation establishments will be published on March 20, and the final January figures for the retail sector will be released on March 24.

2017. 03. 08. 20:37

4 | 1 News

www.bbj.hu

Budapest Business Journal | March 10 – March 23, 2017

Economy Minister Hails AmCham as ‘Strategic Partner’ Minister for National Economy Mihály Varga has given AmCham a ringing endorsement, saying its work is “highly appreciated” by the cabinet and the chamber is a “strategic partner” that shares government objectives.

Mihály Varga, Hungary’s economy minister, addresses AmCham Hungary members at the InterContinental Budapest on February 24.

ROBIN MARSHALL

The minister was speaking at a business forum at the InterContinental Budapest on Friday, February 24. “I very highly appreciate the work of members of the chamber in improving economic competitiveness,” he said, starting his speech in English before switching to Hungarian.

“There is no sector where there is an over supply of workforce. […] There are 7,000-8,000 vacant jobs for cleaners; this [problem] is sector-neutral. Actual and available reserves [in the population] should be mobilized; training should be made up-to-date to accommodate the needs of the economy.”

ADVERTISEMENT

BBJ_2505_news.indd 4

He noted that much of what AmCham was promoting was “in line with government objectives”, adding: “We [the government] regard AmCham as a strategic partner.”

Vitally Important As government representatives have done so often in their recent rhetoric, Varga made much of the new economic and political realities of a world that sees the White House putting “America First” under President Donald J. Trump, and Britain on the verge of pulling out of the European Union.

The economy minister said the United States is a vitally important partner to Hungary, being the second biggest investor after Germany, and the number one export destination outside of the European Union.

“We all agree that partnership between the government and U.S. companies is important, and different visions, a different balance are necessary for long-term development.

The new situation offers new challenges: migration; immigration; the development of the world economy.

Brave approaches and new economic policies are needed,” he told members.

“This coming year and next could be a period of economic growth of extraordinary pace, for which we have waited a long time.”

In a speech that extolled the economic success of Hungary, he noted that “important external judges” such as the ratings agencies were looking much more favorably on the country now.

“State debt is kept under supervision.

The government now would need

unemployment last year, these positive figures also carried a negative side, namely a growing shortage of labor that affects all fields. “There is no sector where there is an over supply of workforce,” he said. Noting that the National Employment Service (NFS) provides a weekly breakdown, Varga said there were

67,000

vacant positions

to increase the debt or deficit, but we do not do that! We evaluate that confidence has come back to the Hungarian economy.”

in the Hungarian economy, ranging from high value jobs to the low skilled.

“There are 7,000-8,000 vacant jobs for cleaners; this [problem] is sectorneutral. Actual and available reserves [in the population] should be mobilized; training should be made up-to-date to accommodate the needs of the economy.”

More Valuable?

Complex Agreement

Even the relatively poor performance of Hungary’s GDP growth last year (the minister quoted the 2% “raw data” figure, although calendar- and workday-adjusted figures released by the Central Statistical Office actually put it at 1.8%) was given a positive twist. Noting that 2016 effectively fell between two EU funding cycles, and therefore saw a drop in the money available for investment, Varga suggested that the growth achieved in 2016 carried much greater significance than the figure alone might imply.

“This 2% is perhaps more valuable than the 3% or more in previous years. [...] Now, last year we could see whether Hungarian growth could be maintained without EU funding. After 2020 [the end of the current EU funding cycle], if EU funding is not available, there is growth potential in the Hungarian economy.”

He identified agriculture, the services sector and increased internal demand as strong drivers of the economy, but noted that industry had performed less well and construction was a definite drag on last year’s figures. He also accepted that, having gone from 12% unemployment in 2010, when Fidesz was returned to power, to 4.6%

The government was working to that end, he said, and again praised AmCham for its input and suggestions, saying many ideas had already been taken onboard and implemented.

The government itself, working with employers and unions, had reached a complex six-year agreement to lower employer contributions (already reduced from 27% to 22%, and set to come down to 15% by 2022, he said). “The minimum wage will have to be changed, and will increase by 15% next year.”

The long awaited competitiveness council, which will advise the government, now appears close to formation. “Partners have been invited in the past few days. I am pleased to say [AmCham] President Farkas Bársony has been invited and has said yes.”

Looking forward, Varga identified three key areas for improving GDP growth: 1) improvements in competiveness and efficiency; 2) quality jobs that create higher added value; and 3) the involvement of ever more Hungarian SMEs in multinational value chains.

An edited version of this article appears in the March issue of JOURNAL, the AmCham magazine.

100 years

2017. 03. 08. 20:37

1 News | 5

www.bbj.hu

Budapest Business Journal | March 10 – March 23, 2017

Hoping Hollywood will say #helloHUNGARY Following the new global “Film stars, producers, trend of film tourism, the directors; they are all 10-year-old Hungarian coming with their families. film studio complex So we want to assure Korda Studios has signed them that they can spend a cooperation agreement the best time in Hungary.” with the Hungarian Tourist Agency (MTÜ) Second Largest in to help improve and develop the film industry Europe Korda Studios, situated in a here even further. winegrowing region around the village CLAUDIA PATRICOLO

The main purpose of this agreement is to make Hungary better-known worldwide.

“Film stars, producers, directors; they are all coming with their families. So we want to assure them that they can spend the best time in Hungary,” head of production and development Daniel Kresmery tells the Budapest Business Journal. Thanks to the cooperation with the Hungarian Tourist Agency, this is brought a step nearer, with MTÜ now taking care of organizing tours around the backlot film sets and interactive exhibitions, as well as short trips into the countryside.

of Etyek, about 30 km west of Budapest, is the second largest film park in Europe, after one in the United Kingdom.

“And nowadays, Hungary is one of the most requested locations, in part due to fiscal reasons, since there is a very low tax system here,” explains Kresmery.

Currently Korda Studios offers six different stages giving a combined 15,000 sqm. During scheduled tours, tourists have the chance to take a walk along a New York street, built for the movie “Hellboy 2 - The Golden Army”. Thanks to its attention to detail, including lifelike restaurants, banks, stores and theaters, the set is a great location for movies, commercials or even special events.

The #helloHUNGARY sign outside the Korda Studios is seen as a marketing tool. Actor Jamie Foxx lay on top of it in January and shared a photo via his social media sites.

Or, for people who want to go back in time, the set built for the TV series “The Borgias” represents an astonishing Renaissance environment.

This spectacular set reproduces the most famous Italian buildings, including the Vatican and the Colosseum, besides various structures such as courtyards, prison cells, squares and well-designed interiors.

But before entering the film sets, the first thing everyone notices is the #HelloHungary sign planted at the entrance of the park. “It is a marketing tool,” explains Kresmery.

“When Jamie Foxx arrived here [in mid-January] to shoot the new TV series ‘Robin Hood: Origins’, the first thing he did was to lay down on the sign, posting a picture on all his social networks. It was a great advertisement for us.”

Current projects now include the creation of a publication for film directors and producers, to show them potential Hungarian locations to shoot their movies. The goal is clear: improving film making and film tourism can only help enhance the Hungarian economy.

ADVERTISEMENT

BBJ_2505_news.indd 5

2017. 03. 08. 20:37

REAL ESTATE NEWS

6 | 1 News

www.bbj.hu

Budapest Business Journal | March 10 – March 23, 2017

Developing From Good Fundamentals Award-winning CEOs are not afforded the luxury of resting on their laurels, but then again, the reason they are award-winning in the first place is, surely, in part, down to the fact that they keep moving forward. TriGranit’s Árpád Török is no different in that regard.

His company ended 2016 with a bang, but he has hopes 2017 will be even better.

ROBIN MARSHALL

W

ithin a few weeks of each other, the Budapestheadquartered real estate investment, development and management company had closed two of the biggest deals in recent history. In September it sold its Bonarka City Center development in Krakow, Poland, to Rockcastle.

The largest single-asset transaction in 2016 in Poland, it also won the “Investment Deal of the Year” title at EuropaProperty’s prestigious CEE Investment and Green Building Awards gala.

A few weeks later, TriGranit together with Heitman LLC completed the sale of Millennium Towers in Budapest, a category “A” 70,400 sqm GLA complex comprised of four office buildings within the Millennium City Center, to CA Immo for EUR 175 million. The transaction is the largest office deal ever in the Hungarian market, by both value and gross leasable area. That, too, resulted in a title, this time the CIJ Award for Investment Transaction of the Year.

Fantastic Year “Last year we had a fantastic year. Beside those two deals, we also completed two office developments in Krakow,” Török tells the Budapest Business Journal in an exclusive interview. “This year we are due to launch a minimum of three office development projects, something that has never happened in the 20 year history of TriGranit: three different projects in three different countries at the same time.”

If all three are launched, they will generate close to 60,000 sqm in GLA this year, Török says. He adds, “We might be able to launch one more office

BBJ_2505_news.indd 6

development in Poland of around 20,000 sqm GLA” and admits the company, which has become an investor as well as a developer since it was acquired in 2015

by U.S.-based global private investment firm TPG Real Estate, is also looking for acquisition targets.

“Last year we reviewed more than

EUR 21 billion of assets

across the region – that’s more than ten million square meters of retail and office space. We made offers on maybe 30% of those. In addition to our developments, we are constantly out there, looking for acquisition opportunities. If we can acquire one or two retail projects or large office complexes, it will have been an extremely successful year.”

Good Fundamentals Interestingly, Török argues that the underlying fundamentals of the Hungarian market – which saw EUR 1.7 bln in transaction volume in 2016 –have been getting better over the last four to five years, but almost all activity was held back by a number of factors that all contributed to the build up of a deeply negative perception. That has now changed.

“GDP is good; the growth is there, the stability is there, the investment grade rankings have returned. That CIT [company income tax] is now a flat 9% is positive and helping; the reduction on VAT on new residential building from 27% to

5%

is significant,

especially combined with better financing both for developers and people wanting to buy residential property. And Hungary still offers a very good return on yields compared with Warsaw and Prague; there

is a 100-150 basis point gap on yields between Budapest and those cities for the same quality of assets.”

He says the more interesting question is how long things will stay this positive.

Given how open the Hungarian economy is, and subject to external influences over which it has no control, such as interest rate rises by the Fed or the European Central Bank, it is hard to look much beyond an event horizon of 12-24 months. Török says he expects things to remain good for at least that long.

Been There, Done That His career has been pretty good, too. Last year alone Finance Monthly named him “CEO of the Year” in July, and Global Brands Magazine gave him the title of “Most Inspiring Real Estate CEO” in September. He joined TriGranit originally in March 1999 (the company was founded in 1997) as a leasing manager. He left for a period of three years to help set up Cushman and Wakefield in Greece, then returned 12 years ago as a development director, responsible for overseeing everything on a project from construction to leasing, financing and potentially even the eventual sale. He was made CEO in 2009. He thinks this process is key to the way he now manages the company.

“I went through the ranks. I know almost every aspect of the company and its various roles because I have been there and done it. I am able to offer advice and guidance based on experience,” he says. Not that he thinks that means he has all the answers.

“I often say, if I am the smartest person in the room, we have a problem,” he says with a laugh. “So, on the one hand I am quite hands-on, but on the other I like to give people – the real experts in their field – responsibility to act for themselves in the best interests of the firm.”

Three Developments, Three Countries, One Year Hungary: Millennium Gardens is significant for TriGranit as it is the firm’s first development in Hungary since 2011. With 37,000 sqm GLA, TriGranit says it is the largest office building development in Budapest due to start in 2017. For more on this, please see separate news item on page 8.

Slovakia: Lakeside Park Phase 02 will be an 11-floor building with 13,000 sqm of GLA, located in a well-established business district in Bratislava III (the Nove Mesto area), only 4 km from the city’s historic Old Town. The site has excellent public transport connections by tram and bus, as well as a nearby train station. The building will be connected to Phase 01 via the 1st floor and main lobby. The complex is set into a green environment with a park in a prominent location, adjacent to the picturesque Kuchajda Lake.

Poland: Building H, the eighth building of one of Krakow’s most successful office complexes, Bonarka for Business (B4B), situated in the Podgorze district, will offer 10,000 sqm GLA to its future tenants. The development is planned for launch this year. Once fully complete, B4B will consist of ten “A” class office buildings with a total area of 95,000 sqm GLA in a unique urban arrangement in an overall development value exceeding EUR 200 million.

2017. 03. 08. 20:37

GRUPPO T.F.M. KFT. 1068 Budapest, Király u. 102.

1ST DISTRICT

3RD DISTRICT

4TH DISTRICT

7TH DISTRICT

12TH DISTRICT

14TH DISTRICT

35 SQM – 1 ROOM, TOLDY FERENC STREET

25 SQM – 1 ROOM, VÁRADI STREET

120 SQM – 3 ROOMS, JÓZSEF ATTILA STREET

71 SQM – 3 ROOMS, BETHLEN GÁBOR SQUARE

80 SQM – 2 ROOMS + HALL, MÁRVÁNY STREET

44 SQM – 2 ROOMS, TÁBORNOK STREET

At the bottom of the Buda Castle, this completely renovated, furnished, street facing apartment has fully fi tted kitchen and it is situated in a building with elevator.

In a green area, this bright, park facing apartment in good condition is situated within a well maintained building. Ideal for investment.

In a quiet side street, this sunny, garden facing apartment in good condition benefits of separate rooms, private gas heating, terrace and parking space in the courtyard.

This very bright, high floor apartment that is located in front of the University and has view over the square, benefits of 3 separate rooms, big open kitchen and private gas heating.

This very spacious and bright, street facing apartment in good condition benefits of separate rooms and private gas heating. Good connection to public transport.

In a new building with elevator, this sunny, garden facing apartment has living room with open kitchen, bedroom, balcony, private gas heating and it is located in a quiet side street.

29.900.000 HUF

32.000.000 HUF

34.900.000 HUF

24.500.000 HUF

27.900.000 HUF

+36.1.201.0403

1ST DISTRICT

13.900.000 HUF

+36.1.430.1403

3RD DISTRICT

+36.1.782.72.75

4TH DISTRICT

+36.1.351.0446

7TH DISTRICT

+36.1.789.2846

12TH DISTRICT

+36.1.612.5475

14TH DISTRICT

87 SQM – 4 ROOMS, KRISZTINA SQUARE

23 SQM – 1 ROOM, PÜNKÖSDFÜRDŐ STREET

84 SQM – 3 ROOMS, HORIZONT HOUSE

136 SQM – 4 ROOMS, DAMJANICH STREET

130 SQM – 4 ROOMS, STROMFELD AURÉL STR.

98 SQM – 4 ROOMS, ALSÓRÁKOS

This renovated, very spacious, street facing apartment benefi ts of separate rooms and private gas heating. It is located close to the Buda Castle.

This high floor apartment with panoramic view has balcony and it is situated within a new building with elevator, fi tness room, sauna and reception.

In a new building with elevator, this bright, high floor apartment has living room with open kitchen, separate rooms, balcony and parking space in the garage.

In a beautiful period building with elevator, this completely renovated, very bright, high floor, street facing apartment has separate rooms and private gas heating.

18.490.000 HUF

55.000.000 HUF

This new built family house built on 402 sqm of lot, has separate rooms, two bathrooms, fireplace in the living room, big terrace, well kept garden and parking space.

44.900.000 HUF

49.000.000 HUF

This very spacious apartment, that needs renovation, has covered terrace, direct connection to the common garden and it is situated within a small condominium built on 800 sqm of lot.

69.000.000 HUF

69.900.000 HUF

+36.1.201.0403

2ND DISTRICT

+36.1.379.0506

3RD DISTRICT

+36.1.782.72.75

5TH DISTRICT

+36.1.351.0446

10TH DISTRICT

+36.1.789.2846

13TH DISTRICT

+36.1.612.5475

15TH DISTRICT

83 SQM – 2 ROOMS, RETEK STREET

59 SQM – 3 ROOMS, GYENES STREET

129 SQM – 3 ROOMS + HALL, KÁROLY CIRCUIT

92 SQM – 4 ROOMS, KŐRÖSI CSOMA WALKWAY

45 SQM – 1 ROOM, FORGÁCH STREET

120 SQM – 4 ROOMS, KERTVÁROS

This renovated, quiet, high floor apartment has separate rooms, fully fitted kitchen, private gas heating and balcony. It is situated in a period building with elevator.

This completely renovated, well divided, high floor apartment benefits of panoramic view over the hills and balcony. It is situated within a well maintained building with elevator.

In a very nice period building with elevator, this spacious, high floor apartment has view over the Deák Square and benefits of private gas heating.

This completely renovated, very bright, duplex apartment benefits of two bathrooms and balcony. It is located in the centre of the district.

This bright, street facing apartment has private gas heating and it is situated within a well maintained period building, close to the subway station. Ideal for investment.

This new built, two storey family house built on 225 sqm of lot, is composed of living room with open kitchen, 3 bedrooms, 2 bathrooms, big terrace and parking space in the garden.

37.000.000 HUF

34.900.000 HUF

91.000.000 HUF

15.900.000 HUF

26.900.000 HUF

+36.1.336.1706

2ND DISTRICT

+36.1.430.1403

3RD DISTRICT

+36.1.287.6745

5TH DISTRICT

34.490.000 HUF

+36.1.780.8276

10TH DISTRICT

+36.70.455.8062

13TH DISTRICT

+36.70.398.8754

15TH DISTRICT

135 SQM – 4 ROOMS + HALL, NYÚL STREET

67 SQM – 3 ROOMS, CSILLAGHEGY

200 SQM – 6 ROOMS, ST. ISTVÁN CIRCUIT

93 SQM – 4 ROOMS, ZÖLDPÁLYA STREET

56 SQM – 2 ROOMS, HEGEDŰS GYULA STREET

168 SQM – 5 ROOMS, RÁKOSPALOTA

This well divided, spacious apartment, that needs renovation, has separate rooms, 2 terraces and it is situated within a small condominium with beautiful common garden.

In a quiet and green area, this family house that needs renovation, built on 1290 sqm of lot, has 2 separate bedrooms and parking space in the courtyard.

This property in good condition consists of 3 separate apartments at the moment with 3 separate entrances. All of the flats have kitchen and bathroom. It is situated in a period building.

In a quiet area, this new built terraced house has living room with open kitchen, 3 bedrooms, 2 bathrooms, garage and well kept garden.

In a nice period building, this sunny, street facing apartment in good condition has private gas heating. It is located a few minutes walk from the Danube.

In a quiet street, this renovated, two storey family house built on 393 sqm of lot, has terrace, balcony, garage and a nice gazebo in the garden.

78.000.000 HUF

52.900.000 Ft

100.000.000 HUF

36.900.000 HUF

26.800.000 HUF

53.000.000 HUF

+36.1.336.1706

2ND DISTRICT

+36.1.379.0506

3RD DISTRICT

+36.1.287.6745

+36.1.780.8276

+36.70.414.7759

+36.70.398.8754

6TH DISTRICT

11TH DISTRICT

13TH DISTRICT

DUNAKESZI

221 SQM – 8 ROOMS, CSÉVI LANE

112 SQM – 3 ROOMS, RÓMAI-PART

51 SQM – 2 ROOMS, OKTOGON SQUARE

135 SQM – 4 ROOMS, BERCSÉNYI STREET

75 SQM – 3 ROOMS, VISEGRÁDI STREET

53 SQM – 3 ROOMS, BARÁTSÁG STREET

Beautiful panorama over the Buda Hills from the 2 balconies, this very sunny family house consists of 3 separate apartments. It is located in a quiet side street.

In a new built building, this very spacious apartment has beautiful panorama over the Danube, 2 terraces and wardrobe room. 2 car garage for sale at 6.990.000 HUF.

This sunny apartment is an ideal solution for anybody seeking a renovation project in a perfect area within a renovated period building.

135.000.000 HUF

71.900.000 HUF

In a well maintained period building, this very spacious, street facing corner apartment in good condition benefits of private gas heating.

Good connection to public transport.

A few minutes from the Víg Theatre, this bright, high floor apartment has separate rooms, private gas heating and it is situated in a well maintained building with elevator.

In a new building with elevator, this very sunny apartment has living room with open kitchen, 2 separate bedrooms, balcony and parking space.

49.900.000 HUF

33.600.000 HUF

25.900.000 HUF

+36.1.376.6080

2ND DISTRICT

+36.70.669.5350

3RD DISTRICT

30.000.000 HUF

+36.70.3156.087

6TH DISTRICT

+36.1.720.2433

11TH DISTRICT

+36.70.414.7759

13TH DISTRICT

+36.70.399.0399

DUNAKESZI

659 SQM – 4 ROOMS, KONDOR STREET

300 SQM – 5 ROOMS, CSILLAGHEGY

98 SQM – 4 ROOMS, IZABELLA STREET

219 SQM – 10 ROOMS, GALAMBÓC STREET

43 SQM – 2 ROOMS, BODOR STREET

77 SQM – 3 ROOMS, DUNAPARK SUBDIVISION

This very spacious and bright, four storey semi-detached house has 3 bathrooms, terrace, 400 sqm of wellness area, well kept garden with a pond and 3 car garage.

This luxury, eco-friendly home has 1517 sqm of lot, 3 bathrooms, terraces, balconies, swimming pool, private gas and solar panel heating and 2 garages. Handover in 2017.

This apartment is situated within a renovated period building. Benefits of private gas heating and double entrances (you can divide it in two smaller units).

In a quiet side street, this 4 storey family house in good condition built on 363 sqm of lot, consists of 3 separate apartments, 2 terraces (21 sqm each) and parking space in the courtyard.

In the new built Dagály sétány subdivision, this high floor apartment benefits of living room with fully fitted open kitchen, separate bedroom and 13 sqm of terrace.

In a new built building with elevator, this very bright apartment benefits of 44 sqm of private roof terrace with view over the Danube. It has parking space.

148.000.000 HUF

193.000.000 HUF

34.000.000 HUF

89.900.000 HUF

36.900.000 HUF

35.900.000 HUF

+36.1.376.6080

+36.70.669.5350

+36.70.3156.087

+36.1.720.2433

+36.70.455.8062

+36.70.399.0399

EACH AGENCY INDEPENDENTLY OWNED AND OPERATED. • THESE OFFERS ARE VALID, TILL THE APARTMENTS ARE SOLD. • THESE INFORMATION DO NOT CONSTITUTE A CONTRACTUAL ELEMENT.

BBJ_2505_news.indd 7

2017. 03. 08. 20:37

8 | 1 News

REAL ESTATE NEWS

www.bbj.hu

Budapest Business Journal | March 10 – March 23, 2017

Industrial Market Improving, Says Prologis Prologis sees favorable trends in the industrial sectors in Hungary and Central Europe as occupier markets are continuing to outperform GDP growth. There are also falling vacancy rates, speculative development is on the up (albeit from a low base), there is upward pressure on rents and increasing activity in capitals markets.

GARY J. MORRELL

In Hungary, Prologis let 245,000 sqm of space in 2016, of which 70,000 sqm represented new contracts. “Demand for industrial space increased further in 2016, resulting in new development starts and record high occupancy,” said László Kemenes, country manager at Prologis Hungary.

Across the CEE region (Czech Republic, Hungary, Poland, Romania and Slovakia) Prologis leased 1.8 million sqm of space in 2016. New lettings accounted for 700,000

“This year, I think there will be mainly built-to-suit development in Hungary.

We have land and the permits to undertake speculative development when the time is right.”

sqm of this total, and at the turn of the year the Prologis industrial and logistics portfolio for CEE stood at 4.5 million sqm. In all, the company started 18 new development in the region, three of which were in Hungary. “Last year was the most active in the region for Prologis since 2008,” said Martin Polak, head of Prologis CEE. “Low vacancy levels contributed significantly to increased investment activity, and customers made faster decisions about space in order to stay ahead of shrinking stock,” he added.

Industrial developers active in Hungary, wary of vacancy rates as high as 20% plus that were a feature of the market in the post-economic downturn, are undertaking

cautious built-to-suit development strategies with a smaller proportion of speculative development. This has resulted in what Prologis describes as a “growth in disciplined speculative development.” In the current favorable demand climate, with limited available class “A” industrial stock, Prologis has delivered two speculative buildings totaling 21,500 sqm at Prologis Park Budapest-Sziget DC7 that are fully let to the international transport and logistics services provider, Waberer’s.

Delivery Time “This year, I think there will be mainly built-to-suit development in Hungary. We

have land and the permits to undertake speculative development when the time is right. Our speculative development in, for example, Czech Republic was already leased before completion and our speculative project in Hungary was leased two months after delivery. The delivery time in Hungary has grown to seven to eight months from gaining a building permit to delivery, due to a shortage of labor,” commented Kemenes.

The three projects launched last year totaling 43,000 sqm are now 100% let.

This includes a 21,000 sqm build-tosuit facility for Waberer’s at Prologis Park Budapest-Sziget. Occupancy for Prologis in Hungary stands at 98%, slightly outperforming the CEE average for the company at 96%.

Overall, industrial vacancy in Hungary has fallen to 7.6% and CEE vacancy is expected to be around 6% for the year, according to Cushman & Wakefield.

Prologis sees most demand in the Budapest area as regional hubs have not developed in Hungary as has been the case in Poland, Czech Republic and Slovakia.

Last year saw EUR 225 million in investment activity in the Budapest industrial sector according to CBRE. Prologis acquired the M0 Central Business Park and the two fully leased buildings (totaling 31,000 sqm) become part of Prologis Park Budapest-Sziget. Although the industrial and logistics sector is attracting the interest of investors, there is a limited supply of investment grade assets as many purchasers are industrial park operators who tend to keep hold of their stock.

TriGranit Launches Budapest Office Development TriGranit has commenced its first Budapest office project since 2011, the 37,000 sqm Millennium Gardens office project at the Millennium City Center on the Pest bank of the Danube. The office center is being developed adjacent to the Palace of Arts (MÜPA), the National Theater and the proposed congress center at the complex.

GARY J. MORRELL

In TriGranit has commenced its first Budapest office project since 2011, the 37,000 sqm Millennium Gardens office project at the Millennium City Center on the Pest bank of the Danube. The office center is being developed adjacent to

BBJ_2505_news.indd 8

the Palace of Arts (MÜPA), the National Theater and the proposed congress center at the complex.

The Millennium City Center regeneration project of a brownfield site has been developed in phases by TriGranit over the last decade. The latest office phase at the Millennium City Center, designed by the Finta Studio, will deliver

office space on ten levels overlooking the Danube in addition to green areas, restaurants, bicycle parking, and changing rooms.

Years of Silence “Although TriGranit is, and has always been, a Central European player, I am extremely happy that, after years of silence on the Hungarian market, we have launched our next office development in Budapest on the 20th anniversary of TriGranit,” said Árpád Török, CEO of the investor/developer.

The development project reflects growing confidence in both the Hungarian investment market and the Budapest office market. Demand is strong and a growing pool of investors active in Hungary provide exit potential for developers of

successful office developments. In what is the biggest single asset transaction in the Budapest office market, the Austrian CA Immo acquired 70,000 sqm of space at the Millennium City Center from TriGranit and Heitman in September for EUR 175 million.

There are currently six Budapest office projects due to deliver this year that should meet annual absorption figures of around 150,000 sqm. At least 12 office developments are planned for delivery in 2018-2019. With regard to supply, a lack of development has brought the supply and demand curve more in line, which should support rental growth and investor interest. In such a favorable market environment, most of the office assets under construction are expected to be substantially let before completion.

The Millennium Gardens project is scheduled to be completed in the second half of 2019.

2017. 03. 08. 20:37

2

2

Business

Business

PwC Reveals Hungarian CEOs’ Mindset in Sixth Survey

Confirming recent reports, the sixth PwC survey of Hungarian CEOs, which was published yesterday (March 9), found that the growing skills shortage is the single biggest concern for company bosses, much more so than their global counterparts.

ROBIN MARSHALL

The most recent pointer in that direction came less than a week before the publication, when Minister for National Economy Mihály Varga told an AmCham Hungary business forum there were 67,000 vacant positions countrywide, and problems affect all sectors from IT to cleaners.

The annual PwC survey covers far more than this one subject, however.

“This is the sixth occasion on which we have asked Hungarian CEOs to share their thoughts on growth, threats to growth, and on finding and retaining talent,” explained Nick Kós, PwC Hungary’s Country Managing Partner.

“We also endeavored to discover what they think about managing the relationship between man and machine, and the pros and cons of globalization.

Overall, this year’s survey shows that Hungarian and global CEOs are very much of the same mind on these issues. They are planning to increase headcount, while they continue to be challenged by skills shortages and overregulation. They are largely positive about the impacts of globalization, but many of them also say that globalization has not helped to close the gap between rich and poor,” he said in summary.

Some 186 Hungarian CEOs, representing seven different industries, took part in the survey, which involved a little less than 1,380 bosses worldwide.

Asked what they were concerned about as a barrier to growth, a staggering 92% (up from 85% in 2016) of Hungarian CEOs listed skills shortages, which PwC says is an all-time high, and affects practically every business in Hungary.

The skills shortfall is also a rising concern globally with

77% OF CEOS

(up from 72%), but is still trumped by others concerns. The top challenge

BBJ_2505_bus.indd 9

“Overall, this year’s survey shows that Hungarian and global CEOs are very much of the same mind on these issues. They are planning to increase headcount, while they continue to be challenged by skills shortages and overregulation.” worldwide is uncertain economic growth (82%), a factor mentioned by only 42% of CEOs in Hungary. The number two threat, both globally and in Hungary, is over regulation (put at 80%, up from 79%, and 73%, on parity with the previous year, respectively). See F1 on following page.

Effective Tax System Given those workforce concerns, it should perhaps be no surprise that, when it comes to businesses’ wish list from government, most Hungarian CEOs expect the government to ensure the availability of a skilled workforce (91%, up from 83%), some way ahead of the number two priority, a clearly understood, stable and effective tax system (69%, level with last year). See F2.

Despite those concerns, a slight majority (51%) expects to increase headcount in Hungary this year, albeit that is somewhat down from last year’s total of 54%. Globally, the figures have gone in the other direction, up to 52% this year from 48% in 2016. PwC has data-mined those headline figures deeper to reveal that, in Hungary, technology and telecom companies and privately owned businesses have the

Nick Kós, PwC Hungary’s country managing partner.

most ambitious plans to increase their staff numbers. Only 13% of Hungarian CEOs expect to cut headcount over the next 12 months. See F3.

Given the concerns over labor, it is little surprise that big firms are doing ever more in the field of talent retention. Some 70% of local CEOs say they promote diversity and inclusion, 69% that they seek out the best talent wherever it may be found; 62% say they are rethinking their HR function. See F4.

The skill set that is hardest to recruit, Hungarian CEOs say, is leadership, at 74% (a figure exactly matched by their global peers. But the skill sets they say it is most important to have are problems solving and collaboration (92%), neither of which are apparently especially hard to find. See F5.

Confident of Growth As far as growth is concerned, 89% of Hungarian CEOs are confident about their own revenue growth (slightly ahead of the global figure of 85%), are marginally less confident about Hungarian economic growth than last year (56% down from 59%), but markedly less confident about the global situation (where just 39% are confident of global economic growth, down from 54% last year). See F6.

When it comes to where the markets that will fuel Hungarian growth are to be found, Germany continues to be the

most important for locally-based CEOs at 41% (up 4%). Perhaps picking up on improved political relations, the second most important market is the United States, up 15% to 23%. China, too, saw marked growth, rising 10% to 15% this year, moving it to seventh on the list.

Most markets remained stable or saw some growth, but interestingly Czech Republic dropped in significance, falling back 3% to 9%, putting it tenth.

As in previous years, cost cutting continues to be a key priority 54%, but 60% of Hungarian CEOs expect to drive economic growth through organic growth.

Increasingly, continuous innovation and human capital development are seen as the key to the future, both globally and in Hungary. PwC says the importance of innovation was particularly underlined by financial and automotive CEOs, while human capital ranked higher than average in retail, technology and telecoms.

Technology a Game Changer Globally and locally, a massive majority of CEOs believe that technology will change competition in their industrial sector. In Hungary this is apparently especially so in the transportation, communication, and automotive industries. Hungarian CEOs give themselves relatively high marks when it comes to digital literacy and adoption, but they are markedly less active than global peers when it comes to social media, and the use of automation or robotics in the home.

When it comes to threats in the digital age, most companies in Hungary say they already have measures in place to address IT disruptions and breaches of cyber security and data privacy, although notably more global CEOs see the threat potential of cyber security.

Respondents have been largely positive about the impacts of globalization. More Hungarian CEOs, for example, think it has helped in harmonizing regulations (87%) than globally (80%). Far fewer here, however, believe it has helped close the gap between rich and poor (33% in Hungary to 51% globally). Over half of Hungarian CEOs also expressed doubts about the fairness and integrity of global tax systems, far more than globally.

To see the results of the full survey, contact PwC Hungary directly.

2017. 03. 08. 20:26

10 | 2

F1

Business

www.bbj.hu

Budapest Business Journal | March 10 – March 23, 2017

What are the threats to growth?

82%

Uncertain economic growth

45%

80% 79%

Over-regulation

73% 73%

77% 72%

Availability of key skills

74% 74%

Geopolitical uncertainty

70% 61%

Speed of technological change

70% 73%

Exchange rate volatility

68% 69%

Increasing tax burden

68% 65%

Social instability

65% 60%

Changing consumer behavior

61% 61%

Readiness to respond to a crisis

58% 57%

New market entrants

“The skills shortage is a pressing concern. Yet, despite this, the majority of respondents plan to increase headcount over the next 12 months, both globally and in Hungary. In Hungary, technology and telecom companies and privately Government owned businesses have the most ambitious plans to increase their staff numbers.

Globally, only 16% of CEOs plan to cut their company’s headcount over the next priorities 12 months; in Hungary, 13% expect to do so.” Anita Mekler, Partner at PwC Hungary’s Tax and Legal Services practice.

Which of the following outcomes do you think should be government

F2

91%

A clearly understood, stable and effective tax system

69%

Adequate physical and digital infrastructure

40%

Good health and well-being of the workforce

31%

Workforce diversity and inclusiveness

17%

Greater income equality High levels of employment

BBJ_2505_bus.indd 10

60% 68% 34% 53% 38% 30% 35% 28%

35% 27%

2017 2016

46% 40%

F3 Respondents planning to increase headcount RESPONDENTS PLANNING TO INCREASE HEA

priorities in Hungary?

Which of the following outcomes should be gov’t priorities in Hungary?

A skilled and adaptable workforce

40% 32%

58%

Protectionism

59% 61%

58% 62%

49% 31%

Cyber threats

59%

92% 85%

2017

2016

83%

RESPONDENTS PLANNING TO INCREASE 48% HEADCOUNT

69%

2017

35%

2016

52% 2017 2016

36% 6%

13% 14% 9%

20%

2017 2016

48% 52%

54% 51%

2017. 03. 08. 20:26

F4

Business | 11

2

www.bbj.hu

Budapest Business Journal | March 10 – March 23, 2017

Managing talent

People

F5

How important are the following skills and how difficult is it to recruit people with them?

“We see that, in addition to technical business expertise, skills that are still difficult to measure and cannot be performed by machines will gain in significance, while the importance of skills such as mathematical and digital competences that could be replaced by technology will diminish.

Hungarian CEOs have the greatest difficulty in recruiting people with creativity, innovation and leadership skills,” added Anita Mekler.

98% 61%

Problem solving

92% 60%

96% 61%

Adaptability

83% 45%

96% 48%

Collaboration

92% 41%

95% 74%

Leadership

67% 74%

92% 76%

Creativity and innovation

74% 65%

87% 63%

Emotional intelligence

69% 57%

83% 58%

Risk management

44% 55%

79% 52%

Digital skills

65% 34%

70% 51%

STEM skills (science, technology, engineering, and maths)

44% 46%

Respondents who answered “somewhat important” or “very important”

F6

to recruit people with skill

Respondents confident about global and Hungarian economic growth and their own prospects over the next year Global CEOs

w

Global CEOs 84

81

Hungarian CEOs 85

84

85

82

82 72 64 60

44

15 2012

Global economic growth

BBJ_2505_bus.indd 11

2014

55

47

59 51

2015

89

56

54

46 39

37 27

29

2016

2017

own revenue growth

26

19

18 2013

84

2012

2013

own revenue growth

2014

2015

2016

2017

Global economic growth Hungarian economic growth

3

2017. 03. 08. 20:27

12 | 2

Business

www.bbj.hu

Budapest Business Journal | March 10 – March 23, 2017

M&A Market Value Grows in 2016, Despite Fewer Signed Deals “This means that even with a lower number of deals one or two large transactions can boost the value and, as a result, the market grows. It is important, however, that in the last seven years – since we have issued our M&A Barometer — we see stable growth on the Hungarian M&A market in terms of deal numbers. It might be a slight decrease on a year-to-year basis, but the trend shows us steady growth.”

Although the number of deals the Hungarian mergers and acquisitions market saw dropped in 2016, the estimated value was slightly up compared to the previous years, according to the latest M&A Barometer published by EY on March 9. Margaret Dezse, partner of Transaction Advisory Services at EY Hungary, discussed the positive trends seen in the market with the Budapest Business Journal.

CHRISTIAN KESZTHELYI

The number of signed M&A deals in the Hungarian market in 2016 dropped significantly to 110 from the preceding year’s 130, which is a

15% DECLINE,

according to EY. That said, 2015 was outstanding in terms of deals signed, and even with the drop, 2016 was the second most active period in terms of the number of publicly disclosed transactions since 2012. “We consider it as normal fluctuation, however, JEREMIE [EU funding for SMEs] deals did slow down and that was indeed the major factor,” Dezse tells the BBJ. “We do not foresee lower M&A activity for the future since our companies are healthy and attractive for investors,” she adds.

The estimated value of the M&A market was put at USD 1.61 billion, a 6% increase when compared to 2015.

Albeit at a slower rate, market size has been growing since 2013, when the plummeting tendency of preceding years finally stopped. Last year’s growth was mainly driven by the increase in average deal size, with disclosed deal value below USD 100 million increasing by 19% to USD 8.7 mln in 2016 from USD 7.3 mln in 2015, according to EY. Commenting on the dropping number of deals but growing overall value, Dezse noted that deals are homogenous neither in type nor in size. “This means

BBJ_2505_bus.indd 12

Margaret Dezse, partner of Transaction Advisory Services at EY Hungary.

that even with a lower number of deals one or two large transactions can boost the value and, as a result, the market grows. It is important, however, that in the last seven years – since we have issued our M&A Barometer – we see stable growth on the Hungarian M&A market in terms of deal numbers. It might be a slight decrease on a yearto-year basis, but the trend shows us steady growth,” Dezse explains.

Domestic Dominance Following the tendency observed in previous years, the Hungarian market was dominated by domestic transactions in 2016. In 54% of the deals, both the target and buyer were Hungarian entities, while foreign inbound investments arrived from Austria (six deals), the USA (five), Germany and Czech Republic (four each), and Italy and Romania (three each). Additionally, ten publicly disclosed outbound transactions were noted in 2016, three of them executed in Poland.

The dominance of local deals seems to be characteristic of the Hungarian market, but more FDI is entering the market. “The share of inbound transactions has been continuously increasing for three years; this is clear evidence that we have attractive

and healthy companies that do tempt foreign investors,” Dezse says.

In line with previous years, financial investors were in the minority, and the limited availability of European Union funds appears to limit this market as well. A decline in the number of financial transactions was due to the lower activity of JEREMIE investors now that investment period has come to the end. The share of strategic buyers increased to 68% of the total deal number in 2016, up from 62% in 2015, EY notes.

Manufacturing and Services In what seems to be an unfolding changing trend, the IT sector last year lost its crown to manufacturing and services, as far as the number of deals is concerned. The manufacturing sector saw a total of

15 INdeals 2016

(up from 12 in 2015), with an average deal value of USD 5.4 mln.

“Manufacturing and services have always been amongst the top sectors in terms of deal value and as such we have no doubt that they will keep their strong position. However, IT is the future and

a rapidly growing platform to invest in.

It has probably secured its position in the long run,” Dezse comments.

With a total of 13 deals, the services sector was up by 63% in 2015 compared to the previous year. In 11 transactions target companies were Hungarian entities and ten of those transactions were closed by domestic investors.

The IT sector, despite losing top spot, still remained an important player of the market with 12 deals in 2016. Average deal value in the sector was USD 27.3 mln, representing a significant increase from USD 9.4 mln in 2015. The sector was characterized equally by strategic and financial investors.

The real estate sector, which has been reviving recently and is facing huge expectations by professionals in the CEE bloc, saw 12 transactions in 2016, going head-to-head with the IT. Inbound transactions by strategic investors amounted to more than 50% of the total deal volume. The average deal value based on four disclosed transaction values was USD 83 mln.

“The stronger position of the real estate sector has been already seen.

The number of deals tripled last year from four in 2015 to 12 in 2016. This high level of activity can be maintained over the next few years, but it might not take over the leading position,” Dezse forecasts.

The telecom and media sector as well as the banking and financial services sector each saw 12 deals in 2016. In ten of the telco and media transactions, both the target companies and buyers were Hungarian entities. Two-thirds of the transactions were closed by strategic buyers investing mainly in digital media companies.

The banking and financial services sector saw the biggest jump in deals in 2016. In 58% of the transactions both the target and buyer companies were domestic players. The total size of the sector was not estimated as no deal values were disclosed.

2017. 03. 08. 20:27

3

www.bbj.hu

Budapest Business Journal | March 10 – March 23, 2017

Special Report Banking Consolidation and Digitalization Ahead14 Adding Value and Diversity to Corporate Banking16 The Mobile Wallet is Dead: Long Live the Mobile Wallet19

An industry that suffered public unpopularity, financial hardship and heavy government taxation is finally looking at better times BBJ_2505_special_report.indd 13

2017. 03. 08. 20:40

14 | 3

Special Report

www.bbj.hu

Budapest Business Journal | March 10 – March 23, 2017

More Consolidation and Digitalization Ahead After record breaking profits in 2016, the banking sector is likely to witness more acquisitions down the road, while digital solutions are pointing to a declining need for

staff and brickand-mortar offices.

Change in number of staff of Hungarian banks (2016) % 16 12 8 4 0 -4 -8 -12

Consolidation Desired Detailed financial statements for 2016 are still in the pipeline, so for now 2015 statistics published by MNB in the so-called Golden Book in September 2016 serve as the most current guideline as regards existing market conditions.

The biggest leap forward was made by

BBJ_2505_special_report.indd 14

Soure: portfolio.hu

TO TA L

k an erb Sb

Ra iffe is

Ba st Bu

da

pe

CI B

en

nk

B MK

Un iC red

it

H K&

FH B

Change in number of branches of Hungarian banks (2008-2016)

now,” Sándorfi adds. “They are just entering a phase of profitability; they want to gain the capital back that was invested for all those loss-generating years. Now is the time to compensate for those losses.”

120

Betting on Digital

90 60 30 0

n ise

Ra

iffe

nk ba

Sb

er

dit re Un

iC

B CI

ste

Ba st pe Bu

da

Er

nk

H K&

B MK

P OT

B

-60

Soure: portfolio.hu

-30

FH

After six meager years there is finally something to celebrate in the Hungarian banking sector. Whereas total after-tax losses since 2009 hit the HUF 994 billion mark, 2016 will be entered in history books as the year aftertax profits returned, amounting to HUF 456 bln, according to the latest report of the National Bank of Hungary (MNB). Earnings were driven mainly by the fact that the credit portfolio of Hungarian banks underwent heavy cleansing and related liability reserves were released. In parallel, revenues from dividend and service charges have also soared. Cutting the sectoral tax by half helped as well. Another remarkable phenomenon was the dramatic improvement of return on equity (ROE) figure in the industry. It came back from the dead, reaching 14.1%, having dropped as low as -18.2% in 2014.

Balázs Sándorfi, CEO of Bankmonitor, a website specializing in banking analysis, believes that market players handled the negative interest rate environment well. In fact, net interest revenues went up by 6%. However, it is unlikely that profitability could climb back up to pre-recession levels of 15-20%.

“The MNB is strongly committed to push for more transparency in terms of operation and pricing, which will move the market towards more competition.

This will leave consumers with lower prices,” Sándorfi tells the Budapest Business Journal. “Therefore, I am not counting on ROE levels that existed prior to the crisis; in fact, they are bound to go down.”

OT P

-16 LEVENTE HÖRÖMPÖLI-TÓTH

UniCredit, which hiked up its balance sheet total so massively that it was catapulted from seventh place to second, behind market leader OTP. It is true, though, that K&H still ranks second in terms of loan and deposit stock, pushing UniCredit to third in that contest.

The remaining top ranking banks are Raiffeisen, MKB, Erste, CIB and Budapest Bank, in that order.

The entire banking sector is comprised of no less than 137 players that render related services. Of these,

40

operate as banks ,

there are 87 credit unions and 10 branch offices of foreign banks. As Sándorfi explains, this is a huge number and MNB is encouraging large-scale consolidation with reason. “It would prefer having five large banks instead of the current number

of eight, and they want credit unions to head towards integration since their cost structure is not effective and consumers lose out as a result,” he says.

According to Sándorfi, in spite of MNBʼs desires, consolidation will likely be limited, as the industry is bound to preserve its heterogenic nature. That said, anything can happen in terms of acquisitions. OTP keeps hinting that, after it successfully bought AXA with its more than 40,000 account holders, it is still keeping an eye out for further opportunities. And rumors are circulating about K&H and Erste willing to buy up Budapest Bank. The latter was purchased by the state in 2015 and the price tag is HUF 200 bln, but the government’s preferred buyer would be a local player which is not the case at present. “What is highly unlikely is that foreign banks among the top ten would want to exit the market

Market movements will be influenced by digitalization to a large extent. For one, the emergence of a new breed of player is around the corner, namely those that provide solely online-based services and operate no brick-and-mortar facilities.

Such providers have existed for many years in Western Europe and they have the potential to alter the local landscape.

As Sándorfi notes, digitalization is taking place in two layers. The primary effect is to usher clients to online platforms for as many services as possible.

This inevitably cuts demand for labor.

Just how dramatic this process has been is clearly shown by two figures: since 2008 the number of branch offices of the ten biggest Hungarian banks has plunged by 25%, whereas there is

11% less staff

employed by them now than nine years ago. CIB, UniCredit, Sberbank and Raiffeisen got rid of up to half of their branches. Raiffeisen and CIB downsized most by letting 37% and 44% of their employees go.

The secondary layer of the digital transformation, namely making workflow management increasingly efficient by cutting-edge technology, is further accelerating this evolution. “State-ofthe-art solutions decrease the time spent serving customers. Ever less clicks are needed to complete a transaction. Every vector points to the same direction: staff and bricks-and-mortar office numbers are declining, even for banks on a growth track,” the expert concludes.

2017. 03. 08. 20:40

www.bbj.hu

3

Budapest Business Journal | March 10 – March 23, 2017

Special Report | 15

Non-Performing Loans: Moving From Misery Towards a Happier Place Hungary’s banking sector has been plagued by several negative factors in the past few years, one of the major concerns for financiers being non-performing loans (NPLs).

LEVENTE HÖRÖMPÖLI-TÓTH

Market players have been desperate to sell on, write off or turn NPLs round into performing loans and the time seems to have come at last when this can happen on a large scale. In 2014, the total NPL volume in Hungary accounted for EUR 6 billion, tying up valuable liability reserves and hamstringing operations.

As Balázs Bíró, a partner at Deloitte and the Central European head of Portfolio Lead Advisory Services, says to the Budapest Business Journal, transaction activity has been particularly widespread in the corporate segment, where volume dropped from

EUR 2.8 bln to EUR 1 bln

in the period of 2014-2016. The Hungarian operations of CIB and Raiffeisen have already sold a part of their corporate NPL portfolios, while Lombard Leasing, Erste and UniCredit have disposed of their bad loans in the retail segment.

2014 2016 CORPORATE NPL VOLUME

EUR 2.8 bln EUR 1 bln

Moratorium Lifted “The corporate segment should see sales of non performing packages worth EUR 400-500 million annually in 2017 and 2018,” Bíró reckons.

“Retail portfolios will take a bit longer to get into the game, since the foreclosure moratorium [on this sector] has been lifted only recently.”

The Hungarian NPL market is attracting global investment funds as

BBJ_2505_special_report.indd 15

Balázs Bíró, a partner at Deloitte and the Central European head of Portfolio Lead Advisory Services. growing GDP, a skyrocketing real estate market, record low unemployment and financing costs all fuel hopes for high returns. Under such conditions, it is easier to convince debtors to prudently re-launch their payments and revive stalled projects.

Bíró believes that the upcoming two years will be dominated by the sale of retail NPLs. Restructuring is key, as has been the case with corporate NPLs, but it may not play out the same way for private individuals. “For the retail segment, it is still questionable what restructuring

Banks work to shed non-performing loans In the last five years the ratio of banks’ non-performing loans - those past 90 days due - compared to their gross lending stock has steadily fallen from a peak 14.1% at the end of 2013 to 6.4% by the end of 2016, data released by the National Bank of Hungary shows. Gross lending stock stood at HUF 18.9 trillion at the end of 2012 when the share of NPLs was 13.7%, and stood at HUF 17.8 tln at the end of 2016. The NPL ratio rose until the end of 2013, but has fallen since then, to 13.2% at the end of 2014, then to 10.6% at the end of 2015 to reach 6.4% at the end of last year. In 2012, the stock of nonperforming loans of non-financial corporations was HUF 1.247 tln and the stock of retail loans was HUF 1.167 tln. While the stock of non-performing corporate loans diminished in each year during the period, the stock of nonperforming retail loans increased from 2012 to 2013 and to 2014 before also starting to fall. The corporate NPL stock was down at HUF 1.094 tln by the end of 2013, a less significant drop lowered it to HUF 933 bln by the end of 2014 and then it decreased further to HUF 568 bln and HUF 320 bln in the next two years, respectively. In contrast the amount of nonperforming retail loans climbed as high as HUF 1.276 tln at the end of 2014 before falling to HUF 1.037 tln a year later and to HUF 725 bln at the end of last year. Retail clients received major relief in 2014 when the Hungarian Parliament approved a law on the conversion of retail mortgages in foreign currency and denominated in foreign currency to forints. This resulted in a sharp drop of FX-denominated retail NPL loan stocks from HUF 835 bln at the end of 2014 to a mere HUF 20.5 bln at the end of 2015.

measures banks can take, and what general approach debt recovery agencies would have on the market,” he notes.

It is in the best interest of the banks to dispose of their non-performing loans since clearing them off the books improves their risk rating, they can access financing at cheaper rates, and they need to hold less capital in reserve to cover liabilities. Released resources can therefore help boost lending (something the government is also keen on, for obvious reasons). And given the generally more conservative approach banks take today compared to the run up to the crisis, newly granted loans are bound to have a significantly better performance ratio than those that caused the recent NPL misery in the first place.

“The corporate segment should see sales of non performing packages worth EUR 400-500 million annually in 2017 and 2018. […] Retail portfolios will take a bit longer to get into the game, since the foreclosure moratorium [on this sector] has been lifted only recently.”

2017. 03. 08. 20:40

16 | 3

Special Report

www.bbj.hu

Budapest Business Journal | March 10 – March 23, 2017

Adding Value and Diversity to Corporate Banking

“Commerzbank puts an emphasis on diversity as we aim to have the best people in the market on board to give clients the best service.”

Corporate entities tend towards the small “c” conservative, so perhaps it is no wonder that the corporate banking sector does the same. Stability and reputation are vital, and Klaus Windheuser President-CEO believes Commerzbank Zrt. has both in spades. What it also has, where it adds value, he says, is in its embrace of diversity in its widest form.

ROBIN MARSHALL

Many people in Hungary seem to equate diversity with womenʼs issues.

Commerzbank does its bit in the sphere too, and in November it won the “Best Workplace for Women” title for 2015 from the Association for Women’s Career Development in Hungary (MNKS) – more on this later.

“Doing more for women is important, but diversity is about both genders, and gays, and different religions and nationalities, and the disabled, because when all of those people are in the mix, that is what adds value. When you have different voices contributing, that is when you find the best ideas, the best possible solutions.”

And so he decided to introduce a practice from his time with Commerzbank in Frankfurt: “Focus on Fathers”. “When I lived in Germany I was part of something called the Fathers’ Network. That was very close to my heart, and I thought it might be interesting to introduce something similar here. I know from my own staff here, but also from talking to other CEOs in the sector, that it is very unusual in Hungary to have a father stay at home with the newborn child, but that is not the case in Germany.”

So Commerzbank arranged a session for 15 male members of staff who had expressed an interest in the idea, with five dads from Germany’s Fathers’ Network, and a Hungarian expert.

Windheuser also attended, and shared his own experiences of taking two months’ paternity leave when his son was born.

Something Moving Windheuser says no one at Commerzbank Zrt. has thus far applied for paternity leave, and a Hungarian Fathers’ Network has yet to be formed. But the CEO says this is the start of a long process that involves something of a cultural shift.

BBJ_2505_special_report.indd 16

Klaus Windheuser President-CEO, Commerzbank Zrt.

“I want to grow by 10% and increase our market share.

I think that is feasible. The environment is OK; we have a value adding proposition for clients in the Hungarian environment.”

“They have started thinking about the idea; something is moving.”

Which brings us back to that best workplace award. Unlike the Focus on Fathers, Windheuser says he has introduced nothing new on the female front, other than suggest the bank start applying for awards. The reasoning behind that was simple: it is good publicity both towards the market, and to potential hires. He never expected the bank would win an award in its first year.

“Our success was based on three pillars: the quota of women in leadership roles in the bank, which is very high; the training and incentive programs we offer both to junior and senior staff; and the way we keep in contact with mothers at home on maternity leave, inviting them to company outings and events, briefing them on strategy developments, keeping them connected with what is going on here, and offering part time work when they want to come back.”

In terms of reputation, the award certainly seems to be helping: despite the labor shortages employers now face across the country, Windheuser says he has few problems recruiting.

“Commerzbank puts an emphasis on diversity as we aim to have the best people in the market on board to give clients the best service,” he says.

“We don’t even really need to advertise. This is a combination of a couple of things: we have a good reputation – people want to work for us – and we are small. Big companies with good reputation have to hire hundreds of people; I just need a couple.” He does admit to one problematic position, however; the bank has been looking for an IT programmer for a couple of months. “But then everybody in Hungary is looking for IT engineers,” the CEO notes ruefully.

Commercial banks, of course, are ultimately judged on their figures, rather than their popularity. So how was last year? “It was good. For the banking industry it was a nice year, starting from the point that the regulatory burdens – the so-called unconventional measures as they are known in Hungary – were eased. There were no FX conversions, and the banking levy was halved, more or less. We accompany our targeted clients, be it international subsidiaries or Hungarian corporates with more than EUR 12 million revenue, with tailored solutions. That is very much appreciated.”

Hedging Risk Banks are now able to focus on their core businesses, no bad thing as “the market is tough and margins rather low”.

It is a market place in which one has to

offer something different and better. “In that regards Commerzbank is a good proposition: we are the Western bank in Hungary with the broadest network and thus the capability to hedge country risk all around the world, especially in key developing markets, among other things. We started last year to really play the value proposition card, and that will be the approach in 2017,” the CEO says. “Our German background is very well appreciated here. Hungarians like Germans, they like our values: they see us as predictable and reliable, they like the speed of decision making, and that we stick to a decision once made.

On top of that, I have ‘best in class’ teams here: each account has a group of specialists and one coordinator who is the relationship manager.”

So what is the target for 2017? “I want to grow by 10% and increase our market share. I think that is feasible.

The environment is OK; we have a value adding proposition for clients in the Hungarian environment.”

Importantly, he now believes he will be able to concentrate on that target, without worrying about what the government might do next. “The direction is good. Of course I would be happier if they brought the bank levy down to zero, but basically, I believe, the decision has been made to bring it down further. It is good that there is no new burden, and policies like the lending program have supported our business.”

In terms of new trends, Windheuser comes back to the fact that the corporate banking sector is conservative, and values stability over change. Moves towards digitalization will, however, definitely happen in banking in general, and also among the corporate clients, and Commerzbank is positioned to help here, he says.

“We are beginning to see a trend towards club deals – syndicated loans for mid-caps – which are very common in Germany and where we are the perfect arranger and advisor. It means clients have one agency to deal with; they do not have to negotiate with all the banks individually, or provide all of them with papers. But structured and individual hedging solutions, for example, are something we are still waiting to see develop more in this market. That is a shame, because we have lots of experience in this and good ideas about how we could deliver structure to hedge corporate exposures.”

“Our German background is very well appreciated here.

Hungarians like Germans, they like our values.”

2017. 03. 08. 20:40

www.bbj.hu

3

Budapest Business Journal | March 10 – March 23, 2017

Central Strategy to Boost Corporate Lending

A strong SME sector with New Direction challenge to close the current 20142020 period less dependent on EU courage and willingness In the third phase of the scheme funds. “We aim to have an economic to invest must be one performance that enables the that is currently on offer, companies government to keep developments can apply for investment loans and of the pillars of the running only by relying on our own leasing transactions. Funding for resources, even if the cohesion policy capital financing or the redemption of Hungarian economy, in its current form ceases,” he says. existing loans is no longer available. once the country finally To take things one step further, as the FGS is being gradually phased Better Mood Needed steps on the path out, MNB is now introducing its Market-Based Lending Scheme However, that the credit supply is of more sustainable (MLS), which offers an interest rate not wide enough might not be the growth. The resurrection swap conditional on lending activity only, or even the strongest, reason Within its framework, 17 behind the low amount of corporate of the banks’ corporate (LIRS). banks made a commitment to raise lending. their SME lending stock by at least As the data of Central Statistical lending has been one-quarter of the allocated swap Office (KSH) shows, the investment taken seriously by the volume annually. On March 3, state volume of SMEs has been dropping news agency MTI reported that 15 since early last year and totaled government, but will of those banks had exceeded their 20% less in 2016 than in 2015. commitments, while two had fallen Again, the government has sought it be enough to reduce short of their respective marks. The to jump start matters; new changes Hungary’s dependence report quoted the MNB as saying in corporate tax aim to improve the the MLS has made a “substantial willingness to invest. From 2017, on EU-funds and contribution” to lending growth, tax base benefit may be taken up to noting that SME lending stock, the amount of profit before tax, but make market-funded including loans to sole proprietors, also above the former limit of HUF investments sexy again? was up 12%, while total corporate 30 million, if an SME acquires new ÁGNES VINKOVITS

Knowing that domestic investments are essential in building a prosperous economy, the Hungarian government has been active in widening the financing possibilities of the country’s SMEs. And its efforts have not been without achievements.

Following long years of steady decline in corporate lending since the outbreak of the crisis, the 2013 introduction of Funding for Growing Scheme (FGS) by the National Bank of Hungary (MNB) seemed to bring corporate credit departments back to life. The program provided refinancing for credit institutions at a 0% interest rate; that money could then be lent out to enterprises at a maximum interest rate of 2.5%. FGS has managed to put the stock of bank lending to SMEs back on the rise: since its introduction; more than 38,000 domestic enterprises have obtained financing amounting up to HUF 2.65 billion, MNB data shows.

loan stock rose 4%.

As another incentive, the government also offered to reduce the financial transaction tax for those banks that increase their stock of lending by 20% from 2015 to the end of 2017.

Too Dependent The desire of the government and MNB to boost bank lending is entirely understandable. Experts warn that Hungarian companies are overly reliant on EU-funds: as the Deputy Governor of MNB Márton Nagy points out, 70% of those winning European funds do not use any other external sources of finance.

This phenomenon imposes a huge risk to stability and needs to be changed, especially given the very real possibility that the amount of the money available from Brussels could shrink significantly from 2020. According to the Deputy Minister of Prime Minister’s Office Nándor Csepreghy, it is an important

real estate, performs a value-adding renewal, expands, changes function, acquires a new machine, asset or intellectual property. Another novelty is that the entire amount of interest paid on investment loans is deductible, without an upper limit.

But critics such as governor György Surányi, governor of the MNB from 1990-91, and again from 1995-2001 say the tendency toward underfunding SMEs can be reversed only by a far more predictable economic political environment.

“Economic policy has failed to regain its trustworthiness, which would be necessary for investments,” says Surányi, an influential voice in banking circles as he was also, until 2014, chairman, president & CEO at CIB Bank, as well as regional head of CIB’s Italian owners, Intesa Sanpaolo banking group. He adds that, until trust is restored, Hungary’s economy will continue to have a hard time in achieving stable growth, no matter what funds or loans are available.

Special Report | 17 Premium Banking in a new era of Expansion An ever growing number of high-net worth individuals are enjoying exclusive banking services, a sector that looks set to continue to

grow rapidly.

LEVENTE HÖRÖMPÖLI-TÓTH

The demand for premium banking services is clearly on the rise in Hungary. According to a recent survey

by Portfolio.hu, a major business website, assets worth HUF 2.7 trillion were managed on behalf of more than 186,000 clients as of the end of 2016.

The latter is a 22% hike compared to statistics recorded just six months earlier. There is a wide range, though, as to who qualifies for such privileges.

At OTP, for instance, savings of HUF 2 million and a monthly income of HUF 200,000 are enough if the account holder is less than 35. At the other end of the spectrum is FHB, where a minimum of HUF 20 mln in savings is needed, or a monthly deposit of HUF 500,000.

UniCredit grants special treatment to those with savings of at least HUF 30 mln, whereas Ersteʼs limit to be eligible for the elevated premium class is HUF 20 mln. Truly stunning is the rate at which the pool of such clientele is growing: at K&H by 25.6%, for example.

And market players are looking forward to even better times. Most of those surveyed believe that the expansion of the client base could surpass 16% within the next year, and the estimated average growth rate was put in the range of 8-16%.

Banks seem to be prepared for this surge in elite customers; nearly every second branch office of those that participated in the survey offers premium banking services. This is another indication that, with yields becoming ever harder to earn, banks are increasingly betting on new methods to boost profitability and making a shift to premium clients fits these tactics.

ADVERTISEMENT MAIN SPONSOR

REGIONAL STRATEGIC CONFERENCE

29-31 MARCH 2017

BÁLNA BUDAPEST, HUNGARY

REGISTER

UNTIL 19 MARCH

think.bdpst.org

BBJ_2505_special_report.indd 17

2017. 03. 08. 20:40

Special Report

18 | 3

www.bbj.hu

Budapest Business Journal | March 10 – March 23, 2017

EXPERT OPINION

CEU COLUMN

Creating Value From bad Loans Dr. Erika Papp Partner, Head of Banking and Finance CMS BUDAPEST

B

ad loans – or legally speaking, non-performing loans (NPLs) – may have a negative sounding name, but they are assets that can create significant profits for investors.

NOTE: ALL ARTICLES MARKED EXPERT OPINIONS ARE PAID PROMOTIONAL CONTENT FOR WHICH THE BUDAPEST BUSINESS JOURNAL DOES NOT TAKE RESPONSIBILITY

The NPL industry worldwide is massive, and made up of institutional investors (funds) and professional investors (debt management companies). In the hands of an experienced investor, a lossmaking loan can be turned into an asset producing double-digit profits.

Banks sell bad loans because it is expensive to keep them on their books.

Investors buy bad loans because they are not subject to the same regulatory regime as banks, and because they are usually willing to take more risks than banks.

Until recently, the NPL industry in Hungary was small. No portfolios were sold, only a few single assets existed, and sales prices for NPLs were not attractive.

Then, in 2014, foreign investors appeared in Hungary and pioneered the first NPL deals. Since then, the Hungarian market has become home to all the international players: Bank of America, CarVal, Balbec, APS, Deutsche Bank and many more.

Sellers include CIB/intesa, Raiffeisen, Unicredit and Erste Bank.

The portfolios to be sold are either corporate or retail/consumer loans.

Retail portfolios are more complicated to acquire because both seller and buyer must pay special attention to consumer protection laws. Corporate loans (or “connections”) usually number in the hundreds, while retail loans number in the thousands.

The loans in the portfolio are either “terminated” or “live” (live means the debtor is in default but the contract has not been terminated.) Of the two, terminated loans are easier to sell because only outstanding receivables must be transferred once a loan agreement is terminated.

Under the advice (usually) of Deloitte, PwC or ZolfoCooper, sellers issue competitive tenders for the sale of their NPL portfolios, and those bidders offering the best price and contractual terms will win. Each transaction takes roughly four months, and the documentation is often complex. Furthermore, buyers in Hungary need a financial license, which may add more complexity and delays.

BBJ_2505_special_report.indd 18

But how do you buy or sell an NPL asset?

There are several options, and the legal solutions depend on a variety of questions. Is it a portfolio or a single asset being sold? If a portfolio, is it retail or corporate?

Legal solutions are evolving with each new transaction, and Hungary’s Parliament has helped players by enacting new NPL legislation that allows for both terminated and live portfolios exceeding HUF 10 billion in value (or consisting of at least 20 contracts) to be transferred from seller to buyer with the approval of the National Bank of Hungary (MNB).

This law solves two legal problems: firstly, without it, live contracts could not be transferred without the debtor’s consent, which would be impossible in the case of portfolios of thousands of loans.

Secondly, the law now makes it possible for unconventional security interests such as security assignments, options and prompt collection rights to be transferred with the loans.

But this law has one unattractive feature.

A transaction may only be closed when approved by the MNB, and the approval time can take up to five months.

Therefore, buyer and seller often chose a simpler solution: the assignment of receivables, which is a simple contract requiring no MNB approval.

A third legal solution is transfer of contract, which is a three-party agreement regulated in the new Civil Code between buyer, seller (or creditor) and debtor. This solution does not require MNB approval, but it does need the consent of the debtor, so this solution cannot be used in cases involving numerous debtors or when there is only debtor but he/she is not willing to sign the transfer contract.

Hungarian lawyers are on the steepend of the learning curve with NPL transactions, working to simplify and speed up deals. One of our United Kingdom clients, an experienced investor who does billions of euros’ worth of NPL deals each year in the London market, says that a NPL deal need not take longer than a couple of weeks to conclude. We, in Hungary, are working towards that level of experience, and hopefully we will get there soon.

cms.law

Lagging Digital Transformation in the Hungarian Banking Sector Prof. László Urbán Economist ADJUNCT FACULTY CEU BUSINESS SCHOOL

Digital transformation in the Hungarian banking system is still in its early stages and is lagging behind other countries in Central Europe.

According to a recent study by Deloitte called CE Banking Outlook (which looked at Bulgaria, Croatia, Czech Republic, Hungary, Poland, Romania, Slovakia, and Slovenia), while Hungary ranks among the top in the region in terms both of general access to the internet and mobile phone access the internet, the country’s banks are near the bottom on the list when comparing the digital banking services offered. The study benchmarked these countries and banks by aggregating the digital features available in five leading banks globally. Among Hungarian banks, even the best offers only

39%

of those functionalities.

The two forerunner countries are Slovakia and Poland, where the top banks offer 64% and 57% respectively.

Mbank in Poland, for example, had completely reorganized itself as a digitalized bank as far back as 2013, while Tatra Banka in Slovakia has won three awards from Global Finance magazine, not only for Best Internet Bank in CEE, but Best in Mobile Banking and Best Web Site Design worldwide, also in 2013.

Money and Trust What explains this? In order to invest in new digital services and technology, banks need to have money and trust to invest in the future, which has been present in Poland and Slovakia since the financial crisis, but has certainly not been the case in Hungary. In Poland and Slovakia, sector average return on equity in the banking sector since 2011 has been steadily between 8-12%, while in Hungary it was negative until 2015. We would think that it is simply the result of the financial crisis and its aftermath.

However, based on a report by the National Bank of Hungary [i] (MNB 2014. p.4), only about half of the

In addition to the impact of the crisis, the Robin Hood mentality of the Orbán regime towards the banking sector during the last six years contributed to the same extent to the relative deterioration of the service level offered to banking clients and the lack of progress in the digital transformation of the Hungarian banking sector. additional costs of operation resulted from the portfolio deterioration of the banks, the rest was added by the extraordinary measures the Hungarian government decided to implement since 2010 in order to impose additional financial burdens primarily on the larger, foreignowned banks. These included the internationally high banking levy, but also an introduction of the banking transaction tax, and losses suffered from below-market rate early repayment of FX loans and later the revision of rules applied to currency conversion rates and changes implemented in contractually flexible lending rates (“banking accountability”), the latter revisions being applied retroactively.

In this uncertain political environment, banks have neither the money, nor the willingness to invest in modernization of their services and operations. Not to mention that Hungarian laws are also lagging behind, internationally and regionally, in enabling digitization by insisting that record-keeping, proof of ownership, identification of clients and several other aspects of doing business has to be paper-based.

In addition to the impact of the crisis, the Robin Hood mentality of the Orbán regime towards the banking sector during the last six years contributed to the same extent to the relative deterioration of the service level offered to banking clients and the lack of progress in the digital transformation of the Hungarian banking sector.

This column is part of a continuing series of opinion pieces from experts at the CEU Business School in Budapest. The opinions stated here do not necessarily reflect those of the Budapest Business Journal. [i] Átalakulóban a magyar bankrendszer. MNB tanulmányok különszám. 2014.

2017. 03. 08. 20:40

www.bbj.hu

3

Budapest Business Journal | March 10 – March 23, 2017

Special Report | 19

The Mobile Wallet is Dead: Long Live the Mobile Wallet

SIM-based mobile wallets seem to have reached an evolutionary deadend, but a new generation of solutions should alter the local mobile payment landscape for good.

LEVENTE HÖRÖMPÖLI-TÓTH

According to the Financial Times, more payments are made in China via mobile devices than by bank cards. One mobile payment provider, Ant Financial handles more transactions alone than the stateowned bank card provider, Unionpay.

This presents banks with something of a headache, to say the least, because of their falling revenues: in 2015 losses amounted to USD 20 billion due to the mass migration of payments to mobile platforms.

Another problem is that banks are losing sight of their customers: there is less data

available to them that would allow them to keep track of spending habits, which in turn makes it harder to offer tailor-made products and services.

Similar trends are prevailing in Europe.

According to a recent Digital Payments survey by Visa, the number of those making payments via a portable device has tripled in the past few years. Some 54% of respondents claimed they would use their mobile gadget to settle bills, whilst that ratio was

just

18%

one year earlier. In Hungary, online banking functions have quickly found their way to the mobile world. “An online presence by itself will not do. In order to fulfil the needs of customers efficiently, services available via mobile must operate on a uniform platform,” Gábor Rajnai, director of sales at K&H Bank says.

That said, the idea of the mobile wallet seems to have hit something of a brick wall around here. Magyar Telekom, which pioneered it back in 2014, has announced that its Mobile Wallet service will cease to exist as of April 1; Vodafone withdrew from the project as of February 1.

Customer Experience Suffered Ákos Gáborjáni Szabó, CTO of Gránit Bank, says he was not caught by surprise

Banking ///briefs

Bloomberg says National Bank of Hungary lacks independence In an article on the dangers of populism in relation to the independence of central banks, Bloomberg.com has listed Hungary and Turkey as negative examples for other central bankers in the world, claiming that they have no power to act independently from government pressure, despite the fact that their independence is enshrined in statute. Bloomberg claims that Hungarian Prime Minister Viktor Orbán only stopped being critical of monetary policy after György Matolcsy – a man he had previously described as his “right hand” – was appointed Governor of the National Bank of Hungary.

CIB puts repossessed property worth more than HUF 5 bln on the block CIB has announced that the group is putting repossessed real estate with a market value of more than HUF 5 billion

BBJ_2505_special_report.indd 19

“You needed a bank, a card company and a mobile provider in order to make it work. Having so many players involved in one transaction made the whole thing very complicated and customer experience suffered as a consequence.”

on the block over the next four months, according to Hungarian news agency MTI. The properties are being sold in 11 packages containing 3-12 pieces of commercial and residential real estate.

The properties are in six regions around the country. There is no reserve price for the sale of the properties.

Citi Magyarország CEO named USHBC chair Kevin A. Murray, Citi’s country officer and CEO for Hungary and cluster head for the Balkan and Baltic Regions in Central and Eastern Europe, has been named the new chairman of the U.S.Hungary Business Council (USHBC), Citi Magyarország has announced. The USHBC was established early last year by 11 American businesses operating in Hungary to facilitate dialogue between American business leaders and the Hungarian government.

OTP’s new mobile app angers users The release of the latest version of OTP Bank’s mobile app caused uproar among clients, according to index.hu. While the

by this turn of events. “You needed a bank, a card company and a mobile provider in order to make it work.

Having so many players involved in one transaction made the whole thing very complicated and customer experience suffered as a consequence,” he says. Users also needed an Android handset that was NFC-compatible and they received a special SIM card, which together with a connected app, enabled payment.

But it is not all gloom. For one, Magyar Telekom is planning to

fingerprint reader did speed up the login process, some clients whose operating system had been modified were unable to register. According to the notice displayed on the app, registration was not permitted due to security reasons.

OTP claims that the sole purpose of the restriction was the protection of users when using mobile communication devices, and is in line with international bank security practices. OTP claimed that only about 5% of the users who attempted to download the app were unable to do so. The bank says it has no intention of changing its practice, as the OTPdirekt netbanking site can also be opened and used from a mobile browser.

UniCredit performs successful share capital increase UniCredit announced on its website that the subscription period relating to its recently announced rights offering ended on February 23 in Italy and Germany, and on February 22 in Poland.

During the subscription period, 99.8% of the offering was subscribed, which means that EUR 12.968 million was raised. The unexercised rights were to be auctioned on the Stock Exchange in Milan from February 27.

New HUF 2,000 and HUF 5,000 banknotes issued

The new banknotes entered circulation on March 1, although it is likely to

introduce a new payment application in lieu of its mobile wallet sometime this year. And banks that have only recently launched their mobile payment projects will also use a new generation of solutions.

The arrival in Hungary of Apple Pay is very much overdue too after it has made its debut elsewhere in Europe, and that should trigger further growth of the mobile payment sector. Samsung Pay and Android Pay will presumably pop up soon as well. And other experiments may give another hint about what comes next. Take Vodafone’s agreement with PayPal, according to which PayPal accounts can be directly debited in the United Kingdom and Spain in the course of mobile payment transactions.

take a few months before they become widespread, said Ferenc Gerhart, vice president of the National Bank of Hungary (MNB) at a press conference, according to magyarhirlap.hu. He noted that new security features have been incorporated into the notes. The old banknotes may be used in the retail sector until the end of July, after which they will be withdrawn; from August 1 only the new banknotes will be accepted.

More than 10,000 foreclosed homes sold in 2016

After banks were given the green light to increase the sale of mortgaged homes under foreclosure, 10,020 such properties were sold in Hungary last year, fresh data from the National Bank of Hungary show, according to a report by vg.hu. Hungary’s National Asset Management Agency (NET) was founded with the purpose of helping borrowers in bad financial situations; it bought 6,184 such homes and allowed the previous owners to continue to live in them as tenants. Borrowers themselves were able to sell a further 2,743 of the homes, which is the most favorable solution for them. Banks auctioned 1,100 homes last year, but that number is likely to grow as the restrains on the banks have eased, and they have started to clean their portfolios. The umber of auctions initiated by financial institutions was highest in Budapest, and in Pest, Komárom-Esztergom, Győr-MosonSopron and Fejér Counties.

2017. 03. 08. 20:40

Special Report

20 | 3

www.bbj.hu

Budapest Business Journal | March 10 – March 23, 2017

Giving Some Thought to the Crowdfunding: Feasible in Hungary? Choice of Bank for a new Business EXPERT OPINION

Dr. Gergely Szalóki Partner

NOTE: ALL ARTICLES MARKED EXPERT OPINIONS ARE PAID PROMOTIONAL CONTENT FOR WHICH THE BUDAPEST BUSINESS JOURNAL DOES NOT TAKE RESPONSIBILITY

SCHOENHERR HETÉNYI ATTORNEYS AT LAW

The National Bank of Hungary (MNB) issued guidance regarding the regulatory treatment of lending- and investmentbased crowdfunding models last fall. The guidance meant to provide an overview of the conditions and circumstances under which the crowdfunding platform operator, investors or project sponsors seeking financing might fall in a regulatory or licensing requirement.

Nevertheless, we anticipate that crowdfunding is not currently feasible under Hungarian law.

T

he MNB analyzed the regulatory treatment of crowdfunding from the perspective of banking, investment and payment services regulations. In the case of lending-based crowdfunding, the MNB concluded that the activity of a crowdfunding operator does not fall within the scope of the banking regulation itself, but noted that investors (i.e. private persons who want to invest relatively small amounts of money into projects with a promise of a higher return than savings accounts) may be deemed as providing a lending activity.

In Hungary, lending is subject to a licensing requirement if it is performed as a business. In the practice of the MNB, one single action may be considered a business activity, provided that it was performed with a view to entering into other or a series of transactions. In its guidance, the MNB emphasizes that one investor can participate in several

BBJ_2505_special_report.indd 20

projects and, therefore, the regularity of such deals is not excluded. The investors’ activity might, therefore, fall under the scope of the licensing requirement.

Furthermore, in case the investors perform a lending activity as a business, the platform operator would be deemed their agent, which is also subject to licensing.

Turning to an analysis of the activity of the project sponsors, the MNB noted in its guidance that under certain circumstances resulting from poor structuring of the platform, the project companies might be deemed to be collecting a deposit from the public, which is an activity strictly reserved for banks. The MNB concluded that the platform is open to anyone who wants to give money to the projects and that the repayment obligation is usually not excluded in the terms of the investment. Therefore, the sponsors may be seen as providing financial services and a license may be required. In such a case, the platform operator may also be deemed an agent (this time of the sponsors), which would again require the platform operator to obtain the respective license from the MNB. The MNB analyzed the lending- and investment-based crowdfunding models from the perspective of investment services and payment services regulations.

As for the latter, the MNB concluded that the licensing requirement is not triggered if the payment is made via a bank transfer directly to the sponsor’s bank account, without the involvement of the platform.

As for the investment services regulation, the conclusion was that if no financial instrument is involved in the investment structure (i.e. the investors do not buy bonds, notes, certificates, derivatives or other financial instruments), no license will be required from the participating parties.

Investors are typically private individuals looking to invest a certain part of their savings into higher risk ventures with a higher potential rate of return, whereas sponsors are typically micro enterprises or private entrepreneurs looking to start or expand their business, but struggling to obtain financing. Such investors and sponsors obviously lack the resources to meet the licensing requirements. Thus, with the theoretical possibility that either participant of a crowdfunding model might fall under a licensing requirement, we believe that this model is not currently feasible in Hungary.

www.schoenherr.eu

In the stressful, yet exciting process of starting a new business, choosing the right bank for you is also something worth spending time over. Do Hungary’s startups take it seriously enough? ÁGNES VINKOVITS

A good bank choice as part of a mature business strategy can ease the initial difficulties of new businesses.

Still, fresh Hungarian companies and entrepreneurs seemingly need more time to realize the importance of such decisions.

When choosing a bank for corporate accounts, one of the most important questions to consider is whether the company plans to trade only within Hungary, or also targets international markets. As Zoltán Lambert, managing partner of tax advisory company WTS Klient points out that, if you are aiming to be international in scope, it makes more sense to choose a bank that operates in the given countries too. Not only should administration be easier, but bank fees can also be lower, he says.

Nonetheless, starting businesses often have their own, somewhat more personal priorities. PR agency MITTE Communications puts an emphasis on choosing a bank with innovative communication solutions and a fresh brand identity, while, on a more practical level, having bank offices in downtown Budapest, close to its offices, was also taken into consideration.

Graphic designer Eszter Csontos, who, after winning several Golden Blade Creative Awards for advertising agency ACG Hey decided to try her luck on her own a year ago did not waste time getting lost in the downto-earth details of choosing a bank.

She stayed at the bank her former company used. Operating thus far without any special banking needs, she says she presently feels content adding, however, that if internet banking was not quick and simple enough at her current bank, she would change for a new institution.

Zoltán Reketye, co-owner of Jónás Brewery, likewise paid attention only to certain aspects of banking when opening the brewing company and beerhouse account in 2013. Jónás has won several international and Hungarian awards since then, but its professional enthusiasm seems not to have been accompanied by deep financial consciousness. “I only checked the cost of POS terminals and the account maintenance fees,” Reketye admits, adding that, if choosing today, he would

“Given this situation, reaching figures that are able to cover the high interest rates which come from high risks might present difficulties.” also do some research on the speed of administration before engaging a bank.

Good to Plan Even though accounts can be moved to another bank at any time, the ideal option is to get it right the first time as part of an initial business strategy.

That said, young entrepreneurs, almost by definition, do not have the experience or training – and possibly the inclination –to go into business with a fully-fledged business plan in place. “You can hardly find entrepreneurs starting new enterprises with years-long business plans,” WTS Klient’s Lambert says, adding that this tendency should change as financially well-prepared companies definitely have a bigger chance for success. And if entrepreneurs ask for professional advice prior to establishing their companies, they run a better chance of finding the optimum tax solutions, he adds.

Financial Backup When it comes to finding the starting capital, the choice of bank will likely play a smaller role; new businesses, unless they can offer a serious guarantee for a bank loan, usually have a hard time getting bank finance anyway. In such cases, venture capital comes to the fore. “Given this situation, reaching figures that are able to cover the high interest rates which come from high risks might present difficulties,” Lambert says.

Slower yet sustainable growth is still achievable without institutional financial support, however. MITTE Communications, which during its five years of operations to date has worked with clients as diverse as gas and oil giant MOL Hungary and leading Budapest theater Radnóti Színház, is proud of its organic growth and of reaching its position on the Hungarian PR map in harmony with its professional performance.

However, in sectors of a higher material demand such patience is not always possible. If there is nothing else in the picture, the resources of the good old FFF – friends, family and fools – network may be your only option. According to entrepreneur.com,

38%

of American

startups are financially supported by a close personal circle. Most experts agree it is almost impossible to start a business without such support in Hungary too.

2017. 03. 08. 20:40

www.bbj.hu

3

Budapest Business Journal | March 10 – March 23, 2017

Special Report | 21

To Own or not; the Government and the Banks

MTI Fotó: Szilárd Koszticsák

Following its initial drive to significantly increase stateownership in the Hungarian banking sector, the government seems to have changed its strategy, somewhat.

What is the current situation with Hungary’s stateowned banks?

National Bank of Hungary Governor György Matolcsy addressing Parliament.

He has often said long-term state ownership of the banks is not the goal.

ÁGNES VINKOVITS

Back in 2012, at the peak of rhetoric against multinational corporations, and two years after introducing Europe’s highest bank tax, Prime Minister Viktor Orbán announced the aim of having at least 50% of the banking sector in Hungarian hands.

Undoubtedly, foreign-owned banks have some disadvantages. Usually, they have a pro-cyclical fiscal policy, meaning that they may fail to give a boost to the national economy just when it is needed most. Also, they might be more willing to protect the interests of the country of the parent company while forwarding external shocks to the country of operation. At the same time, however, foreign banks import new technology and different business cultures. They also increase competitiveness, not to mention that possible further capital needs are covered by the foreign owners instead of local taxpayers.

Nature of Power Still, soon after the Orbán announcement, the government started major acquisitions.

The state already owned credit institutions MFB and Eximbank, which were designed to support the longterm development objectives of the country, but it also took over credit union Takarékbank in 2013. That acquisition drew heavy objections from shareholders as well as industry experts. Then in 2014, it also bought commercial banks MKB and Budapest Bank and gained a 49%

BBJ_2505_special_report.indd 21

ownership stake in FHB Mortgage Bank.

Yet, Viktor Orbán and National Bank of Hungary chief György Matolcsy have declared numerous times that long-term state ownership in the banking sector is not an aim; moreover, it is considered to be dangerous and might result in market distortions. The state, they keep stressing, takes over certain banks only in order to support their reconstruction and then to resell – preferably to Hungarians.

The risks of keeping banks in state hands can be clearly seen from the example of Slovenia. Hungary’s southwestern neighbor had decided to sell only minority stakes in its banks, a decision that, when the troubled financial institutions needed a

EUR 4.8 billion bailout

in 2013, severely jeopardized the country’s macroeconomic balance.

If an understanding of the existence of such perils would not be enough motivation for the government to sell banks, the European Bank of Reconstruction and Development (EBRD) is also pushing the issue.

Memorandum of Understanding In order to increase the profitability and lending capacity of the Hungarian banking sector, the Hungarian government and the EBRD signed a memorandum of understanding in early 2015.

The agreement included the fact that the rate of bank tax would be gradually reduced between 2016 and 2019, and the government also pledged not to implement measures that may have a negative impact on the profitability of the banking sector. Furthermore, the document included a tripartite agreement between the government, the EBRD and Erste Bank Hungary. According to this, the state and the EBRD would each acquire a

15% share

in Erste Bank Hungary, which, in return, committed to increase its lending stock in Hungary.

At the same time, the government committed that it did not aim at gaining further ownership in the banking sector and that it would sell its majority equity stakes in local banks to private owners within three-years’ time, finishing by early 2018. In return, EBRD pledged to do its bit in increasing lending capacity in Hungary and helping to manage nonperforming loans.

To meet the above directives, MKB was passed on to the consortium of Blue Robin Investments S.C.A. and Hungary’s Metis Private Equity Fund and Pannónia Pension Fund in 2016.

Budapest Bank is still state-owned but there has been a promise that it will be sold in a year, and the state has not taken any further ownership in FHB, although the bank has issued bonds recently.

Friends in Need The whole concept behind the stateownership of banks, in theory, is to increase corporate lending and so to give a boost to the economy. However, Hungarian state-owned banks have been repeatedly criticized by parliamentary opposition parties and online news portals for their willingness to loan to a certain circle of friends and to finance the establishment of a governmentfriendly media, which has become something of a focus since media mogul Lajos Simicska fell out with Viktor Orbán two years ago.

One example of this is Eximbank, which keeps increasing its lending stock, offers various refinancing options – somewhat balancing the fact that the Funding for Growth Scheme is only available for investments now – and 88% of its clients are Hungarian SMEs. This is all very well, but what sounds more problematic is that the bank also lent HUF 6.72 billion to Andy G. Vajna, the film producer and government commissioner in charge of the Hungarian film industry, so that he could buy countrywide television channel TV2. Since then, the tone of the channel has become markedly more government-friendly. According to a joint study by the Berlin-based think tank Democracy Reporting International and Hungarian media analyst group Mérték Médiaelemző Műhely, TV2 exhibited the second strongest government bias in the referendum campaign on EU refugee quotas last fall.

Widely popular, yet loss-making online news portal Origo was purchased in 2016 by New Wave media group.

Origo cost HUF 4.2 bln. Data from the Budapest-Capital Regional Court shows that the price was partly covered by a loan from MKB, which at that time was still state-owned.

2017. 03. 08. 20:40

4

www.bbj.hu

Budapest Business Journal | March 10 – March 23, 2017

Focus Translation and Interpretation Human Factor Remains Vital in Translation, Speech Recognition23 Translation Market: A Random Paradox24 Video Remote Interpreters: Coming Soon to a Mobile Near You26

A look at the latest trends and challenges shaping the market BBJ_2505_special_report.indd 22

2017. 03. 08. 20:41

www.bbj.hu

4 Focus | 23

Budapest Business Journal | March 10 – March 23, 2017

Human Factor Remains Vital in Translation, Speech Recognition While developing tech solutions seem to be making spectacular progress in the field of language-related software, due to the complex nature of languages, the human factor is still an important one when deciphering the pragmatics behind uttered words, and is expected to remain so. The Budapest Business Journal discussed the latest trends in the field with Péter Lepahin, general director at Hunnect Ltd.

CHRISTIAN KESZTHELYI

Due to the advent of technology and its fast development, many jobs have been endangered by software and robots taking over from humans. The trend is so visible that Microsoft Corp. founder Bill Gates has recently suggested that robots that take the job of humans should be taxed in order to help humans keep their jobs. However, the complexity of languages seems to save the day for — and job of — translators.

Although recent years saw a peak in statistical machine translation (MT), little progress has been made since then, and Hungarian is one of the languages that are less appropriate for MT, chiefly because of its complexity, Lepahin tells the BBJ. “While there are a lot of free MT tools (Google Translator,

BBJ_2505_special_report.indd 23

Bing, etc.), and also some paying services that can be trained and developed to produce better output, most of the players of the translation market rather rely on computerassisted (human) translation, and not machine translation,” Lepahin points out. “A new kind of MT model, neural machine translation (NMT) is being developed by several software giants currently, but it is still in the early development phase, and they are planning to treat bigger language combinations first,” he adds.

The accuracy of translation executed by machines is not only a question of the source and target languages’ complexity though, but also the topic of the translation. “This [accuracy] depends on the subject matter and the type of MT environment. The narrower the field is and the more specific the MT engine is to the product (for example, industrial cutting machines) and the more bilingual corpora the MT engine uses (at least 1,000,000 ‘segment pairs’, which are basically equivalent and paired sentences in both languages), the better the output will be a for statistical machine translation solution,” Lepahin explains. Another problem is that finding bilingual training corpora on the same subject in a large quantity is difficult.

Grammar Matters Differences in the grammatical nature of languages also make it demanding for a machine to translate from one language to another. When it comes to Hungarian, Lepahin says that “the frequent use of suffixes and, in general, the very different logic of Hungarian compared to Indo-European languages” can be an obstacle that MTs may fail to tackle. “Also, the lack of context is a big enemy of good machine translation, but this is not specific to the

“I don’t think we have to worry that machines will translate Dostoyevsky – or even sophisticated marketing texts, for that matter – better than humans. The more underlying meaning and connotation is present in the text, the more elaborate and sophisticated it is, the clumsier MT becomes.

That being said, in some special fields – especially when it comes to technical translation – MT is already gaining considerable momentum, and translators are becoming post-editors of the machine translated text.”

Hungarian language,” he adds. While Lepahin cannot rule out the possibility of machines knocking humans out of the league, it seems to be highly unlikely.

“I don’t think we have to worry that machines will translate Dostoyevsky – or even sophisticated marketing texts, for that matter – better than humans.

The more underlying meaning and connotation is present in the text, the more elaborate and sophisticated it is, the clumsier MT becomes.

That being said, in some special fields – especially when it comes to technical translation – MT is already gaining considerable momentum, and translators are becoming post-editors of the machine translated text,” he adds.

Human Understanding Despite an emerging buzz around speech recognition software, developing technological solutions are still having a hard time understanding human-uttered words, which chiefly occurs because computers lack understanding of several factors — mainly related to pragmatics — that are needed to help understand human speech. “Hungarian speech recognition could work well [for Hungarian] in theory, as spoken Hungarian has far fewer different accents, dialects or sociolinguistic variants” compared to other languages, Lepahin says. However, when it comes to Hungarian, collecting sufficient input (training) data is also more difficult, he adds.

Again, grammatical and complexity differences between languages can make the job easier for computers to understand human speech in the case of one language, but harder in another.

“The Hungarian language has much less homonyms than English (think of the words see/sea/C for example – they are indistinguishable when said without context). In Hungarian, one pronunciation can basically have one correct orthography (with some exceptions),” Lepahin says.

However, long and suffixed words, as well as discerning the word limits in Hungarian can raise the bar too high for computers. “Hungarian has other difficulties, such as long words with a lot of suffixes, which create new variants that might not be found in the computer’s earlier audio data. Thus, these variants are not recognizable to the engine,” Lepahin says. “Hungarians have a tendency not to intonate too much, and rather speak at a balanced level – this phenomenon makes it hard for the computer to ‘hear’ where a word ends and the next one starts,” the professional concludes.

2017. 03. 08. 20:41

24 | 4 Focus

www.bbj.hu

Budapest Business Journal | March 10 – March 23, 2017

Translation Market: A Random Paradox The translation industry is confronted with a paradox: while the global market is expanding, rates in real terms are dropping, which requires constant adaptation in order to keep revenues growing.

LEVENTE HÖRÖMPÖLI-TÓTH

“The market has growing expectations in terms of quality, and demand shows no sign of decline despite recent uncertainties on the global political landscape caused by Brexit, the U.S. presidential elections or the upcoming elections in major Western European countries,” says Péter Márton, finance manager at Albion Languages Kft. The company he represents has overcome the recession successfully, not least thanks to the fact that the bulk of its clientele operates in healthcare and automation, which were relatively little affected by the downward trends of the recent past.

The overall picture of the Hungarian translation market reflects similar phenomena. Companies serving automotive, consumer electronics manufacturers, international organizations and the ITC sector fare best. Another clear pattern hints that auxiliary services such as interpreting equipment rental, software localization or printing tend to propel many enterprises towards the top 20. The same goes for dubbing, subtitling and voice-overs, since global marketing campaigns trigger robust demand for them. (For more on the latest industry trends see separate story on page 26.)

Full Monopoly Not surprisingly, OFFI, the Hungarian Office for Translation and Attestation, has preserved its number one position, as it enjoys a full monopoly in the field of attestation and its pricing methods are notoriously far from moderate.

The runner-up place now belongs to Amplexor Magyarország Kft., the Hungarian affiliate of Euroscript that generates vast revenues mainly from the European Union Publication Office, local ministries and multinational corporate giants.

BBJ_2505_special_report.indd 24

Sándor Sojnóczky, managing director of Hunnect Kft.

Péter Márton, finance manager at Albion Languages Kft.

“We monitor what our translators know, so their knowledge gets evaluated through tests and their previous track record is authenticated. […] Our top priority is to find people who can identify with our corporate philosophy and integrate well.”

However, it would be foolish to think that leading market positions are easy to keep. Sándor Sojnóczky, managing director of Hunnect, a translation firm with the third largest revenues in the industry in Hungary, fully agrees. “You need to keep focusing on broadening your clientele. Therefore, a sales manager is employed by us whose sole task is to sign new clients,” he says.

Another factor for preserving competitiveness is to make use of automation to the full extent. But this does not just mean relying on computerassisted translation tools. “Project managers can benefit from automation greatly as well, which can result in spectacular improvement of efficiency,” Sojnóczky adds.

Beefed-up efficiency is very handy when it comes to keeping up with global trends highlighting two contradicting patterns. On the one hand, the language services market is expanding by

a specialist dealing with recruiting and testing new translators. “We can’t afford not to have a large enough pool of professionals on tap,” Márton says.

“Our clients are up to 95% based abroad and can approach us with large-scale projects at any time.”

however, rates in real terms have been gradually declining in the past 10-12 years. As Sojnóczky explains, it all comes down to worldwide supply chain dynamics.

Translator’s Degree

3-6% per year;

United Front “Whoever has the financial resources will decide how much they are willing to pay for translation and related tasks,” the managing director says. Multinational corporations operate under pressure to produce savings at all times. Sojnóczky believes that rates cannot go back up unless global translation firms present a united front for the cause.

Dropping rates make it even less attractive for qualified workers, and Hungary’s EU accession had already accelerated their migration to countries with higher wages. But as Sojnóczky points out, competition for their services is fierce, even on the domestic labor market.

“Enterprises offer ever more jobs to people with excellent linguistic skills in industries other than the language sector.”

Albion Languages Kft. is well aware of this situation, which is why it has

But how do you ensure top quality if your clients operate in automotive, IT or life sciences sectors with highly technical terminology? “We monitor what our translators know, so their knowledge gets evaluated through tests and their previous track record is authenticated,” Márton notes. “Our top priority is to find people who can identify with our corporate philosophy and integrate well.”

This also means that the company policy does not require translators to hold a certified translator degree as a default (extensive experience can be just as valuable), although clients may request that a text be prepared by people having one, and in that case that criteria must be met.

Sojnóczky believes that the translation degree is only one among many factors when selecting translators. “Success is also subject to other skills such as knowledge of the mother tongue or the target language, interest in cuttingedge technologies and the will for continuous improvement,” he says.

2017. 03. 08. 20:41

www.bbj.hu

4 Focus | 25

Budapest Business Journal | March 10 – March 23, 2017

Specialist Language Translators/ Interpreters in Short Supply

CLAUDIA PATRICOLO

According to the last survey published by Manpower Group Hungary, there is no a huge lack of interpreters and translators in the country – it is rather skilled trades positions that still represent the most difficult roles to be filled.

That said, new opportunities are rising within European Union. European institutions are continuously looking for interpreters, offering high salaries and even the possibility to work remotely from home. In fact, according to the European Commission, it is facing a wave of retiring freelance interpreters, meaning it is due to start a huge campaign of hiring. The EC even pays all the travel costs of those who take part in the preliminary test. A lucky few – or perhaps more accurately the very best – will have the opportunity to become official translators in various European agencies.

Good Living

Interestingly, however, the Hungarian Association of Translators and Interpreters (MFTE) and Hungarian Association of Professional Language Service Providers (Proford) both insist that there is just as good a living to be made by those who decide to stay in Hungary.

“When we talk about beginner translators and interpreters, who do not represent the highest category or do not have enough qualifications and subsequently do not receive sufficient amount of work, they may search for work elsewhere and this includes looking for completely different positions, or maybe even working at the customer service departments of multinational companies,” Vera Mendel, board member of Proford and CEO of Intercontact, tells the Budapest Business Journal.

“But when we talk about good quality translators and interpreters, they receive enough work not to be forced to work elsewhere, and they would definitely earn more as freelancers here in Hungary,” Mendel continues.

Technology is Key And we are not talking just about freelancers and self-entrepreneurs.

Nowadays, it is not that difficult to open a translation agency, as it does not necessitate of huge capital investment. Many people, it seems, are trying their hand at this career, providing translations for anything from one-page documents to those up to hundreds of pages. “We have no precise data on the number of translators and interpreters working in Hungary. The MFTE has approximately 120 members and each translation company generally has a pool of a few hundred translators and interpreters working for it,” Mendel explains.

But to build a truly successful business might not be as easy as it at first seems, since such agencies need more than mere translators. Technology

is increasingly key today and a good quality agency also requires professional IT employees, competing with the SSCs for that particular area of expertise. And since the competition is hard, the local translation market is quite small.

“In Hungary, a decree stipulates that translators need to hold a certificate for translation and/or interpreting in order to be able to pursue this activity,” Mendel explains. “In reality, there are thousands who take up translation or interpreting jobs, often occasionally or as a side activity, most with no certificates at all.”

Language Matters Considering this large number of private interpreters and the competition created by multinational companies and the European Union, it seems a plausible scenario that the Hungarian market could face a shortage. Proford and the MFTE suggest that it is so only for

EXPERT OPINION

Dedicated to Life Sciences Éva Tóth-Tölgyesi Head of the Life Sciences Department HUNNECT

We talk to Éva Tóth-Tölgyesi, head of the Life Sciences Department, Hunnect about managing translation expectations in a specialist field.

How long has Hunnect had a life science group?

As an outcome of a long process, we launched our Life Sciences Department in the summer of 2015. We have been working on medical and other life science translations for more than ten years. The amount of these jobs was increasing so much that we had to dedicate a full division for the task with five members, who focus only on language services in life sciences. Three of us have a degree in translation specialized in life sciences; therefore, a top-quality end-result is guaranteed in all assignments.

What are the particular challenges of working in the life sciences field?

Quality is a major challenge in medical translations, since it can be a question of life or death. As a result, top quality is a default requirement. When setting up deadlines, we need to consider that our experts, the medical translators, are mostly part-time subcontractors.

What unique aspects does Hunnect bring to its work in this field?

There are two of them. One is the human

BBJ_2505_special_report.indd 25

certain languages, some of them perhaps a little surprising.

“As far as so-called ‘typical languages’ such as English and German are concerned, there is no shortage in the number of translators and interpreters, although as far as quality is concerned, I would say there may be a shortage of qualified and superior quality translators and interpreters,” Mendel says.

“As far as other languages are concerned, even if we are referring to popular ones such as French, Italian, Spanish, Portuguese or the Scandinavian languages, there is a definite shortage in qualified and good translators and interpreters and, quite surprisingly, even more so in the case of the languages of Eastern European countries such as Bulgarian, Slovenian, Slovakian, Serbian, Croatian, Polish, and so on. Quite often we have to search outside of Hungary to find the appropriate person.”

aspect, as we maintain close contact with our clients and subcontractors as well as the students studying translation at the University of Szeged. The other aspect is technology. We always use the latest software and prepare client-specific style guides and terminology lists. Furthermore, we also offer complex services like voiceover or preparing subtitles, neither of which are typical translation assignments.

Hungary currently has a labor shortage affecting many areas. Are life sciences affected too?

Indeed, there is a serious shortage of labor in the medical profession throughout Eastern Europe. We work with physicians, biologists and pharmacologists who also have a degree in translation; thus, we have also experienced some labor shortage. Nevertheless, we have been able to cope with the problem and could complete our assignments in every Central and Eastern European language. Having our own experts within the department also helps a lot.

What are your expectations for the year?

Our aim in 2017 is to further increase our clientele. The first months of this year have confirmed that the need for our top quality language services in this special field is increasing both in Hungary and internationally.

Who are your typical customers?

We translate mostly for pharmaceutical companies. Typical assignments are clinical studies, drug descriptions, discharge summaries, scientific papers, etc. Companies manufacturing medical devices are also among our regular clients, but private people frequently order medical translations as well.

NOTE: ALL ARTICLES MARKED EXPERT OPINIONS ARE PAID PROMOTIONAL CONTENT FOR WHICH THE BUDAPEST BUSINESS JOURNAL DOES NOT TAKE RESPONSIBILITY

Following a growing trend, translation agencies can increasingly be found countrywide in Hungary. But is it hard to find qualified people, especially considering the competition from the large numbers of multinational companies whose customer service departments represent a well-paying alternative for all those people who can speak foreign languages?

2017. 03. 08. 20:41

26 | 4 Focus

www.bbj.hu

Budapest Business Journal | March 10 – March 23, 2017

Video Remote Interpreters: Coming Soon to a Mobile Device Near You Video remote interpreting and widening the scope of services are just two of the latest methods translation firms are relying on to tackle growing market pressure.

“To tell the truth, it is very difficult to stick out of the crowd by producing document translations.

Therefore, we focused on implementing complex translation projects and high-quality interpreting to start with, and in addition we moved towards services that create added value.”

LEVENTE HÖRÖMPÖLI-TÓTH

An intensifying price race and the advancement of cutting-edge technology are pushing service providers in the global languages industry to come up with ideas that help maintain or improve their market position. What other choice do they have in a world where, just three years from now, the Tokyo Olympics is expected to feature real-time machine translation on a mass scale in order to make the lives of tourists easier at sightseeing, shopping and medical venues?

EDIMART has realized the need for adapting early, and it has been widening the scope of its services aggressively.

“This is the only way to go,” CEO Márta Balázs tells the Budapest Business Journal. “To tell the truth, it is very difficult to stick out of the crowd by producing document translations.

Therefore, we focused on implementing complex translation projects and highquality interpreting to start with, and in addition we moved towards services that create added value.”

Prevailing Trends One of the prevailing trends is that products are no longer accompanied by print manuals, but rather audio or video guides, or additional apps and other downloadable support material are made available. This requires more than simple translation. Take audio guides where translated texts are read aloud by voice artists and the recorded material is polished for perfection by technicians in the right format.

“Requests for subtitling marketing videos are also on the rise, and so are those requiring voice-over services,” Balázs notes. “Our job is rather localization by delivering a so-called trans-creation which means that if, for instance, a marketing video needs to be translated into German, we engage a German copywriter in order to get the right message in the target language.”

A different level of responsibility is attached to this kind of work, though, since it makes a huge difference whether the assignment is restricted to producing a given language version of a text, or

BBJ_2505_special_report.indd 26

Márta Balázs, EDIMART CEO.

“We go abroad a lot to learn about it [voice over assignments] and in places like Japan they are more than happy to share their knowledge. [...] This different kind of business culture, based on openness, would be highly appreciated around here as well!” your work is used in a multimillion euro marketing campaign.

Part of the job is language consultation. This means that if a company wants to launch a product in, say, three new countries, a cost estimate and a timeframe are provided for how fast the marketing effort could have the desired impact. “In the case of less well-known countries, this is invaluable information because without the right expertise it is difficult to predict how much time is needed for a Hungarian

marketing text to be turned into Swedish or Korean so effectively that consumers get the message,” the expert adds. “We are also in a position to tell how many quality assurance checks are actually needed for a professional output.”

Gaining Momentum Voice-over assignments are gaining particular momentum. “We simply love it. We go abroad a lot to learn about it and in places like Japan they are more than happy to share their knowledge,” Balázs notes. “This different kind of business culture, based on openness, would be highly appreciated around here as well!”

EDIMART is also among the leading interpreting firms in Hungary, and given its relevant expertise in the field, it was the first to introduce virtual remote interpreting (VRI) two years ago. The technology enjoys enormous popularity in the United States, where companies specializing in VRI operate call centers with up to

1,500 interpreters

on stand-by mode. In the States, around 350 languages are spoken and

every citizen has the right to use his or her mother tongue in healthcare.

Immigration procedures are another area where there is large demand for the service, whereby the given language is identified by voice-recognition software, and within 20 seconds the client is connected with an interpreter over the phone or via video messaging.

VRI should have a bright future elsewhere too. Business trips lasting several days have been replaced by to-the-point meetings of just one or two hours, often conducted via video conference calls. It is also getting ever more difficult to charge for collateral expenses such as travel time, stand-by periods or travelling costs. “Customers tend to be surprised why half a day is billed if interpreting is provided in a meeting in the countryside,” Balázs says. “They find it difficult to accept the justification for charging for additional costs.”

VRI could be a way around such unpleasant situations; EDIMART now offers an online platform that allows you to book interpreters covering

30

spoken languages

and sign language. The service is available 24/7 under a pre-paid scheme or on a monthly plan where every 15 minutes is billed. On the spot VRI where you are connected immediately to interpreters applies to English and German, whereas under the pre-booked scheme VRI for less common languages can be arranged within 24 hours.

“The idea was to make great use of it in immigration procedures, but so far we have hit a wall and got rejected [by the authorities], which makes no sense because it is clear how every stakeholder would benefit,” Balázs explains. It also seems a distant dream to hope that public health care might embrace the innovation anytime soon.

However, private health care facilities are expected to be open to the novelty.

So stay tuned for a VRI experience in a private hospital near you, should you need interpreting services involving Hungarian in a convenient way.

2017. 03. 08. 20:41

www.bbj.hu

4 Focus | 27

Budapest Business Journal | March 10 – March 23, 2017

Translation agencies

www.offi.hu

amplexoR 2 magyaRoRszág kft. 1,015 1,015 ✓ ✓ ✓ www.amplexor.com

–

✓ ✓

liaison inteRpReting

ConseCutive

ConfeRenCe

Ÿ

–

EU Publishing, Bosch, European Parliament

✓ ✓ ✓

✓ ✓ ✓

www.hunnect.com

Hunnect

441

442

✓ ✓ ✓ ✓ ✓ ✓

Attestation

Ÿ

Terminology management

JP Morgan, Google, PriceWaterhouseCoopers, KnorrBremse, Bayer, Telenor

www.espell.com

415

415

✓ ✓ ✓ ✓ ✓ ✓

albion languages foRdítóiRoda kft.

5

www.albionlanguages.com

leg

6 magyaRoRszág zRt. www.leg.eu

affoRd foRdító- és

7 tolmáCsiRoda kft. www.afford.hu

l.C. bt.

8

www.lcbt.hu

inteRContaCt 9 budapest kft. www.icontact.hu

tRanzpRess kft.

10 www.tranzpress.hu

business team

11 inteRnational kft. www.businessteam.hu

Consell tRanslations 12 Cee kft. edimaRt tolmáCs- és foRdítóiRoda kft.

www.forduna.hu

ils nemzetközi foRdító szolgálat 15 kft. www.ils.hu

BBJ_2505_special_report.indd 27

sándor sojnóczky – Péter Lepahin

6726 Szeged, Sepsi utca 5.

(62) 950-222 – mail@hunnect.hu

ISO 17100

2012 21 400 (approx.)

Individuals (100) –

miklós bán Edit Takács –

1056 Budapest, Belgrád rakpart 26.

(1) 239-8043 (1) 799-0581 forditas@espell.com

–

1997 21 430

Individuals (Ÿ) Individuals (Ÿ)

alistair binks Péter Márton –

1111 Budapest, Bartók Béla út 28.

(1) 793-3610 (34) 381-915 info@ albionlanguages.com

György Kovács (75), János Zelenák (25) –

boglárka tímea tési – –

1054 Budapest, Tüköry utca 5.

(1) 439-0650 (1) 439-0651 info@leg.eu

2004 23 23

Individuals (100) –

andrás Winkler-virág Erika Antal András Winkler-Virág

1093 Budapest, Lónyay utca 29.

(1) 310-7168 (1) 310-7169 afford@afford.hu

–

1990 4 150

Gábor Pataki (100) –

gábor pataki – –

1026 Budapest, Rügy utca 12.

(1) 394-4758 (1) 200-5740 lcbt@lcbt.hu

MSZ EN ISO 9001:2009, EN 15038:2006

1991 14 200

Veronika Mendel Lehel (50), Dr. László Lehel (50) –

veronika mendel lehel – –

1054 Budapest, Hold utca 15.

(1) 269-1153 (1) 312-5408 office@icontact.hu

ISO 2008:9015

2002 13 1,000

(100) –

andrás szalayberzeviczy Réka József –

ISO 9001:2009

1999 8 1,136

Individuals (100) –

lilla kocsár Judit Bárdos Roland Rácz S.

Life science, vehicle industry, software localization, ISO marketing, IT, technical 9001:2008, documentation ISO MemoQ, SDL Trados 15038:2006 Studio, STAR Transit NXT, Memsource

1996 16 150

– Consell Consultancy (50), Suzanna V. Ellmann (50)

mark ellmann – –

Life sciences, finance, technical, localization, marketing SDL Trados, MemoQ

ISO 9001:2009, EN15038

Ÿ Ÿ Ÿ Ÿ

✓ ✓ ✓

–

Finance, legal, life science, biotech, energy, ITC, technical MemoQ, SDL

✓ ✓

Interpretation equipment

MLSZ, BM NOK, OBA, HM, PWC, MNV

✓ ✓ ✓ ✓ ✓ ✓

Attested translation, interpretation equipment, editing, copying, copy-editing

European Commission, Translation Center for the Bodies of the European Union, Sanofi-Aventis Zrt., Chinoin Zrt., OTP Bank, K&H Bank

Ÿ

✓ ✓ ✓

Software localization, business and technical translation, – legal translation, media MemoQ, SDL Trados, Across, Smartling, Idiom

Ÿ

✓ ✓ ✓

–

✓ ✓ ✓ ✓ ✓ ✓

✓ ✓

–

–

✓ ✓ ✓ ✓ ✓ ✓

250

250

✓ ✓ ✓ ✓ ✓ ✓

–

245

245

✓ ✓ ✓ ✓

220

220

✓ ✓ ✓ ✓ ✓ ✓

114

Sándor Sojnóczky (50), Anikó Sojnóczky (50) –

–

GLS, European Commission, Morningside, Erste Bank, Unicredit Bank, Núsz

✓

268

114

1061 Budapest, Andrássy út 12.

(1) 555-0100 (1) 555-0199 janos.muth@ amplexor.com

Translation preparation, post editing, subtitling, interpretation equipment

–

268

220

jános muth – –

ISO 9001; ISO 17100

–

✓

International media watch

220

– Amplexor Luxembourg (100)

– SDL Stidio Transit, Accross

–

–

–

✓

www.edimart.com

foRduna 14 foRdító kft.

2002 41 500 (min.)

–

–

Ÿ

–

–

✓ ✓

–

–

✓ ✓

✓ ✓ ✓ ✓ ✓ ✓

Technical translation, complex and multi-language document management SDL Trados, MemoQ

ISO 9001:2015

Medical medical technology, pharmaceutical, health care, tourism, business, economic, ISO bank, finance, IT, telecom, 9001:2009 technology, vehicle industry, and ✓ ✓ ✓ ✓ electric engineering, legal, MSZ EN social, sports, technical sports MemoQ, SDL Trados, Across, 15038:2006 XTM, Passolo, Memsource, Wordfast ✓ ✓ ✓

–

✓ ✓ ✓ ✓

–

–

–

–

www.consell.net

13

1062 Budapest, Bajza utca 52.

(1) 428-9600 (1) 269-5184 budapest@offi.hu

Ÿ

✓ ✓

271

gabriella németh Zoltán Ignácz –

Printing, packaging, education, terminology management

349

271

Hungarian State (100) –

✓ ✓ ✓

349

325

1869 160 478

Ÿ

✓ ✓ ✓ ✓ ✓ ✓

320

ISO 9001:2008

–

390

322

addRess pHone fax email

Medical equipment, medical image creation, pharmaceuticals, vehicle industry, – machine production, IT, software localization, law, finance SDL Trados Studio, Memoq, Across, Start Transit

373

322

top loCal exeCutive Cfo maRketing diReCtoR

Attested translation, translation attestation SDL Trados Studio 2017 Professional

Making sense of the world

espell foRdítás és 4 lokalizáCió zRt.

oWneRsHip (%) HungaRian nonHungaRian

fields of speCialization Cat tools used

HunneCt kft.

3

yeaR establisHed no. of full-time employees on feb. 1, 2017 no. of subContRaCtoRs on feb. 1, 2017

✓ ✓

Attested translation, translation attestation

Quality assuRanCe

–

tRanslation

inteRpReting

desktop publisHing

–

otHeR

softWaRe loCalization

native pRoofReadeRs

oRszágos foRdító és 1 Fordításhitelesítő 1,819 1,840 ✓ ✓ iRoda zRt.

majoR Clients in 2016

sign language inteRpRetation

inteRpReting

seRviCes

pRoofReading

total net Revenue in 2016 (Huf mln)

Company Website

net Revenue fRom tRanslation and inteRpRetation in 2016 (Huf mln)

Rank

Ranked by net revenue from translation and interpretation in 2016 (HUF mln)

State Audit Office, Distance Rail Cargo, Café ✓ ✓ ✓ ✓ interpretation Frei, Univer, Porsche, Vodafone

–

Centre de Traduction des ✓ ✓ ✓ Organes, European Commission-Brussels

–

Wolters Kluwer Kft., Weishaupt Hőtechnikai Kft., Candy Hoover Hungary Kft., ✓ ✓ ✓ Bevándorlási és Állampolgársági Hivatal, MÁV-Thermit Kft., CG Electric Systems Hungary Zrt.

–

–

Police, finance, law

Ÿ

EU, pharmaceutical, finance, banking, law MemoQ, SDL Trados Studio

– SDL Trados Groupshare

2003 18

Ÿ

2005 16

Ÿ

Legal, finance, IT, technical MemoQ

ISO 2009:9001

2005 15 450

Márta Balázs (50), Edit Balázs (50) –

márta balázs, edit balázs Edit Balázs –

Law, finance, telecom, IT, trasnprtation, pharmaceuticals SDL Trados

ENISO9001: 2008, MSZEN 15038: 2006

1989 14 300

Individuals (100) –

ferenc jantner, zoltánné lehel – –

–

1989 6 95

László Reha (80), Lászlóné Reha (20) –

lászló Reha Annamária Puskás Kerstin Reha

Technical, legal, finance Trados, Across, MemoQ

1022 Budapest, Detrekő utca 12.

(1) 225-1426 (1) 225-1427 hr@tranzpress.hu 1036 Budapest, Dereglye utca 2.

(1) 250-6729 (1) 240-9291 info@businessteam.hu 1073 Budapest, Erzsébet körút 23.

(1) 373-0112 (1) 269-4780 info@consell.hu 1123 Budapest, Alkotás utca 39/C (1) 209-2688 – info@edimart.com 1113 Budapest, Bartók Béla út 86.

(1) 209-2482 (1) 386-8626 megrendeles@ forduna.hu 1114 Budapest, Móricz Zsigmond körtér 3/A (1) 209-6386 (1) 372-0136 ils@ils.hu

2017. 03. 08. 20:41

–

–

✓ ✓

94

94

✓ ✓ ✓ ✓ ✓ ✓

90

90

–

✓ ✓

Moderation

www.interlex.hu

17

tRm kft.

www.sosforditas.hu

mind poWeR

18 HungaRy kft. www.mindpower.hu

19

multi-lingua foRdító és tolmáCs kft.

–

–

–

–

✓

88

88

✓ ✓ ✓ ✓ ✓ ✓

Honvédelmi Minisztérium , Médiaszolgáltatás-támogató és Vagyonkezelő Alap, Emberi Erőforrások ✓ ✓ ✓ Minisztériuma, GraphArt Kft., Leonardo Corporation Kft., Roche Magyarország Kft.

Defense policy, health care, law Trados, MemoQ

ISO 9001

1997 4 180

Interpretation equipment

Ÿ

✓ ✓ ✓

–

Ÿ

ISO9001

2004 7 170

Individuals (100) –

istván fülöp – –

–

Ÿ

–

–

–

–

– SDL

–

Elek István Csóka (100) –

elek istván Csóka – –

–

–

Ÿ

✓ ✓ ✓

–

ABB, Beston Dickinson, Emerson, Gestamp, Harman/ Becker, Total

✓ ✓ ✓

–

✓

–

Ÿ

–

–

✓

Sofitware sale, training, consulting

Nikon Metrology, OMAX, MAN Trucks&Busses, Jabil Circuit Hungary Kft, KÉSZ Csoport, Hussmann

www.multi-lingua.hu

20

m-pRospeCt kft.

80

175

✓ ✓ ✓ ✓ ✓ ✓

21

emeRald kft.

76

76

✓ ✓ ✓

www.m-prospect.hu

www.emerald.hu

teCH-lingua bt.

22

75

www.tech-lingua.hu

133

✓

–

–

–

✓

–

–

ConCoRd 23 foRdítóiRoda kft.

65

65

✓ ✓ ✓ ✓ ✓ ✓

linguaRium kft.

65

65

✓ ✓

www.concordforditoiroda.hu

23

www.linguarium.hu

–

–

✓ ✓

–

–

–

–

–

fields of speCialization Cat tools used

Trados 2015

– ISO SDL Trados Studio 9001:2008, 2017, 2014, 2011, SDL MSZ WorldServer, Idiom EN ISO WorldServer, MemoQ 2015, 15038:2006 SDLX Translation Suite 2003 Technical, finance, legal, company management, medical equipment production MemoQ 2015, Trados Software localization, company management, vehicle industry, medical equipment, compliance, marketing SDL Trados Studio, Idiom, Translation Workspace, Passolo

–

Vehicle industry, construction industry, IT, machine tools, measurement technology SDL Trados Studio, SDL GroupShare

– MemoQ, Trados

–

Ÿ

✓ ✓ ✓

–

–

Ÿ

✓ ✓ ✓

–

Quality assuRanCe

–

Alex B. Lawani (70), Ágnes B. Lawani (20), Julietta B. Lawani (10) –

sign language inteRpRetation

oWneRsHip (%) HungaRian nonHungaRian

liaison inteRpReting

ConfeRenCe

ConseCutive

tRanslation

inteRpReting

desktop publisHing

105

otHeR

softWaRe loCalization

native pRoofReadeRs

105

majoR Clients in 2016

yeaR establisHed no. of full-time employees on feb. 1, 2017 no. of subContRaCtoRs on feb. 1, 2017

inteRlex CommuniCations 16 kft.

inteRpReting

seRviCes

pRoofReading

Company Website

www.bbj.hu

Budapest Business Journal | March 10 – March 23, 2017

total net Revenue in 2016 (Huf mln)

net Revenue fRom tRanslation and inteRpRetation in 2016 (Huf mln)

Rank

28 | 4 Focus

Company documents, contracts, legal documents, decrees, real estate, full range company administration

ISO 9001

–

apt HungáRia kft.

25

62

www.apthungaria.hu

enCo-f kft.

26

52

www.enco-f.eu

H-net nyelvi 27 központ kft.

42

www.h-net.co.uk

HelpeRs HungaRy 28 kft. www.helpers.hu

kfi foRdítóiRoda

NR kft. www.kfi.hu

NR

penna-euRópa kft. www.penna.hu

tuRRis babel kft.

NR www.turrisbabel.hu

Ÿ= would not disclose, NR = not ranked, NA = not applicable

BBJ_2505_special_report.indd 28

66

52

48

✓ ✓ ✓ ✓ ✓ ✓

✓ ✓

✓ ✓

–

–

–

MOL Nyrt., MOL Petrolkémia Zrt., MOL-LUB Kft., – ✓ ✓ – Petrolszolg Kft., ✓ ✓ ✓ Mélyfúrási Információs Szolgáltató Kft., Proinvest Kft., Rotary Zrt. Harley-Davidson Europe, ScheidtBachmann Germany, ✓ ✓ ✓ Transcreation ✓ ✓ ✓ Terrorelhárítási Központ, Dome Facility Ltd.

–

Energy, law, accounting, technical MemoQ

–

12

187

✓ ✓ ✓

–

–

✓

–

Ÿ

–

–

–

Energy, pharmacology, telecom, marketing MemoQ

Ÿ

Ÿ

✓ ✓

–

–

✓ ✓

–

Ÿ

✓ ✓ ✓

–

Ÿ

Ÿ

Ÿ

✓ ✓ ✓ ✓ ✓ ✓

Dubbing, subtitling

Ÿ

Ÿ

Ÿ

✓ ✓ ✓

–

✓ ✓

–

Ÿ

–

Ÿ

1996 5 80

1998

Ÿ Ÿ

Zsolt Kunos (100) –

1013 Budapest, Attila út 33.

(1) 487-0660 (1) 487-0659 office@interlex.hu 1015 Budapest, Hattyú utca 14.

(1) 599-9299 (1) 599-9298 info@sosforditas.hu 9023 Győr, Szigethy A. utca 95.

(30) 639-8294 – info@mindpower.hu

lászló jános Végső Sándor Rónai –

1173 Budapest, Pesti út 8–12.

(1) 202-0202 – multi@lingua.hu

Csaba Hajdú Márta Hajdú László Matolcsi

8000 Székesfehérvár, Szörényi utca 59.

(22) 311-653 (22) 311-653 office@m-prospect.hu

zsolt kunos – –

1116 Budapest, Fehérvári út 130.

(1) 464-3144 (1) 464-3145 info@emerald.hu

Csaba Csaba Szekeres szekeres (50), Dóra Dóra Szekeres-Simon Szekeres-Simon (50) Mónika Pap – Mohainé

8052 Fehérvárcsurgó, Páskom utca 2.

(22) 792-959 (22) 792-959 info@tech-lingua.hu

–

2012 5 80

(100) –

andrás zsolt muhi – –

–

2001 3 15

(100) –

zoltán kardos – –

–

2003 5 51

Tibor Palásti (70), Norbert Hegedűs (20), Gyula Kovács (10) –

1075 Budapest, Madách Imre út 13–14.

(1) 486-0508 (1) 486-0508 office@linguarium.hu

tibor palásti Mónika Tajcs Judit Kerekes

1076 Budapest, Thököly út 25.

(30) 561-8454 (28) 389-432 apt@apthungaria.hu

1990 1 90

Miklós Gábor Szigeti (90) Brigita Jaklin Szigeti (10)

miklós szigeti Istvánné Kovács –

1025 Budapest, Verecke lépcső 20/A (70) 373-0665 – enco-f@outlook.com

ISO 14001/2015

1999 2 26

Zsuzsanna Tóth (100) –

zsuzsanna tóth Zoltán Szántódi –

–

2006 12 100

Barbara Ürögdi (50) Nenad Ignjatovic (50)

barbara Ürögdi, nenad ignjatovic – –

László Busa (90), Dorottya Ferenczy Busáné (10) –

lászló busa – –

Trados

Ÿ

✓ ✓ ✓ ✓

Ÿ Ÿ

–

–

Ÿ Ÿ

✓ ✓ ✓

1982 6

3V Systems Kft. (50), László János Végső (35), Gergely Balázs Végső (5), Péter Zsolt Végső (5), Liza Borbála Végső (5) – Csaba Hajdú (50), Csabáné Hajdú (50) –

alex b. lawani Ágnes B. Lawani Ágnes B. Lawani

–

Oil and gas industry, petrolchemistry, industrial IT, finance, accounting, retail and ISO 9001 – wholesale trade, lubrication ICH060627 technilogy, facility management, process management Transit NXT, MemoQ Legal, technical, marketing, website translation Trados

Ÿ

addRess pHone fax email

2007 6 120

Ÿ

FŐGÁZ Zrt., Magyar Államkincstár, ✓ ✓ ✓ Tata Consultancy Services, DHL Freight

2008 1

top loCal exeCutive Cfo maRketing diReCtoR

ISO 9001

2003

Ÿ Ÿ

2000

Ÿ Ÿ

2004

Ÿ Ÿ

Sándor Tóth (50), Balázs Fejes (50) – Péter Gárdos (50), Ádám Dániel BreuerZehevi (50) –

sándor tóth, balázs fejes – – péter gárdos, ádám dániel breuer-zehevi – –

1025 Budapest, Pusztaszeri út 70/C (1) 336-1148 (1) 326-5670 info@ concordforditoiroda.hu

1095 Budapest, Lechner Ödön fasor 1.8/19 (20) 953-3862 – info@h-net.hu 1094 Budapest, Tompa utca 9.

(1) 317-8570 (1) 328-0363 info@helpers.hu 1125 Budapest, Szilágyi Erzsébet fasor 10.

(1) 459-0400 – info@kfi.hu 1078 Budapest, István utca 5.

(1) 321-6606 (1) 413-0424 translations@penna.hu 1054 Budapest, Tüköry utca 3.

(1) 329-0161 (1) 329-0161 info@turrisbabel.hu

This list was compiled from responses to questionnaires received by March 8, 2017 and publicly available data. To the best of the Budapest Business Journal’s knowledge, the information is accurate as of press time.

While every effort is made to ensure accuracy and thoroughness, omissions and typographical errors may occur. Additions or corrections to the list should be sent on letterhead to the research department, Budapest Business Journal, 1075 Budapest, Madách Imre út 13–14., or faxed to (1) 398-0345. The research department can be contacted at research@bbj.hu

2017. 03. 08. 20:41

5

Socialite Voyage From Bosnyák

Market to Lukács Baths

sister went shopping while I headed back to where we were staying to take a siesta.

This part of Buda feels especially steeped in the past to me. Passing a cobbled square in front of a church, it took me a while to register that I was watching a film shoot.

I thought the actors dressed in the kind of clothes Adolf Ágai would have worn were ghosts.

We spent the first warm, sunny Friday of the year drifting through Budapest. I knew where I wanted us to begin and end but that was it. Tourists ‘do’ cities. I wanted to be “done” by Budapest.

Sauna Séance at the Lukács Baths

DAVID HOLZER

You could call this “hanging”. I prefer to imagine my partner and I as modernday flâneurs, following in the footsteps of Hungarian-Jewish journalist Adolf Ágai.

His 1908 classic Voyage from Pest to Budapest, 1832-1907 described what he saw of the changing city, from the grand hotels to its ripped backside.

A “flâneur” is an urban stroller who simply records what he or she sees, cloaked in anonymity. In 1846, the poet Charles Baudelaire celebrated the flâneur as a modern hero who floated free from the pressures of society. I didn’t feel too heroic when I collapsed into bed at two in the morning. But I knew I’d seen Budapest in a different light.

Bambi Presszó, on Frankel Leó utca. Photo by Gabriella Kiss.

Porters at the Bosnyák tér market, Csömöri utca.

Photo by Péter Zsolnai

Bosnyák tér Market For the unitiated, lángos is deep-fried Hungarian flatbread spread with garlic paste and sour cream – tejföl – and topped with grated cheese. I allow myself one a year.

We shared a lángos at a café midway down the market, where the permanent red-brick building ended and outdoor temporary stalls began. Below us were clothes, plastic toys, stationery and tubes of toothpaste. Above us, tantalizingly murky alleyways were lined with pungent sausage and nostril-piquing pickles in tubs. Every kind of paprika shone in the gloom.

I scribbled in my notebook while my partner fell into conversation with a Hungarian man and what turned out to be his mother. The guy, who drank his big beer through a straw, ate at the market nearly every day. He felt at home there. So did I. Rightly or wrongly, I believe markets are places where you can often glimpse the essence of a city even if, like parks, they’re where the country comes to town.

The café where we ate offered Hungarian food I’d never seen before. After the lángos I tried aranygaluska for the first time.

This was a rough and ready version of a pudding I later read was served at the White House by Nancy Reagan. “Arany” means gold and “galuska” dumplings. In the United States, the dish is also known

BBJ_2505_socialite.indd 29

| 29

www.bbj.hu

Budapest Business Journal | March 10 – March 23, 2017

as “Monkey Bread”. I have no idea why.

Anyway, it was delicious. I knew that the aranygaluska and the lángos were the last things I would eat that day.

If you want a taste of how ordinary life is lived in Budapest, I suggest you head for Bosnyák. I didn’t see a single hipster.

Although I did spot a skinny Asian lad wearing hybrid patent leather loaferslippers lined with leopard skin print fake fur.

Bambi Presszó We’d arranged to meet my partner’s sister at the legendary Calgary Bar near Margit híd. It was closed. We did a short schlep to the Bambi Presszó, on Frankel Leó utca.

A presszó is more than a bar that just serves alcohol, more than a café, but not a restaurant.

I’d seen Bambi on previous meanders through old Buda and caught a glimpse of its giccs (kitsch) interior: faded canary yellow, red and blue mosaic wallpaper and red leatherette seats. But my partner had shuddered and insisted we keep walking.

The name and the décor reminded her of growing up under socialism, a time for which she has little nostalgia.

Back then, most Hungarian towns had a Bambi. They were named for the orangeflavored Hungarian fizzy drink or soda that, before Coca-Cola arrived in the

country in 1968, everyone drank. As far as I know, Bambi wasn’t made with real Hungarian oranges.

You’ve probably guessed that Bambi got its name from the 1942 Disney movie.

After Stalinist Hungary ended private enterprise in the late 1940s, a company owned by the municipality of Budapest took over production. It became the country’s only soft drink. Food and wine writer Sándor Csiki wrote that “Bambi made an appearance…. underneath the portraits of Marx, Engels and Lenin.”

No wonder my partner wasn’t keen on us dropping into the Bambi Presszó.

Coke, Pepsi and the flood of soft drinks that came after them pretty much killed Bambi. Today, however, limited quantities are produced and, should you wish, you can drink it at retro-themed bar Ibolya Presszó.

The great thing about the Bambi is that it’s not a retro joint. It’s simply been left the way it always was. But with better food and drink. Its patrons are mainly older locals who come to play dominos and sip beer because they always have done, and young Hungarians with only hazy memories of socialism at most.

Unlike just about every café you’ll go into in the city, there’s no music at the Bambi – mercifully. Breakfast, served all day, is generous and cheap.

After the Bambi, my partner and her

Freddy Mercury is a hero in Hungary. The country, including my partner’s extremely conservative father, fell in love with him and Queen when they were one of the first bands to perform here, back in 1986.

If you’ve ever watched Queen steal Live Aid, you’ll know that Freddy was the master of enticing a crowd into the palm of his hand. In 1986, he sang the first couple of lines of the Hungarian folk song “Tavaszi szél vizet áraszt” before encouraging the crowd to join in. After a shaky start, they did.

To understand how profound this moment was, you need to know that Hungarians had for decades not felt free enough to sing anything other than their national anthem en masse.

So when, in the last sauna séance of the night at the Lukács, the séance master did his whole essential oil dripping, towelflapping, ice-flinging routine to “Tavaszi szél vizet áraszt” it seemed like a stroke of genius.

Men and women, some naked but for bell-shaped felt sauna pixie hats, began to sway from side to side. A huge, musclebound guy closed his eyes and sang his heart out. I like to think those weren’t just beads of perspiration trickling down his cheeks.

I too was moved.

Flâneouring around To get from the center of Budapest to Bosnyák tér market takes around 30 minutes by tram and bus. You’ll have to walk for a few minutes at the end.

Bambi Presszó is a short walk from Margit bridge. If you’re crossing from the Pest side, turn left down Frankel Leó utca and walk for about ten minutes.

If it’s your first visit to the Lukács, it’s best to take a taxi to the baths.

The sauna séance nights are becoming increasingly popular so get there by 7:30 p.m. if you want to be sure of a place in séances happening before 10 p.m. The baths are open until 2 a.m., so you have plenty of time.

2017. 03. 08. 20:25

30 | 5

Socialite

www.bbj.hu

Budapest Business Journal | March 10 – March 23, 2017

Taming the Bull, Building the Bikavér Brand

While the winemakers of Eger and Szekszárd are still falling short of collectively hitting the bulls-eye in terms of pinning down a definitive style for their Bikavér, they do at least appear to have finally taken the bull by the horns and tamed the wine into something more refined and elegant.

ROB SMYTH

An ongoing debate among Hungary’s winemaking and imbibing fraternity has long ensued as to whether Bikavér (Bull’s Blood) should be big and brooding, with high tannins, concentration and alcohol, or whether it should be lean, lithe and elegant.

While the latter may be hard to equate what we may imagine to be with the thick blood of bulls, it is however a wine style that fits in with today’s very welcome preference for finesse over forcefulness, and also allows the Kékfankos grape to express itself without being bullied out by the fuller-bodied international brigade of grapes that also make up the mix.

Plenty of good and ever-improving Bikavér, which is helping to restore the bruised and battered image of this one-time bottom shelf go-to wine for British students (among others), oozed out of this year’s Eger-Szekszárd parbaj (dual). The event was held in its usual venue, the Corinthia Hotel Budapest, where the majestic ballroom provided a fine backdrop for such an encounter on March 3.

Regional Variations

The wines from the cooler northern region of Eger and the often

sweltering southern region of Szekszárd are always likely to have their differences: leaner, tighter, with livelier acidity and more finesse in Eger, while it’s richer and more robust with riper fruit in Szekszárd.

However, this year it was noticeable how the Szekszárdians are also pursuing poise over power, such as in the examples made by Vida, Heimann and Tüske.

It was a revelation to see that that Bodri’s Bikavér Faluhely 2013 reined in the alcohol to tip the scales at 13%, which is very low for this cellar. The result is that the delicious and juicy fruit, which is Szekszárd’s prime asset, has come to the fore. “I understood the criticism,” said István Bodri, though he also suggested that the cooler vintage may have enabled such a wine to be made.

While Kékfrankos is usually the leading component of most Bikavérs in both regions, a few percent of the airy, aromatic and spicy Kadarka grape is all but a given in Szekszárd. It gives the wine a unique feel. A small amount brings lots of red fruit (to supplement that of the Kékfrankos) such as raspberry, sour cherry and blood orange, plus rose hip and plethora spices to

ADVERTISEMENT

complement the black fruit of the Bordeaux varieties like Cabernet Franc, Cabernet Sauvignon and Merlot. Tricky to cultivate, Kadarka was once the dominant grape in Eger and its Bikavér, but was for the most part grubbed up during communism in favor of less awkward grapes. However, Eger vintners are rapidly replanting and quite a few already have it, as they know the spicy kick is just the ticket for making expressive Bikavér – such as in the excellent Bikavérs of St. Andrea, Tibor Gál, Lajos Gál and Thummerer. Lajos Gál’s Pajdos Grand Superior Bikavér 2012 also has a few percent of the rare Menoir grape, which gives it a unique floral character. Meanwhile, the 19.5% of Pinot Noir really comes through in Nimród Kovács’ impressive Rhapsody 2013.

While Bikavér is generally treated as higher-end wine in Szekszárd, my top picks this time came from Eger, which also a tiered system of quality.

Gál Tibor Egri Bikavér “Titi” 2015

Coming from the volcanic rhyolite tuff soils of the Síkhegy, Pajdos and Tornyos vineyards, this is based on a Kékfrankos backbone and also includes Kadarka, Syrah and Cabernets Sauvignon and Franc. It was fermented in an open vat and spontaneously fermented, then aged in sixto eight-year-old five hectoliter oak barrels, including French barrels.

It was bottled unfined. The oak is very well integrated in this wine, which

enables this fruit-driven (especially blueberry) blend to shine, but it’s about more than fruit with its tangy spiciness. The wine is balanced and long with smooth, medium tannins.

For a long time, Tibor Gál’s wines had been suffering from a moldy note that originated from the old cellar, but that is now a thing of the past. HUF 2,790 from Bortársaság

St. Andrea Hangács Bikavér Grand Superior 2013

This hails from the Hangács vineyard where there’s just 40 cm of brown forest topsoil and then it’s into the volcanic rhyiolite tuff, according to György Lőrincz Jr., who makes the wines with his father. This has long been one of my favorite Hungarian reds for it having a certain indefinable X-factor that manifests itself in its edgy earthiness.

The 2013 (50% Kékfrankos, backed up by Cabernet Franc, Merlot, Pinot Noir and Kadarka) is very smooth, polished and layered with lots of red and black fruit, a plethora of spice and an earthy character. For a wine with so much going on, it is supremely well balanced with the oak subtly integrated, adding body and spice, but not overriding the place of growth and the delicious fruit.

It was aged for 18 months in mainly used 500 liter barrels, although a small part of it was aged in new oak. HUF 5,500 from Bortársaság.

ADVERTISEMENT

1036 Bp., Kiskorona u. 7. Phone: +36 1 2500288 Ticket: obudaitarsaskor.hu jegymester.hu

BARTÓK 135 Artists of Anima Musicae Chamber Orchestra Ervin Nagy – piano 17th March 7 p.m.

DANCES OF THE SEASONS Anima Musicae Chamber Orchestra Maria Glotz, Endre Szeghalmi dancers 26th March 7 p.m.

GUITAR MUSIC IN ÓBUDA Márton Stummer and László Horváth 6th April 7 p.m.

BAROQUEPLUS SERIES II. Liszt Ferenc Chamber Orchestra 8th April 7.30 p.m.

Information and reservations info@laparrilla.hu • +36.1.269.0834

TÁROGATÓ, ORCHESTRA AND THE BAND A Concert by Franz Liszt Prize-winning clarinetist László Kiss Gy. Featuring: Budapest Strings 13th April 7 p.m.

Ad-124x77-fekvo.indd 1

BBJ_2505_socialite.indd 30

2017. 03. 03. 10:20

2017. 03. 08. 20:25

5

www.bbj.hu

Budapest Business Journal | March 10 – March 23, 2017

Socialite | 31

WHAT’S ‘THE SUFFERING OF LIGHT’ ALEX WEBB PHOTO EXHIBITION March 1-April 9 Műcsarnok (Kunsthalle) 1146 Budapest, Dózsa György út 37 Multiple-award-winning Magnum Photos photographer Alex Webb showcases a total of 63 of his most iconic images, taken all around the globe from throughout his 30-year career.

Webb is recognized as a pioneer of color photography, consistently creating images with intense, vivid, and vibrant colors and lights, presenting not only a scene, but also complete stories and moments captured. The exhibition called “The Suffering of Light” is on view at Budapest’s Kunsthalle as part of the Budapest Photo Festival.

BUDAPEST CUP – INTERNATIONAL SYNCHRONIZED SKATING COMPETITION March 16-19 Tüskecsarnok Ice Rink 1117 Budapest, Magyar tudósok körútja

Budapest’s spacious indoor ice rink presents spectacular stunts on ice performed by attractively dressed teams that move as one flowing unit on a mirror-smooth surface. Fascinating figures combine with various dance forms to heat up the scenes, while pulsating music emanates from the speakers and sparkling garments dazzle audiences.

VINCE BUDAPEST WINE SHOW March 17-19 Corinthia Hotel Budapest 1073 Budapest, Erzsébet körút 43-49 The VinCE Budapest Wine Show welcomes an elite crowd at the prestigious Corinthia Hotel Budapest, where altogether 160 international and Hungarian exhibitors showcase their best reds, whites, and sparkling potables, as well as Magyar-made pálinka, amid an exclusive and elegant atmosphere.

Furthermore, the event is complete with seated wine tasting, master classes, and exciting workshops.

“The Suffering of Light” at the Műcsarnok is part of the Budapest Photo Festival.

Photo by Norbert Hartyányi/We Love Budapest.

ST. PATRICK’S DAY PARADE March 19 Szabadság tér 1054, Budapest, Szabadság tér On the first Sunday after St Patrick’s Day, Budapest dresses up in emerald colors, and face-painted people in funny hats join leprechauns, bagpipe groups, and folk dancers at central Szabadság Square for a daylong festive parade fueled with perfectly poured

Guinness and intoxicating Irish-style fun. Everyone is welcome to join the jolly march of the shamrock flock as it weaves its way through the heart of the city, likely arriving at a local pub where the party goes on late into the night.

Text provided courtesy of WeLoveBudapest.com

ADVERTISEMENT

ADVERTISEMENT

Agota Kristof: The Illiterate

Autobiography with words and music, Translated by: András Petőcz Premiere Agota Kristof?

Kristóf Ágota? Ágota? Kristóf?

How is it possible that Hungarian readers become uncertain about the gender of this Hungarian writer upon reading her name? How is it possible that a translator is required to present her words to Hungarian readers? Where are we? And when?

We live here, where we always have, now and yesterday, in the second half of the 20th century, when fathers were imprisoned, children lived or survived in boarding schools. When the borders opened up after the revolution and people hurried toward a happier life. Escaping does not end with settling down. Ágota Kristóf, who could read in Hungarian by the age of four, became illiterate once again at the age of 21, as she could not recognize French words. This struggle will never end: she starts writing in French, becomes a French writer, yet the dictionary is a constant presence on her desk. Is there an ‘a’ at the end of the word? Shall she add a small circumflex above the letter ‘o’?

BBJ_2505_socialite.indd 31

How much can one bear? A writer can withstand everything. Perhaps singing helps, too.

Cast: Mariann Falusi With the participation of: Sándor “Fodo” Födő Adapted for the stage by: Judit Galgóczy Set and costume design: Anna Varsányi Musical advisor: Miklós Fáy Composed by: Sándor “Fodo” Födő Directed by: Judit Galgóczy Supported by the Memorial Committee created for the 60th anniversary of the 1956 revolution and freedom fight Premiere planned for: March 28, 2017 Further performances: April 10, 11, 18 Rózsavölgyi Salon Arts & Café 1052 Budapest, Szervita tér 5. • Tel.: +36 1 486 33 38 Ticket Information: +36 30 463 88 22 szalon@rozsavolgyi.hu www.szalon.rozsavolgyi.hu facebook.com/rozsavolgyiszalon

2017. 03. 08. 20:25

BBJ_2505_socialite.indd 32

2017. 03. 08. 20:25