Truly Responsible Enterprise database



Company:  MagNet Magyar Közösségi Bank Zrt. 
Title:  Responsibility and sustainability in the representation and implementation of basic banking services, management, strategy and values 
Mission and vision of the company:  As the first professional ethical community bank in Hungary, MagNet Hungarian Community Bank’s vision is to provide financing  in a responsible and transparent manner by engaging its clients and offering them real choices  for initiatives that have a positive impact on our environment and society and can be a key to our shared future.

Our vision is to operate as the first newbank in Hungary, which builds and build on communities and gives its stakeholders, clients, employees and shareholders the pleasant feeling that they can do a lot for the people and the environment even with the way they manage their finances. The Bank is a major supporter of sustainable development in the banking sector and holds a new set of values.
 
Transport:  As regards our operational model and its effects, this is not a major area. Still, we pay attention to providing the opportunity for our colleagues to get to work in a way that is least harmful to our environment. As a result,

- we do not provide company cars to our managers and
- we have racks in front of our head office to park bicycles, and we are planning to have further bicycle racks in front of our branches so that our customers can also use them.

When selecting our suppliers, the main factors we consider are ethical business behaviour and political independence.
We actively seek contacts with enterprises, businesses or not-for-profit initiatives and partners to cooperate, build and spread best practices that are based on ethical business principles and values.
 
Fairness:  Relationship with competitors:
We have opened a new chapter in the history of the domestic banking sector by the introduction of the community and newbanking model. We hope that our values and perspective, which are part of our basic activities, will provide an example, have a positive impact and inspire other participants of the domestic banking sector.

What changes the place where we live are responsibility and awareness. Through their everyday decisions, even with their little savings, people can bring about considerable changes. We would like to be partners in this with other players of the economy, because together, responsibly we can do more and exert a greater impact on our environment.

Society
Since our shareholders consider economic profit and social profit and utility equal, we also consider the impact of our company on social justice important.
Through the rights we have delegated to them, we have opened up the opportunity for our customers to not only see that the Bank’s primary objective is responsible and sustainable operation, but also to make decisions as a responsible member of a community about the use of the profit to the generation of which they have contributed (Community Donation Programme), and also to provide financing through their community deposits to local enterprises that operate according to the principles of sustainability (Mentor and Sphere community deposits).

Environment
Community banking services serve not only balanced economic performance, but also deliver social and environmental benefits. As regards the environment and our operation, the Bank is characterized by economical operation and awareness, but there are always new opportunities and tasks to do.
Building from inside to outside is our basic strategic direction, in other words, developments should, in the first place, be carried out in basic banking activities, while programs that manifest themselves in external features are managed as important areas (e.g. green office programme).

Employees and working conditions
The internal and external community development plays a strategic role in managing and leading, together with other stakeholders, the community and ethical banking related strategic changes.
MagNet Bank staff numbers increased by 20.9% between 2008 and 2010 due to the expansion of the branch network as the number of branches went up to 13 from 11.
MagNet Bank helps the reintegration of its colleagues who are just looking after their babies. In 2010 the Bank employed 10 people working part-time. Also, at present the Bank employs one disabled worker.
All employees are employed for an indefinite period of time. We do not work with any temporary agency workers. All of our employees are employed by the Bank.

When establishing its remuneration policy, the Bank takes into account special community banking values such as ethical market behaviour, the principle of proportionality as well as transparency. At the same time, the Bank does not encourage its managers and employees to undertake risks that violate the Bank’s risk limits.

Employment-related lawsuit: the Bank has not been convicted of any employment-related offence for the last three years.
 
Economism:  The shareholders of MagNet Bank have laid down the following principles:
- instead of profit maximization, social and environmental profit making capacity and impacts rank equally and are of high priority (e.g: Mentor and Sphere community deposits and loans, Community Donation Programme, positive and negative filters and principles in lending operations...)
- MagNet shareholders have substantially brought down the expected rate of return on equity (ROE) and decided that a ROE rate of maximum 15% is desirable.
- strict dividend policy: maximum 30% of the Bank’s current year after-tax profit is paid as dividend, 60% is devoted to the development of the community banking model, while 10% of the profit is allocated to civil organizations based on the decisions of MagNet Bank customers.

Volunteering, engagement and responsibility appear in both shareholder attitude and the management model. Changes and developments have been carried out by means of organic organization development methods.
 
Size:  MagNet Bank’s plan for the forthcoming years is to open only a few more branches and focus more on the development of online services and its virtual network. As regards the Bank’s strategy, considerable growth and operation as a big bank are not part of the strategy in the long run since the number and proportion of customers who are sensitive to these services and handle their finances with awareness and responsibility is not high in Hungary.

Furthermore, we would like our Sphere and Mentor community loans to be transparent and make up a substantial proportion of the loan portfolio.
 
Product:  On this scale our own products score 10.

Explanation
The world around us is mainly built from loans. The facilities, organizations and economic entities, which either operate according to the principles of sustainability or ignore them, can only develop and prosper if they have access to loans and financial resources.
As a result, we think that the fact that MagNet Hungarian Community Bank has decided to be a pioneer in providing financial resources  through its customers by giving them real choices  for initiatives that deliver benefits to our environment and the society and are a key to our shared future will have major impacts.
 
Stories:  We helped the development of new community banking products and services as well as our community banking strategy by further developing the initiatives created from the shared ideas and creativity of those participating in the organic organization development process.
Owing to the organic organization methods, the trainings and development tools, it was easier for both our managers and our colleagues to adapt to the changes, and they will shape and implement the necessary changes in the future, too.

Examples for engagement, cooperation and shared developments:
2010 Community Donation Programme interactive final event (Open Space) with the participation of civil organizations

Continuous cooperation with the managers of Moral Credit Association in the following areas:
- development of community lending policy, rules of procedures and rating practices,
- implementation of Community Donation Programme
- introduction of international ethical banking models (GLS Bank, Triodos Bank)
- product development schemes (further development of Mentor and Sphere products)
- organic organization development

Our colleagues are free to attend any time the regular shareholders’ and managerial meetings. We encourage the creativity and the initiatives of our colleagues. Our relationships are built on joint thinking, trust and cooperation. Instead of ready answers and solutions, we leave room for open issues, which carries the possibility of ongoing development.
 
Challenges:  Overcoming change management difficulties.
Introduction of new values to the organization culture.
Increasing individual responsibility within the organization.
Adapting to the environment which is rapidly changing due to the ongoing developments, management of priorities.
 
Benefits:  Recognition.
From a professional point of view: Bank of the Year award in two categories, a so far unprecedented phenomenon in the history of a small Hungarian bank.
Reactions from the society: great interest shown by civil organizations, identification with our values and objectives.
We have been invited to numerous for-profit and not-for-profit events and conferences as a lecturer.
Increased interest on online community pages (more than 7,000 facebook members)
 
My place in the ‘small world’:  Our development strategy and objective:

to develop a model and integrated organization which can be set as an example in the for-profit sector, showing that balanced development is desirable from an economic point of view, too, compared to a business strategy which requires fast implementation and high profit, is risky and its implementation is under pressure.

Mission and strategy, the values of which can be easily adopted by stakeholders, giving them the opportunity to make responsible financial decisions and raise the financial awareness of individuals and communities.
This will help both individuals and communities identify and fulfil their life tasks, live their lives with awareness and assume greater responsibility.
 
Industry:  pénzügyi szolgáltatás 
Place of implementation:  Magyarország 
Date of implementation:  Since 1995 
Founding year of the company:  1995 
Related website:  https://www.magnetbank.hu/?page=vizio 
Contact person:  János Salamon
Chief Executive Officer
+36 1 428 8888
salamon.janos[at]magnetbank.hu