Hungarian banking and financial services group Takarék is planning to create a universal bank by 2020 in a bid to reduce operating costs.

The group has unveiled its new five year strategy for the period 2019-2023, which includes establishing an unified bank by merging businesses.

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Details of Takarék five-year strategy

The new plan aims to merge 12 current savings banks, the three banks operating as joint stock companies and the Takarék Kereskedelmi Bank into the single unit.

Already approved by the general assembly of Takarékbank, the plan will be executed in multiple steps through gradual fusion of current savings banks.

Once completed, the universal commercial bank will offer full range of banking services to its customers. It is also expected to have greater presence in the country across the cities and rural localities.

Alongside the unified bank, the Takarék Jelzálog Bank will continue to provide mortgage bond issuing and refinancing activities.

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Both the entities will function as co-operative credit institutions.

Objectives of the new strategy:

With the strategy of forming a universal bank, the Hungarian financial institution aims to reduce operational expenses by nearly HUF25bn-HUF30bn ($88m- $105m) in the next five years.

By 2023, the bank aims to have a market share of 10% with nearly HUF30bn of sustainable profit after taxes annually.

Based on total assets last year, the Takarék group is the fourth largest lender in Hungary, according to Reuters.

In 2017, it registered a loss of HUF12.3bn under Hungarian accounting standards.