To expand a network, or neither – This here the question

Abstract

In the past six years banks in Hungary had branch opening fever. Due to this fever and the series of bank fusions remedial process started at Hungary’s „under-banked” territories and the current structure of the country’s banking market has been developed (5-6 strong universal banks, 10-12 medium-sized banks). Fierce competition has been taken place among the banks to get customers and to conquer the market. The competition implies a serious struggle that banks try to overcome on one hand by branch expansion and by efficiency improvement on the other. Competition constitutes considerable challenges for financial institutions even in normal cases, not to mention a global financial and economic crisis that has been lasting for almost 3 years.