First National Savings Bank of Pest

The First National Savings Bank of Pest (Hungarian: Pesti Hazai Első Takarékpénztár, PHET), sometimes translated as First Domestic Savings Bank or referred to simply as First Savings Bank, was a major bank in Hungary, established in 1839–1840. It was eventually nationalized in 1948, together with its universal banking affiliate Hazai Bank, established in 1895. It was one of the three largest banks in Hungary in the late 19th and early 20th centuries, together with the Hungarian Commercial Bank of Pest and the Hungarian General Credit Bank.[2]: 147–148 

Former head office of the First Savings Bank, designed by Miklós Ybl and completed in 1869[1]

Creation and early development

The decision to create the First Savings Bank was made by the Pest municipal authorities in 1839, following advocacy by prominent local figures such as András Fáy. It started operations on 11 January 1840, initially in two small rooms of Pest County Hall. Lajos Kossuth and István Széchenyi were among its 326 original backers.[3]: 25  In 1844 it was converted from an association to a joint-stock company.[4]: 220  In 1868, it expanded by opening branches in Pest.[2]: 148  By 1913, it was Hungary's second-largest bank by total assets, surpassed only by the Hungarian Commercial Bank of Pest.[4]: 220  It remained among the country's leading banks during the interwar period.[5]: 192 

Hazai Bank
Former building of Hazai Bank in Budapest, designed in 1911 by architect Károly Rainer and inaugurated in 1914; later the British Embassy from 1948 to 2017[6][7]

In 1892, the First Savings Bank initiated work to create an investment banking affiliate through which it would take stakes in major Hungarian companies, on the Crédit Mobilier template already espoused by Hungary's top two banks of the time, the Hungarian Commercial Bank of Pest and Hungarian General Credit Bank. The First Savings Bank eventually partnered with Vienna's Niederösterreichische Escompte-Gesellschaft in 1895 to establish the Hazai Bank (lit. 'Home Bank', sometimes alternatively translated as 'Domestic Bank' or 'Inland Bank'),[8]: 220  which developed into a significant universal banking operation.[9]: 18  It eventually merged into its parent in 1946.[5]: 188 

Legacy

The First Savings Bank and its affiliate Hazai Bank were nationalized in 1948 together with the rest of the Hungarian banking industry. Within the communist-era "one-tier" banking system, its operations were taken over in 1949 by the Hungarian National Savings Bank Company (Hungarian: Országos Takarékpénztár Nemzeti Vállalat), one of the country's four main financial institutions alongside the Hungarian National Bank, the Hungarian Investment Bank (renamed the State Bank for Development in 1972 and liquidated in 1987),[10]: 386  and the Hungarian Foreign Trade Bank. That entity became OTP Bank following the end of communism in Hungary.[10]: 382 

  • Former branch building at Erzsébet Boulevard 1–3, Budapest, photographed in 1904
    Former branch building at Erzsébet Boulevard 1–3, Budapest, photographed in 1904
  • The same building in 2008
    The same building in 2008
  • Former branch at Váci Street 1–3, Budapest, designed by Ignác Alpár
    Former branch at Váci Street 1–3, Budapest, designed by Ignác Alpár
  • Former branch at Fő Street 10, Budapest
    Former branch at Fő Street 10, Budapest

See also

Notes
  1. "Building". Ybl Palota.
  2. Béla Tomka (2001), "The Development of Hungarian Banking: An International Comparison, 1880–1931" (PDF), Journal of European Economic History, 30:1: 125–162
  3. Norbert Bacher, Matthias Beitl, Nadia Rapp-Wimberger, Aleksandra Aleksić (2015), The CEE History Project: The History of Savings Banks in Central and Eastern Europe and the History of Erste Group’s subsidiaries in the Czech Republic, Slovak Republic, Hungary, Croatia, Serbia, Romania, Ukraine (PDF), Vienna: ERSTE Stiftung{{citation}}: CS1 maint: multiple names: authors list (link)
  4. Thomas Barcsay (1991), "Banking in Hungarian Economic Development, 1867-1919", Business and Economic History, Cambridge University Press, 20: 216–225
  5. János Botos (October 2017), "The Hungarian banking system from the trauma of Trianon to nationalization" (PDF), Economy and Finance, Budapest: Hungarian Banking Association, 4:3
  6. "Budapest – Hazai Bank". Bagyinszki Galéria.
  7. Nick Robertson (21 January 2016). "The fascinating history of Budapest's British Embassy building". We Love Budapest.
  8. Thomas Barcsay (1991), "Banking in Hungarian Economic Development, 1867-1919", Business and Economic History, 20: 216–225
  9. Flora Macher (2016), "No banks without states, no states without banks The political economy context of the banking crises in Austria and Hungary in 1931" (PDF), London School of Economics and Political Science
  10. Imre Lengyel (April 1994), "The Hungarian Banking System in Transition", GeoJournal, 32:4: 381–391
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