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Third-quarter net interest income increased 13% to HUF 554.8 bln, while net fee and commission income fell 2% to HUF 150.3 bln.
Several items affected quarterly earnings. A transfer of ownership of the group’s Slovenian subsidiary from OTP Luxembourg to OTP Bank reduced the tax base, producing a positive corporate income tax effect of approximately HUF 39 bln.
Meanwhile, a provision at the Slovenian subsidiary for future legal proceedings involving Swiss franc-denominated loans reduced consolidated after-tax profit by HUF 27 bln.
In Hungary, a fair value adjustment on subsidized retail loans and swap transactions had a positive quarter-on-quarter impact of HUF 27 bln on after-tax profit.
OTP’s after-tax profit for January-September slipped 1% year-on-year to HUF 837.7 bln. Net interest income rose 13% to HUF 1,623 bln, while net fee and commission income declined 1% to HUF 440.6 bln.
The group said its margin benefited from improving margins at its core Hungarian business and Uzbekistan’s Ipoteka Bank, alongside changes in the geographical composition of its operations.
The relative weight of the Slovenian, Croatian and Serbian businesses, which operate at margins below the group average, declined. Higher-margin operations in Uzbekistan, Ukraine and Russia accounted for a greater share.
Foreign subsidiaries generated 76% of adjusted group after-tax profit. Profit at Bulgaria’s DSK Group increased 6% to HUF 163.3 bln, while OTP Bank Russia’s profit rose 1% to HUF 157.8 bln.
OTP said nine-month profit would have been HUF 48.8 bln higher excluding the pro rata impact of Hungarian sectoral taxes and supervisory fees in Bulgaria and Slovenia that were booked in a lump sum at the beginning of the year.
Diluted earnings per share stood at HUF 3,282.
Total assets reached HUF 48,854 bln at the end of September, up 8% from a year earlier.
Adjusted for exchange rate changes, gross customer loans increased 17% to HUF 28,998 bln, while customer deposits grew 10% to HUF 35,088 bln.
The proportion of Stage 3 loans under IFRS 9 declined 0.3 percentage points to 3.2%. OTP’s capital adequacy ratio stood at 20.5%.
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