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OTP earnings in Q3 up 8% year-on-year

Third-quarter consolidated after-tax profit of OTP Bank, Hungaryʼs biggest commercial lender, rose 8% year-on-year to HUF 85.9 billion as its balance sheet expanded, an earnings report published early Friday shows, Hungarian news agency MTI reports.

OTP Bank is present in several neighboring countries, such as Ukraine. (pictured above)

Net interest income climbed 12% to HUF 153.9 bln and net revenue from commissions and fees increased 9% to HUF 57.8 bln. Other net non-interest income jumped 25% to HUF 16.0 bln.

After-tax profit was slightly over the HUF 82.7 bln estimate by analysts polled by Portfolio.hu. Earnings per share came to HUF 328 for the period.

Total risk costs came to HUF 2.5 bln, down 40%. OTP Bank noted that it released provisions at its business in Hungary as well as at its units in Bulgaria and Croatia.

ROE slipped 0.7 percentage point to 19.6%. ROA, from adjusted net earnings, was flat at 2.6%.

OTPʼs foreign units - in Bulgaria, Russia, Croatia, Ukraine, Romania, Serbia, Montenegro and Slovakia - accounted for 45% of group level profit in Q3. After-tax profit of Bulgariaʼs DSK Bank reached HUF 14.3 bln and that of OBH, in Croatia, came to HUF 8.7 bln. OTP Bank Ukraine booked earnings of HUF 7.0 bln.

Including the impact of adjustments, total after-tax profit of the foreign subsidiaries rose 50% year-on-year to HUF 41.5 bln. At the same time, earnings of OTPʼs businesses in Hungary edged down 1% to HUF 51.1 bln.

Total assets stood at HUF 14,362.6 bln at the end of September, up 14% from twelve months earlier. 

Net stock of client loans rose 16% to HUF 7,908.0 bln. Gross client loans increased 13% to HUF 8,616.7 bln. Retail lending stock was up 9% at HUF 5,256.9 bln. The corporate portfolio swelled 20% to HUF 3,050.5 bln.

OTPʼs non-performing loan ratio improved 4.0 percentage points to 7.3%.

Stock of client deposits increased 12% to HUF 11,032.6 bln.

For the period Q1-Q3, OTPʼs net interest income rose 9% year-on-year to HUF 443.4 bln, while net revenue from commissions and fees grew 8% to HUF 164.1 bln. OTP noted that without the impact of acquisitions - Splitska banka in Croatia and Vojvodjanska banka in Serbia, consolidated in May and December, respectively, of last year - net interest income and net revenue from commissions and fees both would have shown organic growth of 4%.