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OTP earnings up 53% in Q3

Third-quarter consolidated after-tax profit of OTP Bank, Hungaryʼs biggest commercial lender, rose 53% year-on-year to HUF 131.6 billion, lifted by acquisitions and stronger business activity, an earnings report released early Friday shows, state news wire MTI reports.

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Profits were well over the HUF 104.8 billion estimate by analysts polled by Portfolio.hu.

Earnings per share came to HUF 504 for the period.

OTP closed the acquisition of the Albanian subsidiary of Franceʼs Société Générale Group in March, and it closed the acquisition of SocGenʼs Bulgarian unit in January. OTP closed acquisitions in Montenegro and Moldavia in July, and another in Serbia late in September.

The Montenegrin and Moldavian units contributed HUF 0.5 bln and HUF 1.2 bln, respectively, to consolidated profit in Q3, OTP noted. As the Serbian acquisition was completed late in the quarter, only its balance sheet was included in the consolidation, it added.

Net interest income climbed 15% to HUF 177.1 bln in Q3, even as OTPʼs net interest margin narrowed by 0.31 percentage point to 3.99%.

Net revenue from commissions and fees increased 26% to HUF 73.0 bln on seasonality and stronger business activity, OTP said.

Foreign units generate half of profit

After-tax profit of OTPʼs core business in Hungary rose 9% to HUF 48.3 bln.

Profit of OTPʼs Bulgarian business, DSK Group, jumped 37% to HUF 19.6 bln on the consolidation of the acquisition from SocGen.

Profit of OTP Bank Ukraine increased 38% to HUF 9.6 bln, and profit of the Croatian business rose 5% to HUF 9.1 bln.

Earnings of OTP Bank Russia were up 34% at HUF 8.2 bln.

The contribution rate of foreign units to consolidated profit rose to 50% in Q3 from 45% in the base period.

Balance sheet balloons

OTP had total assets of HUF 18,971.0 bln at the end of September, up 32% from 12 months earlier.

Gross stock of client loans increased 37% to HUF 11,784.4 bln. Retail lending stock was up 29% at HUF 6,989.0 bln and the corporate portfolio expanded 39% to HUF 4,397.0 bln.

OTPʼs non-performing loan ratio dropped to 5.0%.

Stock of client deposits increased by 33% to HUF 14,653.6 bln.

Shareholdersʼ equity stood at HUF 2,203.9 bln, up 24%.

OTP noted that it had gross operative liquidity reserves, at group level, equivalent to EUR 6.6 bln at the end of Q3.