OTP Q1 profit boosted by business abroad

Telco

First-quarter after-tax profit of OTP Bank, Hungaryʼs biggest commercial lender, jumped 23% year-on-year to HUF 65.1 billion, as foreign businesses beefed up the balance sheet, an earnings report published early Friday shows.

OTPʼs foreign units generated 46% of Q1 profit, up from 33% in the base period. The increase was supported by the acquisitions of Splitska banka in Croatia and Vojvođanska banka in Serbia, national news agency MTI reported.

Net interest income increased 9% to HUF 143.6 bln, while net revenue from commissions and fees rose 11% to HUF 49.6 bln.

ROE increased 1.2 percentage points to 16.2%. Diluted earnings per share came to HUF 248 for the period.

OTPʼs total assets stood at HUF 13.511 trillion at the end of March, up 20% from twelve months earlier.

Loan portfolio grows, foreign units strengthen

Net client loans increased 24% to HUF 7.102 tln. The retail lending stock was up 14% at HUF 4.947 tln, while the corporate lending stock jumped 30% to HUF 2.636 tln.

The quality of the lending portfolio improved as the ratio of non-performing loans (NPLs) dropped 5.2 percentage points to 8.9%. OTP set aside provisions for loan losses of just HUF 0.6 bln in Q1, compared to HUF 10.6 bln in the base period.

Client deposits rose 24% to HUF 10.385 tln.

After-tax profit of OTPʼs foreign units, adjusted for one-offs, rose 68% to HUF 36.6 bln. At the same time, adjusted after-tax profit of its businesses in Hungary declined 5% to HUF 42.7 bln.

Profit of DSK Bank, in Bulgaria, fell 16% to HUF 11.3 bln, but profit of OTP Bank Russia increased 13% to HUF 8.5 bln.

Profit of OTP Banka Hrvatska (OBH), in Croatia, reached HUF 7.7 bln, improving from a loss of HUF 1.8 bln in the base period as Splitska banka was included in the consolidation.

Profit of OTP Bank Ukraine soared 76% to HUF 5.8 bln.

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