OTP reports HUF 38.2 bln Q2 profit, better than expected

The profit was over the HUF 32.3 bln estimate by analysts polled by Portfolio.hu.

Earnings per share came to HUF 145.

In the base period, OTP booked a HUF 153.1 bln loss on the impact of legislation requiring banks to compensate borrowers for using exchange rate margins when calculating repayments on foreign currency-denominated loans. Eliminating the effect of these and other extraordinary items in Q2 and the base period, OTP would have reported profit of HUF 40.6 bln, up 4%.

Net interest income fell 12% to HUF 140 bln during the period. Net income from commissions and fees rose 6% to HUF 43.9 bln.

Operating expenses dropped 5% to HUF 96.8 bln.

Losses on provisions for loans declined 26% to HUF 45.2 bln.

ROE, adjusted for one-off effects, rose 1.9 percentage points to 13.3%. ROA was flat at 1.5%.

OTPʼs foreign businesses contributed 22% to after-tax profit, adjusted for one-off effects. Profit of the bankʼs Hungarian businesses rose 5% to HUF 31.8 bln. Profits of its Bulgarian unit edged down 1% to HUF 10.2 bln. All of the foreign units were profitable, with the exception of OTPʼs bank in Russia, which had a HUF 4.2 bln loss, nearly double that in the base period.

OTP had total assets of HUF 10.761 trillion on June 30, up 4% from twelve months earlier. Net assets fell 3% to HUF 1.259 trillion.

Gross client loans dropped 10% to HUF 6.773 trillion. Retail loans fell 12% to HUF 4.567 trillion. Corporate loans were down 13% at HUF 1.911 trillion.

The ratio of non-performing loans in the portfolio narrowed to 18.4% from 19.3% twelve months earlier.

Stock of client deposits increased 9% to HUF 7.658 trillion. Retail deposits were up 9% at HUF 5.405 trillion. Corporate deposits climbed 8% to HUF 2.221 trillion.