OTP shareholders okay HUF 219 per-share dividend

Telco

Shareholders of OTP Bank, Hungaryʼs biggest commercial lender, approved payment of a HUF 219 per-share dividend on last yearʼs earnings at the bankʼs annual general meeting Friday. The dividend fund comes to HUF 61.32 billion.

Chairman-CEO Sándor Csányi said OTPʼs record profit had exceeded the target in the business plan as well as analystsʼ expectations. Taking into account the dividend on treasury shares, which is distributed among other shareholders, the dividend payment will come to about HUF 221 per share. OTP did not pay out a bigger share of profit as dividends because it needs money to acquire more banks, Csányi said, cited by national news agency MTI.

The OTP Group had HUF 281.3 bln after-tax profit in 2017, up from HUF 202.5 bln in 2016. This year is likely to be "intensive" with regard to acquisitions, Csányi said. Hopefully, OTP can announce details at the beginning or in the middle of summer, he added, noting that OTP is concentrating on acquisitions in Europe and the region. OTP has no plans to close branches in Hungary, but expects to shutter 60-70 abroad because of the synergies its recent acquisitions have achieved, Csányi revealed.

The chairman-CEO said OTP did not meet its cost targets last year because of higher payroll costs as well as the cost of digitization. Even so, OTP had the second-highest return on equity among banks in the region, according to a comparison by Bloomberg, he added.

This year, operating costs are expected to rise 6%, Csányi said. He highlighted OTPʼs strategic goals as stability, profitability and growth, "in that order." He added that it is now evident that the decision during the crisis to keep OTPʼs unit in Russia was a good one.

Csányi praised the "fantastic" work of the National Bank of Hungary (MNB), noting policy makersʼ decisions to lower interest rates, provide financing for cheap credit for businesses, and push banking sector liquidity out of central bank deposits and into government securities.

Csányi declined to comment when asked about the sweeping victory by incumbent Fidesz in the general elections on April 8.

"I donʼt wish to comment on the two-thirds majority, the market has already commented on that," he said.

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