OTP AGM Approves HUF 300/share Dividend

Banking

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Shareholders of OTP Bank, Hungary's biggest commercial lender, approved the payment of a HUF 300-per-share dividend at an annual general meeting on Friday, according to a report by state news wire MTI.

The board had proposed paying HUF 6 billion of the HUF 84 bln dividend from last year's earnings and HUF 78 bln from profit reserves.

At a press conference after the AGM, chairman-CEO Sándor Csányi said 2023 "wasn't among the best of years" for OTP, but added that the lender's capital position is stable, with capital adequacy indicators and liquidity reserves "well over" minimum requirements.

Asked about any possible impact on OTP of recent bank failures abroad, he said sector regulation in Hungary is "much stricter" than in the United States. He added that half of OTP's stock of client deposits is covered by the National Deposit Insurance Fund (OBA), while the coverage ratio stands at 88% for retail deposits alone.

Csányi said he trusts the windfall profit tax on lenders will be rolled back on January 1, 2024, as pledged. Keeping additional burdens on banks for a prolonged period would be "very damaging" for OTP Group's international competitiveness, too, he added.

He said lending activity could pick up in the second half of the year.

Deputy-CEO Péter Csányi said a project launched in cooperation with the state to develop a Hungarian language customer service platform using a supercomputer and AI is "progressing well". OTP could start using the platform in the coming year to year and a half, he added.

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