OTP noted that it had booked the full-year amount of sectoral taxes in the first quarter. Had those items been booked evenly throughout the year, second-quarter after-tax profit would have dropped 13% to HUF 255.9 bln, it said.
OTP also highlighted the negative impact of changes to interest rate cap regulations and the fair-value adjustment of subsidized retail loans and interest rate hedge transactions on second-quarter earnings.
Net interest income rose 13% to HUF 541.4 bln, while net revenue from commissions and fees was flat at HUF 152.4 bln.
First-half after-tax profit fell 7% to HUF 482.7 bln. When adjusted for the pro-rated amount of sectoral taxes booked in the first quarter, profit edged down 2% to HUF 580.3 bln.
Net interest income increased 13% to HUF 1,068.7 bln. Net revenue from commissions and fees was practically unchanged at HUF 290.3 bln.
Total risk costs reached HUF 83.7 bln, down 16% from the base period.
Diluted earnings per share came to HUF 1,889.
First-half after-tax profit at OTP’s core business in Hungary rose 7% to HUF 482.7 bln.
Profit at OTP Bank Russia edged down 2% to HUF 106.4 bln, while profit at its Bulgarian unit, DSK Group, was flat at HUF 103.3 bln. Profit at Ipoteka Bank in Uzbekistan surged 38% to HUF 34.6 bln. Profit at OTP Bank Ukraine dropped 43% to HUF 17.2 bln.
OTP’s foreign units accounted for 80% of after-tax profit in the first half.
OTP had total assets of HUF 46,667 bln at the end of June, up 5% from 12 months earlier.
The gross stock of client loans, adjusted for foreign exchange rate changes, rose 17% to HUF 27,452 bln, while FX-adjusted client deposits increased 12% to HUF 33,747 bln.
The ratio of stage 3 loans under IFRS 9 edged down 0.3 percentage point to 3.1%.
At a press conference following the publication of the report, deputy CEO László Bencsik said the lender had taken legal steps regarding the interest rate cap, which shaved HUF 30.4 bln off second-quarter earnings, and expected a “fair solution” soon.
Fielding questions, he said 68,500 of the bank’s clients, with loans totaling HUF 220 bln, were affected by the rate cap.
Bencsik acknowledged the impact of the stronger forint on second-quarter earnings, pointing out that 70% of group-level revenue came from foreign businesses.
He underscored the impact of the Home Start subsidized lending scheme on balance-sheet growth.
The report showed that OTP had signed HUF 723 bln of Home Start contracts by the end of June, 10 months after the launch of the scheme.
Bencsik said an agreement announced in late July to acquire the parent company of Luminor Bank, a peer in the Baltic region, could pave the way for further acquisitions. He added that the purchase price for Luminor was below book value.
Management raised its full-year guidance for the net interest margin to above the 4.34% recorded in 2025, after it reached 4.61% in the first half.
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