Net interest income at OTP Bank rose 8% to HUF 460.7 billion, according to state news agency MTI. Net revenue from commissions and fees increased 12% to HUF 148.3 billion. Risk costs jumped 94% to HUF 92.5 billion, with provisions for impairment on loan losses amounting to HUF 58.5 billion and other risk costs reaching HUF 34 billion. Diluted earnings per share from adjusted after-tax profit stood at HUF 952.
For the full year, OTP booked an after-tax profit of HUF 1.076 trillion, up 19% after adjustments. Net interest income grew 22% to HUF 1.783 tln, while net revenue from commissions and fees climbed 14% to HUF 545.6 billion. Risk costs rose 83% to HUF 158.5 billion. Diluted EPS from adjusted after-tax profit reached HUF 4,066.
OTP’s foreign units accounted for 68% of adjusted after-tax profit. While the profit of its core business in Hungary increased 16% to HUF 270.4 bln, the profit of Bulgaria’s DSK Group edged up 1% to HUF 200.8 bln. OTP Bank Russia’s profit jumped 43% to HUF 136.9 bln, and OTP Bank Slovenia saw a 1% rise to HUF 113.3 bln.
The bank’s total assets stood at HUF 43.419 tln at the end of 2024, marking a 10% increase from the previous year. The gross stock of client loans edged up 3% to HUF 24.335 tln, while deposit stock inched up 2% to HUF 31.666 tln. The non-performing loan ratio fell 0.7 percentage points to 3.6%.
Looking ahead to 2025, OTP’s management said it expects a “marginal improvement” in the operating environment. Organic performing loan volume growth could surpass the 9% recorded in 2024, while the risk profile is expected to remain similar. The bank anticipates a lower return on equity than the 23.5% achieved last year due to a projected decline in leverage.
OTP also reported that its fourth-quarter capital adequacy ratio calculation included a HUF 270 bln dividend, equivalent to HUF 964 per share, based on the latest decision by the management committee. The final decision on the dividend proposal will be made by the board of directors later in March and published on April 3.
At a press conference following the earnings report, Deputy CEO László Bencsik said OTP was working to reduce its exposure in Russia by scaling back activities that could pose risks, noting that the group’s corporate lending in the country had already ceased. He also said Hungarian government measures had reduced OTP’s profit by HUF 172 bln in 2024 and were expected to have a negative impact of HUF 263 bln this year.
In 2025, OTP is set to pay HUF 33 bln in the bank levy, HUF 54 bln in the windfall profit tax, and HUF 176 bln in transaction duties, Bencsik added. Discussing the Hungarian market, he noted that new mortgage volume had more than doubled, while personal loan outlays climbed 65%. That strong performance, he said, could continue into 2025.
Producing journalism that is worthy of the name is a costly business. For over 30 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.
