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Contribution of OTP Bank foreign units to group profit nearly halved, but no longer loss-making

Combined after-tax profits of OTP Bank’s foreign subsidiaries fell 63% to HUF 5.1 billion in Q2 from the same period a year earlier, nearly halving their contribution to group level profit, but the units' performance improved over Q1, when they racked up a combined loss, cutting consolidated profits by 1%, the bank said in its consolidated IFRS report for the period published on Friday.

OTP Bank’s foreign subsidiaries contributed 12% of group profits in Q2, down from 21% in the same period a year earlier. The year-on-year decline in profits at the foreign units was well over the 43% drop in group level profit. Profits at OTP Bank’s units in Hungary were down 27% at HUF 36.7 billion.

In a unit-by-unit breakdown, OTP Bank said its core activities in Hungary generated after-tax profit of HUF 36.2 billion in Q2, down 16% from the same period a year earlier and falling from HUF 40.8 billion in Q1. Profit of the bank’s leasing unit in Hungary plunged 89% to just HUF 235 million but was up from HUF 118 million in Q1. Profits of its Hungarian asset manager fell 24% to HUF 1.1 billion and were down from HUF 1.2 billion in Q1.

OTP Bank’s biggest foreign unit, DSK in Bulgaria, had after-tax profit of HUF 4.6 billion, down 39%. The bank turned a HUF 7.4 billion profit in Q1.

Its unit in Russia made a slight HUF 95 million loss, compared to a HUF 1.5 billion gain in the same period a year earlier and profit of HUF 313 million in Q1.

CJSC OTP Bank in Ukraine also made a loss of almost HUF 1 billion, compared to profit of HUF 3.0 billion in Q2 2008 but narrowing from a massive loss of HUF 9.1 billion in Q1.

The Romanian unit booked profit of HUF 1.3 billion, compared to a loss of HUF 1.1 billion in Q2 2008. Losses grew from HUF 725 million in Q1.

OTP Banka Srbija had a HUF 265 million loss after turning a small profit in Q2 2008. The Serbian unit turned a HUF 141 million profit in Q1.

Profits in Croatia slid 15% to HUF 1.1 billion, but were up from HUF 815 million in Q1.

OTP Bank’s unit in Slovakia had a HUF 538 million loss, compared to HUF 624 million in profits in Q2 2008. In Q1, the unit broke even.

The unit in Montenegro made a HUF 410 million loss compared to profit of HUF 910 million in the same period a year earlier. The unit had a HUF 594 million profit in Q1.

The ratio of loans past due more than 90 days rose at all of the bank’s units, climbing as high as 13.9% in Russia and 14.4% in Serbia. OTP Bank noted that the speed at which the Ukrainian portfolio deteriorated slowed in Q2. The ratio of loans at the unit past due more than 90 days reached 11.2% in Q2, compared to 10.4% in Q1 and 2.3% in Q2 2008. (MTI-Econews)