Narrower interest margins, risk costs eat up OTP profit

Telco

OTP Bank’s fourth-quarter after-tax profit plunged 95% to HUF 1.4 billion from the same period a year earlier as interest margins narrowed and risk costs rose sharply. Net interest income fell 4% to HUF 159.2 billion, the bank said in its consolidated IFRS report published early Friday.

Total risk costs increased 30% to HUF 91.6 billion. The proportion of non-performing loans in the bank’s lending portfolio rose 0.6 percentage point to 19.8% in the twelve months to the end of the period.

The coverage rate on the NPLs rose 4.4 percentage points to 84.4% at the same time. OTP’s profit was a fraction of the HUF 29.4 billion estimate by analysts polled by Portfolio.hu.

Diluted earnings per share came to HUF 7. Net revenue from commissions and fees rose 11% to HUF 44.8 billion.

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