Net profit of Hungarian OTP Bank rises by 53%

Consolidated after-tax profit of OTP Bank, the largest Hungarian bank, amounted to HUF 131.6bn and increased by 53% y/y in Q3, the bank reported on the Budapest Stock Exchange. After adjustments, profit growth was more subdued at 19% y/y as the adjustments included strong positive effect from acquisitions. A Serbia acquisition was not yet included in the income statement and a Slovenia acquisition will be incorporated in Q4’19, the bank added. Operating profit also rose at a healthy pace of 29% y/y during the quarter, even excluding the effect of acquisitions. It was supported by strong income growth, including net interest income, net income from fees and commissions and other net non-interest income. The strong operating revenue also reflected increases in business volume, OTP said. Operating expenses rose by 12% y/y in Q3 but risk costs surged more than four-fold y/y.

On a cumulative basis, OTP’s after-tax profit reached HUF 309.6bn and was up by 29% y/y in Q1-Q3. Excluding the acquisitions effect, after-tax profit increased by 19% y/y for the period.

Total assets of OTP increased by 32% y/y to HUF18,971.0bn at end-Q3. This also included the acquisition spree during the year. This did not impair the loan-to-deposit ratio of the bank, however, and it rose by 2pps y/y in fx-adjusted terms. The loan portfolio expanded by 37% y/y at the end of the period and asset quality improved further with the share of loans past due for more than 90 days falling by 2.3pps y/y to 5.0%.

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