OTP - No Surprise In Q3, Guidance Unchanged, TP Lifted

Q3/25 adj. profit came slighly ahead of consensus at HUF 330bn and showed c.2%
QoQ positive dynamics on an FX-adjusted basis despite special one-offs having boosted Q2
results. Trends in core banking revenues also came in-line with expectations. NIM stayed flat
and NF&C grew by 2% QoQ also on FX adjusted basis, buoyed by the increase in HU, BG and
UZB. However, the FV adjustment to the Hungarian subsidized loan portfolio added HUF 8bn
in other incomes in Q3, which was indeed also expected on the back of lower HGB yield.
OPEX was a touch higher than expected, while risk costs exceeded consensus by 14%. Loan
loss provisioning was near zero in HU and no additional provision was set aside on the Russian
bonds held in the Bank’s portfolio (79% covered). It also moderated in Russia QoQ as Q2 was
hit by the changes in the impairment model. On the other hand, UZB provisioning grew QoQ
due to the corporate exposure. Performing loan book grew by 3% QoQ (4% FX-adj.) or 10%
YTD, while deposits were uo by 4% QoQ or 9% YTD. Increasing retail deposits boosted the
asset growth, creating room for strong retail lending and some NIM improvement in HU. Also
noteworthy is that the management left its conservative 2025 guidance unchanged.