OTP - Against all odds
We cut slightly our 12M TP for OTP to HUF 14,000, which is a result of three powers: (1) our earnings forecast for 2023 and 2024 are up by 31.5% and 13.4%, respectively. (2) At the same time, the cost of equity also increased to 12.5% from 11% given the acquisition in Uzbekistan and overall higher terminal risk-free rates in countries where OTP operates – in tandem with global core rate hikes. (3) RWA inflation also affected our TP adversely.
OTP Bank is a financial institution based in Hungary. Co. is engaged in retail banking (account management, bankcards and Electronic sevices - OTPdirekt) corporate banking and private banking. In Hungary traditional banking operations are performed by Co. while specialized services, including car leasing, investment funds and insurance are developed and offered by Co.'s subsidiaries. Co. expands its operations throughout the region via its foreign subsidiaries. As of Dec 31 2011, Co. had total assets of HUF10,200,527,000,000 and deposits of HUF6,398,853,000,000.
Concorde Securities Ltd. is Hungary’s leading independent company engaged in investment banking activities. It provides its clients with integrated financial services, including securities trading, research, corporate financing advisory, capital market transactions, wealth management and investment advisory. The operational management of the company is the responsibility of the CEO, while the owners/managers (who control one-third of the company through their shares and options) are in charge of its strategic governance. Concorde Securities Ltd. is a member of the Budapest, Frankfurt, Warsaw and Bucharest stock exchanges, as well as of the Hungarian Association of Investment Service Providers.
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