OTP Bank - Profit Beat On Provisions, Lower Negative One-Offs
OTP reported HUF 76.0 bln net profit in the second quarter, well ahead of the consensus (+70%) and our estimates (+31%) on the back of better operating jaws (though in line with our estimates) while provisioning was lower than anticipated together with smaller negative one-offs.
Key positives
- Partly thanks to FX, revenues rose with NII up by 11% q-o-q (FX-adjusted 4%), Net F&C +12% q-o-q. NIM also improved to 3.6% from 3.4% as a result of higher margins in HU (284 bps vs. 276 bps in Q1), RO, Ukraine. Provisions declined q-o-q by 56% thanks to all segments, asset quality remained more or less stable despite deterioration in RU-Ukr. Mgmt raised guidance for loan growth ex-RU, Ukr to >10% vs. close to 10% for 2022.
Key negatives
- One-offs depleted adjusted profit significantly with already anticipated items (HUF 68 bln windfall tax, HUF 10 bln for interest rate cap). There is a clear slowdown in HU mortgage disbursement if we take out subsidized loans (-13% in q-o-q disbursement, -52% y-o-y). Asset quality in RU, Ukr declined, Stage 2 ratio went up to 43.1%, Stage 3 also to 9.6% in Ukraine, the same figures were 15.3% and 15%, respectively.
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.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.