OTP - No surprise in Q2
OTP reported better-than-expected profit for Q2/24 today morning. Consolidated PATtotalled HUF 268bn (+2% vs. consensus and +1% vs. Concorde). H1/24 EPS came in at
HUF 1,839, with a ROE of 23.6%. Total revenues reached HUF 654bn, +30bn vs. the
consensus, which was attributable to non-interest income, in particular the fair value
adjustment of subsidized housing loans and baby loans at OTP Core. However, higherthan-expected provisioning offset the favorable top line trend. In line with supervisory
expectations, with an aim of lifting provision coverage, altogether HUF 23.7bn impairment
was booked in relation to Russian bond exposures. The management sees NIM to be
higher YoY in 2024 vs. flattish seen earlier (in-line with our FY estimate), while other parts
of the guidance remained unchanged. They also added that the financial transaction tax is
expected to increase by c. HUF 25bn in 2024 following the regulatory changes (broadly in
line with our estimates), while they didn’t comment on the 2025 impact due to the lack of
further official details. H1 report doesn’t contain any commentary on the potential
continuation of the SBB program, but it may be involved in the presentation.
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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