Strong revenues but DPS may disappoint
OTP’s reported net income came to HUF 132.6 bln, while adjusted net income was at
HUF 230.0 bln in the 4th quarter. This is 4% ahead of the market consensus of HUF
221.3 bln while the figure remained below our estimate of HUF 271 bln (our net profit
estimate was HUF 203 bln). Lower results stemmed from a (1) miss in the other income line (2) higher provisioning and (3) badwill release at Ipoteka given the weaker
results from the segment. Also, the Romanian loss on sale as well as the interest rate
cap in Serbia were also booked in this quarter (HUF 59.5 bln and HUF 8.3 bln, respectively). Ipoteka, Merkantil and Ukraine were loss-making, with the latter paying higher
corporate taxes.
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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