OTP Bank's corporate business loan portfolio grows 1.5 times in 2021
During the previous year, OTP Bank's corporate lending was very efficient – Roman Masyk, Head of OTP Bank’s Financial Controlling Department said during the round table "Profit of the Banking System" organized by the Financial Club.
"The loan portfolio of legal entities has grown almost one and a half times, which can be explained by the delayed demand of clients who postponed some of their development projects in 2020. When the situation with the pandemic became a little clearer, they launched them, using banking loans. We already have more investment loans. So, we deliver not just working capital financing - for a month or two to buy goods, put on store shelves, although it occupies quite a large share of our portfolio, but in 2022 we expect also a greater demand for investment financing," the banker highlighted.
He reminded that according to preliminary data recently published by the NBU, the banking system showed a net profit of UAH 77.5 bln in 2021. "Return on capital is currently quite high - 35 p.p., it should encourage shareholders to expand their business further. So it could be of interest for investors to invest in the Ukrainian banking sector," - said R.Masyk.
In addition, according to the banker, in 2021, the operational efficiency of the banking system increased significantly and the growth rate of income was almost 2% higher than the operating expenses growth. "The pandemic has accelerated what should have happened," he said. In particular, customers began to use more remote services, which relieved the burden on banks` branches that were able to serve other groups of clientele more effectively – both corporate, SMEs and private banking customers who need more detailed advice and complex products. "Simple products and transactions go to online or mobile applications. This process is irreversible, it is running, and the mass customers, who do not need VIP service or premium products, are used to the fact that most operations can be done through remote channels. Especially since the tariffs for online services is much lower," the head of OTP Bank financial controlling department underlined.
For 2022, the banker predicted a restrained dividend policy of Ukrainian banks. "It is possible that some banks will pay smaller dividends, thus saving capital in Ukraine. At OTP Bank, we have always pursued a rather conservative policy – high buffers have been laid by the parent bank before, and European regulations are stricter in terms of capitalization requirements. Indeed, new capital requirements and reserve ratios may slow down the growth of retail lending. But this is the price of stability and readiness for certain crises and risks," Masyk said. "In general, the banking system is capitalized enough. The capital adequacy ratio was very high - about 21% at the end of last year. Even after reviewing the requirements, it remained at a high level - 18%," summed up the banker.
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Public Joint Stock Company OTP Bank is a subsidiary of OTP Bank, which is the largest independent Central-Eastern-European banking group. JSC OTP Bank is one of the largest domestic banks, a recognized leader in the financial sector of Ukraine. The Bank provides a full range of financial services to corporate and private customers, as well as to small and medium enterprises. The bank entered the Ukrainian market in 1998, and since then it enjoys a staunch reputation of socially responsible, reliable and stable institution providing its consumers with services of European quality standard.
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