OTP Group: strong results
In 2012 OTP Group posted HUF 150 billion adjusted after tax profit (excluding the special banking levy, the impact of early repayment of FX mortgages, dividends and positive tax shield of investment impairment charges) underpinning a 7% decline y-o-y. The accounting profit including all the adjustments represented HUF 122.6 billion, which is by 46% higher than in 2011. The key reason behind the improvement was due to the base effect of the early FX prepayment and goodwill impairment. The operating profit of the Group improved by 3% y-o-y.
FX-adjusted consolidated loan volumes declined by 1% y-o-y. The yearly drop is mainly related to the 7% decline of Hungarian loans. The Ukrainian and Montenegrin portfolio also suffered meaningful contraction (-7% and -5%, respectively). On the positive side, consumer loans advanced nicely in Russia and the Ukraine (+31% and 282%, respectively) and in line with the management’s aspiration this product segment grew substantially in Romania, Slovakia and Serbia, too. As a result, the consolidated consumer loan book grew by 14% y-o-y.
Deposit volumes increased by 6% y-o-y (+3% q-o-q) with Romania, Russia, Slovakia and Serbia achieving double digit growth, and only CKB suffered a deposit decline.
The strong liquidity positions of the Group did not require foreign currency denominated wholesale funding. By the end of 2012 the gross liquidity reserves of the Group reached almost EUR 6 billion equivalent.
The consolidated capital adequacy ratio of OTP Group under IFRS increased to 19.7% in December (+1.5 ppts q-o-q) with the Tier1 ratio climbing to 16.1% and Core Tier1 to 14.7%.
In 2012 the trend of growing profit contribution by foreign subsidiaries continued, they posted altogether HUF 61 billion versus HUF 51.3 billion a year ago. Bulk of the net result was produced by the Russian and Bulgarian subsidiaries, HUF 71 billion in total, while the Ukrainian unit posted HUF 0.5 billion profit. The Croatian operation not only remained profitable, but managed to substantially improve its result without one-offs. Losses in Serbia and Montenegro moderated a lot, while the Slovakian bank remained in red.