OTP Bank Romania announces the financial results for 2020

OTP Group announces the financial results for 2020, a year severely marked by the Covid-19 pandemic effects. OTP Bank Romania has been a prompt responder during these challenging economic times and has provided best banking solutions for its customers, both through moratoriums, and through the financing of the local businesses and economy. As it follows, the bank reports positive operating results, with a solid operating profit and double-digit increase in loans and deposits volumes.

According to the report published in Budapest, which presents the consolidated results adjusted in accordance with the Group´s standards, OTP Bank Romania has registered an after tax profit of RON 22 million during 2020, lower than the result of the previous year, due to higher expected risk costs generated by the Covid-19 pandemic. During last year, loan risk related provisions increased by 80%, amid uncertainties caused by the pandemic.. Most of the provisions to cover these risks have been in place since the first half of the year.

“The pandemic has struck 2020 as an unexpected tempest and tangled everyone’s plans. We evaluated the risks and set in place the premises for OTP Bank to properly function and perform, constituting additional provisions in the amount of 70 million lei to cover the potential risks caused by the pandemic. We stayed true to our organic growth strategy, Apollo, with a market share target of 5% by 2024. This has brought a significant increase in our operation and a 13% growth of the loan portfolio, while our total loan market share has reached 3,74%. This way we have managed to finance the local economy, provide moratorium deferrals in time, provide funds for small and large companies, all while opening new branches, introducing new digital banking services, and hiring 200 new colleagues”, said Gyula Fatér, CEO OTP Bank Romania.

Operating profit in 2020 reached RON 163 million, following the increase of 10% in total income, compared to 2019. At the same time, operating expenses grew by 20% y-o-y, as the bank followed its growth strategy Apollo, launched in 2019. As it follows, IT and digital developments launched by OTP Bank in 2020 had an important stake in higher IT expenses, while personnel expenses rose by 21% compared to the previous year, as the total number of employees grew by 13%.

The net interest income improved by 10% y-o-y to a total of RON 451 million being supported by a dynamic expansion in performing loan volumes, while the interest margin decreased by 15 bps (basis points) last year.

Supported by an increased lending activity, the performing loan volumes increased by 13% y-o-y. OTP Bank Romania has been an extremely active financial player in the Government guaranteed financing programs, and as a consequence the segment of loans for micro and SME’s grew by 15%, while the corporate segment contributed with a 9% increase from year to year.

Regarding loan quality, overall, the volume of loans classified in stage 1 and 2 increased by 13%, and the volume of loans from stage 3 remained on a downward trend in 2020 (-2%).

FX-adjusted deposit volumes increased by 20% y-o-y, with a dynamic fuelled by both Retail (+15%) and Corporate (+37%) business lines.

According to local reporting standards, the Bank´s standalone total assets posted RON 14.8 billion, increasing by 12% compared to previous year, while the after-tax profit was of RON 2.4 million.

The bank’s capital adequacy ratio remains at a comfortable level of 20.2%.

In 2020, OTP Group has registered an adjusted after-tax profit of HUF 310.3 billion (RON 4,275 million). These results are the effect of increased risk costs due to the negative consequences of the COVID-19 pandemic. The consolidated accounting profit was HUF 259.6 billion (RON 3,578 million).

Profit contribution of OTP Core – Hungary (HUF 159.3 billion / RON 2,195 million), DSK Bank in Bulgaria (HUF 41 billion / RON 564 million), the Croatian operation (HUF 14.8 billion, RON 204 million), the Ukrainian (HUF 26 billion / RON 360 million), the Russian (HUF 16.3 billion / RON 225 million), Slovenian (HUF 9.7 billion/ RON 133 million) and Serbian subsidiaries (HUF 7.3 billion / RON 101 million).

2020COVID-19financial resultsOTP GrouppandemicprofitRomania
Comments (0)
Add Comment