OTP Bank Romania announces the financial results for the first semester of 2020

OTP Group  has announced the financial results for the first semester of 2020. 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 during the first six months of the year an after tax profit of RON 17 million (HUF 1.1 billion), lower than the result of the first half of 2019, having doubled the risk costs in the context of the Covid-19 pandemic.

Despite the severe pandemic situation, OTP Bank Romania continues strong growth as both loans and deposits grew around 16-17% Y-o-Y. The bank achieved 17M RON profit in H1 even after creating RON 58,9 million extraordinary provisions for unforseeable impacts of the Covid-19 pandemic. Transformation projects have not stopped. We recently opened a new branch in Pipera and we continue the process of hiring new colleagues for further expansion”, said Gyula Fatér, CEO OTP Bank România.

Operating profit of the first six months of the year increased to RON 92 million (HUF 6.6 billion), following the increase of 14% in total income, compared to the same time frame of last year; at the same time, operating expenses grew by 18%, due to implementing the organic development program of OTP Bank Romania, started in 2019.

The net interest income improved in the first semester by 18% y-o-y. The growth was supported by the dynamic growth of the performing loan portfolio.

The performing loan volumes, FX-adjusted, increased by 18% y-o-y, supported by SMEs lending (+27%), robust mortgage demand (+18%), and corporate lending increase (+16%).

Lending activity was atypical in the first half of the year as effect of Covid-19 pandemic; after the dynamic increase in the first quarter followed the slowdown of economic activity in April-May and then the bounce back starting June. Compared to the first semester of 2019, loans for legal entities customers increased by +21% while the new sales of real estate loans have decreased by -14% and consumer loans by -21%.

FX-adjusted deposit volumes increased by 17% y-o-y. The dynamic has been fuelled by three business lines: Retail (+22%), SME (+5%) and Corporate (+23%).

According to local regulations, the Bank´s standalone total assets posted RON 13.6 billion, increasing by 16% compared to the end of June 2019, while the after-tax profit was of RON 14 million.

The bank’s capital adequacy ratio rose to 20.9%, compared to 17.1% in the first half of last year. The increase is due to the increase of share capital in the second half of 2019, in the amount of RON 320 million but also to the positive effects brought by the modification of the European regulatory framework, in the context of the pandemic.

In the first half of 2020, OTP Group has registered an adjusted after-tax profit of HUF 114 billion (RON 1,592 million). First semester 2020 results were shaped mainly by the surging risk costs due to the assumed negative impact of the coronavirus. The consolidated accounting profit was HUF 75 billion (RON 1,041 million).

Profit contribution of OTP Core – Hungary (HUF 55 billion / RON 764 million), DSK Bank in Bulgaria (HUF 22 billion / RON 301 million), the Croatian operation (HUF 10 billion, RON 139 million), the Ukrainian (HUF 11 billion / RON 150 million) and Serbian subsidiaries (HUF 4 billion / RON 51 million).

2020COVID-19 pandemicfinancial resultsfirst semesterOTP Bank RomaniaOTP Grouptax profit
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