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OTP Group announces the financial results for the first nine months of 2021. 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 14 million during the first nine months of 2021, lower than the result of the the same period last year. The decline occurred due to a 23% growth in operating expenses.
Operating profit in the first nine months of the year reached RON 87 million, on a downward trend compared to the same time frame of last year, mainly because of a 23% increase in operating expenses. The higher costs stemmed from the bank’s growth strategy launched in 2019, higher personnel expenses following a 10% y-o-y growth of the average number of employees in the first three quarters. At the same time, in the third quarter the operating profit grew 29% compared to the previous trimester after a 7% increase in total income.
“First nine months are a picture of OTP Bank’s development journey, as we are engaged in our Apollo growth strategy and several transformational programs. We also keep investing in increasing our digital and physical footprint and report steady growth in lending and saving activities on our main focus business lines. All these actions imply a lot of spending for our core projects, an overall team growth, and coupled with the necessary risk provisioning, it is all reflected in the profitability parameter. It is a factor we can put on hold while envisioning a long term result, increasing our customer base, and developing great financing stories in the local economy. In this context, we are expecting for new losses considering the risk provisions that we will consider as an additional safety measure.”, said Gyula Fatér, CEO OTP Bank Romania.
The net interest income increased by 8%, to a total of RON 363 million. The dynamic was supported by the sustained growth of performing loan volumes, while mitigated by a slight reduction of net interest margins.
In the third quarter total risk cost amounted to RON 50 million, owing to additional loan provisioning made for Stage 1 and Stage 2 volumes. Overall, in the first nine months of the year, total risk cost reached RON 61 million.
The performing loan volumes increased by 20% in the first nine months of 2021, being supported by increases in all the business areas. In the third quarter, group level definitions were introduced for MSE and corporate loans. As a result, some volumes were reclassified between the two categories in 3Q. Overall, MSE and corporate loan volumes grew by 11% q-o-q.
Deposit volumes increased by 28% compared to the first nine months of last year. As it follows, the loan-to-deposit ratio improved by 9 bps y-o-y to 117%.
According to local reporting standards, the bank´s assets reached the level of RON 17.5 billion, increasing by 23% compared to the level recorded in the first nine months of 2020.
The bank’s capital adequacy ratio stays at a comfortable level of 20.8% (-16 bps y-o-y).
In the first three quarters of 2021, OTP Group has registered an adjusted after-tax profit of HUF373.6 billion (RON 5,146 million) and the consolidated accounting profit was HUF 335.3 billion (RON 4,619 million).
Profit contribution of OTP Core – Hungary (HUF 167.5 billion / RON 2,307 million), DSK Bank in Bulgaria (HUF 66 billion / RON 910million), the Croatian operation (HUF 25.2 billion, RON 347million), the Ukrainian (HUF 28.8 billion / RON 397 million), the Serbian (HUF 20.7 billion / RON 285 million), OTP Slovenia (HUF 12.4 billion / RON 172 million), the Russian (HUF 24.2 billion / RON 333 million), the Montenegro operation (HUF 5.4 billion / RON 74 million), the Moldavian subsidiary (HUF 4.4 billion / RON 60 million) and Albanian subsidiary (HUF 3.9 billion / RON 54 million).
The full results of OTP Bank Romania are presented in the table below:
| Main components of P&L account in RON mn |
9M 2020 | 9M 2021 | Y-o-Y | 3Q 2020 | 2Q 2021 | 3Q 2021 | Q-o-Q | Y-o-Y |
| After tax profit without the effect of adjustments | 39 | 14 | -65% | 22 | 17 | -11 | -163% | -149% |
| Income tax | -1 | -13 | -2 | -3 | -5 | 62% | 237% | |
| Profit before income tax | 40 | 27 | -33% | 24 | 20 | -6 | -128% | -124% |
| Operating profit | 136 | 87 | -36% | 44 | 35 | 45 | 29% | 1% |
| Total income | 450 | 474 | 5% | 149 | 158 | 168 | 7% | 13% |
| Net interest income | 337 | 363 | 8% | 111 | 120 | 131 | 9% | 18% |
| Net fees and commissions | 38 | 41 | 8% | 12 | 15 | 13 | -16% | 7% |
| Other net non-interest income | 75 | 70 | -8% | 26 | 23 | 25 | 8% | -6% |
| Operating expenses | -314 | -386 | 23% | -105 | -123 | -124 | 1% | 18% |
| Total provisions | -96 | -61 | -37% | -20 | -14 | -50 | 259% | 149% |
| Provision for impairment on loan and placement losses | -69 | -84 | 22% | -12 | -17 | -48 | 192% | 311% |
| Other provision | -27 | 24 | -187% | -8 | 3 | -2 | -181% | -76% |
| Main components of balance sheet closing balances in RON mn |
2020 | 9M 2021 | YTD | 3Q 2020 | 2Q 2021 | 3Q 2021 | Q-o-Q | Y-o-Y |
| Total assets | 15,502 | 18,193 | 17% | 14,821 | 16,682 | 18,193 | 9% | 23% |
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