OTP Bank Romania’s profit in Q1, more than twice y-o-y

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Hungary’s OTP Bank has registered an after tax profit of RON 19.1 million in Romania, more than twice as much as in Q1 of 2016 and its second best quarterly earnings on record, a press release informs, quoting the financial report published in Budapest.

Operating profit surged by 45 percent y-o-y as a result of 5 percent higher total income and 12 percent lower operating costs. Within total income net interest income grew by 5 percent.

In Q1, net interest income grew by 4 percent q-o-q. In line with general market trends deposit rates shrank q-o-q.

Operating costs moderated by 12 percent y-o-y as a result of stringent cost control. Amortization costs dropped by 31 percent y-o-y and administrative expenses also declined by 5 percent y-o-y.

Total risk costs increased by 20 percent y-o-y influenced both by higher provisions for possible loan losses and other provisions. However, q-o-q total risk costs dropped by 57 percent to a great extent due to the base effect of other provisions made for litigations in Q4.

DPD90+ volumes adjusted for FX changes and without sales and write offs grew by RON 22 million in Q1. New inflows occurred mainly in the corporate segment.

Gross loan volumes adjusted for FX changes did not change either y-o-y or q-o-q; both the corporate book and the retail portfolio stagnated. FX-adjusted deposit volumes increased by 4 percent y-o-y, but dropped by 2 percent q-o-q mainly due to retail outflows (-3 percent q-o-q).

At the end of March 2017, according to local regulation the bank’s standalone total assets posted RON 8,347.1 million, a net profit after tax of RON 25.5 and the capital adequacy ratio stood at 16.3 percent, which means an improvement of 1.9 percent compared to the previous quarter.

OTP Group has registered in the first quarter of 2017 an adjusted after-tax profit of RON 977 million, with significant growth both year after year (+40 percent) and quarter after quarter (+136). The improvement was due to the significant decline in risk costs and the effective tax rate moderated.

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