Otp Bank Nyrt · BET:OTP
Otp Bank Nyrt — Otp Bank S/Adr R — FY2024 Earnings Presentation
27 slides from Otp Bank Nyrt's earnings presentation, Mar 7, 2025
Slide 1: OTP Group 2024 results
OTP Group 2024 results Conference call – 7 March 2025 László Bencsik, Chief Financial and Strategic Officer
Slide 2: OTP Group - Highlights
OTP Group - Highlights Dominant position in CEE countries: Dominant position in 5 countries; 4-fold loan growth and 14 acquisitions in 10 years. 44% of net loans in Eurozone + ERM2 countries, 76% within the EU Outstanding profitability: ROE exceeded 23.5% in 2024 Strong liquidity position: 74% net L
Slide 3: 2024 profit after tax up 9%, foreign profit contribution 68%
In 2024 OTP Group’s profit after tax increased by 9%, while the foreign profit contribution reached 68%. Both margin and cost efficiency improved Consolidated profit after tax Key performance indicators of OTP Group (HUF billion) (%) Direct effect of acquisitions Return on equity NIM Cost / income C
Slide 4: Operating profit increased by 19% organically and FX-adjusted
In 2024 the operating profit increased by 19% organically and FX-adjusted Y-o-Y Q-o-Q Consolidated P&L (in HUF billion) 2023 2024 3Q 2024 4Q 2024 FX-adj. organic1 FX-adj. w/o OBR Net interest income 1,462 1,783 20% 444 461 2% Net fees and commisions 478 546 13% 137 148 7% Other net non-interest inco
Slide 5: OTP Core realized HUF 270 billion adjusted profit after tax
OTP Core realized HUF 270 billion adjusted profit after tax in 2024 without dividends received from subsidiaries, OTP CORE up by 16% y-o-y, mainly due to the improving margin. In 2025 special banking levies are set to grow OTP Core profit after tax Key performance indicators of OTP Core (without div
Slide 6: Mortgage loan amounts doubled, cash loan sales up 65% at OTP Bank
In 2024 mortgage loan contractual amounts doubled, and cash loan sales soared by 65% at OTP Bank. OTP CORE The Bank’s market share in household deposits kept on increasing Y-o-y change in mortgage loan contractual amounts in 2024 Y-o-y change in cash loan contractual amounts in 2024 Growth in mortga
Slide 7: Demand for corporate loans started to pick up
In 2024 the demand for corporate loans started to pick up, their stock increased by 5% y-o-y without the OTP CORE repayment of a large exposure towards a foreign client, thus OTP’s credit market share improved y-o-y Performing corporate loan volume changes (%) OTP Group’s market share in loans to Hu
Slide 8: Foreign subsidiaries continued to deliver decent performance
In 2024 foreign subsidiaries continued to deliver decent performance Profit after tax1 (HUF billion) ROE1 Cost / income ratio 2023 2024 2023 2024 2023 2024 DSK Group (Bulgaria) 198 201 25% 22% 32% 32% OTP Bank Slovenia 112 113 20% 16% 40% 42% OTP Bank Croatia 53 62 14% 14% 46% 47% OTP Bank Serbia 58
Slide 9: Annual net interest income advanced by 20% y-o-y
The annual net interest income advanced by 20% y-o-y organically and FX-adjusted. The 2% FX-adjusted Inorganic q-o-q growth was partly due to improving Hungarian margins, and volume expansion in Bulgaria and Croatia effects NET INTEREST 2024 4Q 2024 2024 Y-o-Y 4Q 2024 Q-o-Q 1 The 34% y-o-y jump in O
Slide 10: Consolidated NIM stable y-o-y in 4Q
In 4Q, the consolidated NIM remained stable y-o-y supported mostly by the improvement in Hungary, whilst the margin in most EUR-linked countries continued to erode slowly NET INTEREST 4Q 2023 3Q 2024 4Q 2024 MARGIN 1 At OTP Core the margin started to gradually bounce back from the lows OTP Group 4.2
Slide 11: Consolidated net interest margin improved by 34 bps y-o-y
In 2024 the consolidated net interest margin improved by 34 bps y-o-y, mainly attributable to the bounce-back in Hungary. Sensitivity to EUR rate cuts has moderated significantly in recent quarters Drivers behind the y-o-y change of the consolidated net interest margin Sensitivity to rate changes +2
Slide 12: Consolidated performing loans grew by 9% y-o-y
In 2024 consolidated performing loans grew by 9% organically and FX-adjusted, driven by retail significantly outpacing corporate across the Group. In 2024, both Ukrainian corporate and consumer loan growth got back on track Y-o-Y performing (Stage 1+2) LOAN volume changes, adjusted for FX effect Con
Slide 13: Performing loans increased by 3% q-o-q
Consolidated performing loans increased by 3% q-o-q (FX-adjusted). In Hungary, corporate loan growth caught up to the continued dynamic expansion in retail. Bulgarian consumer loan growth slowed down due to macroprudential tightening Q-o-Q performing (Stage 1+2) LOAN volume changes, adjusted for FX
Slide 14: Consolidated deposits increased by 6% y-o-y
Consolidated deposits increased by 6% y-o-y without the sale of Romania and FX-adjusted, while Hungarian household deposits grew by 10%. In 2024 Uzbek deposits expanded by nearly 50% Y-o-Y DEPOSIT volume changes, adjusted for FX-effect Cons. Core DSK OBS OBH OBSrb Ipoteka OBU CKB OBA OBM OBRu (Hunga
Slide 15: Consolidated deposits grew by 2% q-o-q
Consolidated deposits grew by 2% q-o-q. The increasing trend of Hungarian household deposits continued, their stock grew by 3%, while corporate deposits contracted due to outflows before year-end Q-o-Q DEPOSIT volume changes, adjusted for FX-effect Cons. Core DSK OBS OBH OBSrb Ipoteka OBU CKB OBA OB
Slide 16: Net fee income up 13% y-o-y organically and FX-adjusted
In 2024 net fee income went up by 13% y-o-y organically and FX-adjusted. In 4Q, the 7% growth was mainly Inorganic induced by the year-end performance bonuses at OTP Fund Management (Hungary) and card-related one-offs effects NET FEE 4Q 2024 2024 Y-o-Y 4Q 2024 Q-o-Q 1 The 11% y-o-y increase in 2024
Slide 17: Other income remained broadly flat
In 2024 other income remained broadly flat, despite the materially lower fair value adjustment of subsidized Inorganic housing and baby loans at OTP Core effects 2024 4Q 2024 2024 Y-o-Y 4Q 2024 Q-o-Q OTHER INCOME (HUF billion) (HUF billion) (HUF billion) (HUF billion) OTP Group 306 97 0 -81 0%/-2%1
Slide 18: Operating costs increased by 11% organically and FX-adjusted
Inorganic In 2024 operating costs increased by 11% organically and FX-adjusted effects 9M 2023 2024 Y-o-Y Y-o-Y, FX-adjusted OPERATING COSTS (HUF (HUF billion) billion) (HUF billion) (HUF billion) 1 At OTP Core operating expenses were 7% higher than in 2023: the jump in OTP Group 1,089 1111 109 11%/
Slide 19: Consolidated total risk costs increased y-o-y
Consolidated total risk costs increased y-o-y as a joint effect of somewhat higher credit risk cost rate, and impairments on Russian government bonds amongst other provisions for the sake of increasing their own provision coverage ratio 2023 2024 TOTAL RISK COST 2023 credit risk 3Q 2024 4Q 2024 2024
Slide 20: Stage 3 ratio decreased to 3.6%
The Stage 3 ratio decreased to 3.6%. Provisioning policy remained conservative compared to regional peers Development of the Group's main credit Own coverage of Stage 1+2 loans compared to regional peers quality indicators at the end of 4Q 2024 82.7% 83.1% 83.6% 83.8% 83.3% 1.9% 1.4% Stage 1 ratio 1
Slide 21: CET1 ratio improved to 18.9% and CAR to 20.3%
In 2024 the Group’s CET1 ratio improved to 18.9% and the CAR to 20.3%, thanks to strong capital generating capability Capital adequacy Regulatory Decomposition of the y-o-y change in the CET1 ratio and MREL ratios (%)1 requirements 2 (based on the prudential scope of consolidation, % / changes in pe
Slide 22: Robust liquidity position: 74% net loan to deposit ratio
Robust liquidity position: 74% net loan to deposit ratio, 270% LCR, 151% NSFR and relatively benign redemption profile OTP Bank outstanding FX wholesale bonds OTP Bank FX MREL-eligible bond maturity profile2 Issued Amt. / (in EUR million) Issue Maturity Actual Issuance 1,166 Instrument Call Date Ext
Slide 23: Economic growth expected to accelerate in most operating countries in 2025
In 2025 economic growth is expected to accelerate in most operating countries Hungary Bulgaria Slovenia Croatia 2022 2023 2024F 2025F 2022 2023 2024F 2025F 2022 2023 2024F 2025F 2022 2023 2024F 2025F GDP growth (annual, %) 4.3 -0.9 0.5 3.41 4.0 1.9 2.4 2.7 2.7 2.1 1.6 2.0 7.3 3.3 3.8 3.4 Unemploymen
Slide 24: Management guidance for the Group's 2025 performance
Management guidance for the Group’s 2025 performance In 2025 the management expects marginal improvement in the operating environment. Therefore: o FX-adjusted organic performing loan volume growth may be above 9% reported in 2024. o The net interest margin may be similar to the 4.28% achieved in 20
Slide 25: Considerations concerning capital allocation
Considerations concerning capital allocation The Bank may continue to buy back treasury shares. The latest buyback programme amounting to HUF 60 billion announced on 24 January 2025 was completed on 10 February. The Bank will continue its practice to announce new buyback programmes on the day they a
Slide 26: Disclaimers and contacts
Disclaimers and contacts This presentation contains statements that are, or may be deemed to be, “forward-looking statements” which are prospective in nature. These forward- looking statements may be identified by the use of forward-looking terminology, or the negative thereof such as “plans", "expe
Slide 27: Questions and Answers session
Questions and Answers session 27