Otp Bank Nyrt · BET:OTP

Otp Bank Nyrt — OTP Bank — Investor Presentation (July 2005)

34 slides from Otp Bank Nyrt's investor presentation, July 2005

  1. Slide 1: Future growth opportunities on a regional base

    OTP Bank Future growth opportunities on a regional base INVESTOR PRESENTATION BUDAPEST – JULY 2005 DR. ZOLTÁN SPÉDER, VICE CHAIRMAN - CFO

  2. Slide 2: Overview of banking environment

    OTP Bank OVERVIEW OF BANKING ENVIRONMENT

  3. Slide 3: Economy hampered by twin deficit

    ECONOMY HAMPERED BY TWIN DEFICIT; THE RESULTS … 2518P1E030402Ac_OPR019BU GDP growth comparison Weak GDP growth Hungary’s dependence on EU growth coupled with high twin deficit 6% 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 0% 5.2% 4.9% -1% 5% 4.6% 4.2% 4.2% -2% 4% 3.8% -3% 3.5% -4% 2.9% 3% -5%

  4. Slide 4: Volatile interest rates and exchange rates

    VOLATILE INTEREST RATES AND EXCHANGE RATES, BUT 2518P1E030402Ac_OPR019BU 14% 13% 12% 2003 2004 2005 11% 10% 9% 8% 7% 6% 5% 4% 2- 2- 2- 2- 2- 2- 2- 2- 2- 2- 2- 2- 2- 2- 2- 2- 2- 2- 2- 2- 2- 2- 2- 2- 2- 2- 2- 2- 2- Ja n- Fe b- Ma r- Apr- Ma y- Jun- Jul- Aug - Se p- O ct- No v- De c- Ja n- Fe b- Ma r-

  5. Slide 5: Retail financial wealth growing

    RETAIL FINANCIAL WEALTH GROWING, AND 2518P1E030402Ac_OPR019BU Retail Loans Outstanding (HUF bn.) Selected components of RFA vs. Real Wage Index 2,500 125 4,500 50% 30-Sep-99 30-Sep-04 5yr CA GR 43.9% Housing Loa ns 120 4,000 Consum e r loa ns 40% 2,000 115 Re a l wa ge s 3,500 1990=100 110 3,000 30%

  6. Slide 6: Banking penetration is on the rise

    BANKING PENETRATION IS ON THE RISE, 2518P1E030402Ac_OPR019BU BY TOTAL ASSETS RETAIL SECTOR 22,500 100% 6,000 40% 20,000 90% 20,245 36% 77.6% 5,000 17,500 18,573 80% 32% 73.0% 15,000 16,740 70% 25.9% 28% 65.1% 65.3% 65.1% 64.7% 14,850 4,000 25.5% 25.0% 25.4% 25.1% 25.3% 64.0% 24.3% 24.9% 24.7% 23.6%

  7. Slide 7: Driven by loan growth

    D ec D - 0% 10% 20% 30% 40% 50% 60% 70% ec - D 94 - 20% 0% 20% 40% 60% 80% 100% 120% 140% ec D 94 - ec 96 -9 Ju Ju 6 n- n- D 97 ec D 97 -9 ec -9 Ju 7 Ju 7 n- n- D 98 ec D 98 - ec S 98 - ep S 98 - ep M 99 - ar M 99 - ar S 00 - ep S 00 - ep M 00 - ar M 00 Ba nk sy ste m ar - - S 01 Corporate ep Ba nk

  8. Slide 8: Dominant part of a growing banking sector

    OTP Bank DOMINANT PART OF A GROWING BANKING SECTOR

  9. Slide 9: Key facts on OTP

    KEY FACTS ON OTP 2518P1E030402Ac_OPR019BU Short description • Once the national savings institution, OTP is now the largest bank in Hungary, with 19,4 % of total banking assets, 27,5 % of total deposits and 20,3 % of the banking profits • OTP has a strong capital base, high profitability and solid i

  10. Slide 10: Market shares

    Market shares* 2518P1E030402Ac_OPR019BU Market share – total assets Market share – total loans HUF bn HUF bn 2,500 25% OTP Bank Tot al loans 16,000 30% 2,000 20% Group t ot al 1,500 15% loans 14,000 28% 1,000 10% Market 12,000 26% share-t ot al 500 5% loans 10,000 24% 0 0% Group Market 31-Dec-30-Jun

  11. Slide 11: Consolidated retail business

    HAR CONSOLIDATED RETAIL BUSINESS 2518P1E030402Ac_OPR019BU Group retail loans Consolidated retail loans on Dec 31, 2004 HUF bn HUF bn 770.3, 49% OTP Ba nk Consolida te d 1,500 60% re ta il loa ns OTP Building Socie ty 1,200 50% Me rk a ntil Group Re ta il loa ns group m arke t 900 40% OTP Mortga ge s

  12. Slide 12: OTP kept leadership in most traditional product markets

    IN HUNGARY, OTP KEPT ITS LEADERSHIP IN MOST TRADITIONAL 2518P1E030402Ac_OPR019BU PRODUCT MARKETS THROUGH STRONG PRODUCT AND SERVICE FOCUS 2004 2004 market share*** market position Notes Retail 35,4% No. 1 Special promotion programs, combined with segmented deposits approach (i.e., Private Banking of

  13. Slide 13: OTP among first banks to enter attractive new product markets

    OTP WAS AMONG THE FIRST BANKS TO ENTER THE MOST ATTRACTIVE 2518P1E030402Ac_OPR019BU NEW PRODUCT MARKETS IN HUNGARY First year of 2004 2004 service market share market position Notes Retail invest- 1991 21%* No. 1/No. 3 OTP is No. 1 in terms of turnover, No. 3 in terms of revenues; network selling do

  14. Slide 14: Recent business and financial performance

    OTP Bank RECENT BUSINESS AND FINANCIAL PERFORMANCE (BASED ON CONSOLIDATED IFRS ACCOUNTS)

  15. Slide 15: Balance sheet - structure

    BALANCE SHEET - STRUCTURE 2518P1E030402Ac_OPR019BU Liabilities HUF bn 4,800 4,737.6 Q-o-Q: + 13.7% Y-o-Y: + 33.5% ƒ Consolidation of DSK Group in 4,400 4,166.6 3,863.8 Equity 4Q03 with HUF 324 bn assets 4,000 3,600 3,609.2 3,548.0 3,460.8 (HUF 166 bn loans; HUF 273 bn 3,200 Other deposits) 2,800 2,4

  16. Slide 16: Loans, deposits

    LOANS, DEPOSITS 2518P1E030402Ac_OPR019BU Loans, gross Deposits HUF bn HUF bn 3,200 Q-o-Q: +12.7% 2,827 Q-o-Q: + 9.3% Y-o-Y: +22.5% 2,800 2,586 Y-o-Y: +33.0% 3,500 3,272 2,447 611 2,299 2,902 2,400 532 2,126 3,000 2,724 2,671 499 2,586 2,000 449 2,500 385 1072 2,380 1,600 1015 2,000 2,058 976 934 2,0

  17. Slide 17: Loan quality

    LOAN QUALITY 2518P1E030402Ac_OPR019BU Qualified loans NPL ratio HUF bn 350 16% 300 50 13.4% 46 41 12.1% 26 47 11.6% 11.7% 250 23 19 23 39 12% 11.3% 25 25 20 4.0% 200 20 17 3.7% 24 3.5% 3.5% 3.6% 150 8% 229 211 206 100 177 200 8.4% 9.4% 4% 8.1% 8.1% 7.7% 50 0 31-Ma r-05 31-De c-04 30-Se p-04 30-Jun-0

  18. Slide 18: Income

    INCOME 2518P1E030402Ac_OPR019BU Revenues Interest income HUF bn HUF bn Q-o-Q: -1.5% Interest income q-o-q: -1.5% Y-o-Y: +4.6% 120 111 113 111 Net interest income q-o-q:-1.3% 107 103 cent ral bank 120 Non II q-o-q: +3.3% 100 111.4 113.1 Net Insurance q-o-q: +83.0% 86 111.1 106.5 80 * * * * securit ie

  19. Slide 19: Margin, non interest income

    MARGIN, NON INTEREST INCOME 2518P1E030402Ac_OPR019BU Net interest margin Adjusted for swaps difference* Nominal 8.0% 8.0% 7.34% 7.39% 7.28% 7.5% 7.08% 7.5% 6.90% 6.87%6.85% 6.71% 6.62%6.70% 7.0% 6.61% 7.0% 6.25%6.11% 7.05% 6.5% 6.13% 6.93% 6.5% 5.88% 6.86% 6.74% 6.74% 6.0% 6.0% 6.48% 6.27% 6.26% 5.3

  20. Slide 20: Non interest expenses

    NON INTEREST EXPENSES* 2518P1E030402Ac_OPR019BU Non interest expenses - components Fees and Commissions HUF bn HUF bn Income: + 24.7% Y-o-Y; - 1.7% Q-o-Q 70 Q-o-Q: - 27.7% 60.6 30 Expense: + 2.0% Y-o-Y; - 17.5% Q-o-Q Y-o-Y: + 12.0% 60 26.0 Net: 26.5 + 31.3% Y-o-Y; + 2.7% Q-o-Q 22.4 21.9 50 44.9 21.2

  21. Slide 21: Returns

    RETURNS 2518P1E030402Ac_OPR019BU Return on Average Equity Return on Average Assets 45% 41.0% 42.6% 4.5% 4.19% 40.1% 3.88% 3.86% 40% 35.5% 36.4% 4.0% 34.8% 3.45% 3.51% 35% 32.5% 32.5% 3.5% 3.10% 30% 3.0% 2.67% 2.72% 25.6% 25% 2.5% 18.2% 1.71% 20% 2.0% 15% 1.5% 10% 1.0% 5% 0.5% 0% 0.0% 1Q 05 4Q 04 3Q

  22. Slide 22: OTP Group at a glance (IFRS)

    OTP GROUP AT A GLANCE (IFRS) 2518P1E030402Ac_OPR019BU (as at or for the period ending 31 March 2005) March 31, 2003 Assets Net loans Deposits Equity Net II Provisions Non int inc Total inc Non int exp PBT PAT OTP Bank 3,332.9 1,309.1 2,461.2 390.4 35,907 (3,244) 44,885 77,548 29,793 47,755 42,677 Me

  23. Slide 23: Building a regional franchise through acquisition

    OTP Bank BUILDING A REGIONAL FRANCHISE THROUGH ACQUISITION

  24. Slide 24: OTP has taken first steps to become a regional player

    OTP HAVE SUCCESSFULLY TAKEN THE FIRST STEPS TO BECAME A REGIONAL PLAYER 2518P1E030402Ac_OPR019BU OTP and subsidiaries OTP Group* Targeted new markets Number of branches** 843 Major descriptive data, 2004, IFRS Number of customers** ~8 mn Slovakia – OTP Banka Slovensko Total Assets EUR 16,925.1 mn Nu

  25. Slide 25: Expected development of banking in the region, and OTP's strategy for growth

    OTP Bank EXPECTED DEVELOPMENT OF BANKING IN THE REGION, AND OTP’S STRATEGY FOR GROWTH (BASED ON LOCAL GAAP) Note on methodology used: Only the organic growth of today’s group members (including Nova banka) is considered. Free cash-flow is centralized at OTP Bank and withdrawn from the balance sheet

  26. Slide 26: Credit expansion will determine development of Hungarian banking sector

    CREDIT EXPANSION WILL DETERMINE THE DEVELOPMENT OF THE HUNGARIAN BANKING SECTOR 2518P1E030402Ac_OPR019BU Eurozone 2003: 257% Eurozone-households: 64% Eurozone - corporates: 50% Expected development in the banking sector Loan penetration 94.1% 100% 90.0% 86.3% 40% 36.9% 38.5% 90% 82.6% 35.2% 77.7% 79

  27. Slide 27: Banking penetration is driven by dynamic credit growth

    BANKING PENETRATION IS DRIVEN BY DYNAMIC CREDIT GROWTH 2518P1E030402Ac_OPR019BU Total assets of the banking system compared to GDP (%) • Compared to Hungary the • Althroug the most dynamic 120 257% banking penetration is lower in growth is expected in Romania, Bulgaria and Romania, but in 100 the ba

  28. Slide 28: OTP Group aims at improving market share by total assets

    OTP GROUP AIMS AT IMPROVING ITS MARKET SHARE BY TOTAL ASSETS IN ALL COUNTRIES 2518P1E030402Ac_OPR019BU Total assets OTP csoport OTP Group --Total Mérlegf őösszeg assets DSK – Total DSK assets - Mérlegf őösszeg OBS OBS–- Total assets Mérlegf őösszeg Robank RoBank - -Mérlegf Total assets őösszeg Nov N

  29. Slide 29: Targets market share increase in retail lending market

    OTP GROUP TARGETS CONSIDERABLE MARKET SHARE INCREASE IN ALMOST ALL SEGMENTS OF THE RETAIL LENDING MARKET IN THE 2518P1E030402Ac_OPR019BU REGION Housing loans OTP OTPGroup – Housing csoport loans - Lakáshitel DSK –DSK Housing loans - Lakáshitel OBS – OBS Housing loans - Lakáshitel RoBank – Housing Ro

  30. Slide 30: Growth rate of consolidated balance sheet total expected to accelerate

    GROWTH RATE OF CONSOLIDATED BALANCE SHEET TOTAL** IS EXPECTED TO ACCELERATE 2518P1E030402Ac_OPR019BU HUF bn Total assets of OTP Bank ƒ Estimated average yearly 6 000 growth of consolidated balance 5 000 4 000 CAGR 10,6% Consolidated total assets sheet is 18.2%, in case of the 3 000 HUF bn subsidiari

  31. Slide 31: Customer volume increase higher at subsidiaries than at OTP Bank

    INCREASE OF CUSTOMER VOLUMES IS HIGHER AT SUBSIDIARIES THAN AT OTP BANK 2518P1E030402Ac_OPR019BU Loans of OTP Bank Deposits of OTP Bank HUF bn HUF bn 2 500 4 000 CAGR CAGR 2 000 5,7% 12,0% 3 000 1 500 Consolidated loans Consolidated deposits 2 000 2 247 3 056 1 965 2 909 HUF bn 2 765 1 000 2 628 1 7

  32. Slide 32: Contribution of foreign subsidiaries to consolidated pre-tax profit

    CONTRIBUTION OF FOREIGN SUBSIDIARIES TO CONSOLIDATED PRE- TAX PROFIT IS ALREADY SIGNIFICANT, BUT OTP BANK’S 2518P1E030402Ac_OPR019BU PERFORMANCE REMAINS DOMINANT ƒ HUF 294.4 bn targeted pre-tax Profit before tax of OTP Bank* HUF bn profit of banking group in 2009 is 250 CAGR 12,2% higher by HUF 143

  33. Slide 33: Constant above 30% ROE achievable through improving efficiency

    CONSTANT ABOVE 30% RETURN ON EQUITY IS ACHIEVABLE THROUGH CONSTANTLY IMPROVING EFFICIENCY RATIOS 2518P1E030402Ac_OPR019BU ROAA Real ROAE 5% 45% ƒ OTP Bank’s return on assets 4% 3,61% 3,60% 4,03% 3,89% 3,94% 40% grows from 3.61% in 2004 to 3,45% 35,9% 3.94% for 2009, but 3% 35% 32,6% 33,0% consolidat

  34. Slide 34: Further information; forward looking statements

    Further information 2518P1E030402Ac_OPR019BU For further information please contact OTP Bank Investor Relations Phone:+ 36 1 269 1693 or + 36 1 473 5457 Fax:+ 36 1 331 6312 E-Mail: investor.relations@otpbank.hu Or visit our website: www.otpbank.hu Forward looking statements This presentation contain

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