Otp Bank Nyrt · BET:OTP
Otp Bank Nyrt — Otp Bank S/Adr R — 9M 2024 Earnings Presentation
26 slides from Otp Bank Nyrt's earnings presentation, Nov 8, 2024
Slide 1: OTP Group 9M 2024 results
OTP Group 9M 2024 results Conference call – 8 November 2024 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; 3.5-fold loan growth and 11 acquisitions in 7 years. 44% of net loans in Eurozone + ERM2 countries, 77% within the EU Outstanding profitability: ROE exceeded 27% in 2023 and reached 24.9% in 1-9M 2024 Strong
Slide 3: First nine months profit after tax increased 19% y-o-y excluding one-offs
OTP Group’s first-nine months profit after tax increased by 19% y-o-y without the HUF 166 billion positive one-off effect of the acquisitions completed in 2023 Consolidated profit after tax Key performance indicators of OTP Group (HUF billion) (%) -4% Direct effect of acquisitions Return on equity N
Slide 4: 9M 2024 profit after tax increased 14% organically
In 9M 2024 the profit after tax increased by 14% organically, while the q-o-q improvement reached 15% Y-o-Y Q-o-Q Consolidated P&L (in HUF billion) 2023 9M 2023 9M 2024 1 2Q 2024 3Q 2024 FX-adj., organic FX-adj., w/o OBR Net interest income 1,462 1,036 1,322 25% 442 444 3% Net fees and commissions 4
Slide 5: OTP Core profit after tax HUF 210 billion in 9M 2024
OTP Core realized HUF 210 billion profit after tax in 9M 2024, +29% y-o-y, without dividends received from OTP CORE subsidiaries and the HUF 113 billion one-off positive effect of the Slovenian merger OTP Core profit after tax Key performance indicators of OTP Core (without dividends received from s
Slide 6: Mortgage and cash loan contractual amounts at OTP Bank
In 9M 2024, mortgage loan contractual amounts at OTP Bank increased by almost two and a half times, while OTP CORE cash loan contractual amounts grew more than 60% Y-o-y change in mortgage loan contractual amounts in 9M 2024 Y-o-y change in cash loan contractual amounts in 9M 2024 OTP 2.4x Market 2.
Slide 7: Corporate loan demand modest, micro and small enterprise loans expanded
Demand for medium and large corporate loans remained modest, but the stock already grew 1% ytd. OTP CORE Micro and small enterprises loans expanded by 4% Performing corporate loan volume changes (%) OTP Group’s market share in loans to Hungarian (DPD0-90 loan changes until 2018, Stage 1+2 from 2019,
Slide 8: Foreign subsidiaries continued to deliver decent performance
In the first nine months 2024, foreign subsidiaries continued to deliver decent performance Profit after tax1 (HUF billion) ROE1 Cost / income ratio 9M 2023 9M 2024 9M 2023 9M 2024 9M 2023 9M 2024 DSK Group (Bulgaria) 150 147 26% 22% 32% 33% OTP Bank Slovenia 75 83 19% 16% 39% 42% OTP Bank Croatia 4
Slide 9: 9M net interest income grew 25% y-o-y organically
9M net interest income grew 25% y-o-y organically and FX-adjusted. The 3% q-o-q growth was driven by Inorganic improving Hungarian margins, volume expansion in Bulgaria and Croatia, and positive one-offs in Uzbekistan effects NET INTEREST 9M 2024 3Q 2024 9M 2024 Y-o-Y 3Q 2024 Q-o-Q 1 The 45% y-o-y j
Slide 10: Consolidated NIM picked up by 26 bps y-o-y
Consolidated NIM picked up by 26 bps y-o-y driven mostly by the improvement in Hungary, which continued into 3Q. The margin in EUR-linked countries continued to erode q-o-q NET INTEREST 3Q 2023 2Q 2024 3Q 2024 1 MARGIN At OTP Core the margin started to gradually bounce back from 2Q 2023, OTP Group 4
Slide 11: Consolidated net interest margin stable q-o-q; rate sensitivity
The consolidated net interest margin remained stable q-o-q as the lower margin in Slovenia and Bulgaria was offset by improving NIM in Hungary. The sensitivity to EUR rate cuts significantly moderated over the past several quarters Sensitivity to rate 3Q 2024 – drivers behind the q-o-q change of the
Slide 12: Consolidated performing loans increased 2% q-o-q
Consolidated performing loans increased by 2% q-o-q without the sale of Romania. In Hungary, without the repayment of a large foreign loan, corporate loans increased by 2%, and the dynamic growth of household loans also continued Q-o-Q performing (Stage 1+2) LOAN volume changes, adjusted for FX effe
Slide 13: Performing loans grew 7% organically in 1-9M 2024
Consolidated performing loans grew by 7% organically in 1-9M 2024, with strong household and modest corporate loan dynamics. Ukrainian corporate and consumer loans have already grown more than 20% ytd YTD performing (Stage 1+2) LOAN volume changes, adjusted for FX effect Cons. Core2 DSK OBS OBH OBSr
Slide 14: Customer deposits grew 2% q-o-q organically
Consolidated customer deposits grew by 2% q-o-q organically. The stock of Hungarian retail deposits remained stable Q-o-Q DEPOSIT volume changes, adjusted for FX-effect Cons. Core2 DSK OBS OBH OBSrb Ipoteka OBU CKB OBA OBM OBRu (Hungary) (Bulgaria) (Slovenia) (Croatia) (Serbia) (Uzbek) (Ukraine) (Mo
Slide 15: Customer deposits increased 5% in first nine months
Consolidated customer deposits increased by 5% during the first nine months without the impact of the Romanian sale, matching the dynamics of Hungarian retail deposits. The Uzbek deposit portfolio grew by almost a quarter this year YTD DEPOSIT volume changes, adjusted for FX-effect Cons. Core2 DSK O
Slide 16: 14% organic growth in net fees
The 14% y-o-y organic and FX-adjusted growth in net fees was driven mainly by Hungary, however net fees Inorganic dropped in Hungary in 3Q as the impact of increased financial transaction tax rates kicked in from August effects NET FEE 9M 2024 3Q 2024 9M 2024 Y-o-Y 3Q 2024 Q-o-Q 1 The 11% y-o-y incr
Slide 17: Quarterly other income dynamics
Quarterly other income dynamics were largely influenced by the HUF 10.5 billion gain on the sale of the Inorganic Romanian bank presented on consolidated level, and other larger items booked in Hungary effects 9M 2024 3Q 2024 9M 2024 Y-o-Y 3Q 2024 Q-o-Q OTHER INCOME 1 The y-o-y HUF 77 billion declin
Slide 18: FX-adjusted operating costs increased 13% y-o-y
Inorganic FX-adjusted operating costs increased by 13% y-o-y without inorganic effects effects 2023 9M 2024 Y-o-Y Y-o-Y, FX-adjusted OPERATING COSTS 1 (HUF (HUF billion) billion) (HUF billion) (HUF billion) At OTP Core the 8% y-o-y growth was driven by: OTP Group 791 881 98 14%/14%1 861 96 14%/13%1
Slide 19: Consolidated risk costs decreased q-o-q
Consolidated risk costs decreased q-o-q partly due to lower impairments on Russian bonds. Uzbek risk costs were close to zero in 3Q due to positive one-offs 2023 9M 2024 TOTAL RISK COST 2023 credit risk 2Q 2024 3Q 2024 9M 2024 credit risk 1 At OTP Core risk costs were 0 in 3Q. (HUF billion) cost rat
Slide 20: Stage 3 ratio decreased to 4%
The Stage 3 ratio decreased to 4%. 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 at quality indicators the end of 3Q 2024 84.5% 82.7% 83.1% 83.6% 83.8% 1.8% 1.4% Stage 1 ratio 0.8
Slide 21: CET1 ratio improved in the first nine months
The CET1 ratio improved in the first nine months thanks to strong underlying capital generating capability and the sale of OTP Bank Romania (+53 bps) Capital adequacy Regulatory Decomposition of the year-to-date change in the CET1 ratio and MREL ratios (%)1 requirements* (based on the prudential sco
Slide 22: Robust liquidity position and wholesale bond maturities
Robust liquidity position: 73% net loan to deposit ratio, 231% LCR, 154% 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 Date Instrument Call Date Date
Slide 23: Economic growth expected to accelerate 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, %) 4.6 -0.9 <1 2.5-2.8 3.9 1.8 2.3 2.8 2.7 2.1 1.7 2.2 7.0 3.1 3.5 3.0 Unemploym
Slide 24: No change in the management guidance for 2024
No change in the management guidance for 2024 Based on the developments in the first 9 months of 2024, the management reaffirmed its 2024 guidance made in the Half-year Financial Report, accordingly: The net interest margin may exceed the 2023 level (3.93%). FX-adjusted organic performing loan v
Slide 25: 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 26: Questions and Answers session
Questions and Answers session 26