Otp Bank Nyrt · BET:OTP
Otp Bank Nyrt — OTP Bank — Q1 2006 Earnings Presentation
32 slides from Otp Bank Nyrt's earnings presentation, June 2006
Slide 1: OTP Bank – 2006 first quarter results
OTP BANK – 2006 first quarter results INVESTOR PRESENTATION Presented by: Dr. Zoltán Spéder, CFO June, 2006
Slide 2: Agenda
Macroeconomic environment and financial intermediary 3-8 Financial performance (consolidated, IFRS) 10-20 Market position in Hungary (HAR) 22-28 OTP Subsidiaries in the Region 30-31
Slide 3: Main macroeconomic indicators in Hungary
15/06/2006 Main macroeconomic indicators in Hungary 2003 2004 2005 2006 F 2007 F Real GDP 3.4% 5.2% 4.1% 4.1% 2.3% Final household consumption 7.8% 3.6% 1.4% 2.8% -3.4% Investment 2.5% 8.0% 6.6% 6.4% 1.7% Budget deficit as a % of GDP -7.3% -6.5% -7.3% -9.8% -5.7% Current Account Balance as a % of GD
Slide 4: Base rate remained unchanged, 6% in the first quarter of 2006
15/06/2006 Base rate remained unchanged, 6% in the first quarter of 2006 Interest rates Changes of base rate 10% Y10, 14-Mar-06, 7.18% 4-Jan-05, 9.50% Y1, 14-Mar-06, 6.98% 2003 + 400 bp 9% M3, 14-Mar-06, 6.33% 2004 - 300 bp Y10, 31-May-06, 6.81% 2005 - 350 bp 8% Y1, 31-May-06, 6.43% 2006 F +/-25 bp
Slide 5: There is still room for further growth of banking penetration
15/06/2006 There is still room for further growth of banking penetration By total assets Retail sector HUF bn HUF bn 96.5% 30000 100% 8000 40% 89.9% 257% 85.2% 90% 7000 35% 25000 77.0% 6944 72.7% 80% 6000 6455 30% 116% 24.8% 25.3% 20000 70% 5667 58.2% 5000 27.0% 27.4% 25% 5164 26.0% 54.2% 60% 51.5%
Slide 6: Non-banking savings grow faster than volume of banking deposits
15/06/2006 Non-banking savings grow faster than volume of banking deposits Selected components of PFA Distribution of PFA components HUF bn Pension and Health Total PFA 100% 20000 Care Funds 10.5% 12.8% 14.4% 16.2% 17.7% 16,920 Pension and Health 9.4% Insurance reserves 80% 9.4% 9.3% 16000 14,980 Ca
Slide 7: Loans growth is the main driver of banking sector growth
15/06/2006 Loans growth is the main driver of banking sector growth Volume of retail loans Growth of retail loans HUF bn 100% 6000 5,477 93.7% 4,657 FX Consumer loans 80% 1,457 4500 3,786 1,080 60% 60.9% 1,019 HUF Consumer loans 2,997 630 38.3% 3000 925 3,001 40% 33.4% 2,347 873 29.5% 2,653 23.4% 23
Slide 8: Main macroeconomic indicators of countries of foreign subsidiaries
15/06/2006 Main macroeconomic indicators of countries of foreign subsidiaries Bulgaria Slovakia Croatia Romania 2004 2005P 2006F 2004 2005P 2006F 2004 2005P 2006F 2004 2005P 2006F Real GDP growth 5.6% 5.2% 5.1% 5.3% 5.4% 5.5% 3.8% 4.0% 4.2% 8.3% 4.0% 4.6% Household consumption 4.8% 8.1% 7.0% 3.5% 5.
Slide 9: Agenda
Macroeconomic environment and financial intermediary 3-8 Financial performance (consolidated, IFRS) 10-20 Market position in Hungary 22-28 OTP Subsidiaries in the Region 30-31
Slide 10: OTP Bank realised HUF 46.2 billion consolidated profit after tax in 1Q 2006
15/06/2006 OTP Bank realised HUF 46.2 billion consolidated profit after tax in 1Q 2006 Financial highlights of OTP Group (consolidated, IFRS) 1Q 2005 4Q 2005 1Q 2006 Q-o-Q Y-o-Y Total assets (HUF bn) 4,737.6 5,215.9 5,444.8 4.4% 14.9% Total loans and advances (HUF bn) 2,827.1 3,297.2 3,417.7 3.7% 20
Slide 11: Consolidated assets grew by 4.4% in 1Q 2006 and by 14.9% on a yearly basis
15/06/2006 Consolidated assets grew by 4.4% in 1Q 2006 and by 14.9% on a yearly bases Liabilities Assets HUF bn HUF bn 6000 6000 5,444.8 Equity 5,444.8 Other assets 5,215.9 5,215.9 4,737.6 4,910.4 539.1 4,910.4 5000 4,693.0 547.5 5000 4,737.6 4,693.0 429.7 523.9 Investment 476.3 Other securities 400
Slide 12: Consolidated gross loans increased by 3.7% Q/Q and deposits by 2.6%
15/06/2006 Consolidated gross loans increased by 3.7% Q/Q and by 20.9% Y/Y, while deposits by 2.6% and 7.2% respectively Gross loans by business lines Gross loans by countries Change Q/Q HUF bn Q/Q: +3.7% HUF bn 4000 Change 4000 Y/Y: +20.9% 3,417.7 3,417.7 +39.0% 3,297.2 Q/Q 3,297.2 2,980.9 3,089.0
Slide 13: NPL ratio stood at 3.9% on March 31, 2006
15/06/2006 NPL ratio stood at 3.9% on March 31, 2006 HUF bn Volume of qualified loans Qualified and NPL ratio 450 417.6 420.7 428.6 16% 371.1 13.5% 60 64 87 12.4% 12.8% 12.5% 360 327.7 11.6% 53 26 28 23 12% 3.8% 50 23 32 28 25 3.3% 3.6% 3.9% 270 26 24 3.5% 23 8% 180 272 301 302 294 9.7% 229 4% 8.1%
Slide 14: Capital adequacy ratio of OTP Bank stood at 10.92%
15/06/2006 Capital adequacy ratio of OTP Bank stood at 10.92% on March 31, 2006 Consolidated shareholder’s equity Non-consolidated shareholders’ equity Q/Q: -1.5% Q/Q: -4.7% HUF bn HUF bn 600 Y/Y: +25.5% 547.5 600 Y/Y: +15.6% 523.9 539.1 476.3 465.2 473.3 500 429.7 500 451.1 426.2 390.4 400 400 300
Slide 15: Net interest margin dropped by 97 bps compared to 4Q 2005
15/06/2006 Net interest margin dropped by 97 bps, without swaps by 43 bps compared to 4Q 2005 Net interest income Net interest margin Q/Q: -10.9% (w/o swap: -2.3%) HUF bn 100 Y/Y: +9.0% (w/o swap: +15.1%) 7.0% 80.0 6.52% 76.9 74.8 71.3 6.32% 80 65.5 6.5% 6.32% 3.7 6.23% 60 3.4 5.88% 0.6 6.0% 6.23% 6
Slide 16: Cost income ratio improved by 270 bps to 53.5% in 1Q 2006
15/06/2006 Cost income ratio improved by 270 bps to 53.5% in 1Q 2006 Non interest income Cost/income ratio HUF bn Q-o-Q: +14.5% Q/Q: -270 bp 80 Y-o-Y: +35.8% 70% Y/Y: +220 bp 63.8 64.5 56.3 Other 60 60% 56.7% 56.2% 47.5 48.8 56.8% 19.4 Insurance 53.5% 19.3 51.3% 18.0 40 18.3 Dividend 14.2 50% 50.2%
Slide 17: Net fees and commissions decreased by 2.9% Q/Q, increased 28.3% Y/Y
15/06/2006 Net fees and commissions decreased by 2.9% Q/Q, but increased by 28.3% Y/Y Fee and commission income Fee and commission expenses HUF bn Q/Q: -2.2% HUF bn 40 10 Q/Q: +0.9% Y/Y: +28.8% 34.2 33.5 29.9 Y/Y: +31.0% 28.8 8 30 26.0 5.0 4.2 6.2 6.3 3.5 4.1 5.2 3.2 6 20 9.5 9.4 4.8 8.5 8.8 2.3 3.0
Slide 18: Personnel expenses were 18.5% lower than in the previous quarter
15/06/2006 Personnel expenses were by 18.5%, while other non-interest expenses by 10.4% lower than in the previous quarter Personnel expenses Other non-interest expenses HUF bn HUF bn Q/Q: -4.7% Q/Q: -18.5% 40 40 Y/Y: +18.8% Y/Y: +25.5% 30 27.9 27.2 27.3 26.1 24.4 30 23.9 22.7 24.3 24.4 19.1 19.4 20
Slide 19: Consolidated ROE improved to 34.0%, ROA to 3.47%
15/06/2006 Consolidated ROE improved to 34.0%, ROA to 3.47% Profit after tax EPS, diluted Q/Q: +13.0% HUF HUF bn 200 179 Y/Y: +20.4% 50 46.2 155 155 41.0 40.9 146 145 38.4 38.1 150 40 30 100 20 50 10 0 0 1Q 2005 2Q 2005 3Q 2005 4Q 2005 1Q 2006 1Q 2005 2Q 2005 3Q 2005 4Q 2005 1Q 2006 Return on averag
Slide 20: Results of domestic subsidiaries
15/06/2006 From domestic subsidiaries, OTP Mortgage Bank realised HUF 2.8 bn; OTP Garancia HUF 2.3 bn; Merkantil Group HUF 1.7 bn; while OTP Fund Management HUF 1.1 bn profit OTP Mortgage Bank Merkantil Group OTP Garancia Insurance OTP Fund Management 2006 1Q Change 2006 1Q Change 2006 1Q Change 200
Slide 21: Agenda
Macroeconomic environment and financial intermediary 3-8 Financial performance (consolidated, IFRS) 10-20 Market position in Hungary (HAR) 22-28 OTP Subsidiaries in the Region 30-31
Slide 22: OTP Group maintains its leading position on the Hungarian market
15/06/2006 Despite losing market share in some segments, OTP Group maintains its leading position on the Hungarian market Market share Change Market share Change (on 31/03/2006) Q-Q (Y-Y) (on 31/03/2006) Q-Q (Y-Y) Total assets 23.7% -0.4%p (-1.4%p) Total deposits 25.3% -1.6%p (-4.4%p) Total loans 21
Slide 23: OTP Group's market share in retail deposits declined to 33.5%
15/06/2006 OTP Group’s market share in retail deposits declined to 33.5% in Hungary Retail deposits of credit institutions Market share – OTP Group HUF bn 8000 27.0% 27.6% 30% 40% 23.3% 25.1% 21.5% 5,811 25% 5,667 38% 6000 5,184 5,268 5,268 36.5% 36.4% 639 665 20% 36.0% 36.0% 573 585 619 35.4% 35.6%
Slide 24: OTP Group lost market share in HUF housing loans, gained in FX
15/06/2006 OTP Group lost market share in HUF housing loans, while share in FX housing loans increased to 23.0% Housing loans of credit institutions Market share – OTP Group HUF bn 2500 2,367 30% 60% 2,283 53.2% 53.1% 52.9% 52.7% 52.4% 2,175 2,055 1,956 472 566 50% 2000 372 24% 187 272 49.2% 23.9% 4
Slide 25: Market share in household consumer loans grew to 24.6%
15/06/2006 OTP Group market share in household’s consumer loans grew to 24.6% Consumer loans of credit institutions Market share – OTP Group HUF bn 2000 1,618 50% 35% 1,503 29.7% 29.7% 29.5% 28.7% 28.9% 1,380 46.7% 30% 1600 40% 41.9% 1,233 25% 1,123 36.8% 1200 30% 24.0% 24.7% 24.4% 24.6% 20% 23.1% 1
Slide 26: OTP Group is amongst the top players in corporate banking
15/06/2006 OTP Group is amongst the top players also in the corporate banking sector Corporate loans Corporate deposits HUF bn (volume of credit institutions and OTP Group) HUF bn (volume of credit institutions and OTP Group) 8000 7,492 4500 7,180 3,846 6,447 6,469 6,735 4000 7000 3,444 3500 3,336 6
Slide 27: Net asset value of OTP Funds increased by 6.4% in 1Q 2006
15/06/2006 Net asset value of OTP Funds increased by 6.4% in 1Q 2006 and 32.5% on a yearly bases Market volume of mutual funds Net asset value of OTP Funds HUF bn HUF bn 2500 800 708 695 2,078 654 700 53 1,876 1,877 81 2000 576 73 402 600 525 1,553 268 46 47 362 500 31 56 1,362 49 1500 217 34 37 136
Slide 28: OTP Garancia is the 2nd largest life insurance company in Hungary
15/06/2006 OTP Garancia is the 2th largest life insurance company in Hungary with 12.8% share of premium income Life and non-life premium income (market) Life and non-life premium income (OTP Garancia) HUF bn HUF bn 50 300 250 40 206.8 200 176.8 170.7 176.1 162.8 30 150 116.7 19.6 21.2 20.8 87.6 19.
Slide 29: Agenda
Macroeconomic environment and financial intermediary 3-8 Financial performance (consolidated, IFRS) 10-20 Market position in Hungary (HAR) 22-28 OTP Subsidiaries in the Region 30-31
Slide 30: OTP Bank is represented in seven countries in the region
15/06/2006 OTP Bank is represented in seven countries in the region OTP Group OTP Banka Slovensko Raiffeisenbank Ukraine*** Branches* 976 Branches 79 Branches 42 Employees 18,289 Employees 780 Number of clients ~5.5 e Number of clients* ~9,8 m Number of clients ~0,2 m Total assets € 1,200 mn Total a
Slide 31: Contribution of foreign subsidiaries to aggregated profit after tax grew to 10.3%
15/06/2006 Contribution of foreign subsidiaries to aggregated profit after tax grew to 10.3% Share of foreign subsidiaries** DSK Group OTP Banka Slovensko OTP banka Hrvatska* OTP Bank Romania 2006 1Q Change 2006 1Q Change 2006 1Q Change 2006 1Q Change 2006 1Q Change Main balance sheet items, HUF bn
Slide 32: OTP Bank Investor Relations
Further information OTP Bank Investor Relations Tel: + 36 1 473 5460 E-mail: investor.relations@otpbank.hu + 36 1 473 5457 Website: www.otpbank.hu Fax: + 36 1 473 5951 Forward looking statements This presentation contains certain forward-looking statements with respect to the financial condition, re