Otp Bank Nyrt · BET:OTP
Otp Bank Nyrt — OTP Bank — DB Emerging Opportunities in Emerging Europe Conference (March 2006)
37 slides from Otp Bank Nyrt's conference presentation, March 2006
Slide 1: OTP Bank - 2005 preliminary results
DB - Emerging Opportunities in Emerging Europe Conference OTP Bank - 2005 preliminary results Presented by: Dr. Zoltán Spéder, CFO March, 2006
Slide 2: Summary of 2005 results
Summary of 2005 results 2-8 Macroeconomic environment and financial intermediary 9-15 Financial performance (consolidated, IFRS) 16-23 Market position in Hungary 24-31 OTP Subsidiaries in the Region 32-34 Plans for the year 2006 35-36
Slide 3: Main challenges in 2005
06/03/2006 Main challenges in 2005 NBH cut the base rate by 350 bps between January and October 2005 Intensifying competition, especially on retail market Steady growth of FX-linked lending in all segments Special banking tax for financial institutions (over HUF 10 billion for the whole year
Slide 4: OTP Bank realised HUF 158.3 billion profit after tax in 05
06/03/2006 OTP Bank realised HUF 158.3 billion profit after tax in 2005 Financial highlights of OTP Bank (consolidated, IFRS) HUF billion 2004 2005P Y-o-Y 2004 4Q 2005 3Q 2005 4Q Q-o-Q Y-o-Y Total assets 4,162.4 5,216.5 25.3% 4,162.4 4,910.4 5,216.5 6.2% 25.3% Gross loans 2,586.1 3,302.0 27.7% 2,586
Slide 5: In 2005 net interest margin dropped compared to 2004
06/03/2006 In 2005 net interest margin dropped by 51 bps compared to 2004 Profit after tax Total assets HUF bn +20.4% HUF bn 158.3 +25.3% 160 6000 5,216.5 140 131.5 4,737.6 4,693.0 4,910.4 5000 120 4,162.4 4000 100 80 3000 60 +52,1% 38.3 38.1 41.0 40.9 2000 40 26.9 1000 20 0 0 4Q 04 1Q 05 2Q 05 3Q 0
Slide 6: Results of domestic and foreign subsidiaries
06/03/2006 From domestic subsidiaries Merkantil Group, OTP Garancia Insurance and OTP Mortgage Bank, from foreign members DSK Bank had outstanding results OTP Bank OTP Mortgage Bank Merkantil Group OTP Garancia Insurance OTP Fund Management 2004 2005P Y-o-Y 2004 2005P Y-o-Y 2004 2005P Y-o-Y 2004 200
Slide 7: OTP Group managed to keep its leading position in Hungary
06/03/2006 OTP Group managed to keep its leading position in Hungary Market share Change Market share Change on 31 Dec, 2005 y-y (q-q) on 31 Dec, 2005 y-y (q-q) Total assets 24.1% -0.1%p (-0.2%p) Total deposits 26.9% -1.6%p (0.0%p) Total loans 21.4% -0.5%p (0.0%p) Retail deposits 34.7% -0.7%p (-0.1%
Slide 8: OTP Group remained one of the most profitable banking groups in the region
06/03/2006 OTP Group remained one of the most profitable banking groups in the region Return on average equity (ROE) Return on average assets (ROA) 50% 5% 40% 35.5% 35.3% 4% 3.45% 3.41% 3.45% 33.6% 32.8% 32.3% 3.23% 3.23% 3.38% 30.6% 30% 25.8% 3% 2.68% 28.4% 2.93% 20% 2% 10% 1% 0% 0% 4Q 2004 1Q 2005
Slide 9: Macroeconomic environment and financial intermediary
Summary of 2005 results 2-8 Macroeconomic environment and financial intermediary 9-15 Financial performance (consolidated, IFRS) 16-23 Market position in Hungary 24-31 OTP Subsidiaries in the Region 32-34 Plans for the year 2006 35-36
Slide 10: Main macroeconomic indicators in Hungary
06/03/2006 Main macroeconomic indicators in Hungary 2003 2004 2005F* 2006F* 2007F* Real GDP growth 3.4% 4.6% 4.1% 4.5% 3.3% Household consumption 7.8% 3.1% 3.1% 3.9% 1.5% Investment growth 2.5% 7.9% 8.6% 8.0% 6.4% Budged deficit (HUF bn) -1,363 -1,323 -1,632 -1,889 -1,553 as a % of GDP -7.3% -6.5% -
Slide 11: In 2005 NBH cut the base rate
06/03/2006 In 2005 NBH cut the base rate by 350 bps Interest rates Changes of base rate 10% 4-Jan-05, 9.50% 2003 + 400 bp 9% 2004 - 300 bp 2005 - 350 bp 8% 2006 F +/-25 bp 7% Base rate in CEE-Countries 6% 19-Dec-05, 6.00% HU 6.00% 5% CZ 2.00% 03-Jan-05 03-Feb-05 03-Mar-05 03-Apr-05 03-May-05 03-Jun-
Slide 12: Room for further growth of banking penetration
06/03/2006 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% 84.2% 90% 7000 35% 25000 77.0% 6944 72.7% 80% 6000 6455 30% 116% 24.8% 25.3% 20000 70% 5669 58.2% 5000 27.0% 27.4% 25% 5164 25.7% 54.2% 60% 4629 1
Slide 13: Slowly changing investment patterns
06/03/2006 Slowly changing investment patterns… 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 Care Funds 9.6% 9.8% 2,999 In
Slide 14: Dynamic retail loan growth
06/03/2006 …and dynamic retail loan 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% 23.5% 854 2,283 1,084 27.7%
Slide 15: Macroeconomic indicators of countries of foreign subsidiaries
06/03/2006 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 16: Financial performance (consolidated, IFRS)
Summary of 2005 results 2-8 Macroeconomic environment and financial intermediary 9-15 Financial performance (consolidated, IFRS) 16-23 Market position in Hungary 24-31 OTP Subsidiaries in the Region 32-34 Plans for the year 2006 35-36
Slide 17: Consolidated total assets grew by 25.3% in 2005
06/03/2006 Consolidated total assets grew by 25.3% in 2005 Liabilities Assets HUF bn HUF bn 6000 6000 5,217 Equity Other assets 5,216.5 4,738 4,910 4,910.4 5000 4,693 547 5000 4,737.6 4,693.0 4,167 430 524 4,162.4 Investment 476 Other securities 4000 434 4000 liabilities Loans, net 3000 Issued 3000
Slide 18: NPL ratio stood at 3.6% in December 2005
06/03/2006 NPL ratio stood at 3.6% on 31 December, 2005 HUF bn Qualified loans Qualified and NPL ratio 450 417.6 409.5 16% 371.1 13.5% 60 63 12.4% 12.4% 360 327.7 11.7% 11.6% 301.4 53 26 31 12% 32 3.8% 50 23 24 3.3% 3.6% 270 46 24 3.5% 3.5% 26 20 23 25 8% 180 272 301 291 9.1% 9.7% 8.8% 211 229 4% 8.
Slide 19: Net interest income increased by 13.8% in 2005
06/03/2006 Net interest income increased by 13.8% in 2005 Net interest income Net interest margin HUF bn 296.9 7.0% 300 260.9 6.61% 6.52% 6.6 250 6.5% 6.32% 6.33% 15.9 6.55% 200 6.30% +13.8% 5.88% 6.23% 150 6.0% 6.17% 6.23% 6.01% 6.00% 100 76.9 74.8 79.7 5.83% 66.4 65.5 5.75% 5.5% 0.7 0.6 3.4 3.7 50
Slide 20: Total income increased by 23.1%
06/03/2006 Total income increased by 23.1% Total income Non-interest income HUF bn 494.8 HUF bn 500 300 +34.6% 401.9 400 250 217.8 +23.1% 200 300 161.8 150 200 122.0 133.5 131.1 100 107.7 108.2 63.8 57.6 47.2 47.5 48.8 100 50 0 0 4Q 04 1Q 05 2Q 05 3Q 05 4Q 05 2004 2005P 4Q 04 1Q 05 2Q 05 3Q 05 4Q 05
Slide 21: Non-interest expenses were 17.4% higher than 2004
06/03/2006 Non-interest expenses were 17.4% higher than 2004 (without special banking tax and effect of IFRS 2 by 10.3%) Non-interest expenses Personnel expenses HUF bn HUF bn 294.2 95.4 100 300 250.6 79.5 250 80 200 +17.4% 60 +19.9% (+10.3%) (+10.5%) 150 276.5 87.9 250.6 40 28.0 26.1 23.9 24.4 100
Slide 22: Share of net fee income in total income increased
06/03/2006 Share of net fee income in total income increased from 23.3% to 25.0% Non interest income Cost/income ratio HUF bn Q-o-Q: -9.7% Y-o-Y: +34.6% 80% 80 63.8 Other 57.6 60 48.8 70% 66.2% 47.2 47.5 Insurance 19.3 18.0 40 12.1 18.3 Dividend 56.8% 56.7% 56.2% 14.2 60% 62.5% Real estate trx, net
Slide 23: OTP Bank realized HUF 40.9 billion net profit in 4Q 2005
06/03/2006 OTP Bank realized HUF 40.9 billion net profit in 4Q 2005 Profit before tax Profit after tax HUF bn +23.0% HUF bn +20.4% 191.9 158.3 200 160 140 131.5 156.0 160 120 120 100 80 80 60 45.9 46.5 49.1 50.4 38.3 38.1 41.0 40.9 32.1 40 26.9 40 20 0 0 4Q 04 1Q 05 2Q 05 3Q 05 4Q 05 2004 2005P 4Q 0
Slide 24: Market position in Hungary
Summary of 2005 results 2-8 Macroeconomic environment and financial intermediary 9-15 Financial performance (consolidated, IFRS) 16-23 Market position in Hungary 24-31 OTP Subsidiaries in the Region 32-34 Plans for the year 2006 35-36
Slide 25: OTP Group kept its leading position in Hungary
06/03/2006 OTP Group managed to keep its leading position in Hungary Market share* – total assets Market share* – total loans HUF bn HUF bn OTP Bank 3500 35% total loans 6000 30% 3000 30% 27% 21.9% 21.8% 21.9% 21.4% 21.4% Group total 25.1% 2500 25% 24.3% loans 24.2% 23.8% 24.1% 5000 2000 20% 24% 150
Slide 26: OTP Group maintained ~35% market share in retail deposits
06/03/2006 OTP Group maintained its ~35% market share in retail deposits in Hungary Retail deposits of credit institutions Market share – OTP group HUF bn 5,667 6000 5,268 5,268 30% 38% 5,122 5,184 639 5000 564 573 585 619 27.0% 25% 25.1% 37% 36.5% 4000 23.3% 20% 21.5% 36.0% 36.0% 36.0% 19.8% 3,669
Slide 27: Market share in HUF and FX housing loans
06/03/2006 OTP Group lost market share in HUF housing loans, while share in FX housing loans increased to 22.5% Housing loans of credit institutions Market share – OTP group HUF bn 2500 2,283 30% 60% 53.3% 53.2% 53.1% 52.9% 52.7% 2,175 2,055 1,911 1,956 472 50% 2000 372 24% 187 272 49.7% 49.2% 145 4
Slide 28: Market share in household consumer loans at 24.4%
06/03/2006 OTP Group market share in household’s consumer loans stood at 24.4% Consumer loans of credit institutions Market share – OTP group HUF bn 1800 48% 35% 1,503 29.7% 29.7% 29.5% 28.9% 28.7% 1500 1,380 40% 30% 1,233 41.9% 1,093 1,123 25% 1200 36.8% 32% 31.0% 24.0% 24.7% 24.4% 508 630 20% 23.2
Slide 29: Top player in corporate banking sector
06/03/2006 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 4000 7,180 6,735 3,336 3,444 7000 6,447 6,469 3500 6,237 3,089 2,966
Slide 30: Net asset value of OTP Funds decreased by 8% in 4Q 2005
06/03/2006 Net asset value of OTP Funds decreased by 8% in 4Q 2005 Market volume of mutual funds Net asset value of OTP funds HUF bn HUF bn 2000 1,876 1,877 800 708 700 654 53 1,553 268 362 576 600 73 525 1500 1,362 46 47 217 500 31 49 415 37 1,064 136 24 34 400 30 1000 100 300 511 412 200 407 421 3
Slide 31: OTP Garancia is the 2nd largest life insurer in Hungary
06/03/2006 OTP Garancia is the 2th largest life insurance company in Hungary with 14.8% share of premium income Life and non-life premium income (market) Life and non-life premium income (OTP Garancia) HUF bn HUF bn 800 80 75.8 686.5 598.5 600 60 55.6 31.2 384.4 355.2 28.9 400 40 19.6 21.2 19.4 151.
Slide 32: OTP Subsidiaries in the Region
Summary of 2005 results 2-8 Macroeconomic environment and financial intermediary 9-15 Financial performance (consolidated, IFRS) 16-23 Market position in Hungary 24-31 OTP Subsidiaries in the Region 32-34 Plans for the year 2006 35-36
Slide 33: Progress towards establishing a regional financial group
06/03/2006 OTP Bank has made significant progress towards establishing a regional financial group OTP Group OTP Banka Slovensko No of branches* 960 No of branches 78 No of employees 18,076 No of employees 766 No of clients* ~9.1 mn No of clients ~0.2 mn Total assets EUR 20,641 mn Total assets EUR 1,
Slide 34: Contribution of foreign subsidiaries to profit after tax was 10.5%
Contribution of foreign subsidiaries to profit after tax was 10.5% Share of foreign OTP Group OTP Bank DSK Group OTP Banka Slovensko OTP banka Hrvatska OTP Bank Romania subsidiaries** Main balance sheet items, HUF bn 2005P Y-o-Y 2005P Y-o-Y 2005P Y-o-Y 2005P Y-o-Y 2005P Q-o-Q 2005P Y-o-Y 2005P Y-o-Y
Slide 35: Plans for the year 2006
Summary of 2005 results 2-8 Macroeconomic environment and financial intermediary 9-15 Financial performance (consolidated, IFRS) 16-23 Market position in Hungary 24-31 OTP Subsidiaries in the Region 32-34 Plans for the year 2006 35-36
Slide 36: OTP Bank expects 16-17% profit growth in 2006
06/03/2006 OTP Bank expects 16-17% profit growth in 2006 Financial highlights of OTP Bank (consolidated, IFRS) HUF billion 2004 2005 2006P Change 05E/04 06P/05E Total assets 4,162.4 5,216.5 6,014.4 25.3% 15.3% Gross loans 2,586.1 3,302.0 4,087.3 27.7% 23.8% Deposits 2,902.2 3,428.0 3,840.0 18.1% 12.
Slide 37: 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
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