Otp Bank Nyrt · BET:OTP
Otp Bank Nyrt — Otp Bank S/Adr R — Q1 2024 Earnings Presentation
24 slides from Otp Bank Nyrt's earnings presentation, May 10, 2024
Slide 1: OTP Group 1Q 2024 results
OTP Group 1Q 2024 results Conference call – 10 May 2024 László Bencsik, Chief Financial and Strategic Officer
Slide 2: OTP Group - Highlights
OTP Group - Highlights Dominant position in CEE countries: No.1 in 5 countries based on net loans; ~3.5-fold loan growth and 11 acquisitions in 7 years. >42% of net loans in Eurozone + ERM2 countries, ~80% within the EU Outstanding profitability: 2023 ROE exceeded 27% and reached 23% in 1Q 2024 Stro
Slide 3: OTP Group profit after tax increased by 23% y-o-y
OTP Group profit after tax increased by 23% y-o-y. The improvement stemmed mainly from the dynamic increase in core banking income and more favorable risk costs Consolidated profit after tax Key performance indicators of the OTP Group (HUF billion) (%) +23% Return on equity NIM Cost / income Credit
Slide 4: Profit before tax grew by 42% y-o-y without acquisitions and FX-adjusted
In 1Q 2024 the profit before tax grew by 42% y-o-y without acquisitions and FX-adjusted fueled by robust income growth OTP Group (consolidated) P&L (in HUF billion) 2023 1Q 2023 4Q 2023 1Q 2024 Q-o-Q Y-o-Y FX-adj. FX-adj. w/o acq. Net interest income 1,462 311 426 435 2% 30% Net fees and commissions
Slide 5: OTP Core realized HUF 50 billion profit after tax in 1Q 2024
OTP Core realized HUF 50 billion profit after tax in 1Q 2024 without dividends received from subsidiaries OTP CORE OTP Core profit after tax Highlighted key performance indicators of OTP Core (without dividends received from subsidiaries, HUF bn) (%) -67% Return on equity Net interest Cost / income
Slide 6: Mortgage loan contractual amounts tripled y-o-y at OTP Core
In 1Q 2024 mortgage loan contractual amounts tripled y-o-y at OTP Core, outperforming the market. OTP CORE OTP’s market share in mortgage and cash loan flows, plus in retail deposits reached multi-year heights Y-o-y change in mortgage loan contractual amounts in 1Q 2024 Y-o-y change in cash loan con
Slide 7: OTP Core micro, small business and corporate loans remained stable
At OTP Core, micro and small business loans as well as corporate loans remained stable during 1Q 2024. OTP CORE Subsidized lending schemes continued to generate significant new loan disbursements Performing corporate loan volume changes OTP Group’s market share in loans to Hungarian (DPD0-90 loan ch
Slide 8: Foreign subsidiary banks were profitable in 1Q 2024
In the first quarter of 2024 foreign subsidiary banks were profitable. Foreign profit contribution gradually increased in recent years reaching 74% in 1Q 2024 Profit after tax1 (HUF billion) ROE1 Cost / income ratio 1Q 2023 1Q 2024 1Q 2023 1Q 2024 1Q 2023 1Q 2024 DSK Group (Bulgaria) 35 43 19% 19% 4
Slide 9: Net interest income grew 2% q-o-q
Effect of Net interest income grew 2% q-o-q driven by Bulgaria, Uzbekistan and Russia acquisitions NET INTEREST 1Q 2023 4Q 2023 1Q 2024 1Q 2024 Y-o-Y 1Q 2024 Q-o-Q 1 OTP Core NII declined by 1% q-o-q, INCOME (HUF billion) (HUF billion) (HUF billion) (HUF billion) (HUF billion) as a result of the bas
Slide 10: Consolidated NIM picked up by 65 bps y-o-y
Consolidated NIM picked up by 65 bps y-o-y driven mostly by the bounce-back in Hungary and the improvement in EUR-linked countries NET INTEREST 1Q 2023 4Q 2023 1Q 2024 MARGIN 1 At OTP Core net interest margin hit OTP Group all-time low in 1Q 2023, but, partly 3.65% 4.27% 4.30% thanks to the central
Slide 11: Consolidated performing loan volumes grew by 2% q-o-q
Consolidated performing loan volumes grew by 2% q-o-q without Romania, to a great extent driven by the strong performance in Bulgaria and Croatia. In Hungary mortgage loan growth accelerated and corporate exposures stabilized Q-o-Q performing (Stage 1+2) LOAN volume changes, adjusted for FX effect C
Slide 12: Consolidated deposits grew by 1% q-o-q
Consolidated deposits grew by 1% q-o-q due to the Hungarian household deposits turning into growth mode from 4Q 2023, expanding by 3% q-o-q in the first quarter Q-o-Q DEPOSIT volume changes, adjusted for FX-effect Cons. Core2 DSK SKB+ OBH OBSrb Ipoteka OBU CKB OBA OBM OBRu OBR (Hungary) (Bulgaria) N
Slide 13: 14% y-o-y FX-adjusted growth in net fees
The 14% y-o-y FX-adjusted growth in net fees was driven mainly by the Hungarian operation, OTP Core Effect of and Fund Management. The quarterly drop was mostly seasonal and one-off driven acquisitions NET FEE 1Q 2023 4Q 2023 1Q 2024 1Q 2024 Y-o-Y 1Q 2024 Q-o-Q 1 At OTP Core the 11% y-o-y fee INCOME
Slide 14: Other income decreased by 39% q-o-q
Effect of Other income decreased by 39% q-o-q, driven mainly by the lower FVA of subsidized loans at OTP Core acquisitions OTHER INCOME 1Q 2023 4Q 2023 1Q 2024 1Q 2024 Y-o-Y 1Q 2024 Q-o-Q (HUF billion) (HUF billion) (HUF billion) (HUF billion) (HUF billion) OTP Group -121 -15 -23%/-26%2 -26 1 53 67
Slide 15: FX-adjusted operating costs increased by 9% y-o-y without acquisitions
Amid high inflationary environment, FX-adjusted operating costs increased by 9% y-o-y without acquisitions Effect of acquisitions 9M 2023 1Q 2024 Y-o-Y Y-o-Y, FX-adjusted OPERATING COSTS (HUF (HUF billion) billion) (HUF billion) (HUF billion) 1 At OTP Core the 4% y-o-y growth was driven by: OTP Grou
Slide 16: Total risk costs turned positive in 1Q
The sign of total risk costs turned into positive in 1Q with releases in Hungary and Croatia, and moderating risk costs in Uzbekistan 2023 1Q 2024 TOTAL RISK COST 2023 credit risk 1Q 2023 4Q 2023 1Q 2024 credit risk (HUF billion) cost rate1 (HUF billion) (HUF billion) (HUF billion) cost rate1 OTP Gr
Slide 17: Stage 3 ratio stayed flat q-o-q
The Stage 3 ratio stayed flat q-o-q. 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 1Q 2024 84.9% 85.1% 84.5% 82.7% 83.1% 1.9% 1.5% Stage 1 ratio 0
Slide 18: Capital and liquidity position remained stable
The Group’s capital and liquidity position remained stable, capital ratios improved even further q-o-q supported by the strong first quarter results Capital adequacy Regulatory Decomposition of the q-o-q change in the CET1 ratio and MREL ratios (%)1 requirements* (based on the prudential scope of co
Slide 19: Robust liquidity position: 73% net loan to deposit ratio
Robust liquidity position: 73% net loan to deposit ratio, 243% LCR, 159% NSFR and relatively benign redemption profile OTP Bank outstanding FX wholesale bonds1 OTP Bank FX MREL-eligible bond and loan maturity profile1 (in EUR million) Actual External obligation of Issue Date Instrument Call date Mat
Slide 20: Delivery of ESG goals is on track
The delivery of ESG obligations and goals set by the Bank’s ESG strategy is on track according to schedule Green loan stock1 ESG RESULTS AND TARGETS (consolidated, HUF billion) 1Q 2024 Actual Long-term KPIs Plan Building the Corporate: HUF 544 billion Green loans of HUF 1,500 1,500 green loan billio
Slide 21: In 2024 economic growth is expected to accelerate
In 2024 economic growth is expected to accelerate in most operating countries Hungary Bulgaria Slovenia Croatia 2022 2023E 2024F 2022 2023E 2024F 2022 2023E 2024F 2022 2023E 2024F GDP growth (annual, %) 4.6 -0.9 2.52 3.9 1.8 2.1 2.5 1.6 2.4 7.0 3.1 3.2 Unemployment (%) 3.6 4.1 4.7 4.2 4.1 4.1 4.0 3.
Slide 22: Management sees no reason to change the 2024 guidance
Management sees no reason to change the guidance for 2024 Management guidance for 2024 – OTP Group We expect improving GDP growth rate, declining inflationary and rate environment, which may have positive impact on loan demand and portfolio quality. Therefore: FX-adjusted organic performing loan v
Slide 23: 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 24: Questions and Answers session
Questions and Answers session 24