Otp Bank Nyrt · BET:OTP
Otp Bank Nyrt — OTP Bank — Q3 2006 Earnings Presentation
35 slides from Otp Bank Nyrt's earnings presentation, November 2006
Slide 1: OTP BANK – 2006 third quarter results
OTP BANK – 2006 third quarter results INVESTOR PRESENTATION Presented by: Dr. Zoltán Spéder, CFO November, 2006
Slide 2: Agenda
Macroeconomic environment and financial intermediary 3-6 Financial performance (consolidated, IFRS) 8-18 Market position in Hungary (HAR) 20-27 OTP Subsidiaries in the Region 29-38
Slide 3: Main macroeconomic indicators in Hungary
04/12/2006 Main macroeconomic indicators in Hungary 2003 2004 2005 2006 F 2007 F 2008 F 2009 F 2010 F Real GDP 3.4% 5.2% 4.1% 3.9% 2.5% 3.1% 4.2% 4.1% Final household consumption 7.7% 3.6% 1.4% 2.5% -2.3% 0.7% 4.2% 4.8% Public consumption 7.6% 0.7% -0.9% 1.2% -3.0% 0.0% 1.0% 3.5% Investment 2.9% 8.0
Slide 4: Base rate increased by 200 bps to 8.00% YTD 2006
04/12/2006 Base rate increased by 200 bps to 8.00% YTD 2006 Interest rates 9% 02-Oct-06, 7.75% 02-Oct-06, 8.10% 8.47% 7.77% Changes of base rate 2003 + 400 bp 8% 2004 - 300 bp 2005 - 350 bp 06-Jun-06, 6.78% 2006 (ytd) + 200 bp 7% 26-Oct-06, 8.00% 29-Sep-06, 8.35% 29-Sep-06, 8.00% 6% 29-Sep-06, 7.60%
Slide 5: Main macroeconomic indicators of countries of foreign subsidiaries
04/12/2006 Main macroeconomic indicators of countries of foreign subsidiaries Real GDP Budget deficit as a % of GDP 8% 13% 7% 9% 6% 5% 5% 1% 4% -3% 3% -7% 2% -11% 2005 2006 2007 2008 2009 2010 2005 2006 2007 2008 2009 2010 Slovakia Bulgaria Serbia Ukraine Russia Serbia Bulgaria Ukraine Russia Romani
Slide 6: The banking market has low penetration and promising growth potential in the countries of the subsidiaries
04/12/2006 The banking market has low penetration and promising growth potential in the countries of the subsidiaries 140% Total assets to GDP Total deposits to GDP 100% +3.7% +1.9% 120% +6.6% 80% +4.6% +2.8% +2.9% 100% +3.2% 60% +0.9% 80% +7.6% +7.6% +9.0% 40% +12.4% 60% +7.4% +4.6% 20% +4.8% +9.5%
Slide 7: Agenda
Macroeconomic environment and financial intermediary 3-6 Financial performance (consolidated, IFRS) 8-18 Market position in Hungary (HAR) 20-27 OTP Subsidiaries in the Region 29-38
Slide 8: OTP Bank realised HUF 53.6 billion consolidated profit after tax in 3Q 2006
04/12/2006 OTP Bank realised HUF 53.6 billion consolidated profit after tax in 3Q 2006 Financial highlights of OTP Group (consolidated, IFRS) 2005 3Q 2006 2Q 2006 3Q Q-o-Q Y-o-Y 2005 9M 2006 9M Y-o-Y Total assets (HUF bn) 4,910.4 5,735.3 6,174.7 7.7% 25.7% 4,910.4 6,174.7 25.7% Total loans and advan
Slide 9: Consolidated assets grew by 7.7% in 3Q 2006 and by 25.7% on a yearly basis
04/12/2006 Consolidated assets grew by 7.7% in 3Q 2006 and by 25.7% on a yearly bases HUF bn Assets HUF bn Liabilities 6,174.7 6,174.7 5,735.3 Other assets 5,735.3 Equity 6000 5,444.8 6000 5,444.8 650.9 5,215.9 5,215.9 598.7 4,910.4 4,910.4 539.1 5000 Investment 5000 547.5 securities 523.9 Other 400
Slide 10: Consolidated gross loans increased by 4.2% Q/Q and by 24.5% Y/Y
04/12/2006 Consolidated gross loans increased by 4.2% Q/Q and by 24.5% Y/Y, while deposits by 0.8% and 15.6% respectively Gross loans by business lines Gross loans by countries Change Q/Q: +4.2% Q/Q HUF bn Y/Y: +24.5% 3,847.1 HUF bn 3,690.6 Change 3,690.6 3,847.1 +17.3% 4000 4000 3,297.2 3,417.7 Q/Q
Slide 11: NPL ratio did not change significantly and stood at 4.3%
04/12/2006 NPL ratio did not change significantly and stood at 4.3% on September 30, 2006 HUF bn Volume of qualified loans Qualified and NPL ratio 600 540.5 16% 14.1% 505.6 13.5% 13.7% 500 77 12.8% 12.5% 417.6 420.7 428.6 71 53 12% 3.8% 4.2% 4.3% 400 60 64 87 49 34 3.6% 3.9% 26 28 35 32 28 23 25 300
Slide 12: Capital adequacy ratio of OTP Bank stood at 14.54%
04/12/2006 Capital adequacy ratio of OTP Bank stood at 14.54% on September 30, 2006 Consolidated shareholder’s equity Non-consolidated shareholders’ equity HUF bn Q/Q: +8.7% HUF bn Q/Q: +10.2% 700 Y/Y: +24.2% 650.9 Y/Y: +13.6% 598.7 600 528.4 600 523.9 547.5 539.1 465.2 473.3 479.3 500 451.1 500 400
Slide 13: Net interest margin increased by 195 bps, without swaps decreased by 40 bps
04/12/2006 Net interest margin increased by 195 bps, without swaps decreased by 40 bps compared to the last quarter Net interest income Net interest margin HUF bn Q/Q: +2.5% (w/o swap: +10.4%) 7.5% 120 Y/Y: -4.9% (w/o swap: +12.1%) 106.9 7.18% 100 25.0 6.23% 6.03% 80.0 73.1 74.8 71.3 80 5.90% 6.0% 6
Slide 14: Cost income ratio decreased by 220 bps
04/12/2006 Cost income ratio decreased by 220 bps to 53.7% in 2Q 2006 Non interest income Cost/income ratio HUF bn Q/Q: -220 bp Q/Q: -20.6% 70% Y/Y: -310 bp 120 Y/Y: -11.0% 71.5 56.8 100 63.8 64.5 Other 56.3 56.7% 55.9% 18.5 60% 56.2% 80 22.2 Insurance 53.5% 53.7% 19.3 19.4 18.0 13.579 60 Dividend 5
Slide 15: Net fees and commissions increased by 3.0% Q/Q and by 15.6% Y/Y
04/12/2006 Net fees and commissions increased by 3.0% Q/Q and by 15.6% Y/Y Fee and commission income Fee and commission expenses HUF bn Q/Q: +7.0% HUF bn 40 36.7 Q/Q: -% Y/Y: +24.6% 35.8 10 34.2 33.5 1.1 Y/Y: +55.5% 5.4 8.1 8.1 29.9 30 7.6 5.4 8 11.1 6 6.2 6.3 2.9 3.2 10.6 6 5.2 9.5 20 9.5 2.3 2.4 8
Slide 16: Personnel expenses were higher by 5.8%, other non-interest expenses grew by 3.7%
04/12/2006 Personnel expenses were higher by 5.8%, while other non-interest expenses grew by 3.7% on a quarterly base Personnel expenses Other non-interest expenses HUF bn Q/Q: +5.8% HUF bn Q/Q: +3.7% 40 Y/Y: +14.7% 40 Y/Y: +13.3% 28.0 29.7 30.8 30 26.1 26.4 27.2 27.3 24.4 22.7 30 24.4 20 20 30.7 22
Slide 17: Consolidated ROE grew to 34.3%, ROA to 3.60%
04/12/2006 Consolidated ROE grew to 34.3%, ROA to 3.60%, respectively in 3Q 2006 Profit after tax EPS, diluted HUF bn Q/Q: +14.7% HUF 60 Y/Y: +30.8% 53.6 250 207 50 46.2 46.7 41.0 40.9 200 179 180 40 155 155 150 30 100 20 10 50 0 0 3Q 2005 4Q 2005 1Q 2006 2Q 2006 3Q 2006 3Q 2005 4Q 2005 1Q 2006 2Q 2
Slide 18: Domestic subsidiaries: OTP Garancia, Fund Management, Merkantil Group
04/12/2006 Within domestic subsidiaries OTP Garancia Insurance reached HUF 1.6 bn; OTP Fund Management HUF 1.2 bn profit after tax; Merkantil Group HUF 0.9 bn profit after tax in 3Q 2006 OTP Bank (non-cons) OTP Mortgage Bank Merkantil Group OTP Garancia Insurance OTP Fund Management 2006 3Q Change 2
Slide 19: Agenda
Macroeconomic environment and financial intermediary 3-6 Financial performance (consolidated, IFRS) 8-18 Market position in Hungary (HAR) 20-27 OTP Subsidiaries in the Region 29-38
Slide 20: OTP Group still maintains its leading position on the Hungarian market
04/12/2006 Despite losing market share in some important segments, OTP Group still maintains its leading position on the Hungarian market Market share Change Market share Change (2006.09.30.) Q-Q (Y-Y) (2006.09.30.) Q-Q (Y-Y) Total assets 24.4% +0.9%p (+0.1%p) Total deposits 24.4% -0.7%p (-2.5%p) To
Slide 21: OTP Group's market share in retail deposits declined to 32.6%
04/12/2006 OTP Group’s market share in retail deposits declined to 32.6% in Hungary Retail deposits of credit institutions Market share – OTP Group HUF bn 8000 35% 40% 27.6% 28.6% 27.0% 24.4% 30% 25.1% 5,811 5,667 5,957 38% 6000 5,268 5,268 36.8% 748 25% 36.4% 36.1% 639 665 781 36.0% 619 35.6% 20% 3
Slide 22: OTP Group lost market share in HUF housing loans
04/12/2006 OTP Group lost market share in HUF housing loans, its share in FX housing loans decreased by 0.7% Housing loans of credit institutions Market share – OTP Group HUF bn 2,627 2,526 60% 52.9% 2800 32% 52.7% 52.4% 52.0% 51.6% 2,526 2,367 2,283 31.9% 50% 29.1% 2100 472 566 838 24% 47.4% 372 73
Slide 23: Market share in household consumer loans reached 25.0%
04/12/2006 OTP Group market share in household’s consumer loans reached 25.0% in the third quarter of 2006 Consumer loans of credit institutions Market share – OTP Group HUF bn 2000 1,858 60% 35% 29.5% 28.7% 28.9% 1,618 28.1% 27.5% 1,503 50% 30% 1600 52.1% 53.3% 1,380 1,233 46.7% 25% 36.8% 41.9% 40%
Slide 24: OTP Group is amongst the top players in corporate banking
04/12/2006 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) 9000 4500 4,241 7,998 8,220 3,910 3,846 8000 7,492 4000 7,180 3,444 6,735
Slide 25: Net asset value of OTP Funds decreased by 1.8% in 3Q 2006
04/12/2006 Net asset value of OTP Funds decreased by 1.8% in 3Q 2006 and by 7.8 % on a yearly bases HUF bn Market volume of mutual funds HUF bn Net asset value of OTP Funds 3000 2,548 900 2500 2,078 2,084 750 708 695 607 654 665 1,876 1,877 53 653 2000 81 402 425 600 73 86 268 362 47 123 1500 49 56
Slide 26: OTP Garancia is the 2nd largest life insurance company in Hungary
04/12/2006 OTP Garancia is the 2th largest life insurance company in Hungary with 11.1% share of premium income Life and non-life premium income (market) Life and non-life premium income (OTP Garancia) HUF bn HUF bn 250 30 230.3 206.8 191.8 23.3 200 24 176.1 21.2 20.8 170.7 19.4 19.5 102.8 18 9.1 15
Slide 27: Banking sector again the most significant contributor to consolidated profit
04/12/2006 The most significant contribution to the Group’s consolidated after tax profit came again from the banking sector Insurance Other fin. Consolidation Sep 30, 2006 Banks Non-fin. Service Aggregated Consolidated Share of banks Companies Service effect Assets 7,300,474 188,715 192,135 150,146
Slide 28: Agenda
Macroeconomic environment and financial intermediary 3-6 Financial performance (consolidated, IFRS) 8-18 Market position in Hungary (HAR) 20-27 OTP Subsidiaries in the Region 29-38
Slide 29: OTP Bank is represented in nine countries in the region
04/12/2006 OTP Bank is represented in nine countries in the region OTP Group OTP Banka Slovensko CJSC OTP Bank** Investsberbank** Branches* 1,032 Branches 86 Branches 60 Branches 78 Employees 18,865 Employees 814 Number of clients ~95 th Number of clients ~880 th Number of clients* ~9,0 m Number of
Slide 30: Contribution of foreign subsidiaries to consolidated profit grew to 11.8%
04/12/2006 Contribution of foreign subsidiaries to the consolidated profit grew to 11.8% in 9M 2006 Share of foreign DSK Group OTP Banka Slovensko OTP banka Hrvatska* OTP Bank Romania Niska banka subsidiaries 2006 3Q Change 2006 3Q Change 2006 3Q Change 2006 3Q Change 2006 3Q Change 2006 9M Change M
Slide 31: Bulgaria remained the main contributor among foreign countries
04/12/2006 From the foreign countries, Bulgaria remained the main contributor Consolidation Foreign Sep 30, 2006 HU BG CR SK RO SE UK Aggregated Consolidated effect ratio Assets 6,089,424 848,468 366,793 355,552 156,539 11,100 3,594 7,831,470 1,655,993 6,175,477 22.2% Loans 2,972,363 523,659 198,285
Slide 32: OTP has entered new markets with high growth and value creation potential
04/12/2006 OTP has entered new markets with high growth and strong value creation potential Strong growth potential y Low current penetration, less Total loans as % of GDP, 2005 (bars) and expected uncertain expectations, lower average loan growth (CAGR in LCY), 2005-2010 interest rates, better risk
Slide 33: Key descriptive data of enlarged OTP Group
04/12/2006 Entering Ukraine, Russia and Serbia is a significant step in OTP’s growth story Key descriptive data of enlarged OTP Group OTP Group Newly Enlarged OTP excluding new acquired Group total subsidiaries subsidiaries Number of 1012 33% 49% 19% 230 1,242 (+23%) branches (1H 2006) Number of ~10
Slide 34: OTP Bank issued in total EUR 1.3 billion bonds to finance acquisitions
04/12/2006 OTP Bank issued in total EUR 1.3 billion bonds to finance acquisitions Lower Tier 2 EUR 300 m issue on September 19, 2006 Maturity: 10 years Fixed 5.17% coupon (10 yrs midswap + 120bp) Book runners: Calyon, Citigroup Income Certificate Sale of 14.5 million treasury shares to Opu
Slide 35: 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