OTP Bank Nyrt · BET:OTP
OTP Bank Nyrt — Debt Investor Presentation (May 2022)
26 slides from OTP Bank Nyrt's debt investor presentation, May 2022
Slide 1: OTP Group Fixed Income Investor Presentation, 1Q 2022 results
OTP Group – Decent adjusted profit without Russia and Ukraine; ample capital & stable liquidity position amid turbulent times Fixed Income Investor Presentation Based on 1Q 2022 results
Slide 2: Important Information
Important Information • This presentation has been prepared by OTP Bank Nyrt. ("OTP Bank") and is the sole responsibility of OTP Bank. This presentation and the information contained herein is strictly confidential to the recipient, have been furnished to you solely for your information and may not
Slide 3: OTP Group offers universal banking services to around 16 million customers in 11 countries
OTP Group offers universal banking services to around 16 million active customers in 11 countries across the CEE/CIS Region Major Group Members in Europe Total Assets Systemic position in Hungary… Montenegro Albania 1Q 2022 market share (%) OTP Bank Russia Russia Moldova Ukraine 3% 1% Total assets 2
Slide 4: Strong CEE franchise offsets temporary losses in Ukraine and Russia
Strong CEE franchise offsets temporary losses in Ukraine and Russia; the Group performance may be similar to 2021 performance without the Russian and Ukrainian operations 2021 / 1Q 20221 PROFITABILITY SIZE & GROWTH CAPITAL STRENGTH ASSET QUALITY FUNDING & LIQUIDITY Profit after tax Total assets CET1
Slide 5: OTP Bank offers a unique investment opportunity to access the CEE banking sector
OTP Bank offers a unique investment opportunity to access the CEE banking sector. The Bank is a well diversified and transparent player without strategic investors Ownership structure of OTP Bank on 31 March 2022 ’Best Consumer Digital Bank in Hungary in 2019, 2020 and 2021’ ‘Best Bank in CEE 2018 a
Slide 6: Almost 80% of net loan book is invested in EU countries
Almost 80% of the total net loan book is invested in EU countries, with Hungary having the dominant share. Retail lending remains the leading product Breakdown of the consolidated net loan book 1Q 2022 (in HUF billion) Hungary1 5,784 billion Bulgaria 2,886 billion Leasing Leasing By countries By pro
Slide 7: Hungary represents half of the deposit book
Hungary represents half of the deposit book, Bulgaria is the second largest deposit holder in the Group. Retail volumes account for 56% of the total deposit base Breakdown of the consolidated deposit base 1Q 2022 (in HUF billion) Hungary1 10,846 billion Bulgaria 3,876 billion Vállalati By countries
Slide 8: Acquisitions completed in recent years improved OTP's positions
Acquisitions completed in the last few years materially improved OTP’s positions in many countries. The financial closure of the Slovenian Nova KBM and Albanian acquisitions are expected to be completed in 2Q 2022 Target Net loan volumes Market share in total assets Book value (seller, date of closi
Slide 9: 1Q adjusted ROE decreased to 12.1% due to risk costs in Russia and Ukraine
The 1Q adjusted ROE decreased to 12.1% shaped by surging risk costs in Russia and Ukraine 2003-2008 2009-2013 1Q 2022 average 2014 2015 2016 2017 2018 2019 2020 2021 average annualised ROE -4.6% 29.4% 8.3% -7.4% 5.1% 15.4% 18.5% 18.7% 20.3% 10.9% 17.0% (from profit after tax) 4.4%5 ROE 12.1% 29.0% 1
Slide 10: Consolidated profit after tax turned negative in 1Q
The consolidated profit after tax turned into red in 1Q due to the deeply negative balance of adjustment items. The adjusted profit after tax for the first quarter reached HUF 88.6 billion, a decrease of 24% q-o-q and 28% y-o-y Profit development (milliárd forintban) (HUF billion) Profit after tax A
Slide 11: Russia and Ukraine: going concern approach and deconsolidation scenario
Regarding Russia and Ukraine, a „going concern” approach is applied. Under an unexpected extremely negative scenario of deconsolidating both entities and writing down the outstanding gross intragroup funding as well, the effect for the consolidated CET1 ratio would be 0 bp in the case of Ukraine and
Slide 12: Decline in adjusted profit after tax mainly due to surge in risk costs
The decline in adjusted profit after tax was mainly due to the surge in risk costs. The 1Q corporate tax burden was shaped by the write-off of Russian deferred tax assets in the amount of HUF 6.4 billion; in addition to this, the 1Q effective corporate tax rate was upwardly biased by the fact that n
Slide 13: Russian, Ukrainian, Romanian and Montenegrin operations suffered losses in 1Q 2022
In 1Q 2022 the Russian and Ukrainian as well as the Romanian and Montenegrin operations suffered losses. This was partly offset by stronger q-o-q results in Hungary, Bulgaria and Croatia, shaped by favourable risk cost developments 1Q 2021 4Q 2021 2021 1Q 2022 Q-o-Q Y-o-Y HUF billion Adjusted profit
Slide 14: Profit of HUF 28 billion in 1Q 2022 excluding Russia and Ukraine
OTP Group achieved a profit after tax of HUF 28 billion in 1Q2022 excluding the Russian and Ukrainian operations, with the Russian subsidiary suffering a loss of HUF 27 billion and the Ukrainian HUF 35 billion, respectively in 1Q 2022 OTP Group without OTP Bank Russia OTP Bank Ukraine Russia and Ukr
Slide 15: Consolidated net interest margin shrank by 19 bps q-o-q
The consolidated net interest margin shrank by 19 bps q-o-q, mainly due to the narrowing Hungarian and Russian margins Drivers behind the q-o-q decline of the consolidated net interest margin 3.62% -13 bps -5 bps -4 bps 4 bps 3.43% 4Q 2021 OTP Core OTP Bank Others FX-effect 1Q 2022 (Hungary) Russia
Slide 16: Q-o-Q performing loan volume changes, FX-adjusted
Consolidated performing loans grew by 3% q-o-q, which is the same as the growth rate without Russia and Ukraine. The Hungarian PIT refund caused a decline in consumer credit, while mortgage demand (mainly green housing loans) jumped, where disbursements have not yet occurred Q-o-Q performing (Stage
Slide 17: Hungarian loan penetration still low in regional comparison
The Hungarian loan penetration levels are still low in regional comparison implying good volume growth potential. This is also the case for Romania, as well as for the Bulgarian housing loan segment Net loan to deposit ratio in the Market penetration levels in Hungary in ... 4Q 2021 data for other H
Slide 18: Q-o-Q deposit volume changes, FX-adjusted
Consolidated customer deposits increased by 4% q-o-q, and by 7% in Hungary partly as a result of the PIT refund. Ukrainian and Russian deposits also increased Q-o-Q DEPOSIT volume changes adjusted for FX-effect – 1Q 2022 Cons. Core DSK OBH OBSrb SKB OBR OBU OBRu CKB OBA OBM (Hungary) (Bulgaria) (Cro
Slide 19: Stage 3 rate continued to decline in first quarter of 2022
The Stage 3 rate continued to decline in the first quarter of 2022. The management's provisioning policy remained conservative compared to regional banking groups, especially regarding the coverage of performing loans Development of the Group's main credit quality Own coverage of Stage 1+2 loans com
Slide 20: Strong capital position, ratios well above regulatory requirements
Strong capital position, all capital adequacy ratios are well above the regulatory requirements Decomposition of the change in CET1 ratio in 2021 Regulatory minima of capital adequacy ratios for OTP Group (changes in pps) in 4Q 2022 13.2% -0,6% 17.5% Combined 3.2% 10.7% +1.2 -0,3% -0.1 8.8% +0.4 Buf
Slide 21: Robust liquidity position with more than EUR 8 billion liquidity reserves
Robust liquidity position with more than EUR 8 billion equivalent liquidity reserves; 74% net loan to deposit ratio; 224% LCR, 123% NSFR and light maturity profile with marginal refinancing needs Consolidated1 outstanding amount of wholesale debt (in EUR billion) Subordinated debt 25% Share of total
Slide 22: Ratings correlate with sovereign ceilings; subsidiaries benefit from parental support
While OTP Bank ratings closely correlate with the sovereign ceilings, subsidiaries’ ratings enjoy the positive impact of parental support Hungarian sovereign, OTP Bank and OTP Mortgage Bank ratings Composition of main ratings by Moody’s and S&P Moody's S&P / Scope Moody's Moody's S&P Scope A1 12 12
Slide 23: OTP's way to a sustainable world
OTP’s way to a sustainable world: dedicated permanent ESG organization, strategic focus, and visible results ORGANIZATION STRATEGY RATINGS The whole organization of the Bank and its OTP Bank has successfully started implementing its OTP Bank’s improving sustainability Subsidiaries are involved in th
Slide 24: Main pillars of OTP Group's ESG Strategy
We have defined the main pillars of OTP Group’ ESG Strategy OTP GROUP ESG STRATEGY OTP Group is aiming to be the regional leader in financing a fair and gradual transition to a low-carbon economy and building a sustainable future through our responsible solutions IMPLEMENTATION TIMELINE KPI’s TO MEA
Slide 25: Footnotes and Glossary
Footnotes and Glossary Slide 4 Profit after tax and Total assets calculated with 358.52 / 364.27 (2021 / 1Q 2022) HUF/EUR average exchange rate and 369.00 / 369.62 (2021 / 1Q 2022) HUF/EUR closing exchange rate Loan growth: FX-adjusted performing (Stage 1 + Stage 2) loan growth year-on-year in 2021
Slide 26: Investor Relations & Debt Capital Markets
Investor Relations & Debt Capital Markets Tel: + 36 1 473 5460; + 36 1 473 5457 Fax: + 36 1 473 5951 E-mail: investor.relations@otpbank.hu www.otpbank.hu 26
OTP Bank Nyrt. — Debt Investor Presentation (May 2022) on 6ix