OTP Bank Nyrt · BET:OTP
OTP Bank Nyrt — Debt Investor Presentation (March 2022)
25 slides from OTP Bank Nyrt's debt investor presentation, March 2022
Slide 1: OTP Group – Strong results and capital provide resilience in turbulent times
OTP Group – Strong results and capital provide resilience in turbulent times Fixed Income Investor presentation Based on 4Q 2021 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: Content
1. 2. Content 3. 4. 5. 1. Overview of OTP Group: a diversified footprint in CEE with leading position and a resilient business model 2. 2021 performance update: Outstanding profitability, best in class ROE 3. Steadily expanding business volumes, stable portfolio quality 4. Strong capital and liquidi
Slide 4: OTP Group offers universal banking services to around 16 million active customers in 11 countries
1. OTP Group offers universal banking services to around 16 million active customers in 11 countries across 2. 3. the CEE/CIS Region 4. 5. Major Group Members in Europe Total Assets Systemic position in Hungary… Montenegro Albania 4Q 2021 market share (%) OTP Bank Russia Russia Moldova Ukraine 2% To
Slide 5: OTP Group is ideally positioned for post-COVID rebound
1. 2. OTP Group is ideally positioned for post-COVID rebound 3. 4. 5. 2020 / 20211 PROFITABILITY SIZE & GROWTH CAPITAL STRENGTH ASSET QUALITY FUNDING & LIQUIDITY Profit after tax Total assets CET1 ratio Stage 3 ratio Net LTD €0.74bn/€1.27bn €63.9bn/€74.7bn 15.4% / 17.5% 5.7% / 5.3% 76% / 75% ROE Loa
Slide 6: OTP offers a unique investment opportunity to access the CEE banking sector
1. OTP offers a unique investment opportunity to access the CEE banking sector. The Bank is a recognized 2. 3. leader with a diversified shareholder base 4. 5. Ownership structure of OTP Bank on 31 December 2021 OTP Group’s recent capabilities Treasury shares Others1 ‘‘Bank of the Year in 2021’ Empl
Slide 7: Net loan book dominated by Hungary and tilted to retail lending
1. The net loan book is dominated by Hungary and tilted to retail lending; almost 80% of the total book is invested 2. 3. in EU countries with stable earning generation capabilities 4. 5. Breakdown of the consolidated net loan book 4Q 2021 (in HUF billion) Hungary1 5,741 billion Bulgaria 2,730 billi
Slide 8: Deposit book: Hungary and the retail segment dominant
1. In the deposit book Hungary and the retail segment is dominant. In Hungary and Bulgaria OTP is the largest 2. 3. retail deposit holder 4. 5. Breakdown of the consolidated deposit base 4Q 2021 (in HUF billion) Hungary1 10,133 billion Bulgaria 3,875 billion Corporate By countries By products Retail
Slide 9: Acquisitions completed in the last few years materially improved OTP's positions
Acquisitions completed in the last few years materially improved OTP’s positions in many countries. 1. 2. The financial closure of the Albanian and Slovenian Nova KBM acquisitions might be completed in 2Q/3Q 2022, 3. 4. subject to regulatory approvals 5. Target Net loan volumes Market share in total
Slide 10: 2021 adjusted ROE recovered as margin pressure was offset by modest risk cost
1. The 2021 adjusted ROE recovered as the margin pressure was offset by modest risk cost rate and improved 2. 3. cost efficiency 4. 5. 2003-2008 2009-2013 2014 2015 2016 2017 2018 2019 2020 2021 average average Accounting ROE 29.4% 8.3% -7.4% 5.1% 15.4% 18.5% 18.7% 20.3% 10.9% 17.0% Adjusted ROE 29.
Slide 11: Accounting profit after tax for 2021 surpassed HUF 456 billion, up 76%
1. The accounting profit after tax for 2021 surpassed HUF 456 billion, up by 76% y-o-y. The adjusted yearly profit 2. 3. was 60% higher than in the base period; the contribution of foreign group members increased substantially 4. 5. (milliárd forintban) After tax profit development y-o-y (in HUF bil
Slide 12: Annual adjusted profit improvement driven by revenue dynamics and lower risk costs
1. The annual adjusted profit improvement was equally driven by double-digit revenue dynamics and lower risk 2. 3. costs, entailing 19% clean operating income growth 4. 5. Y-o-Y (HUF billion) 2020 2021 Y-o-Y FX-adjusted, w/o the sale of Slovakia Consolidated adjusted after tax profit 310.3 496.9 60%
Slide 13: Main Group members posted significant y-o-y improvement in 2021 profit
1. The main Group members posted significant y-o-y improvement in their 2021 profit with Serbia, Romania and 2. 3. Albania delivering the most dynamic y-o-y profit growth 4. 5. Adjusted profit after tax (in HUF billion) 2020 2021 Y-o-Y OTP Group 310.3 496.9 60%/59%1 OTP Core (Hungary) 159.3 213.4 34
Slide 14: OTP Group structure enables strong revenue and income diversification
1. 2. OTP Group structure enables strong revenue and income diversification 3. 4. 5. 2021 (in HUF billion) Corporate Centre, Total Assets 27,553 Foreign Fund Total Income 1,313 Man., Eliminations and others OTP Group Operating Costs -653 Total Assets 782 Total Risk Costs -73 Leasing Total Income 23
Slide 15: Consolidated performing loans expanded 15% y-o-y
1. The consolidated performing loans expanded 15% y-o-y. The outstanding 19% expansion of the Hungarian loan 2. portfolio was supported mainly by the subsidized lending programmes, whereas the direct volume-boosting 3. 4. effect of the moratorium explained 3 pps out of the 19% growth in Hungary 5. Y
Slide 16: Hungarian loan penetration levels still low in regional comparison
1. 2. The Hungarian loan penetration levels are still low in regional comparison implying good volume growth 3. potential. This is also the case for Romania, as well as for the Bulgarian housing loan segment 4. 5. Net loan to deposit ratio in the Market penetration levels in Hungary in ... 4Q 2021 d
Slide 17: Consolidated deposits grew by 16% (FX-adjusted) in 2021
1. 2. Consolidated deposits grew by 16% (FX-adjusted) in 2021, within that Hungarian deposits surged by 25% 3. 4. 5. Y-o-Y DEPOSIT volume changes adjusted for FX-effect – 2021 Cons. Core DSK OBH OBSrb SKB OBR OBU OBRu CKB OBA OBM (Hungary) (Bulgaria) (Croatia) (Serbia) (Slovenia) (Romania) (Ukraine)
Slide 18: Portfolio quality remained stable; provision coverage favourable vs peers
1. In 2021 the portfolio quality remained stable. The provision coverage levels at OTP screen favourably 2. 3. compared to its regional peers 4. 5. Changes in different Stage categories OTP Group’s conservative provisioning policy is demonstrated through a peer group comparison 88.8% 80.4% 81.5% Sta
Slide 19: Strong capital position, ratios well above regulatory requirements
1. Strong capital position, all capital ratios are well above the regulatory requirements. The effect of the ICES 2. redemption was reflected in the 3Q 2021 numbers and the related sale of treasury shares to the Special 3. 4. Employee Partial Ownership Plan Organizations was executed in December 5.
Slide 20: Robust liquidity position with more than EUR 9 billion liquidity reserves
1. Robust liquidity position with more than EUR 9 billion equivalent liquidity reserves; 75% net loan to deposit 2. 3. ratio; 180% LCR, 135% NSFR and light maturity profile with marginal refinancing needs 4. 5. Consolidated1 outstanding amount of wholesale debt (in EUR billion) Subordinated debt 25%
Slide 21: OTP Bank ratings correlate with sovereign ceilings; subsidiaries benefit from parental support
1. While OTP Bank ratings closely correlate with the sovereign ceilings, subsidiaries’ ratings enjoy the positive 2. 3. impact of parental support 4. 5. 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
Slide 22: OTP's way to a sustainable world
1. 2. OTP’s way to a sustainable world: dedicated permanent ESG organization, strategic focus, visible results 3. 4. 5. ORGANIZATION STRATEGY RATINGS The whole organization of the Bank and its OTP Bank has successfully started implementing its OTP Bank’s sustainability performance to date Subsidiari
Slide 23: Russia-Ukraine military conflict: exposure of the Group
1. Currently it is difficult to estimate the ramifications of the military conflict between Russia and Ukraine for the 2. Group, in particular for the operation and performance of the Ukrainian and Russian subsidiaries. The share 3. 4. of the Ukrainian and Russian net loans is less than 8% within th
Slide 24: Footnotes and Glossary
Footnotes and Glossary Slide 5 Profit after tax and Total assets calculated with 351.17 / 358.52 (2020 / 2021) HUF/EUR average exchange rate and 365.13 / 369.00 (2020 / 2021) HUF/EUR closing exchange rate Loan growth: FX-adjusted performing (Stage 1 + Stage 2) loan growth year-on-year in 2020 and 20
Slide 25: 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 25
OTP Bank Nyrt. — Debt Investor Presentation (March 2022) on 6ix