Otp Bank Nyrt · BET:OTP
Otp Bank Nyrt — OTP Bank — 9M 2004 Earnings Presentation
43 slides from Otp Bank Nyrt's earnings presentation, November 2004
Slide 1: OTP Bank First 9 Months 2004 Performance
OTP Bank First 9 Months 2004 Performance Based on HAR Presented by: Dr. Zoltán Spéder CFO November 2004
Slide 2: Forward looking statements
Forward looking statements This presentation contains certain forward-looking statements with respect to the financial condition, results of operations, and businesses of OTP Bank. These statements and forecasts involve risk and uncertainty because they relate to events and depend upon circumstances
Slide 3: Interest rate environment 2003-2004
Interest rate environment 2003-2004 25-25 bp rate 14% decrease 23 March 300 bp rate 50 bp rate cut 4 and 6 April 2004 200 bp rate increase 28 May, 17 Aug & 19 13% increase 19 June November 2003 October 2004 2003 100-100 bp rate 12% cut to defend HUF 16&17 January 2003 11% 10% 100 bp rate increase 11
Slide 4: EUR/HUF environment 2003-2004
EUR/HUF environment 2003-2004 as e M II volatility due to incre anno g of ER contradictory actions 274 13% d and statements by un c e rate n ey a l o f government timin 269 12% „hot withdraw ” mo 264 rate decrease 11% slow as e 259 10% incre rate 254 9% on 249 Moving of center 8% s p ec ed ulati of
Slide 5: Evolution of banking system
Evolution of banking system Intermediation started to grow due to mortgage HUF bn lending and wage increases 20,000 100% 18,000 18,574 90% 16,000 80% 16,740 73.0% 14,850 14,000 65.1% 65.3% 65.1% 64.7% 64.0% 64.8% 70% 64.1% 12,000 13,172 60% 11,394 10,000 50% 42.5% 10,087 8,000 36.3% 40% 8,540 32.1%
Slide 6: Loan growth (Y-on-Y)
Loan growth* (Y-on-Y) Corporate Municipality shift from FX to HUF 70% 45% 42% shift from 58% 40% 37% HUF to FX 60% 35% 50% 35% 48% 50% 45% 46% 30%27% 26% 42% 38% 24% 40% 35% 25% 20% 32% 34% 18% 27% 28% 20% 17% 30% 36% 36% 34% 14% 13% 15% 31% 20% 29% 30% 31% 15% 20% 25% 26% 26% 25% 15% 7% 19% 14%14%
Slide 7: Rising Real Wages
Rising Real Wages Retail Loans Outstanding (HUF billion) vs. Real Wage Growth 2,500 122.8 125 120.2 117.8 2,165 120 2,000 115 1,814 107.7 110 1,519 1,500 105 1,143 100 94.5 94.8 982 1,000 93.0 95 91.7 844 802 89.1 88.1 87.8 684 90 85.6 551 500 82.9 82.7 410 85 336 287 196 189 78.8 184 195 170 176 17
Slide 8: Macro: Selected components of RFA
Macro: Selected components of RFA HUF bn 4,500 80% 4,271 31-Dec-97 30-Jun-04 CAGR (Rh-scale) 4,000 70% 3,500 60% 59.2% 3,000 50% 2,500 40% 27.8% 2,000 30% 1,639 Strong growth in 17.8% 11% 16.6% non-banking 1,500 14.9% 20% 1,282 savings 1,214 1,179 1,000 10% 1.2% 759 -0.4% -7.0% 586 494 525 566 474 5
Slide 9: Macro assessment
Macro assessment 2003 2004F 2005F Real GDP growth 2.9% 3.7% 3.6% Household consumption 6.5% 2.7% 2.8% Public consumption 1.9% 0.2% 0.0% Investment growth 3.0% 11.3% 7.5% Final consumption 5.9% 2.3% 1.9% Exports 7.2% 12.9% 9.6% Imports 10.3% 13.5% 9.4% Budged deficit (cash flow based) HUF -1,064 bn H
Slide 10: OTP's position on HU banking market
OTP’s position on HU banking market September 30, 2004 Total assets Loans Deposits 74.7% 69.7% 78.9% 25.3% 21.1% 30.3% OT P Group Other banks OT P Group Other banks OT P Group Other banks Net interest income* Pretax profits* Average employees* 54.9% 65.4% 68.8% 34.6% 31.2% 45.1% OT P Group Other ban
Slide 11: Market share–total assets
Market share–total assets Mortgage lending HUF bn causes strong increase in bank system’s B/S 16,000 26.1% 26.2% 26.3% 28% 25.1% 25.3% 26.2% 25.4% 25.3% 24.5% 24.3% 23.9% 23.9% 24.1% 14,000 23.3% 23.5% 23.5% 25% 12,000 22.8% 22.8% 23.2% 22.7% 22.7% 22% 22.1% 22.3% 22.3% 22.5% 22.1% 18.1% 20.7% 21.0%
Slide 12: Balance sheet, interest income
Balance sheet, interest income HUF bn Assets, liabilities HUF bn Loans, deposits 3,500 +9.6% 2,500 +6.2% 2,235 2,189 2,061 3,000 2,000 421 359 2,500 375 +14.8% 2,000 1,500 1,213 1,056 1,094 1,500 1,000 2,069 2,241 2,193 1,528 1,656 1,670 1,000 634 691 745 1,195 500 500 1,056 1,088 323 318 362 0 0 30
Slide 13: Non interest income
Non interest income Driver: Non interest income components Fee and commission income mortgage HUF bn HUF bn lending 85.6 83.2 Othe r 100 96.0 83.1 80 +34.8% 80 68.5 +21.3% 21.5 61.7 Prope rty 19.8 tra nsa ctions 60 15.4 60 F ore x 40 tra ding 85 34.5 34.1 40 76 20 24.2 Se curitie s 62 9.8 tra ding 7
Slide 14: Non interest income
Non interest income Driver: mortgage lending Non interest income components Fee and commission income HUF bn HUF bn +22.9% 30 29.3 Othe r 30 27.5 27.2 29.5 27.0 26.9 26.4 23.8 23.9 25 7.0 25 19.8 6.2 6.0 6.9 Prope rty tra nsa ctions 20 5.3 20 +47.7% 15 F ore x 15 tra ding 10 27 10.3 10.8 12.6 8.6 10
Slide 15: Non interest expenses
Non interest expenses Non interest expenses Cost/income ratio HUF bn 120 110.2 56% 100 52% 81.5 - 788 bp 80 74.3 56.5 48% +9.7% 60 39.7 44% 37.5 54.1% 9.9 50.0% 40 40% 7.0 7.8 42.2% 43.8 36% 20 34.8 29.0 32% 0 9M 03 12M 03 9M 04 9M 03 12M 03 9M 04 pe rsonne l de pre cia tion ope ra tiona l cost inco
Slide 16: Non interest expenses
Non interest expenses Non interest expenses Cost/income ratio HUF bn 40 70% 36.0 35 +12.8 29.0 30 27.5 60% 24.3 19.0 25.0 25 14.0 - 795 bp 20 13.7 50% 12.2 12.0 65.0% 15 2.1 2.3 2.2 2.5 10 2.0 40% 48.9% 45.1% 14.9 12.8 41.0% 41.0% 5 10.1 10.7 11.3 30% 0 3Q 03 4Q 03 1Q 04 2Q 04 3Q 04 3Q 03 4Q 03 1Q 0
Slide 17: Provisioning/loan losses
Provisioning/loan losses HUF mn Provisioning structure Provisioning/Operating income 15,000 16.0% 12,000 2,803 +53.7% 14.2% 3,017 14.0% 9,000 2,400 1,684 12.0% 1,886 6,000 10.1% 10.3% 1,000 10.0% 8,048 3,000 6,636 5,082 8.0% 0 6.0% 9M 03 12M 03 9M 04 9M 03 12M 03 9M 04 prov isions& loan losse s / op
Slide 18: Provisioning/loan losses
Provisioning/loan losses HUF mn Provisioning structure Provisioning/Operating income 6,000 917 473 30.0% 29.7% 4,000 330 1,696 1,400 492 25.0% 989 991 312 1,083 2,000 1,000 32 20.0% 2,966 2,452 2,185 1,999 15.0% 12.4% 1,412 11.0% 0 -328 -388 10.0% 7.8% 3Q 03 4Q 03 1Q 04 2Q 04 3Q 04 5.0% -2,000 -3,50
Slide 19: Loan quality
Loan quality Qualified receivables as Qualified receivables as % of total receivables % of customer receivables 7% 7% 6.2% 6% 6% 5.6% 5.8% 5.7% 5.6% 5.4% 5.3% 5.4% 5.2% 5.0% 5.0% 5% 4.7% 5% 4.8% 4.5% 4.4% 1.7% 1.9% 3.0% 4.2% 4.2% 1.6% 1.7% 2.4% 3.9% 1.8% 1.3% 1.6% 2.1% 2.7% 1.4% 4% 1.4% 4% 1.4% 1.1%
Slide 20: Loan quality
Loan quality HUF bn Qualified loans HUF bn Provisions, coverage 80 77 80 70% 8 70 67 70 60% 63 8 60 57 7 16 60 56 55 56 50% 51 50 11 8 8 8 16 50 50 40.3%40.1% 9 6 17 37.8%37.3% 36.9% 40% 15 35.9% 15 33.3% 40 15 40 31.9% 18 17 29.2% 17 16 18 67.4 30% 30 18 63.2 30 76.6 57.3 55.7 55.0 55.8 15 51.4 50.
Slide 21: Quality of consolidated loans
Quality of consolidated loans Consolidated qualified loans Provisions, coverage HUF bn HUF bn 360 360 45% 320 320 40% 60 57 280 59 280 35% 58 57 20 23 240 19 240 27.6% 30% 23 26 27 22 26 Qualified receivables as 25.9% 25.9% 25.0% 200 18 25 % of total receivables 200 23.2% 25% 160 324.6 327.4 20% 160
Slide 22: Retail deposits
Retail deposits HUF bn Volumes, market share HUF bn Retail current account deposits 1,600 40% 800 707 652 651 558 557 570 581 600 538 491 1,400 39% 415 1,4 10 1,4 11 1,4 0 9 1,4 3 6 374 377 356 400 296 312 302 280 244 1,2 5 9 1,2 7 9 1,2 7 5 200 1,200 1,2 5 5 38% 1,13 8 0 1,000 37% 30- 31- 31- 30- 3
Slide 23: Retail loans
Retail loans HUF bn Volumes, market share Housing loans HUF bn 800 300 60% 273 Existing loans also 600 transferred to OTPMB 50.8% 250 50% 400 212 200 201 195 200 187 40% 0 184 180 168 192 170 Dec- Jun- Dec- Jun- Dec- Jun- Dec- Jun- Dec- Jun- 99 00 00 01 01 02 02 03 03 04 28.4% 163 Old 1989 1994 2000
Slide 24: Mortgage Loans at OTP Group
Mortgage Loans at OTP Group Cumulative HUF bn Monthly 900 43.8 43.2 45 40.4 38.9 800 40 46 40 34.7 34.935.3 34.5 35.234.9 53 50 47 56 700 32.9 71 35 32.2 32.1 72 31.2 69 29.6 29.4 71 600 28.5 69 28.2 30 26.3 70 25.0 82 24.0 500 77 25 82 20.9 76 400 18.5 20 92 715 726 733 745 86 691 703 15.0 86 627 6
Slide 25: OTP Mortgage Bank selected data
OTP Mortgage Bank selected data All data as of September 30, 2004 Distribution of mortgage portfolio by size Distribution of portfolio by maturity 3.0% 2.9% 24.9% 3.5% up to HUF 5m 0.6% 12.1% under 5 yrs HUF 5-10m 5 - 10 yrs 40.1% 13.0% HUF 10-15m 10 - 15 yrs 15 - 20 yrs HUF 15-20m 20 - 25 yrs 41.2%
Slide 26: Representative margin on mortgage loans
Representative margin on mortgage loans Validity before after after 16 June 2003 16 June 2003 22 December 2003 Rate paid by customer 6% (4+2%) max. 5% (3+2%) max. 8%** (max. GBBY * 1.1 + 4% - GBBY * 0.6) Liability side subsidy 10% (CMB coupon + 2% 9.03% (GBBY * 5.16% (GBBY* 0.6) but max. 10%) 1.05)
Slide 27: Consolidated retail business
Consolidated retail business Consolidated retail loans Group retail loans* HUF bn HUF bn 744.3, 50% Consolidated O TP Bank 1,500 60% retail loans O TP Building Society 1,200 50% Re tail loans Merkantil Group 900 40% group market O TP Mortgage Bank share 23.1, 2% 600 30% 140.8, 10% O BS Housing loans
Slide 28: Distribution technology
Distribution technology Bank cards ATMs 2,250,000 1,400 47% 1,368 2,000,000 1,350 1,324 46% 1,750,000 1,305 1,303 1,300 1,285 45% 1,500,000 1,250 1,228 44% 1,250,000 1,200 1,183 43% 1,000,000 1,168 1,151 750,000 1,150 42% 500,000 1,100 41% 250,000 1,050 40% 0 1,000 39% Sep-02 Dec-02 Mar-03 Jun-03 Se
Slide 29: Corporate business
Corporate business HUF bn Commercial loans HUF bn Corporate deposits 700 667 692 14.5% 500 20% 645 628 600 591 14.0% 402 389 400 358 18% 500 13.5% 325 332 300 16% 400 13.0% 14.6% 14.3% 300 12.5% 200 13.5% 14% 11.9% 200 12.0% 12.0% 11.5% 11.8% 11.6% 11.5% 100 12% 11.4% 100 11.5% 18 19 22 23 27 0 11.0
Slide 30: Consolidated corporate business
Consolidated corporate business Consolidated corporate loans Group corporate loans* HUF bn HUF bn 13, 1% 17.4, 2% OTP Bank 1,000 20% 55, 6% 2.9, 0% OTP Building Society 800 16% 104.7, 11% Merkantil Group 0, 0% 600 12% OTP Mortgage Bank Consolidated corp loans OBS 400 8% 38, 4% D SK 200 4% Group mark
Slide 31: Municipality business
Municipality business y g a lit r on on HUF bn Municipal loans Municipal deposits st eas HUF bn s 100 57% 89.2 88.5 180 82% 158 157 156 160 78.9 79.0 80 56% 150 78% 67.6 55.5% 120 111 74% 60 55.4% 55% 75.2% 74.9% 90 70% 40 54.3% 54.4% 54% 60 68.7% 66% 66.5% 20 53% 30 62% 61.6% 0 58% 0 52.3% 52% 30-S
Slide 32: Consolidated municipal business
Consolidated municipal business Consolidated municipal loans Group municipal loans* HUF bn HUF bn OTP Bank 0.2, 0% 0.5, 1% 100 60% OTP Building Consolidated 0, 0% Society 80 55% Merkantil Group municipal 0, 0% loans 0, 0% OTP Mortgage Bank 60 50% 0.9, 1% OBS 40 45% 0.1, 0% D SK 20 40% Group market 0
Slide 33: Equity, CAR
Equity, CAR HUF bn Equity, gearing Book value per share HUF 400 11.4% 1,500 Bank Group 11.0% 1,335 1,300 1,241 350 10.9% 11.0% 1,165 1,138 1,090 1,070 1,100 1,052 990 917 935 300 10.6% 900 700 250 10.2% 500 10.0% 300 9.7% 200 9.8% 30-Se p-03 31- De c-03 31- Ma r- 04 30- Jun-04 30-Se p-04 9.7% 9.5% 9
Slide 34: Efficiency, productivity
Efficiency, productivity HUF mn HUF mn 400 19,000 16 18,000 353 14.7 356 14.5 346 344 350 17,500 315 17,350 14 16,000 17,086 17,044 13.0 16,950 300 16,000 12 14,000 243 250 14,500 224.5 210.5 215.2 205 16,707 200 13,000 10 9.6 12,000 8.3 17,150 16,997 12,504 150 11,500 7.8 8 10,000 12,587 7.5 7.5 10
Slide 35: Performance indicators
Performance indicators Non-interest vs. total income Cost income ratio 46% 65% 62.0% 44.1% 44.0% 44% 43.1% 59.6% 42.8% 42.8% 60% 42.0% 42% 41.6% 55% 54.1% 52.7% 51.9% 40% 50.6% 50.0% 50% 38% 37.2% 37.2% 36.8% 36% 45% 42.8% 42.2% 40.7% 34% 40% 9M 2003 2003 3M2004 1H2004 9M2004 9M 2003 2003 3M2004 1H2
Slide 36: ROA, ROE
ROA, ROE ROAE annualized ROAA annualized 45% 4.5% 41.7% 40.4% 39.6% 39.1% 39.6% 4.24% 40% 38.1% 4.15% 36.0% 34.0% 35% 4.0% 30.6% 30.6% 30% 3.71% 3.63% 25% 3.57% 3.53% 3.5% 20% 3.31% 34.6% 33.4% 31.3% 31.3% 3.14% 15% 25.9% 10% 3.0% 2.78% 5% 2.66% 29.3% 25.9% 32.8% 32.0% 32.6% 0% 2.5% 9M 03 2003 1Q 04
Slide 37: Consolidated subsidiaries
Consolidated subsidiaries Change Change in HUF million 3Q 2003 2Q 2004 3Q 2004 Y-o-Y 9M 2003 9M 2004 Y-o-Y Merkantil Bank Ltd. 787 1,082 702 -10.8% 1,898 2,390 25.9% Merkantil-Car Ltd. 493 175 275 -44.2% 998 1,247 24.9% Merkantil Bérlet Ltd. 39 185 56 43.6% 110 311 182.7% NIMO 2002 Ltd. -- - 3 -- --
Slide 38: Consolidated market shares (1)
Consolidated market shares (1) (at September 30, 2004) Total assets Housing and mortgage loans Total deposits OTP Group, 25.3% Ba nk Ba nk sy ste m, sy ste m 45.3% 69.7% 0.2% n. c. 1.4% OTP Ba nk Group OTP sy ste m, 30.3% Group, 74.7% 54.7% Total loans Corporate loans Total retail deposits OTP OTP G
Slide 39: Consolidated market shares (2)
Consolidated market shares (2) (at September 30, 2004) Municipal deposits Car loans Insurance OTP Group, OTP 70.4% OTP Group, Group, 9.5% 20.0% Bank n.c. 4.5% sy stem, 29.6% Ba nk Bank n.c. sy stem, sy stem , 90.5% 80.0% Investment funds Private pension funds* Life insurance OTP OTP Group, OTP Group
Slide 40: Market shares of subsidiaries
Market shares of subsidiaries (at September 30, 2004) Mortgage Bank DSK Bank OTP Banka Slovensko by loan volume by deposits by deposits DSK, OBS, OTP MB, 15.9% 2.5% 63.3% Ba nk Othe rs, sy ste m, 36.7% 84.1% 0.3% Ba nk 0.1% sy ste m, 0.3% 97.5% Mortgage Bank DSK Bank OTP Banka Slovensko by bonds iss
Slide 41: 2008 vision for DSK is of leadership
2008 vision for DSK is of leadership Vision Definition of success Key strategic direction Pre-tax profit > EUR 100 mn 1. Retain the leading role in The performance leader ROE after tax > 25% household savings market in Bulgarian banking 2. Remain the top lender to Cost to income ratio ~50% h
Slide 42: DSK in 2004: aggressive growth
DSK in 2004: aggressive growth BGN millions Total assets Net revenues * +30% 3,116 +48% 247.3 2,389 2,019 167.3 145.7 2002 2003 2004f 2002 2003 2004f Operating profit (no restructuring Operating costs +9% and tax) 113.5 104.4 91.8 116.1 +82% 63.9 52.9 2002 2003 2004f 2002 2003 2004f * Includes curre
Slide 43: DSK Bank 2004 financial targets
DSK Bank 2004 financial targets 2004F/ 25% of the Financial indicators (BGN millions) 2003 1Q04 1H04 9M04 2004P 2004 F 2003 % increase due to pricing Net interest income 141.0 41.4 89.6 143.4 177.6 186.4 +32 changes; 75% are due to Net non-interest income* 26.3 10.8 21.8 32.9 47.5 60.9 +132 volume i