Otp Bank Nyrt · BET:OTP
Otp Bank Nyrt — OTP Bank — FY2006 Earnings Presentation
30 slides from Otp Bank Nyrt's earnings presentation, March 2007
Slide 1: OTP Bank 2006 preliminary results
OTP Bank 2006 preliminary results Investor Presentation Presented by: Dr. László Urbán, CFO March, 2007
Slide 2: Agenda
Macroeconomic environment and financial 3-7 intermediary Financial performance (consolidated, IFRS) 9-17 Market position in Hungary (HAR) 19-25 OTP Subsidiaries in the Region 27-29
Slide 3: Major factors influencing the Group's activity and results in 2006
March, 2007 3 Major factors influencing the Group’s activity and results in 2006 • Highest-ever budget deficit Deteriorating macroeconomic conditions • Weakening of HUF in the first half of 2006; significant correction in 4Q, exchange rate of 252.3 in Hungary HUF/EUR at the end of the year, increasi
Slide 4: Base rate increased by 200 bps to 8.00% in 2006
March, 2007 4 Base rate increased by 200 bps to 8.00% in 2006 Interest rates 9% 03-Jul-06, 8.20% 29-Dec-06, 8.00% Changes of base rate 8% 2003 + 400 bp 14-Mar-06, 7.18% 2004 - 300 bp 2005 - 350 bp 7% 25-Sep-06, 7.25% 2006 + 200 bp 29-Dec-06, 7.98% 6% 27-Jun-06, 6.25% 29-Dec-06, 7.93% 29-Dec-06, 6.71
Slide 5: In 2007, the macroeconomic environment will be determined by the effect of the austerity package
March, 2007 5 In 2007, the macroeconomic environment will be determined by the effect of the austerity package Expected macroeconomic indicators of Hungary in 2007 2005 2006 P 2007 F Real GDP 4.2% 4.1% 2.4% Final household consumption 3.8% 1.5% -2.3% Public consumption 0.2% -4.7% -2.0% Investment 5.
Slide 6: Economic growth will remain buoyant in the economies of OTP's subsidiaries
March, 2007 6 Economic growth will remain buoyant in the economies of OTP’s subsidiaries in the coming years Bulgaria Croatia 05 06 07 F 08 F 05 06 07 F 08 F Real GDP growth 5,5% 6,7% 6,0% 6,0% Real GDP growth 4.3% 4.4% 4.2% 3.8% Inflation (CPI) 5,0% 7,3% 5,0% 4,0% Inflation (CPI) 3.3% 3.2% 2.9% 3.0
Slide 7: The banking market has low penetration and promising growth potential
March, 2007 7 The banking market has low penetration and promising growth potential in the countries of the subsidiaries Total deposits to GDP 23.9% Total loans to GDP 30.7% 9.6% 100% 13.8% 100% 16.4% 22.8% 80% 80% 11.0% 13.7% 24.4% 60% 24.8% 60% 8.1% 16.4% 40% 40% 22.6% 27.8% 24.6% 20% 21.9% 20% 14
Slide 8: Agenda
Macroeconomic environment and financial 3-7 intermediary Financial performance (consolidated, IFRS) 9-17 Market position in Hungary (HAR) 19-25 OTP Subsidiaries in the Region 27-29
Slide 9: OTP Bank realised HUF 187.5 bn consolidated profit after tax in 2006
March, 2007 9 OTP Bank realised HUF 187.5 bn consolidated profit after tax in 2006 Financial highlights of OTP Group (consolidated, IFRS) 2005 20054Q 4Q 2006 20063Q 3Q 2006 20064Q 4Q Q-o-Q Q-o-Q Y-o-Y Y-o-Y 2005 2005 2006P 2006P Y-o-Y Y-o-Y Total Totalassets assets(HUF (HUFbn) bn) 5,215.9 5,215.9 6,
Slide 10: Loan volume grew by 35.8% y/y; deposits increased by 23.4%
March, 2007 10 Loan volume grew by 35.8% y/y (+16.4% q/q); deposits increased by 23.4% on a yearly base (+13.0% q/q) Change Distribution Gross loan volume by business lines Change Gross loan volume by countries y/y y/y HUF bn HUF bn +49.9% 5000 ... 4.8% 5000 4,477 4,477 Russia ... 8.2% 3,847 +25.6%
Slide 11: NPL ratio stood at 5.6% on December 31, 2006
March, 2007 11 NPL ratio stood at 5.6% on December 31, 2006 Volume of qualified loans Share of qualified loans HUF bn 1000 915 25% 20.4% 77 800 20% 111 5.6% 541 13.7% 14.0% 600 506 15% 12.8% 12.5% 421 429 77 4.3% 71 3.6% 3.9% 4.2% 400 64 87 10% 663 14.8% 200 350 377 5% 9.1% 8.6% 9.5% 9.7% 302 294 0
Slide 12: Capital adequacy ratio, according to Hungarian regulation, stood at 9.91%
March, 2007 12 Capital adequacy ratio, according to Hungarian regulation, stood at 9.91% Shareholders’ equity, HAR Tier 2 capital elements Guarantee capital HUF bn HUF bn HUF bn 600 600 600 +27.0 -264.5 -235.8 127.8 -1.7 18.4 242,3 400 400 400 -28.6 -21.8 553.8 126.2 553.8 200 407.6 200 200 75.7 314
Slide 13: Consolidated capital adequacy ratio stood at 13.21%
March, 2007 13 OTP Bank’s consolidated capital adequacy ratio, according to Hungarian regulation, stood at 13.21% Consolidated guarantee capital of OTP Bank HUF bn 2005 HUF bn 2006 1000 1000 800 800 195.3 28.8 291.8 26.3 100.0 87.5 600 47.2 58.7 600 35.2 0.0 8.2 2.8 400 400 598.2 585.7 627.1 200 468
Slide 14: Net interest margin decreased by 97 bps compared to the last quarter
March, 2007 14 Net interest margin decreased by 97 bps, without swaps by 57 bps compared to the last quarter Net interest income Net interest margin HUF bn 354 360 8.0% 297 34 280 7 7.2% 6.32% 7.18% 6.4% 5.60% 5.90% 200 6.21% 5.50% 107 103 5.6% 6.03% 120 80 71 73 5.23% 25 21 4 5.35% 4.8% 4.93% 40 76
Slide 15: Cost income ratio increased to 60.8% in 4Q 2006
March, 2007 15 Cost income ratio increased by 71 bps to 60.8% in 4Q 2006 Non-interest income Cost/income ratio Q/Q: +710 bp Q/Q: -7.3% HUF bn Y/Y: +460 bp Y/Y: -6.4% 80% 100 Other 70% 80 60.8% 71.5 56.8 64.5 52.7 Insurance 56.2% 55.9% 60 56.3 60% 53.7% 53.5% 18.5 Dividend 19.4 22.2 15.8 56.8% 40 18.
Slide 16: Consolidated ROE deteriorated to 22.8%, ROA to 2.47% in 4Q 2006
March, 2007 16 Consolidated ROE deteriorated to 22.8%, ROA to 2.47%, respectively in 4Q 2006 Profit after tax EPS, diluted HUF bn HUF 200 187.5 800 723 158.3 603 160 640 120 480 80 320 46.2 46.7 53.6 207 40.9 40.9 179 180 156 y/y: +18.4% 155 y/y: +19.8% 40 160 0 0 4Q 2005 1Q 2006 2Q 2006 3Q 2006 4Q
Slide 17: Among Hungarian subsidiaries; OTP Garancia and Merkantil Group profits
March, 2007 17 Among Hungarian subsidiaries; OTP Garancia Insurance reached HUF 7.2 bn and Merkantil Group HUF 6.9 bn after tax profit OTP Bank OTP Mortgage Bank Merkantil Group OTP Garancia Insurance OTP Fund Management (non-consolidated) 2006 2006 2006 2006 2006 Main balance sheet items, HUF bn Y-
Slide 18: Agenda
Macroeconomic environment and financial 3-7 intermediary Financial performance (consolidated, IFRS) 9-17 Market position in Hungary (HAR) 19-25 OTP Subsidiaries in the Region 27-29
Slide 19: OTP Group maintains its leading position on the Hungarian market
March, 2007 19 Despite losing market share in some segments, OTP Group maintains its leading position on the Hungarian market Market share Change Market share Change (31/12/2006) Q/Q ( Y/Y) (31/12/2006) Q/Q ( Y/Y) Total assets 24.7% +0.3%p (+0.6%p) Total deposits 23.7% -0.7%p (-3.2%p) Total loans 20
Slide 20: OTP Group's market share in retail deposits declined to 32.4%
March, 2007 20 OTP Group’s market share in retail deposits declined to 32.4% in Hungary Retail deposits of credit institutions Market share – OTP Group HUF bn 7500 35% 40% 27.0% 27.6% 28.6% 5,639 5,931 5,957 25.3% 5,667 5,811 38% 6000 24.4% 28% 36.8% 665 748 834 36.4% 639 781 36.0% 36.1% 4500 21% 36
Slide 21: OTP Group lost market share in HUF housing loans
March, 2007 21 OTP Group lost market share in HUF housing loans, its share in FX housing loans decreased by 0.4% Housing loans of credit institutions Market share – OTP Group HUF bn 2700.2 60% 3000 2627.0 35% 52.7% 52.4% 52.0% 51.6% 51.2% 2,526 33.8% 2282.8 2366.5 31.9% 48% 2400 28% 566 734 29.1% 91
Slide 22: Market share in household consumer loans stood at 24.9%
March, 2007 22 OTP Group market share in household’s consumer loans stood at 24.9% in the fourth quarter of 2006 Consumer loans of credit institutions Market share – OTP Group HUF bn 2250 60% 35% 2,031 1,858 1,993 28.7% 28.9% 28.1% 27.5% 26.1% 1800 1,618 53.3% 53.9% 48% 28% 52.1% 1,503 46.7% 24.9% 2
Slide 23: Net asset value of OTP Funds increased by 1.4% in 4Q 2006
March, 2007 23 Net asset value of OTP Funds increased by 1.4% in 4Q 2006, slightly exceeding the level of 4Q 2005 Market volume of mutual funds Q/Q: -0.4% Net asset value of OTP Funds Q/Q: +1.4% Y/Y: +35.3% HUF bn Y/Y: +1.3% HUF bn 900 3000 2,548 2,538 695 720 654 665 653 662 2400 2,078 2,084 81 607
Slide 24: OTP Garancia is the 2nd largest life insurance company in Hungary
March, 2007 24 OTP Garancia is the 2th largest life insurance company in Hungary with 8.5% share of premium income Life and non-life premium income (market) Life and non-life premium income (OTP Garancia) HUF bn HUF bn 275 30 230.3 220 206.8 201.5 23.3 191.8 24 176.1 20.8 19.4 19.5 102.8 165 18 9.1
Slide 25: Largest contribution to consolidated profit came from the banking sector
March, 2007 25 The most significant contribution to the Group’s consolidated after tax profit came again from the banking sector Insurance Dec 31, 2006 Banks Other fin. Service Non-fin. Service Consolidated Share of banks Companies Assets 8,424,201 197,832 215,769 108,568 7,101,493 118.6% Loans 4,50
Slide 26: Agenda
Macroeconomic environment and financial 3-7 intermediary Financial performance (consolidated, IFRS) 9-17 Market position in Hungary (HAR) 19-25 OTP Subsidiaries in the Region 27-29
Slide 27: OTP Bank is represented in nine countries in the region
March, 2007 27 OTP Bank is represented in nine countries in the region OTP Group OTP Banka Slovensko CJSC OTP Bank*** Investsberbank*** Branches* 1,290 Branches 86 Branches 65 Branches 78 Employees 26,869 Employees 772 Number of clients ~121 th Number of clients ~880 th Number of clients* ~9,0 m Num
Slide 28: Contribution of foreign subsidiaries to consolidated after-tax profit was 13.7%
March, 2007 28 Contribution of foreign subsidiaries to consolidated after-tax profit amounted to 13.7% in 2006 Contribution of OTP Banka Niska Zepter CJSC OTP Invest- foreign subsidiaries DSK Csoport OTP banka Hrvatska OTP Bank Romania Slovensko banka banka Bank sberbank 2006 2006 2006 2006 2006 200
Slide 29: From the foreign countries, Bulgaria remained the main contributor
March, 2007 29 From the foreign countries, Bulgaria remained the main contributor Dec 31, 2006 HU BG CR SK RO SE UA RU Consolidated Foreign ratio Assets 6,366,045 858,398 367,658 360,888 196,049 34,615 431,092 330,097 7,101,493 36.3% Loans 2,964,977 532,092 197,364 220,828 101,295 15,625 367,856 216
Slide 30: Further information
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