Otp Bank Nyrt · BET:OTP
Otp Bank Nyrt — OTP Bank — H1 2004 Earnings Presentation
43 slides from Otp Bank Nyrt's earnings presentation, August 2004
Slide 1: OTP Bank First Half 2004 Performance
OTP Bank First Half 2004 Performance Based on HAR Presented by: Dr. Zoltán Spéder CFO August 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 increase and 6 April 2004 200 bp rate increase 28 November 2003 50 bp rate decrease 13% 19 June 2003 4 May 2004 100-100 bp rate cut 12% to defend HUF 16&17 January 2003 11% 10% 100 bp rate increase 11 June 2003 9% 8%
Slide 4: EUR/HUF environment 2003-2004
EUR/HUF environment 2003-2004 as e on volatility due to M II s p ec ed incre 274 0% ulati contradictory actions ease ew anno g of ER and statements by n ey a l o f - 1% R en d decr rate as e government un c e „hot withdraw 269 incre - 2% timin rate - 3% ” mo rate 264 slow - 4% - 5% 259 - 6% - 7% 254
Slide 5: Evolution of banking system
Evolution of banking system Intermediation started to grow due to mortgage lending and HUF bn 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 HUF 58% 40% 37% to FX 60% 35% 50% 35% 48% 50% 45% 46% 30% 27% 42% 26% 38% 24% 40% 25% 20% 32% 34% 17% 27% 28% 20% 30% 36% 36% 34% 15% 14% 13% 31% 20% 29% 30% 15% 19%11% 20% 25% 26% 26% 25% 15% 7% 20% 14% 12% 12%
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% 4,159 31-Dec-97 31-Mar-04 CAGR (Rh-scale) 4,000 70% 3,500 60% 60.7% 3,000 50% 2,500 40% 28.4% 2,000 30% 1,639 Strong growth in 17.8% 11% 16.7% non-banking savings 1,500 14.4% 20% 1,245 1,147 1,113 1,000 10% 1.2% 735 -0.7% 494 525 567 474 -8.1% 562 5
Slide 9: Macro assessment
Macro assessment 2003 2004F 2005F Real GDP growth 2.9% 3.7% 3.6% Inflation (average) 4.7% 6.9% 4.5% Nominal wage increase 14.3% 7.0% 6.0% Final consumption 5.9% 2.3% 1.9% Household consumption 6.5% 2.7% 2.8% Investment growth 4.7% 11.3% 7.5% Budged deficit (cash flow based) HUF -1,064 bn HUF -1,305
Slide 10: Market share–total assets
Market share–total assets Mortgage lending causes HUF bn strong increase in bank system’s B/S 14,000 28% 26.1% 26.2% 26.3% 26.2% 25.1% 25.3% 25.4% 24.5% 24.3% 23.9% 24.1% 12,000 23.9% 23.5% 23.5% 25% 23.3% 10,000 23.2% 22% 22.8% 22.8% 22.7% 22.7% 22.3% 22.3% 22.5% 22.1% 22.1% 20.7% 21.0% 18.1% 20.3%
Slide 11: Balance sheet, interest income
Balance sheet, interest income HUF bn Assets, liabilities HUF bn Loans, deposits 3,000 +9.4% 2,500 +6.7% 2,235 2,104 2,008 2,500 2,000 421 348 2,000 359 +6.0% 1,500 1,500 1,094 1,147 1,029 2,241 1,000 1,000 2,015 2,109 1,656 1,645 1,548 621 691 715 500 997 1,088 1,136 500 309 318 332 0 0 6/ 30/ 03 6
Slide 12: Non interest income
Non interest income Driver: Non interest income components Fee and commission income mortgage HUF bn HUF bn lending 90 85.6 Othe r 100 96.0 +20.1% 80 +28.7% 80 21.5 70 Prope rty tra nsa ctions 60 53.6 60 54.0 44.6 F ore x 12.8 50 40 10.1 41.9 tra ding 85 34.5 40 20 Se curitie s 15.6 21.5 30 tra ding
Slide 13: Non interest income
Non interest income Driver: mortgage Non interest income components Fee and commission income lending HUF bn HUF bn +27.2% 30 +13.9% 27.5 27.2 30 Othe r 26.4 27.0 26.9 23.9 23.9 23.8 25 25 6.2 6.0 6.9 21.2 19.8 20 Prope rty 5.3 5.3 20 tra nsa ctions 15 F ore x 10 15 10.3 10.8 tra ding 8.8 8.6 10.7 2
Slide 14: Non interest expenses
Non interest expenses Non interest expenses Cost/income ratio HUF bn 120 110.234 60% 100 56% 52% - 782 bp 80 56.5 +8.2% 48% 60 54.007 49.929 44% 54.1% 9.9 40 26.0 50.6% 25.3 40% 4.5 42.8% 20 5.8 43.8 36% 18.8 23.5 32% 0 1H 03 12M 03 1H 04 1H 03 12M 03 1H 04 pe rsonne l de pre cia tion ope ra tiona l
Slide 15: Non interest expenses
Non interest expenses Non interest expenses Cost/income ratio HUF bn 40 65% +6.8% 35.962 35 60% 29.046 30 27.195 24.961 55% 24.343 19.0 25 14.0 50% - 1,178 bp 20 14.1 12.0 65.0% 12.2 45% 15 2.1 2.3 52.8% 3.0 2.0 2.2 40% 48.9% 10 45.1% 14.9 12.8 41.0% 5 10.1 10.1 10.7 35% 0 30% 2Q 03 3Q 03 4Q 03 1Q 0
Slide 16: Provisioning/loan losses
Provisioning/loan losses HUF mn Provisioning structure Provisioning/Operating income 14,000 12,000 2,803 20% 17.0% 10,000 +2.0% 2,400 15% 14.2% 8,000 1,574 11.7% 2,026 6,000 10% 3,040 2,072 4,000 8,048 5% 2,000 3,670 4,184 0 0% 1H 03 12M 03 1H 04 1H 03 12M 03 1H 04 Loan loss Prov ision on MB loans O
Slide 17: Provisioning/loan losses
Provisioning/loan losses HUF mn Provisioning structure Provisioning/Operating income 6,000 -16.5% 29.7% 917 30% 5,000 1,216 473 25% 21.9% 4,000 330 1,696 1,400 492 20% 3,000 3,026 312 989 1,083 15% 12.4% 11.0% 2,000 1,000 10% 2,966 1,000 2,185 1,999 5% 1,088 1,412 0 0% 2Q 03 3Q 03 4Q 03 1Q 04 2Q 04
Slide 18: Loan quality
Loan quality Qualified receivables as Qualified receivables as % of total receivables % of customer receivables 7% 7% 6.1% 6% 6% 5.6% 5.8% 5.7% 5.4% 5.3% 5.4% 5.2% 5.0% 5.0% 5% 4.7% 4.7% 5% 4.8% 4.5% 4.4% 2.7% 1.6% 1.7% 1.9% 4.2% 4.2% 1.7% 2.4% 3.9% 1.8% 1.3% 1.6% 2.1% 1.4% 4% 1.4% 4% 1.4% 1.1% 2.1%
Slide 19: Loan quality
Loan quality HUF bn Qualified loans HUF bn Provisions, coverage 70 70 70% 8 60 7 60 60% 11 8 8 8 16 50 15 50 50% 9 6 17 40.4%40.3%40.1% 40 15 37.8%37.3% 36.9% 15 18 17 40 35.9% 40% 13 16 33.3% 17 31.9% 18 67.4 30 18 63.2 30 30% 4 57.1 57.3 55.7 55.0 55.8 51.4 50.5 15 12 13 19 6 12 20 20 20% 26 28 21
Slide 20: Quality of consolidated loans
Quality of consolidated loans Consolidated qualified loans Provisions, coverage HUF bn HUF bn 360 360 45% 320 320 40% 60 280 59 280 35% 58 57 20 52 240 19 240 27.1% 27.6% 30% 27 22 25.9% 25.9% 20 23 26 25 Qualified receivables as 23.2% 200 18 200 25% 19 % of total receivables 160 160 324.6 20% 310.5
Slide 21: Retail deposits
Retail deposits HUF bn Volumes, market share HUF bn Retail current account deposits 700 652 651 1,600 48% 581 558 557 570 600 538 491 491 500 415 374 386 1,400 46% 400 1,4 10 1,4 11 1,4 0 9 296 280 312 302 300 245 244 1,2 7 9 1,2 7 5 200 1,200 1,2 5 9 1,2 5 5 44% 100 1,113 1,13 8 0 1,000 42% 30- 30-
Slide 22: Retail loans
Retail loans HUF bn Volumes, market share Housing loans HUF bn 300 70% 800 273 Existing loans also 600 transferred to OTPMB 250 56.2% 60% 400 2 12 200 200 201 200 19 5 50% 18 7 18 4 18 0 0 16 8 De c- Jun- De c- Jun- De c- Jun- De c- Jun- De c- Jun- 99 00 00 01 01 02 02 03 03 04 38.6% 16 3 15 0 40% O
Slide 23: Mortgage Loans at OTP Group
Mortgage Loans at OTP Group Cumulative HUF bn Monthly 43.8 43.2 900 45 40.4 38.9 800 40 34.7 34.935.3 34.5 35.234.9 50 71 56 53 700 32.9 72 35 32.2 32.1 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 86 691 703 715 650 669 15.0 300 86 605 627 13.0 1
Slide 24: OTP Mortgage Bank selected data
OTP Mortgage Bank selected data All data as of June 30, 2004 Distribution of mortgage portfolio by size Distribution of portfolio by maturity 3.1% 3.0% 3.6% 27.0% 0.1% 11.8% 39.8% 14.9% 42.3% 37.7% 16.7% up to HUF 5m HUF 5- 10m HUF 10- 15m under 5 yrs 5 - 10 yrs 10 - 15 yrs HUF 15- 20m ov e r HUF 20
Slide 25: 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 26: Consolidated retail business
Consolidated retail business Consolidated retail loans Group retail deposits HUF bn HUF bn 1,400 70% 1,800 1,645 57.3% 57.1% 1,600 1,200 56.2% 60% 53.1% 52.6% 1,400 47.8% 48.3% 47.5% 1,000 50% 40.8% 41.3% 1,200 38.6% 800 36.4% 37.2% 40% 1,000 600 30% 800 22.7% 22.6% 400 20% 600 400 200 10% 252 828 9
Slide 27: Distribution technology
Distribution technology Bank cards ATMs 2,000,000 1,350 46% 1,324 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 1,150 1,127 42% 750,000 500,000 1,100 41% 250,000 1,050 40% 0 1,000 39% Jun-02 Sep-02 Dec-02 Mar-03 Jun-03 Sep-03 Dec-03 M
Slide 28: Corporate business
Corporate business HUF bn Commercial loans HUF bn Corporate deposits 700 667 14.5% 500 20% 645 628 600 580 591 14.0% 402 389 400 358 18% 341 500 13.5% 325 300 16% 400 13.0% 14.6% 14.3% 300 12.5% 200 13.1% 13.4% 14% 11.9% 200 12.0% 11.7% 11.6% 11.5% 11.7% 11.4% 100 12% 100 11.5% 18 18 19 22 23 0 11.0
Slide 29: Consolidated corporate business
Consolidated corporate business Consolidated corporate loans Group corporate deposits HUF bn HUF bn 1,000 15% 400 12.7% 348 350 12.1% 12.2% 800 12% 300 250 600 9% 7.3% 7.3% 200 400 6% 150 100 200 3% 43 50 31 2 2 0 689 708 791 782 817 0 0 0% 30-Jun-04 30-Jun- 30-Se p- 31-De c- 31-Ma r- 30-Jun- 03 03
Slide 30: Municipality business
Municipality business s se tro as n g HUF bn Municipal loans on Municipal deposits HUF bn al 100 58% i ty 89.2 180 82% 78.9 79.0 158 157 156 80 57% 150 78% 66.5 67.6 120 111 74% 60 56% 100 75.2% 74.9% 55.6% 90 70% 40 55.4% 55.5% 55% 60 68.7% 66% 20 54.3% 54.4% 54% 30 62% 61.6% 0 60.4% 58% 0 53% 30-J
Slide 31: Municipality business
Municipality business Consolidated municipal loans Group municipal deposits HUF bn HUF bn 100 56.9% 57.0% 120 111 100 80 56.5% 80 60 55.9% 56.0% 55.8% 55.6% 60 55.5% 40 55.5% 40 20 55.0% 20 14 7 68 69 80 80 91 0 54.5% 0 0 0 0 30-Jun- 30-Sep- 31-Dec- 31-Mar- 30-Jun- 30-Jun-04 03 03 03 04 04 O TP Bank
Slide 32: Equity, CAR
Equity, CAR HUF bn Equity, gearing Book value per share HUF 350 10.9% 11.0% 1,300 Bank Group 1,241 1,165 1,090 1070 1,100 1,052 300 10.6% 969 990 917 935 900 852 250 10.2% 700 10.0% 500 9.7% 200 9.8% 9.7% 300 9.5% 9.5% 30-Jun- 03 30-Se p- 03 31- De c-03 31- Ma r- 04 30- Jun- 04 9.5% 150 9.4% Capital
Slide 33: Efficiency, productivity
Efficiency, productivity HUF mn HUF mn 400 19,000 16 18,000 353 14.7 346 350 344 17,500 315 14 16,000 17,086 17,044 16,950 13.0 300 293 16,000 12 14,000 243 250 14,500 228.5 210.5 215.2 9.6 205 200 13,000 10 12,000 9.2 12,707 16,997 12,504 8.3 16,707 150 11,500 7.5 8 10,000 12,628 13,768 7.5 100 10,
Slide 34: Performance indicators
Performance indicators Non-interest vs. total income Cost income ratio 48% 65% 46.6% 62.0% 46% 60.4% 59.6% 44.1% 44.0% 60% 44% 42.8% 42.8% 42.5% 41.6% 42.0% 55% 54.1% 42% 52.7% 50.6% 50.0% 50.6% 40% 50% 38% 37.2% 37.2% 45% 42.8% 36% 40.7% 34% 40% 1H2003 9M 2003 2003 3M2004 1H2004 1H2003 9M 2003 2003
Slide 35: ROA, ROE
ROA, ROE ROAE annualized ROAA annualized 45% 4.5% 41.7% 39.6% 39.1% 4.24% 40% 38.1% 36.3% 36.0% 35% 32.2% 34.0% 4.0% 30.6% 30.6% 30% 3.71% 25% 3.57% 3.53% 3.5% 20% 3.28% 3.31% 34.6% 32.0% 31.3% 31.3% 15% 3.14% 25.9% 10% 3.0% 2.90% 2.78% 5% 2.66% 27.9% 29.3% 25.9% 32.8% 32.0% 0% 2.5% 1H 03 9M 03 2003
Slide 36: Consolidated subsidiaries
Consolidated subsidiaries 2Q 2003 2Q 2004 Change 1H 2003 1H 2004 Change Merkantil Bank Ltd. 564 1,082 91.8% 1,111 1,688 51.9% Merkantil-Car Ltd. 201 175 -12.9% 505 972 92.5% Merkantil Bérlet Ltd. (3) 185 -6266.7% 71 255 259.2% NIMO 2002 Ltd. -- - -- -- 1 -- Merkantil Group 762 1,442 89.2% 1,687 2,91
Slide 37: 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 indome ratio ~50% h
Slide 38: 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 39: DSK Bank 2004 financial targets
DSK Bank 2004 financial targets 2004F/ Financial indicators (BGN millions) 2003 1Q04 1H04 2004P 2004 F 2003 (%) 25% of the increase due to Net interest income 141.0 41.4 89.6 177.6 186.4 +32 pricing changes; Net non-interest income* 26.3 10.8 21.8 47.5 60.9 +132 75% are due to volume increase Total
Slide 40: Consolidated market shares (1)
Consolidated market shares (1) (at June 30, 2004) Total assets Housing and mortgage loans Total deposits OTP Group, 25.4% Ba nk Ba nk sy ste m , sy ste m 43.8% 69.9% 2.1% 0.9% 0.9% OTP Ba nk Group sy ste m , OTP 30.1% 74.6% Group, 56.2% Total loans Corporate loans Total retail deposits OTP OTP Group
Slide 41: Consolidated market shares (2)
Consolidated market shares (2) (at June 30, 2004) Municipal deposits Car loans Insurance Group, 65.9% OTP OTP Group, Group, 9.5% 20.0% 1.7% 7.2% Ba nk sy ste m , Ba nk 34.1% Ba nk n.c. sy ste m , sy ste m , 90.5% 80.0% Investment funds Private pension funds* Life insurance OTP OTP Group, OTP Group,
Slide 42: Market shares of subsidiaries
Market shares of subsidiaries (at June 30, 2004) Mortgage Bank DSK Bank OTP Banka Slovensko by loan volume by deposits** by deposits DSK, OBS, OTP MB, 16.0% 2.2% 63.4% Ba nk Othe rs, sy ste m, 36.6% 84.0% 0.1% Ba nk 0.6% sy stem , 0.3% 97.8% Mortgage Bank DSK Bank OTP Banka Slovensko by bonds issued
Slide 43: 2004 targets and growth rates
2004 targets and growth rates Bank Consolidated Balance sheet related growth rates HUF bn Growth rate HUF bn Growth rate Total assets 2,926.9 6.1% 3,990.5 13.9% Total loans 1,183.7 8.8% 2,395.7 15.2% Corporate loans 739.7 7.0% 822.8 4.0% Retail loans 359.6 13.0% 1,487.7 23.2% Mortgage loans 157.8 -1