Otp Bank Nyrt · BET:OTP
Otp Bank Nyrt — Otp Bank S/Adr R — 1H 2024 Earnings Presentation
26 slides from Otp Bank Nyrt's earnings presentation, Aug 9, 2024
Slide 1: OTP Group 1H 2024 results
OTP Group 1H 2024 results Conference call – 9 August 2024 László Bencsik, Chief Financial and Strategic Officer
Slide 2: OTP Group - Highlights
OTP Group - Highlights Dominant position in CEE countries: No.1 in 5 countries based on net loans; 3.6-fold loan growth and 11 acquisitions in 7 years. 42% of net loans in Eurozone + ERM2 countries, ~80% within the EU Outstanding profitability: 2023 ROE exceeded 27% and reached 23.6% in 1H 2024 Stro
Slide 3: Semi-year profit after tax decreased by 12% due to one-off acquisition effect
OTP Group’s semi-year profit after tax decreased by 12%, basically due to the HUF 179 billion positive one-off effect of the acquisitions completed in the first half of 2023 Consolidated profit after tax Key performance indicators of OTP Group (HUF billion) (%) -12% Direct effect of acquisitions Ret
Slide 4: Profit after tax up 22% without one-off effects and acquisitions
In 1H 2024 the profit after tax went up by 22% without the one-off directs effects and on-going contribution of acquisitions Y-o-Y Q-o-Q Consolidated P&L (in HUF billion) 2023 1H 2023 1H 2024 1Q 2024 2Q 2024 FX-adj. w/o acq. FX-adj. Net interest income 1,462 651 878 25% 435 442 1% Net fees and commi
Slide 5: OTP Core realized HUF 112 billion profit after tax in 1H 2024
OTP Core realized HUF 112 billion profit after tax in 1H 2024 without dividends received from subsidiaries. OTP CORE The y-o-y doubling profit was due to the normalization of NIM and declining tax burden OTP Core profit after tax Key performance indicators of OTP Core (without dividends received fro
Slide 6: OTP Core mortgage and cash loan contractual amounts and market share
In 1H 2024, mortgage loan contractual amounts at OTP Bank increased to more than two and a half times, OTP CORE while cash loan contractual amounts grew more than 50% Y-o-y change in mortgage loan contractual amounts in 1H 2024 Y-o-y change in cash loan contractual amounts in 1H 2024 OTP 2.6x Market
Slide 7: Corporate loans demand moderate, micro and small enterprise loans growing
Demand for medium and large corporate loans remained moderate, but the stock of micro and small enterprises OTP CORE loans started to grow Performing corporate loan volume changes (%) OTP Group’s market share in loans to Hungarian (DPD0-90 loan changes until 2018, Stage 1+2 from 2019, FX-adjusted) c
Slide 8: Profit contribution of foreign subsidiary banks continued to improve
In the first half of 2024, the profit contribution of foreign subsidiary banks continued to improve Profit after tax1 (HUF billion) ROE1 Cost / income ratio 1H 2023 1H 2024 1H 2023 1H 2024 1H 2023 1H 2024 DSK Group (Bulgaria) 88 98 24% 22% 35% 35% SKB + NKBM (Slovenia) 382 10 49 57 20% 17% 39% 42% O
Slide 9: Semi-annual net interest income grew 25% y-o-y organically
Effect of Semi-annual net interest income grew 25% y-o-y organically and FX-adjusted, including a 1% q-o-q growth acquisitions NET INTEREST 1H 2024 2Q 2024 1H 2024 Y-o-Y 2Q 2024 Q-o-Q INCOME (HUF billion) (HUF billion) (HUF billion) (HUF billion) 1 The 50% jump in OTP Core’s net OTP Group 878 442 15
Slide 10: Consolidated NIM picked up by 51 bps y-o-y
Consolidated NIM picked up by 51 bps y-o-y driven mostly by the bounce-back in Hungary and the improvement in EUR-linked countries. Similarly to 1Q, the margin in EUR-linked countries continued to erode in the second quarter NET INTEREST 2Q 2023 1Q 2024 2Q 2024 1 MARGIN At OTP Core partly thanks to
Slide 11: Consolidated net interest margin shrank 4 bps q-o-q
The consolidated net interest margin shrank by 4 bps q-o-q due to lower margins in Bulgaria, Slovenia and Uzbekistan, partly offset by better Hungary. The sensitivity to EUR rate cuts moderated further Drivers behind the q-o-q change of the consolidated net interest margin Sensitivity to rate change
Slide 12: Consolidated performing loans grew 3% q-o-q
Consolidated performing loans grew by 3% q-o-q, mainly due to the strong performance in Bulgaria, Croatia and Serbia, but Ukrainian volumes picked up, too. In Hungary mortgage loan growth accelerated Q-o-Q performing (Stage 1+2) LOAN volume changes, adjusted for FX effect Cons. Core2 DSK SKB+ OBH OB
Slide 13: Performing loans grew 5% ytd without Romania
Consolidated performing loans grew by 5% ytd without Romania, mainly as a result of strong performance in Bulgaria and Croatia. Corporate lending growth lagged behind retail across the Group YTD performing (Stage 1+2) LOAN volume changes, adjusted for FX effect Cons. Core2 DSK SKB+ OBH OBSrb Ipoteka
Slide 14: Consolidated deposit book grew 2% q-o-q
The consolidated deposit book grew by 2% q-o-q. The uptrend in Hungarian household deposits continued Q-o-Q DEPOSIT volume changes, adjusted for FX-effect Cons. Core2 DSK SKB+ OBH OBSrb Ipoteka OBU CKB OBA OBM OBRu OBR (Hungary) (Bulgaria) NKBM (Croatia) (Serbia) (Uzbek.) (Ukraine) (Monten.) (Albani
Slide 15: Consolidated deposits grew 3% over first six months
Consolidated deposits grew by 3% over the first six months. The deposit collection efforts in Serbia paid off with their deposit to net loan gap narrowing to negligible level against more than -HUF 430 billion in 2021 YTD DEPOSIT volume changes, adjusted for FX-effect Cons. Core2 DSK SKB+ OBH OBSrb
Slide 16: 14% organic growth in net fees
The 14% y-o-y organic and FX-adjusted growth in net fees was driven mainly by the Hungarian operation. Effect of The 14% q-o-q increase in 2Q was mainly driven by OTP Core and seasonality acquisitions NET FEE 1H 2024 2Q 2024 1H 2024 Y-o-Y 2Q 2024 Q-o-Q INCOME (HUF billion) (HUF billion) (HUF billion
Slide 17: Other income driven by subsidized loans fair value and dividends
Other income dynamics were to a great extent determined by the volatility of subsidized loans’ fair value Effect of adjustment in Hungary and dividend income realized in 2Q acquisitions 1H 2024 2Q 2024 1H 2024 Y-o-Y 2Q 2024 Q-o-Q OTHER INCOME (HUF billion) 1 The y-o-y HUF 56.7 billion decline in (HU
Slide 18: FX-adjusted operating costs up 10% y-o-y without acquisitions
FX-adjusted operating costs increased by 10% y-o-y without acquisitions Effect of acquisitions 9M 2023 1H 2024 Y-o-Y Y-o-Y, FX-adjusted OPERATING COSTS (HUF billion) (HUF billion) (HUF billion) (HUF billion) 1 OTP Group 530 421 77 17%/10%1 431 77 17%/10%1 At OTP Core the 6% y-o-y growth was driven b
Slide 19: Total risk cost and additional impairments on Russian bonds
In line with supervisory expectations additional impairments were created on Russian government bonds in Hungary and Bulgaria. The impact of rate cap extension was booked amongst risk costs. The Uzbek risk costs further moderated in 2Q 2023 1H 2024 TOTAL RISK COST 2023 credit risk 1Q 2024 2Q 2024 1H
Slide 20: Stage 3 ratio stayed flat q-o-q
The Stage 3 ratio stayed flat q-o-q. Provisioning policy remained conservative compared to regional peers Development of the Group's main credit Own coverage of Stage 1+2 loans compared to regional peers at quality indicators the end of 2Q 2024 85.1% 84.5% 82.7% 83.1% 83.6% 1.9% 1.4% Stage 1 ratio 0
Slide 21: Capital and liquidity position is strong; CET1 improved
The Group’s capital and liquidity position is strong. The CET1 ratio improved in the first half thanks to strong underlying capital generating capability. The sale of OTP Bank Romania is not yet reflected in capital adequacy ratios Capital adequacy Regulatory Decomposition of the year-to-date change
Slide 22: Robust liquidity position and bond redemption profile
Robust liquidity position: 73% net loan to deposit ratio, 237% LCR, 152% NSFR and relatively benign redemption profile OTP Bank outstanding FX wholesale bonds OTP Bank FX MREL-eligible bond maturity profile2 (in EUR million) Issued Amt. / Issue Maturity Actual Issuance Date Instrument Call Date Date
Slide 23: Economic growth expected to accelerate in most operating countries
In 2024 economic growth is expected to accelerate in most operating countries Hungary Bulgaria Slovenia Croatia 2022 2023 2024F 2022 2023 2024F 2022 2023 2024F 2022 2023 2024F GDP growth (annual, %) 4.6 -0.9 2.0 3.9 1.8 2.2 2.5 1.6 2.4 7.0 3.1 3.5 Unemployment (%) 4.1 4.1 4.5 5.1 5.0 4.9 4.0 3.7 3.2
Slide 24: Management guidance for 2024 – OTP Group
Management guidance for 2024 – OTP Group Based on the developments in the first six months, in 2024 the consolidated net interest margin may be higher than in 2023 (3.93%). The guidance for all other performance indicators was upheld by the management: • FX-adjusted organic performing loan volume gr
Slide 25: Disclaimers and contacts
Disclaimers and contacts This presentation contains statements that are, or may be deemed to be, “forward-looking statements” which are prospective in nature. These forward- looking statements may be identified by the use of forward-looking terminology, or the negative thereof such as “plans", "expe
Slide 26: Questions and Answers session
Questions and Answers session 26