Hungarian OTP Bank’s 2024 profit exceeds psychological barrier
Fourth-quarter consolidated after-tax profit of OTP Bank, Hungary’s biggest commercial lender, reached HUF 249.7bn, climbing 17pc after adjustments, an earnings report released ahead of the opening bell on Friday shows. For the full year, OTP booked after-tax profit of HUF 1,076.1bn, up 19pc after adjustments.
Net interest income rose 8pc to HUF 460.7bn. Net revenue from commissions and fees increased 12pc to HUF 148.3bn. Risk costs jumped 94pc to HUF 92.5bn. OTP noted that provisions for impairment on loan losses came to HUF 58.5bn, while other risk costs reached HUF 34.0bn. Diluted earnings per share from adjusted after-tax profit came to HUF 952. For the full year, OTP booked after-tax profit of HUF 1,076.1bn, up 19pc after adjustments.
Net interest income rose 22pc to HUF 1,782.6bn and net revenue from commissions and fees increased 14pc to HUF 545.6bn. Risk costs climbed 83pc to HUF 158.5bn. Diluted EPS from adjusted after-tax profit reached HUF 4,066.
OTP’s foreign units generated 68pc of adjusted after-tax profit. While profit of the core business in Hungary increased 16pc to HUF 270.4bn, profit of DSK Group in Bulgaria edged up 1pc to HUF 200.8bn and profit of OTP Bank Russia climbed 43pc to HUF 136.9bn. Profit of OTP Bank Slovenia inched up 1pc to HUF 113.3bn.
OTP had total assets of HUF 43,419bn at the end of 2024, up 10pc from twelve months earlier. Gross stock of client loans edged up 3pc to HUF 24,335bn and deposit stock inched up 2pc to HUF 31,666bn. The non-performing loan ratio declined 0.7pp to 3.6pc.
In guidance for 2025, OTP’s management said it expected “marginal improvement” in the operating environment. Organic performing loan volume growth could be over the 9pc in 2024, while the risk profile could be similar to that in 2024. The management said ROE could be lower than the 23.5pc in 2024 because of an expected decrease in leverage.
OTP said the Q4 capital adequacy ratio calculation included a HUF 270bn, or HUF 964-per-share, dividend, based on the latest decision of the management committee. The final decision on the dividend proposal will be made by the board of directors later in March and be published on April 3, it added.
OTP deputy CEO of the results
At a press conference after the report was published, deputy-CEO László Bencsik said OTP was trying to reduce its exposure in Russia by scaling back activities that posed potential problems, adding that the group’s corporate lending there had ceased.
He said Hungarian government measures had shaved HUF 172bn off profits last year and would have a negative impact of HUF 263bn in 2025. This year, OTP will pay HUF 33bn for the bank levy, HUF 54bn for the windfall profit tax and HUF 176bn for the transactions duty, he added.
Touching on the market in Hungary, Bencsik said new mortgage volume had more than doubled, while outlays of personal loans had climbed 65pc. That strong performance could continue in 2025, he added.
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