OTP Bank Romania si-a majorat capital social cu 27 milioane euro, indicatorul de solvabilitate fiind de 14,5% la finalul anului trecut, sub media sistemului bancar, de 18,86%. Banca maghiara a obtinut un profit net de 3 miliarde forinti (45,5 milioane lei) in 2017, in crestere cu 83% fata de anul precedent.

Raportul bancii-mama din Ungaria:

The Romanian subsidiary’s adjusted annual profit exceeded HUF 3 billion (+83% y-o-y). The 4Q profit was HUF 1 billion. Operating income improved by 9% y-o-y; alongside the 2% increase of total income (within that both NII and fees and commissions declined), operating expenses moderated by the same magnitude.

Annual total risk costs dropped by 16% y-o-y. The net interest margin for 2017 eroded by 12 bps (3.27%), but the pace of decline moderated y-o-y. The performing loan volumes grew by 10% y-o-y (FX-adjusted) supported by a dynamic expansion of the consumer and SME exposures. The net loan-to-deposit ratio increased to 142%. The DPD90+ ratio declined to 13.5%.

 The bank posted HUF 3.0 billion net profit in 2017 (+83% y-o-y)

 In 4Q accounting corrections occurred influencing several P&L lines; the total negative impact of these corrections was HUF 0.8 billion, thus the after tax profit
declined by 22% q-o-q

 The annual operating profit advanced by 9% y-o-y as a result of 2% higher total income and 2% lower operating expenses

 Total risk costs moderated by 16% y-o-y

 The performing FX-adjusted loan portfolio grew by 10% y-o-y supported by strong lending activity in the consumer and corporate segments

In July 2017 OTP Bank Romania S.A., the Romanian subsidiary of OTP Bank signed an acquisition agreement on purchasing a 99.28% shareholding held in the Romanian Banca Romaneasca S.A. by National Bank of Greece S.A and certain other Romanian exposures held by different subsidiaries of National Bank of Greece S.A.

The Competition Office has approved the transaction. The financial closing of the deal is subject to the necessary regulatory approvals by the central bank.

The Summary of the full-year 2017 results does not
incorporate the effect of the transaction.

OTP Bank Romania posted HUF 3.0 billion net
profit in 2017 exceeding the base period by 83%
y-o-y. The bank reached HUF 1.0 billion profit in 4Q
(-22% q-o-q).

In 4Q 2017 there were certain accounting
corrections influencing several P&L lines. Those
corrections had a total profit impact of -HUF -0.8
billion. Within that, -HUF 2.0 billion appeared on the
net interest income, +0.4 billion on the other income
and +0.9 billion on the other risk costs line,
respectively.

The annual operating profit grew by 9% y-o-y as a
result of a 2% increase in total income and a 2%
moderation in operating expenses. Within total
income the net interest income eroded by 3% y-o-y.

The one-off correction affecting NII in 4Q also had a
small negative influence on the annual net interest
margin (3.27%, -12 bps y-o-y).

Net fees and commissions in 2017 moderated by
5% y-o-y, partly due to a regulatory change:
effective from 4Q 2016 banks cannot charge fees on
cash withdrawals if it is related to new loan
disbursement.

Other non-interest income grew by 39% y-o-y
(+HUF 1.2 billion). The increase is partially
explained by the one-off accounting correction in
4Q (+HUF 0.4 billion), also by one-off gain on
property sale (+HUF 0.3 billion) as well as
improving FX-gains.

Annual operating expenses declined by 2% y-o-y.
Apart from lower amortization costs other
administrative expenses came down, too mainly due
to savings in expenses related to real estates and
lower deductible taxes. On the other hand,
personnel expenses grew by 6% y-o-y.

4Q operating expenses grew by 18% q-o-q, partially
driven by seasonal effects (rising personnel and
marketing expenses) and by higher expert fees.
DPD90+ volumes (FX-adjusted, without sales and
write-offs) grew by HUF 1.9 billion in 2017, but didn’t
change in 4Q. During 2017 HUF 16.1 billion problem
loans were sold/written off, of which HUF 12 billion
in 4Q. The DPD90+ ratio declined to 13.5% at the
end of 2017 (-3.9 pps y-o-y, -2.1 pps q-o-q).

Annual total risk costs declined by 16% y-o-y
supported by both lower provision for possible loan
losses (-9%) and other risk costs (-62% y-o-y). In 4Q
there was a HUF 0.15 billion provision release; out
of the q-o-q HUF 1.3 billion risk cost decrease HUF
0.9 billion was related to the accounting correction.

The FX-adjusted performing loan volumes increased
by 10% y-o-y and by 1% q-o-q. Both the retail and
corporate segment supported the expansion in 2017
(+7% and +15% y-o-y, respectively). Within retail the
consumer and SME segments were the key drivers
of growth (+22% and 18%, respectively); mortgage
volumes grew by 2%. As for new loan
disbursements, the cash loan sales improved by
47% y-o-y, while mortgages by 69% y-o-y.

FX-adjusted deposit volumes increased by 3% y-o-y
(+2% q-o-q). The yearly growth was supported by
retail and corporate inflows, too (+1% and 7%,
respectively).

The y-o-y increase in shareholders’ equity was partly
reasoned by a capital injection of EUR 27 million
executed by the mother bank in 4Q. According to
local regulation the Bank’s standalone capital
adequacy ratio stood at 14.5% at the end of 4Q
2017.

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