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August 11, 2022
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OTP Bank Romania announces the financial results for H1 2021: After tax profit marks an increase of nearly 50% compared to the first half of 2020

  • The first semester results show consolidated profit after tax of 27 million lei, increasing by almost 50%.
  • Performing loan volumes continued to grow, reporting +16% on an annual basis. Main sources of growth are new loans, real estate lending and corporate lending.
  • Deposits volumes increased by 28% on annual basis, fuelled by both Retail and Corporate customers.
  • Operating profit reached RON 43 million lei, lower than the base period, because of the slower advance of interest income on the back of lower ROBOR and due to 26% increase in operating expenses in part owed to Apollo growth strategy started in 2019.

OTP Group announces the financial results for the first semester of 2021. According to the report published in Budapest, which presents the consolidated results adjusted in accordance with the Group´s standards, OTP Bank Romania has registered an after tax profit of RON 27 million during the first half of 2021, marking an increase of nearly 50% compared to the first half of last year.

“The steps we are committedly taking in our national growth program are confirmed by the results of these first six months of the year. The market expresses a solid need for financing, and our investment programs in developing and increasing the OTP Bank team, in the operational area, digitalization, or product development, have exactly this purpose, to attract new customers and to constantly adapt the offer. The correlation is direct, with good results in terms of new loans or the high-performing loans growth, where we are already in line to reach the growth target for this year”, said Gyula Fatér, CEO OTP Bank Romania.

Operating profit in the first six months of the year reached RON 43 million, on a downward trend compared to the same period in 2020, because of the increase in operating expenses by 26% as result of the Apollo growth strategy launched in 2019. Thus, the 11% increase in the number of employees led to higher personnel expenses, while the annual contribution to the Deposit Protection Fund, paid in the first quarter of the year, added about RON 21 million (higher by 8.4 million than the previous year) to the total expenses.

The net interest income increased by 3%, to a total of RON 232 million. These were supported by the sustained development of high-performing loan volumes but mitigated by the gradual reduction of net interest margins. An important factor is also the net fees and commissions, which grew by 11% in the second quarter.

In the first quarter, total risk cost amounted to RON 10 million, owing to lower credit risk costs than in the base periods and the release of other provisions. The change in the risk calculation methodology brought with it an increase of RON 14 million in the second quarter of this year.

The performing loan volumes increased by 16% in the first semester of 2021, being supported by an increase in new loans +158%, mortgages +116% or by the solid contribution of the corporate segment +9% from year to year.

 

FX-adjusted deposit volumes increased by 9% in the first six months of this year , with a dynamic fuelled by Retail (+13%), SME’s and Micro enterprises (+13%) business lines.

 

According to local reporting standards, the bank´s assets reached the level of RON 15,957 billion, increasing by 17% compared to the level recorded in the first half of 2020.

The bank’s capital adequacy ratio (increased) at a comfortable level of 21.9% (+1 pp y-o-y).

In the first six months of 2021, OTP Group has registered an adjusted after-tax profit of HUF 246 billion (RON 3.373 million) and the consolidated accounting profit was HUF 215 billion (RON 2.946 million).

The full results of OTP Bank Romania are presented in the table below.

Main components of P&L account
in RON mn
1H 2020 1H 2021 Y-o-Y 2Q 2020 1Q 2021 2Q 2021 Q-o-Q Y-o-Y
After tax profit without the effect of adjustments 17 24 48% 27 7 17 142% -36%
Income tax 0 -8   -6 -5 -3 -36% -51%
Profit before income tax 16 33 101% 34 12 20 70% -39%
Operating profit 92 43 -54% 56 8 35 318% -38%
Total income 301 305 2% 154 148 158 7% 3%
Net interest income 226 232 3% 112 112 120 7% 7%
Net fees and commissions 26 28 9% 13 13 15 11% 11%
Other net non-interest income 49 45 -8% 29 22 23 6% -20%
Operating expenses -209 -263 26% -98 -139 -123 -12% 26%
Total provisions -76 -10 -87% -22 4 -14 -468% -36%
Provision for impairment on loan and placement losses -57 -36 -38% -2 -19 -17 -14% 907%
Other provision -19 26 -238% -20 23 3 -89% -112%
Main components of balance sheet
closing balances in RON mn
2020 1H 2021 YTD 2Q 2020 1Q 2021 2Q 2021 Q-o-Q Y-o-Y
Total assets 15,502 16,682 8% 14,225 16,340 16,682 2% 17%
Gross customer loans 11,487 12,467 9% 10,798 11,894 12,467 5% 15%
Gross customer loans (FX-adjusted) 11,529 12,467 8% 10,848 11,897 12,467 5% 15%
Stage 1+2 customer loans (FX-adjusted) 10,778 11,724 9% 10,084 11,168 11,724 5% 16%
Retail loans 7,384 8,059 9% 6,803 7,646 8,059 5% 18%
Corporate loans 2,888 3,084 7% 2,827 2,980 3,084 3% 9%

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