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December 4, 2022

OTP Bank Romania announces the financial results for the first nine months of 2022: Solid operational results due to total income increase by 20% and operating expenses by 9%

OTP Group announces the financial results for the first nine months of 2022. 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 a RON 15 million loss during the first nine months of 2022, which was mainly the result of the higher total provisions, amounting to a total of RON 151 million, out of which RON 58 million emerged in 3Q.

Operating profit in the first nine months of 2022 reached RON 146 million, 67% higher compared to the same interval of 2021, following the positive effect of a dynamic 20% surge in total revenues. Within that, net fees and commissions increased by 8% and net interest income grew by 33% y-o-y. At the same time, operating expenses increased by 9% y-o-y in the first nine months, due to higher personnel expenses from wage hikes and from the 3% y-o-y rise in the average headcount.

¨First nine months results show a solid financial performance, following a constant market approach focused on the client, a great commercial proposition, and an intense operational activity. We have a good operating profit level, with dynamic lending and savings volumes, revenues, and growing interest income, which shows our capacity to provide the right banking offer for our clients and adapt in a fast-paced deteriorating economic environment. At the same time, we are constantly evaluating the risk developments and securing future potential comes at the cost of higher risk provisions now, which generated additional loss in the first 9 months of the year. Higher costs are now a constant, but these expenditures help us consolidate our market position, develop our team, as we have done throughout the year, and provide an optimal banking offer for our clients.¨, said Gyula Fatér, CEO OTP Bank Romania.

The net interest income increased by 33%, to a total of RON 484 million. The annual dynamic benefited from the expansion in performing loan volumes, and from the y-o-y 30 bps improvement in net interest margin, fuelled largely by the rising trend of the three-month interbank lending rate (which is the base rate for corporate loans).

During the first three quarters, the total risk cost amounted to RON -151 million, driven by credit risk cost of RON -110 million, due to the increase of the loan portfolio but also due to the declining economic outlook. The provisions for other risks amounted to RON -40 million.

The performing loan volumes increased by 13% y-o-y in the first nine months of 2022, being supported by a 19% increase in corporate loans, while retail loans also increased by 7%.

FX-adjusted deposit volumes increased by 5% compared to the first nine months of last year. In the third quarter customer deposits showed 11% FX-adjusted quarterly growth (+8% y-o-y), chiefly because of the 16% jump in the corporate segment and 6% increase in retail segment. The net loan-to-deposit ratio decreased by 11 pps q-o-q, to 127%.

According to local reporting standards, the bank´s assets reached the level of RON 21,49 billion, increasing by 11% compared to September 2021.

The bank’s capital adequacy ratio reached the level of 21.54% vs. 20.78% in 3Q 2021 on the background of capital increase of RON 200 million in December 2021.

In the first nine months of 2022, OTP Group has registered a consolidated adjusted after-tax profit of HUF 439 billion (RON 5,628 million) while the consolidated profit after tax was HUF 232 billion (RON 2,972 million).

Profit contribution of OTP Core – Hungary (HUF 218 billion / RON 2,792 million), DSK Bank in Bulgaria (HUF 76.5 billion / RON 980 million), the Croatian operation (HUF 38 billion, RON 485 million), the Serbian (HUF 32 billion / RON 416 million), the Slovenian (HUF 19 billion / RON 237 million) the Ukrainian (HUF -26 billion / RON -333 million), the Russian (HUF 24 billion / RON 304 million), the Montenegro operation (HUF 5 billion / RON 58 million), the Moldavian subsidiary (HUF 6 billion / RON 72 million) and Albanian subsidiary (HUF 7 billion / RON 93 million),


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