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March 22, 2023

OTP Bank Romania announces the financial results for 2022

  • OTP Bank Romania keeps up its strategy of local operations development and consolidation and reports strong results, with total revenues rising by 23%
  • The operating profit reached RON 217 million, which marks a 76% increase compared to 2021.
  • Net interest income increased by 35% y-o-y, to a total of RON 672.7 million.
  • Performing loan volumes increased by 10% y-o-y, supported by corporate lending, SMEs, and leasing segment.
  • Deposits increased by 11% y-o-y mainly due to retail segment.
  • After tax profit reached RON 34.6 million, as the indicator was affected by risk costs increase.  

OTP Group announces the financial results for 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 an after tax profit of RON 34.6 million in 2022, 40% lower than the previous year. During the fourth quarter the profit indicator improved significantly, based on the increase in operational profitability and the reduction of risk-related costs.

Operating profit in 2022 reached RON 217 million, 76% higher than in 2021, following the positive effect of a 23% increase in total revenues. At the same time, operating expenses rose by 10%, an important part of these costs being correlated with investments for the bank’s development strategy. The cost/income ratio improved by 8.6 percentage points and reached 72.5% in 2022 compared to last year, while in the last quarter it dropped below 68%. Risk costs almost four times higher following a 50% increase in credit risk costs and other associated risk costs.

“Last year’s results prove for us the resilience of OTP Bank Romania’s strategy for local operations development and consolidation. The transformation we went through in recent years, adapting to a flexible organizational structure, the redesign of business processes and the direct involvement we have in the local economy, supported the solid growth in bank’s revenues and for the operational profitability indicator. This operational development and adaptability helped us during 2022 to propose an optimal banking products and services offer that could mitigate the shock of the general context with constant surges for all types of costs. We are committed to continue our balanced development in Romania, with a focus on the national network, optimizing the digital services portfolio and consistent investments in the bank’s team”. said Gyula Fatér, CEO OTP Bank Romania.

The net interest income increased by 35%, to a total of RON 672.7 million. The annual dynamic benefited from the expansion in performing loan volumes, and from the y-o-y 39 bps improvement in net interest margin, fuelled by the increase in reference interest rates, especially for three-month interbank transactions (the main benchmark for corporate loans) and of the IRCC index.

Total risk cost almost four times higher, amounting to RON -173.8 million, driven by credit risk cost of RON -139.0 million, due to the increase of the loan portfolio but also due to the declining economic outlook. The provisions for other risks amounting to RON -34.8 million, were influenced by the establishment of an extraordinary provision for an operational risk event amounting to RON -28 million.

The performing loan volumes increased by 10% y-o-y at the end of 2022, supported by growth on most business lines. The corporate lending segment grew by 15%, SME lending by 11%, leasing financing by 25%, while the retail sector slowed down to 4%.

FX-adjusted deposit volumes increased by 11% in 2022. The largest contribution came from deposits in the retail segment, +28% year-on-year, while the volume of corporate loans contracted by 5%. The net loans-to-deposits ratio decreased by 10 percentage points q-o-q, to 117%.

According to local reporting standards, the bank´s assets reached the level of RON 19.9 billion, increasing by 8% compared to 2021.

The bank’s capital adequacy ratio reached the level of 22.16% vs. 22.24% in 2021.

In 2022, OTP Group has registered a consolidated adjusted after-tax profit of HUF 593 billion (RON 7,326 million) while the consolidated profit after tax was HUF 347 billion (RON 4,291 million).

Profit contribution of OTP Core – Hungary (HUF 252 billion / RON 3,119 million), DSK Bank in Bulgaria (HUF 120 billion / RON 1,482 million), the Croatian operation (HUF 43 billion, RON 529 million), the Serbian (HUF 37 billion / RON 456 million), the Slovenian (HUF 24 billion / RON 295 million) the Ukrainian (HUF -16 billion / RON -197 million), the Russian (HUF 43 billion / RON 526 million), the Montenegro operation (HUF 10 billion / RON 121 million), the Moldavian subsidiary (HUF 6 billion / RON 72 million) and Albanian subsidiary (HUF 10 billion / RON 126 million),

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