OTP Bank Romania reports after tax profit of 7 million RON for the first quarter of 2021

OTP Bank Romania has registered an after tax profit of RON 7 million during the first quarter of 2021, marking an increase compared to the first quarter of last year, when a loss of 11 million RON was recorded, as a result of supplementing by 48 million RON the risk costs in the context of COVID-19.

“We are now in full deployment of our organic growth program, implementing new projects and developing new products and services, while in the first three months we have marked steady double digit growth on our loans and deposits portfolios, as in our customer numbers. These are encouraging results, which show the effect of our Q1 investment program, the large capital increase at the beginning of the year, and other important development, such of the expansion of our branch network with a new centre in Timișoara, or the launch of new products, as the fully online personal loan”, said Gyula Fatér, CEO OTP Bank Romania.

Operating profit in Q1 2021 reached 8 million RON, on a downward trend compared to the same period in 2020, because of the increase in operating expenses, which grew by 26 percent. Aside from the higher mandatory costs such as the fee paid to the Deposit Guarantee and Resolution Fund, the operating expenses are higher following the investments and costs incurred in 2020 as per the Growth Program.

The Growth Program continues into 2021, carrying over additional FTE (12 percent y-oy increase in average headcount) as well as running costs for investments and developments finalized in 2020. This year the bank continued its investments, with new IT and digital programs meant to increase efficiency.  

The net interest income decreased by only 2 percent, to a total of RON 112 million, being maintained by the dynamic expansion of performing loans but eroded by the net interest margin that decreased, on lower ROBOR and IRCC reference rates, with more emphasis on the credit side than on the deposit side.

In the first quarter, total risk cost amounted to +RON 3.8 million, owing to lower credit risk costs than in the base periods and the release of provisions for litigations (one-off large case).

The performing loan volumes increased by 14 percent in the first quarter of 2021, being supported by housing loans + 14 percent, the SME segment + 17 percent, while the corporate segment contributed with a 10 percent increase from year to year.

FX-adjusted deposit volumes increased by 31 percent compared to the first three months of last year, with a dynamic fuelled by both Retail (+24 percent), SME’s and Micro enterprises (+28 percent) and Corporate (+51 percent) business lines.

According to local reporting standards, the bank´s assets reached the level of RON 15.6 billion, increasing by 18 percent compared to March 2020.