OTP Bank Romania reports net profit of 183 million RON in first semester

OTP Bank Romania announces the financial results for the first half of 2023. The bank recorded a consolidated net profit of 183 million RON in the first semester of 2023, driven by higher operating profit and positive risk costs on loans.

Operating profit in the first six months of 2023 reached RON 120 million, up 39 percent over the same interval of last year, while net interest income jumped by 39 percent y-o-y, and net fees increased by 16 percent.

“The performance we have achieved in the first part of the year marks a new milestone for us, the highest ever profit in the bank’s history, underlining our commitment to progress, to deliver excellent service for our clients and for our local business goals. We have made meaningful steps on our local consolidation process, and business continues on the right track even during the potential sale process we have recently started.

We are content to share excellent figures now across our business lines and operational metrics, a collective effort also reflected in the award received from Global Finance, which recently selected us as the best bank in Romania, considering the bank’s great financial performance and significant development in the Romanian banking sector,” said Gyula Fatér, CEO OTP Bank Romania.

The net interest income increased by 39 percent, to a total of RON 436 million. The improvement was predominantly driven by the 1 pp y-o-y increase in net interest margin.

In the first six months, the total risk cost structure improved significantly, considering the selling the local factoring company’s non-performing loan portfolio. At the same time, another important reason for this improvement was releasing provisions for loan impairment, owing to the revision of the macroeconomic expectations.

The performing loan volumes decreased by 2 percent y-o-y in the first half of 2023, while q-o-q said volumes grew by 1 percent. This was largely driven by the increase in corporate loans, while the retail loan book shrank further.

FX-adjusted deposit volumes increased by 1 percent compared to the first quarter of 2023, following a 3 percent rise in Corporate deposits, while retail deposits remained stable. Comparing the first half of 2023 with the same interval of last year, deposits grew by 17 percent, driven by a 26 percent surge in the retail segment. The net loan/deposit ratio decreased to 115 percent (-22 pps).

According to local reporting standards, the bank´s assets reached the level of RON 19,5 billion, decreasing by 1 percent compared to June 2022.

The bank’s capital adequacy ratio reached the level of 21.16 percent (+1.14 pp y-o-y) on the background of risk-weighted assets decrease.