OTP Bank Romania recorded 24 million RON loss in the first quarter

OTP Bank Romania has registered a 24 million loss RON during the first quarter of 2022, predominantly shaped by risk costs, a company release shows.

Operating profit in Q1 2022 reached 35 million RON, 4 percent lower than Q4 2021, due to an increase in operating expenses linked to the yearly payment of contributions to deposit insurance fund and resolution fund, booked in full in Q1 2022.

“We are now entering the fourth year of our local development strategy, and the quarterly results truly depict the journey we take through our investment plans and transformational programs. The operational change and growth, while we transitioned to the new working model, Agile, have brought us closer to our customers and contributed to the increase of interactions and operations. As it follows, in the first three months we have marked steady growth on our loans and deposits portfolios, as it was the case for the interest income. This could not have been achieved without considerable expenditure, which for the moment directly impacts quarterly profitability, and without increasing our teams and welcoming more and more local talents”, said Gyula Fatér, CEO OTP Bank Romania.

The net interest income increased by 31 percent, to a total of 147 million RON. The quarterly dynamics benefited from a vigorous growth in performing (Stage 1+2) loan volumes (+4 percent q-o-q), and the 19 bps q-o-q improvement in net interest margin. The three-month interbank lending rate, which is the benchmark for corporate loans, remained on an increasing trajectory, so the average interest on the corporate loan portfolio grew further in the first quarter.

In the first quarter, the total risk cost amounted to -58 million RON. The additional provisions for impairment of stage 2 and 3 loans generated a risk cost of 25 million RON. The provisions for other risks, amounting to 33 million RON in Q1 2022, were influenced by the establishment of an extraordinary provision for an operational risk event, amounting to 28 million RON.

According to local reporting standards, the bank´s assets reached the level of 18.5 billion RON, increasing by 18 percent compared to March 2021.