OTP Bank Romania reports 15 million RON loss in first nine months

OTP Bank Romania has registered a 15 million RON loss during the first nine months of 2022, which was mainly the result of the higher total provisions, amounting to a total of 151 million RON, out of which 58 million RON emerged in the third quarter.

Operating profit in the first nine months of 2022 reached 146 million RON, 67 percent higher compared to the same interval of 2021, following the positive effect of a dynamic 20 percent surge in total revenues. Within that, net fees and commissions increased by 8 percent and net interest income grew by 33 percent y-o-y. At the same time, operating expenses increased by 9 percent y-o-y in the first nine months, due to higher personnel expenses from wage hikes and from the 3 percent 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 percent, to a total of 484 million RON. 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 percent y-o-y in the first nine months of 2022, being supported by a 19 percent increase in corporate loans, while retail loans also increased by 7 percent.

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

According to local reporting standards, the bank´s assets reached the level of 21.49 billion RON, increasing by 11 percent compared to September 2021.