OTP Bank Romania posts net profit of 262 million RON in 2023

OTP Bank Romania recorded a consolidated net profit of 262 million RON in 2023, seven times higher than the amount of 2022.

Operating profit in 2023 reached RON 270 million, up 25 percent higher than in 2022, as a result of a 13 percent increase in total income, while net interest income grew by 4 percent y-o-y, and net fees and commissions increased by 8 percent, following an increase in card commissions.

„I am proud to say that OTP Bank Romania not only navigated the challenges with resilience, but during the sale process remained steadfast in its commitment to excellence, ensuring the continuity of its successful operations. 2023 marked an important milestone for us, as we proudly achieved a record profit, a commitment to the dedication and competence of our team. Furthermore, we are pleased to report a remarkable 15 percent increase in our active customer base, reflecting the growing confidence and satisfaction of our valued customers. These results underscore our relentless focus on delivering exceptional financial services and strengthening client relationships.”, said Gyula Fatér, CEO OTP Bank Romania.

The net interest income grew by 4 percent, to a total of RON 698 million, with an annual dynamic that benefited from stable loan volumes and the repricing of outstanding loan volumes in the higher interest rate environment. Nevertheless, the net interest income indicator and other income dynamics were influenced by the change in the accounting of result on FX swap deals, although this reclassification was neutral on profits.

Total risk cost amounted to +RON 38 million, mainly driven by the credit risk cost in the second quarter of the year, which stemmed from the sale of the Romanian factoring company’s non-performing loan portfolio.

Performing loan volumes decreased by 3 percent y-o-y at the end of 2023, while q-o-q volumes were stable. This was due to a 12 percent drop in mortgage loans, caused by the rising mortgage rates, and a 4 percent decline in consumer loans, which was only partly offset by the 3 percent increase in corporate loans and a 9 percent growth in leasing volumes. Following the decline in interest rates towards the end of the year, mortgage loan placements tripled q-o-q in the fourth quarter.

FX-adjusted deposit volumes increased by 16 percent in 2023. The largest contribution came from retail deposits, which grew by 17 percent, while corporate deposits increased by 13 percent. A multi-year improvement drove the net loan to deposit ratio below 100 percent by the end of the year (-19 pps y-o-y). As a result, the volume of liabilities to credit institutions fell by 41 percent y-o-y.

According to local reporting standards, the bank´s assets reached RON 19.8 billion, a stable level compared to the previous year.