OTP Bank earned HUF 85.9 billion in Q3, down 4 percent from the previous quarter and 8 percent more than in the previous year, according to a press release issued by the Budapest Stock Exchange (BSE) , International Financial Reporting Standards (IFRS).
The third quarterly OTP Bank report overlooked the confidence gained in the stock market in recent days: leading domestic financial institutions have outpaced analysts' expectations, and net profit has risen to a record level.
In November, the exchange rate of the banknotes on the stock exchange was nearly 1,000 forints, which is 9.2 percent, mainly due to the positive expectations of the flash news reported on Friday at dawn. OTP Turnover on Thursday was extremely high, 33 billion forins. Priority investor interest was no accident, the bank showed a very strong quarter.
The Group's net profit increased to HUF 85.9 billion, a year-on-year increase of 8%. The value exceeds analysts' expectations of HUF 82.7 billion. Quarterly profits rose to HUF 92.7 billion from July to September, 17 percent (market expectation was milder and reached HUF 83 billion) without correction items – reached a new historic peak.
Consolidated earnings after tax for the first three quarters were 240.5 billion forints, up 13 percent from a year earlier.
In the first nine months of the year consolidated consolidated profit after tax of HU 262.8 billion was a banking group, which is 17 percent higher than a year ago.
The first nine months of the accounting period amounted to HUF 22.3 billion, HUF 6.8 billion in the third quarter. The biggest item was 5.7 billion goodwill forints.
Return on equity (ROE) for the third quarter was 19.6 percent, with the kilenchavi index reaching 19.3 percent and improving year on year by 0.1 percentage point.
According to the report, it should be borne in mind that the Croatian Splitska bank was only consolidated in May and the Vojvodská banka was in December. In addition, the exchange rate of the Ukrainian hryvnia and the Russian ruble kilenchav decreased by 6 and 9 percent a year.
Improvement of nine months of consolidated, adjusted earnings after tax is mainly driven by foreign group members.
The results of operations of Ukraine, Croatia, Serbia and Montenegro have improved, while OTP Core has grown by 2 percent, 139.6 billion forints a year, and DSK Bank 5 percent to 38.4 billion forints. A Chinese operation with a performance of 18.9 billion forints in 9 months, which grew by 16 percent year-on-year, includes a loss of 3.3 billion forints of the bank in question integrated with the Russian bank.
Thanks to Splitska Bank's results, Croatian operations achieved nearly 21 billion earnings after tax in the first nine months. The Serbian operation saw a profit of 1.3 billion forints, and the improvement was also explained by the acquisition. In the base period, only the performance of the Vojvodská banka was consolidated in December.
Foreign-exchange gains grew by 8 percentage points yoy, to 41 per cent in the first nine months, with 45 per cent of profits after tax coming from abroad.
Among the new banks that were included in the banking group in 2017, Splitska Bank's profit was HUF 12.4 billion, while the Vojvodská banka had HUF 2.4 billion.
The performance of the Ukrainian subsidiary (60 percent) remains in the banking group for the past nine months, but Bulgarian (20.8 percent) and Russian (17.1 percent) also have excellent ROE performance. 10.9% ROE Croatian operations reflect an improvement of 2.1 percentage points on an annual basis.
Kilenchavi's consolidated earnings increased by 10 percent yoy. In this context, net interest income increased by 9 percent to HUF 443.4 billion and net fee and commission income increased by 8 percent to HUF 164.1 billion. Without organic growth, organic growth would be 5.4% and 4% of total revenues, net interest income and net commission income.
Consolidated operating costs increased 12 percent to HUF 357 billion in the first nine months of the year,
without the impact of the increase in costs due to the acquisitions of Splitska and Vojvodjanska, would be 6.8 percent on the exchange rate expansion.
Among the components of the revised third quarter report, the report notes that operating profit improved by 7 percent – HUF 7.4 billion compared with the previous quarter, while the total risk (HUF 2.5 billion) increased slightly in absolute terms. In the third quarter, net interest income increased by 12 percent year-on-year by 5% quarterly. Net fee and commission income improved by 2% compared to the previous quarter, mainly due to one-off and underlying performance.
The balance sheet total of the bank's group at end-September amounted to 14,362.6 billion forints, up 14 percent in the first quarter of this quarter.
The net portfolio of client loans rose by 4 and 16 percent to HUF 7908 billion and quarter on quarter and customer deposits grew by 3 and 12 percent to HUF 11,032.7 billion. The rate of overdue loans for 90 days amounted to 0.9 on a quarterly basis, down by 4 percentage points to 7.3 percent year on year, and rose by only 1.5 billion forints.
OTP's shares are classified as BSE premiums, while the final paper price on Thursday was 11,250 HUF, up by HUF 300 higher than the previous day. In the past year, OTP's largest share of 11,780 shares was the lowest of 9,510 forints.