Q3 2024 OTP Bank Nyrt Earnings Call Transcript
Key Points
- OTP Bank PLC (STU:OTP) reported a strong capital adequacy ratio above 19%, significantly higher than the European minimum requirement of 5%.
- The company achieved a 19% year-on-year growth after adjusting for last year's one-off items, showcasing robust financial performance.
- Net interest margin stabilized at approximately 4.3%, with significant improvements noted in Hungary.
- The cost-to-income ratio is approaching 40%, indicating improved operational efficiency.
- Foreign operations contributed 70% to earnings, highlighting successful international expansion and diversification.
- The third quarter earnings were slightly lower compared to the previous year due to the absence of one-off positive items from past acquisitions.
- The sale of the Romanian bank, despite efforts, indicates challenges in achieving organic growth in certain markets.
- Risk costs were higher this year, primarily due to extra provisions for Russian bonds.
- The Hungarian GDP growth was lower than expected, which could impact future corporate loan demand.
- Increased transaction taxes in Hungary negatively impacted fee growth in the third quarter.
Portions of this transcript marked (audio in progress) indicate audio problems. The missing text will be supplied if a replay becomes available.
(audio in progress) But we are at much lower leverage. In fact, as you can see on this slide, our capital adequacy ratio went up above 19%. And our leverage ratio is closer to 11%.
Just to remind you, the European kind of minimum requirement is 5% and most of the banks are between 5% and 6.5%. So this is -- this kind of shows the amount of capital we are running on and kind of relatively little leverage we have. And despite of all of this, we have this quite strong ROE.
Liquidity remained strong and portfolio quality stable, and it has been served for, frankly, the last 8 years, despite all the events and turbulences in the economy and in the environment.
Page 3 summarizes the most important financials. So the third quarter was
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