OTP Bank Romania has registered an after-tax profit of RON 58 million during 2021, more than double the result of the previous year. OTP Group announces the financial results for 2021, which presents the consolidated results adjusted in accordance with the Group´s standards,
Operating profit in 2021 reached RON 123 million, on a downward trend compared to the previous year, mainly because of an 18% increase in operating expenses. The better part of these costs stemmed from the bank’s growth strategy launched in 2019, higher personnel expenses following an 8% y-o-y growth of the average number of employees and also wage hikes.
"The 2021 results represent a clear picture of our state of development. We are following a journey started in 2019, which step by step brings us closer to our market position objective. As we look at the business activity, we are gaining in market share and marking the positive end-of-year results, with both lending and savings volumes growing dynamically, by two digits. Therefore, our approach of following customer needs and providing useful and well-designed banking instruments is proving its efficiency and helps us build an even closer relationship with them. As we implement our main investment and growth programs, the figures clearly indicate a steady increase in operating costs, and, most importantly, this happens as we are constantly growing our team. These investments lay down the foundation for further growth. Thus, we will follow on the same path this year, financing the local economy and businesses, mitigate, as much as we can, the incoming increasing financing costs for our customers, and continue our digital and network development nationwide”, said Gyula Fatér, CEO OTP Bank Romania.
The net interest income increased by 10%, to a total of RON 498 million. The dynamic was supported by a vigorous 21% growth of performing loan volumes, while mitigated by a slight reduction of net interest margins.
In 2021, the total risk cost amounted to -RON 46 million. The 68% y-o-y decline stemmed from the lower credit risk cost than in the base period, and from the release of other provisions. In the fourth quarter, provisions created for the higher volume of Stage 2 and Stage 3 loans resulted in -RON 10 million credit risk costs. On the other risk costs line, RON 25 million provisions were released, mostly induced by litigation.
The performing loan volumes rose by 21% y-o-y in 2021 and by 4% q-o-q (the last quarter of 2021), is supported by increases in all the business areas. Firstly, mortgage loan placements increased by 25% y-o-y and by 7% in the fourth quarter, while in the third quarter, group-level definitions were introduced for MSE and corporate loans. As a result, certain exposures were reclassified between the two categories.
Deposit volumes increased by 17% compared to 2020. Despite the successful deposit-taking, the loan-to-deposit ratio grew by 4 pps y-o-y to 118%.
According to local reporting standards, the bank´s assets reached the level of RON 18.5 billion, increasing by 24% compared to the previous year.
The bank's capital adequacy ratio stays at a comfortable level of 22.54 % (+222 bps y-o-y) following the 200 million lei capital increase received from the Group in December 2021.
In 2021, OTP Group has registered an adjusted after-tax profit of HUF 456 billion (RON 6,266 million) and the consolidated accounting profit was HUF 497 billion (RON 6,821 million).
Profit contribution of OTP Core – Hungary (HUF 213 billion / RON 2,928 million), DSK Bank in Bulgaria (HUF 77 billion / RON 1,054 million), the Croatian operation (HUF 33 billion, RON 459 million), the Ukrainian (HUF 39 billion / RON 536 million), the Russian (HUF 38 billion / RON 516 million), the Serbian (HUF 32 billion / RON 441 million), OTP Slovenia (HUF 17 billion / RON 231 million), the Montenegro operation (HUF 4 billion / RON 57 million), the Moldavian subsidiary (HUF 6 billion / RON 80 million) and Albanian subsidiary (HUF 6 billion / RON 76 million).
The full report published by OTP Bank Plc. is available here.