OTP Bank Romania has recorded a loss of 14 million RON in H1 2022 mainly as a result of rising risk costs, the bank announced on Thursday.
Operating profit in the first six months of 2022 reached 86 million RON, double the one in the same period of 2021, as the positive effect of a 22% increase in total revenues, partially diminished by an increase of +10 % of operating expenses, according to the bank's H1 2022 financial report published in Budapest, in which the bank's results are presented consolidated, adjusted for the group's standards.
Net interest income increased by 35% per year, and net fees and commissions increased by 9%, while in the case of operating expenses the increase is mainly due to investment under the bank's growth strategy, which determined the advance of expenses for the IT area, a 2% increase in the average number of employees and a larger contribution paid in 2022 to the Bank Deposit Guarantee Fund and the Resolution Fund.
Gyula Fater, CEO of OTP Bank Romania, says the first half of 2022 imposed once again extraordinary conditions for the entire economy, with a constantly changing macroeconomic and geopolitical context. OTP kept direct contact with the market and followed closely the developments in the banking sector in order to offer the best services and an attractive offer for customers. Thus, there were six months of development, constant investment and organisational transformation for OTP Bank, which in turn brought significant improvements in its operations and results. All planned investment is being implemented and the bank is engaged in its development projects, both for team growth and operational improvement.
In the first six months, the total cost of risk amounted to -93 million RON, fueled by credit risk costs of -59 million RON, as a result of an increase in the loan portfolio, and also of declining economic prospects for certain sectors.
According to the bank, the volume of performing loans increased by 23% year-on-year in the first half of 2022, supported mainly by an increase in corporate loans, while mortgage loans increased by 17%. The 111% increase in corporate loans is a result of a change in the definition of the corporate and SME segments in the Q3 2021.
The volume of deposits adjusted for the exchange rate increased by 2% from Q2 2021. The 66% increase in corporate deposits is a consequence of a change in the definition of the corporate and SME segments in Q3 2021. The net loans/ deposits ratio increased by 23 percentage points y-o-y, to 137%, up 12 percentage points on a quarterly basis, Agerpres.
In accordance with local reporting standards, the bank's assets reached 19.78 billion RON, a 24% increase as against June 2021.
The bank's capital adequacy ratio reached the 20.02% (-2.13 pp year-on-year) amidst an increase in assets. In the H1 2022, the OTP Group recorded an adjusted consolidated profit of 251 billion Hungarian forints while the consolidated profit after taxation was 43 billion Hungarian forints.
OTP Bank Romania is a subsidiary of the OTP Group. The bank ranks 9th in terms of assets in the ranking of banking players in Romania, according to the latest data released by the National Bank of Romania (BNR) . In Romania, the members of the OTP Group are: OTP Bank Romania, OTP Consulting, OTP Leasing, OTP Asset Management, OTP Factoring, OTP Advisors and the OTP Bank Romania Foundation.