Bulletin: OTP Bank Has Solid Prospects For 2023 Despite Reduced Profit

FRANKFURT (S&P Global Ratings) March 13, 2023--S&P Global Ratings said today that Hungary-based OTP Bank PLC's (OTP; BBB-/Stable/A-3) strong operating performance in 2022 displays the bank's strong franchise and solid prospects for 2023, despite profits being affected in 2022 by extraordinary items. OTP's operating profits were up 22% (all numbers foreign-exchange-adjusted) from the previous year, thanks to a strong loan growth in its core markets and further acquisitions in the region, as well as a dynamic macroeconomic environment with rapidly rising interest rates. Earnings metrics remained strong, in our view, with a return on equity of 17%, but below previous years' average because of several one-off items. Firstly, the Hungarian government imposed a windfall tax on domestic banks, slashing OTP's

...March 13, 2023 FRANKFURT (S&P Global Ratings) March 13, 2023--S&P Global Ratings said today that Hungary-based OTP Bank PLC's (OTP; ###-/Stable/A-3) strong operating performance in 2022 displays the bank's strong franchise and solid prospects for 2023, despite profits being affected in 2022 by extraordinary items. OTP's operating profits were up 22% (all numbers foreign-exchange-adjusted) from the previous year, thanks to a strong loan growth in its core markets and further acquisitions in the region, as well as a dynamic macroeconomic environment with rapidly rising interest rates. Earnings metrics remained strong, in our view, with a return on equity of 17%, but below previous years' average because of several one-off items. Firstly, the Hungarian government imposed a windfall tax on domestic banks, slashing OTP's profits (together with the banking tax) by Hungarian forint (HUF) 91.4 billion to HUF347 billion, from HUF456 billion in 2021. In addition, rate cap schemes mainly for mortgage...

Bulletin