2003 Audited Performance Based on HAR

Transcription

1 OTP Bank 2 Audited Performance Based on HAR Presented by: Dr. Zoltán Spéder CFO April 24

2 TP Bank 2 audited results 2 Forward looking statements This presentation contains certain forward-looking statements with respect to the financial condition, results of operations, and businesses of OTP Bank. These statements and forecasts involve risk and uncertainty because they relate to events and depend upon circumstances that will occur in the future. There are a number of factors which could cause actual results or developments to differ materially from those expressed or implied by these forward looking statements and forecasts. The statements have been made with reference to forecast price changes, economic conditions and the current regulatory environment. Nothing in this announcement should be construed as a profit forecast.

3 TP Bank 2 audited results 3 Interest rate environment 2 14.% 13.% 12.% 11.% 1-1 bp rate cut to defend HUF 16&17 January 2 bp rate increase 19 June 3 bp rate increase 28 November 1.% 9.% 1 bp rate increase 11 June 8.% 7.% 6.% 5.% 4.% wider repo band straightening of yield curve inverse yield curve 3M rate + 3 bp Y15 rate +127 bp 2-Jan Jan 27-Feb 27-Mar 24-Apr 22-May 19-Jun 17-Jul 14-Aug 11-Sep 9-Oct 6-Nov 4-Dec 1-Jan M3 M6 Y1 Y3 Y5 Y1 Y15 2w repo

4 EUR/HUF environment interest rate cut intervention strong HUF policy to push down inflation speculative run for appreciation slow withdrawal of hot money rate increase timing of ERM II announced Renewed speculation rate increase volatility due to contradictory actions and statements by government Moving of center of band (devaluation) Jan Jan 27-Feb 27-Mar 25-Apr 27-May 25-Jun 23-Jul 21-Aug 18-Sep 16-Oct 17-Nov 15-Dec rate bottom of band TP Bank 2 audited results 4

5 TP Bank 2 audited results 5 Evolution of banking system 2, 18, Intermediation started to grow due to mortgage lending and wage increases 18,6 1% 9% 16, 14, 16, % 65.3% 65.1% 64.% 64.5% 14,9 63.9% 63.8% 72.9% 8% 7% 12, 1, 8, 6, 22.6% 6,893 8,54 1, % 24.6% 11, % 13, % 32.2% 35.8% 42.4% 6% 5% 4% 3% 4, 2% 2, 4,488 5,577 6,571 7,373 8,427 9,521 1,841 13, /12/2 Total banking assets GDP Toal assets as % of GDP Loan/GDP Source: NBH, NSB, OTP Note: GDP data for 2 is estimated 1% %

6 Loan growth in 2* (Y-on-Y) Corporate 45% 42% 4% 37% 35% 35% 3% 27% 26% 24% 25% 3% 2% 2% 15% 14% 13% 15% 2% 2% 1% 7% 15% 7% 12% 11% 11% 5% 1% 7% 6% 8% 1% % Ma r- 1 Ju n- 1 Se p- 1 De c- 1 Ma r- Ju n- Se p- Bank system Retail De c- OTP 14% 116% 12% 18% 97% 1% 86% 89% 82% 8% 63% 68% 72% 71% 48% 63% 64% 61% 45% 48% 49% 52% 6% 46% 47% 71% 4% 2% shift from FX to HUF 13% 12% 18% 2% % Ma Ju Se De -2% r- n- p- c- -4% % 43% 42% Ma r- Ju n- Se p- Ma r- 28% 22% De c- Ma r- Ju n- Se p- -3% -19% Ju n- Bank system OTP OTP + MB shift from HUF to FX Se p- De c- -4% De c- transfer of mortgage loans to mortgage bank Total loans 6% 52% 43% 45% 45% 49% 48% 5% 5% 41% 4% 32% 47% 41% 3% 32% 23% 23% 42% 24% 31% 18% 2% 24% 2% 19% 21% 19% 21% 25% 24% 1% 14% 14% 8% 1% 16% 14% -2% % TP Bank 2 audited results 6-1% ed on new NBH specification used since 1 January 2. Source for sector data: NBH 7% 6% 5% 4% 3% Ma r- 1 Ju n- 1 Se p- 1 27% De c- 1 Municipality 58% 5% 48% 38% 42% 45% 46% Ma r- Ju n- Se p- De c- Ma r- Ju n- Bank system OTP OTP + MB Se p- 28% 31% 36% 36% 29% 2% 8% 12% 12% 25% 26% 26% 25% 21% 1% 12% % 9% 8% Ma Ju Se De Ma Ju Se De Ma Ju Se De r- n- p- c- r- n- p- c- r- n- p- c Bank system OTP De c-

7 TP Bank 2 audited results 7 Rising Real Wages 1,6 Retail Loans Outstanding (HUF billion) vs. Real Wage Growth 13.6% 13.2% 15% 1,4 1,2 1, , % 6.4% 4.9% 3.6% 2.5% 1.5% % % -5.% % % F Housing Loans Consumer loans Real Wage Growth 1% 5% % -5% -1% -15%

8 TP Bank 2 audited results 8 Macro: Selected components of RFA 4,5 4, 4,9 97 CAGR (Rh-scale) 8% 7% 3,5 61.4% 6% 3, 5% 2,5 4% 2, 1,5 1, , , % 11% -.1% Cash HUF Cash FX Bank dep HUF 15.1% 1.9% Bank dep FX 1,99 Non eq. securities -9.2% BSE shares 22.% Mutual funds 28.9% Strong growth in non-banking savings Life ins. Reserves 57 1,16 Pension fund assets 3% 2% 1% % -1%

9 TP Bank 2 audited results 9 Macro assessment 2 2E 24F Real GDP growth 3.5% 2.8% 3.% Inflation (average) 5.3% 4.7% 7.2% Nominal wage increase 16.% 8.% 7.% Final consumption 5.% 5.7%.8% Household consumption 9.4% 7.1% 2.5% Investment growth 7.2% 3.% 3.7% Budget deficit (cash flow based) HUF -1,616 bn HUF -1,64 bn HUF -1,285 bn as a % of GDP -9.3% -5.7% -6.3% Current Account Balance* EUR -5. bn EUR -5.8 bn EUR -5.7 bn as a % of GDP -7.2% -7.9% -7.1% 1yr T-bill yield (average) 8.9% 8.% 1.4% * Reinvested earnings calculated as FDI Prepared by OTP Research Center based on sources from NSB, NBH

10 TP Bank 2 audited results 1 Market share total assets 14, Mortgage lending causes strong increase in bank system s B/S 3% 12, 25.4% 25.% 24.5% 24.6% 24.6% 24.% 24.4% 24.4% 25.3% 25.8% 25.8% 25.2% 25.8% 23.9% 24.2% 25.8% 25% 1, 8, 24.% 23.3% 22.8% 22.8% 15.9% 15.8% 15.6% 15.3% 22.8% 22.1% 14.6% 15.% 22.3% 22.3% 23.2% 22.7% 22.7% 18.1% 17.% 16.6% 16.1% 15.5% 22.1% 22.5% 16.% 15.% 2.7% 21.% 2.3% 14.% 13.6% 13.4% 2% 15% 6, 4, 2, 1,813 1,865 1,931 1,865 1,945 1,974 2,127 2,4 2,164 2,185 2,258 2,39 2,534 2,522 2,636 2,759 1% 5% % Bank sector OTP Bank Market share-total assets Market share-total loans Group Market share-total assets

11 TP Bank 2 audited results 11 Balance sheet, interest income UF bn 3, 2,5 2, 1,5 1, 5 12% 11% 1% 9% 8% 7% 6% 5% 4% 3% 1,8 Assets, liabilities 2, 1,88 2,241 12/31/ assets 12/31/ liabilities 12/31/ assets 12/31/ liabilities customer treasury non interest earning/yielding 5.8% 4.6%4.63%4.7%4.7% 4.31% 4.59%4.6%4.63% 12M 1 1Q 1H 9M 12M 1Q 1H 9M 12M Asset yield Spread +15.4% Yields, spread Liability yield Margin 2,5 2, 1,5 1, , ,656 12/31/ loans 12/31/ 12/31/ loans 12/31/ deposits deposit s retail corporate municipal other M inc 1, M exp Loans, deposits 2, M NII +11.1% +8.5% Net interest income M inc. 1, M exp. 2, M NII

12 TP Bank 2 audited results 12 Non interest income Non interest income components % M 12M Other Property transactions Forex trading Securities trading Net fees & commissions Fee and commission income % M 12M account management loans Deposits Retail current acc. Securities. Card business Other Driver: mortgage lending Non int. income/total income Non int. income/average total assets 43% 42% 41% 4% 39% 38% 37% 38.2% 42.% 3.6% 3.4% 3.2% 3.% 2.8% 2.6% 2.4% 2.2% 2.91% 3.36% 36% 12M 12M 2.% 12M 12M non interest / total income non interest income/ total assets

13 TP Bank 2 audited results 13 Non interest expenses Non interest expenses % M 12M personnel depreciation operational 6% 56% 52% 48% 44% 4% 57.5% Cost/income ratio bp 54.1% 12M 12M cost income ratio nnualized Non int. expenses/total assets 2.5% 2.1% 2.2% 2.% 1.7% 1.7% 1.5% 1.%.5%.5%.4%.% 12M 12M personnel depreciation operational 9,4 9, 8,6 8,2 7,8 7,4 7, 6,6 Cost rationalization 16 % 15.4 % 14 % 12 % 1. % 9.8% 9.2% 12.1% 1 % 9.7% 8% 5.3% 8,77 4.7% 6% 8, % 8,497 8,137 7,98 4% 4.1% 2% 9,6 8,435 8,188 8,569 8,51 % Average employment Year end employment Inflation Growth in non-interest expenses

14 TP Bank 2 audited results 14 Provisioning/loan losses HUF mn 16, Provisioning structure Provisioning/Operating income 14, 12, 1, -1.9% 3,44 2,8 21% 18% 15% 19.1% 14.2% 8, 6, 4, 2, 1,448 8,811 12M 12M 12% 9% 6% 3% % 12M 12M Loan loss Other General risk provisions&loan losses / operating income Provisioning/Total receivables Provisioning/Average total assets 1.1%.8% 1.%.9%.95%.99%.7%.6%.5%.62%.5%.8%.4%.7%.3%.6% 12M 12M loan loss provisions / receivables (annualized).2% 12M 12M total provision / total assets (annualized)

15 TP Bank 2 audited results 15 Loan quality Qualified receivables as % of total receivables Qualified receivables as % of customer receivables 6% 8% 5% 4% 1.6% 1.6% 2.1% 1.2% 1.5% 1.4% 1.4% 1.1% 1.1% 6% 2.4% 2.2% 2.7% 1.6% 1.8% 1.7% 1.7% 1.4% 1.3% 3% 4% 2% 2% 1% % 2.4% 2.6% 2.6% 3.% 2.7% 3.2% 1 3.1% 2.8% 3.3% % 3.4% 3.4% 3.3% 3.8% 3.4% 3.9% 1 3.7% 3.4% 3.8% NPL Watch NPL Watch

16 TP Bank 2 audited results 16 Loan quality UF bn Qualified loans Provisions, coverage 6 6 6% % 48.% %4.3%4.1% 37.8% 37.3%35.9% 36.9% % 4% 3% 2% % 1 Watch Below average Doubtful Bad 1 Qualified Provision Coverage %

17 TP Bank 2 audited results 17 Retail deposits Volumes, market share Retail current account deposits,6,4 1,4 1 42% 41% ,2 1, , ,279 1,275 4% 2 1, 1, 7 7 1, 9 8 1,113 1, % % sight term 6 37% Yields, spread % 35.8% 36% 35% 18% 16% 14% 12% 1% 15.1% 15.1% 14.9% 11.4% 12.% 1.5% 16.1% 16.7% 12.6% 12.8% HUF HUF market share Group retail deposit market share FX FX market share 34% 8% 6% 4% 2% % 4.7% 3.7% 2.9% 3.5% 3.9% 4Q 1Q 2Q 3Q 4Q asset yield liability yield spread

18 TP Bank 2 audited results 18 Retail loans UF bn 3 Volumes, market share 273 7% Housing loans Existing loans also transferred to OTPMB 25 6% % 4% Old Mortgage bank % 3% 2% Subsidized housing loans Housing Housing market share Housing group market share 12.3% 1 % Consumer Consumer market share Consumer group market share Jan- Feb- Apr- May- Jul- Aug- Oct- Nov- Approval Disboursement Transfer to MB

19 TP Bank 2 audited results 19 Mortgage Loans at OTP Group Cumulative 8. Monthly Feb- Apr- May- Jul- Aug Oct Nov Jan- Feb Apr- May Jul Aug Oct Nov Mortgage Bank Parent bank Granted amount (Rh scale) 12 mo moving average volume

20 TP Bank 2 audited results 2 OTP Mortgage Bank selected data All data as of 31 December 2 Distribution of mortgage portfolio by size Distribution of portfolio by maturity.6%.1% 1.% 3.6% 3.5% 4.5% 27.% 3.% 14.9% 16.7% 42.4% 37.7% <= HUF 5 mn HUF5-1 mn HUF 1-15 mn HUF 15-2 mn over HUF 2 mn under 5 yrs 5-1 yrs 1-15 yrs 15-2 yrs 2-25 yrs 25-3 yrs over 3 yrs Mortgage bond maturity distribution Market share of mortgage banks 39.1% 22.1% 232.5, 31% 38.8% 488.5, 65% 31.9, 4% -1 year 1-5 years 5+ years FHB HVB OTP

21 TP Bank 2 audited results 21 Representative margin on mortgage loans Validity before 16 June 2 after 16 June 2 after 22 December 2 Rate paid by customer 6% (4+2%) max. 5% (3+2%) max. 8%** (max. GBBY * % - GBBY *.6) Liability side subsidy 1% (CMB coupon + 2% but max. 1%) 9.% (GBBY * 1.5) 5.16% (GBBY*.6) Total bank interest income 16% max. 14.% max % (max GBBY * %) GBBY 8,6% 8,6% 8,6% CMB spread over GBBY 1 bp. 1 bp. 1 bp. Coupon of CMB 8% 8% 8% Funding cost (Yield of CMB) 9.6% (8.6% + 1%) 9.6% (8.6% + 1%) 9.6% (8.6% + 1%) Margin (asset side, CMB funded) Loan volume 31 December 2 6,4% 4,43% 3,86% HUF521.3 bn. HUF83.4 bn. - *GBBY = Government Bond Benchmark Yield based on CMB maturity ** for new lending varies monthly

22 TP Bank 2 audited results 22 Distribution technology Bank cards ATMs 2,, 1,35 45% 1,75, 1,3 1,285 1,35 44% 1,5, 1,25 1,228 1,25, 1,, 75, 5, 1,2 1,15 1,1 1,5 1,91 1,112 1,127 1,151 1,168 1,183 43% 42% 41% 25, 1, 4% % Cirrus maestro EC/MC Visa FX Other corp. Othr HUF ATM Market share (est) POS terminals HáziB@NK users 21,2 6% 3, 2,2 19,2 58% 56% 25, 18,2 54% 2, 17,2 52% 15, 16,2 15,2 5% 1, 14,2 48% 5, 13,2 46% 12,2 1 POS Market share (est.) 44% J un- 99 Se p- 99 De c- 99 Ma r- J un- Se p- De c- Ma r- 1 J un- 1 Se p- 1 De c- 1 Ma r- J un- Se p- De c- Ma r- J un- Se p- De c-

23 TP Bank 2 audited results 23 Corporate business Corporate loans Corporate deposits % 14.% 13.5% % % 18% 17% 16% % 11.9% 11.7% 11.6% 11.9% 13.% 12.5% 12.% 11.5% % 13.4% 12.8% 13.1% % 14% 13% 12% 11% 11.% 1% Corporate SME Entrepreneurs Non-profit market share HUF deposits FX deposits market share Yields, spread Loan quality 1 % 8% 6% 8.69% 5.57% 6.86% 6.8% 7.27% 8.% 4.75% % % 32.4% 29.3% % 5% 45% 4% 35% 3% 25% 4% 3.8% 3.9% 3.12% 3.6% 2.91% 3.87% 3.4% 3.27% % 15 % 1 % 2% M ar- 4Q 1Q 2Q 3Q 4Q asset yield liability yield spread total rec. qualified provision Coverage

24 TP Bank 2 audited results 24 UF bn % % Municipality business Municipal loans % 55.4% % loans market share Yields, spread 68% 66% 64% 62% 6% 58% 56% 54% 52% 5% % Municipal deposits % 1 6.4% % 74.9% deposits market share Loan quality strong seasonality 9% 85% 8% 75% 7% 65% 6% 55% 5% 45% 12% 1% 8% 6% 4% 2% % 1.6% 1.7% 9.4% 8.5% 6.7% 6.% 4.8% 4.5% 5.1% 5.8% 2.9% 4.% 3.8% 4.3% 4.7% 4Q 1Q 2Q 3Q 4Q asset yield liability yield spread % 66.4% 1. % % 5.4% M ar- total rec. qualified provision Coverage 1 % 9% 8% 7% 6% 5% 4% 3% 2% 1 % %

25 TP Bank 2 audited results 25 Equity, CAR Equity, gearing HUF Book value per share % 1,3 Bank Group % 9.7% 9.7% 9.5% 9.8% 9.5% 1, , ,9 9.3% % % Capital adequacy 1 8.6% 8.7% 8.7% 8.8% 8.7% 8.6% 2% 16%.8% Tier 1 Tier 2.8%.8% 1.1% 5 8.3% 12% 1.1% Bank equity Bank gearing Group equity Group gearing 35 8.% 8% 4% % 12.6% 14.% 14.9% 16.2% 9.4%

26 Efficiency, productivity HUF mn 4 19, HUF mn 1 14, ,86 17,5 16, , ,65 12,89 12,77 12, ,5 13, 11, , 11, 1 5 8,77 8,836 8,61 8,368 7,98 1- Bank assets/employee Group assets/employee Bank Employees (period end) Group Employees (period end) 1, 8,5 7, 11,883 12,644 12,628 12,587 13,7719, 1.6 8,458 8,8 8,778 8,724 8,669 TP Bank 2 audited results A 3M 1H 9M 2A Bank Average employees Group Average employees Bank PAT/employee Group PAT/employee 1, 8,

27 TP Bank 2 audited results 27 Performance indicators Non-interest vs. total income Cost income ratio 6% 5% 4% 5.6% 38.2% 47.1% 46.6% 44.1% 42.5% 44.1% 41.6% 42.% 42.8% 8% 7% 6% 5% 57.5% 67.7% 48.3% 6.5% 6.4% 59.6% 5.6% 5.% 54.1% 62.% 3% 4% 2% 1% 3% 2% 1% % 2 3M2 1H2 9M 2 2 Bank Group % 2 3M2 1H2 9M 2 2 Bank Group Provisioning vs. operating income Provisioning vs. customer receivables 21% 19% 17% 15% 13% 11% 9% 7% 5% 19.1% 17.% 16.% 14.2% 13.% 12.1% 11.4% 1.1% 7.7% 5.4% 2 3M2 1H2 9M % 1.%.8%.6%.4%.2%.%.95% 1.1%.99%.82%.72%.78%.61%.42%.38%.26% 2 3M2 1H2 9M 2 2

28 TP Bank 2 audited results 28 ROA, ROE ROAE annualized ROAA annualized 3.5% 4% 3.3% 3.3% 35% 3% 25.9% 26.2% 25% 33.% 33.3% 36.3% 36.% 32.2% 34.% 3.6% 3.6% 3.% 2.9% 2.9% 2.9% 3.1% 2.8% 2.7% 2% 2.5% 15% 2.2% 2.1% 1% 2.% 5% 2.6% 2.9% 28.4% 28.7% 32.% 27.9% 31.3% 29.3% 25.9% 25.9% % 2 1Q 1H 9M 2 Bank nominal Bank real Group nominal Group real 1.5% 2 1Q 1H 9M 2 Bank only Consolidated

29 TP Bank 2 audited results 29 Consolidated subsidiaries HUF million rounded Merkantil Bank Ltd. Merkantil Car Ltd. Merkantil Bérlet Ltd. NIMO 2 Ltd.. Merkantil Group OTP Building Society Ltd. OTP Mortgage Bank OTP Banka Slovensko a. s. DSK Bank EAD DSK subsidiaries DSK Group OTP-Garancia Insurance Ltd. OTP Fund Management Ltd. HIF Ltd. OTP Real Estate Ltd. OTP Factoring Management Ltd. OTP Factoring Ltd. OTP Factoring Group Bank Center No I. Ltd. OTP Fund Servicing and Consulting Ltd. Other subsidiaries Pre-tax profits of subsidiaries Consolidated pre-tax profits Subsidiaries' proportion 2 2, ,86 1, (3,54) ,6 3, , , ,44 68, % 2A 2,646 1, (38) 4, ,548 (27) 1,587 (14) 1,573 2,65 4, , ,321 1, ,2 1, % 2/2 11.4% 13.8% 92.7% 36.7% -77.6% % -94.1% 62.6% 23.9% 9.7% 25.2% -63.8% 5.1% 31.% -87.3% 184.2% 57.8% 15.9% 5.7% 9.8%

30 TP Bank 2 audited results 3 The 28 vision for DSK Bank is a vision of leadership ision Definition of success Key strategic direction The performance leader in Bulgarian banking Pre-tax profit > EUR 1 mn ROE after tax > 25% 1. Retain the leading role in household savings market Bulgaria's largest bank Cost to indome ratio ~5% Market share by assets > 18% 2. Remain the top lender to households in Bulgaria The undisputed #1 in retail banking Number of cards and current accounts ~1.7 million Retail loans market share ~ 42% Retail deposits market share ~ 3% 3. Expand market position in households transaction banking Among top 3 banks in corporate banking Corporate loans market share 8-1% 4. Achieve market position in SME banking that is in line with the infrastructural market share Innovation engine in Bulgarian banking Introduction of new products and upgrades to existing products at least once a month 5. Establish a significant position large and midsize corporate banking The bank most respected by customers Customer satisfaction index > 8% 6. Introduce promptly new financial services for households and corporates

31 TP Bank 2 audited results 31 In 24, DSK will continue its aggressive growth BGN millions Total assets Net revenues * 2,19 2,391 2, % % f f 91.8 Operating costs % Operating profit (no restructuring and tax) % f * Includes currency revaluation adjustments but does not include provisions f

32 24 financial targets of DSK Bank Financial indicators (BGN millions) Net interest income Net non-interest income* Change y-o-y % % of the increase due t pricing change 75% are due t volume increa Total revenues Operating cost Gross operating income Net provisions/write downs Operating profit before restr. costs, taxes Restructuring cost, investment, taxes Pre-tax profits ** n.m. +68 n.m. +21 Repricing, new fee carrying products, penetration Cost control, personnel cut efficiency gain through integrated IT Selected ratios Higher pruden level Net interest income/average earning assets 6.4% 6.8% +.4*** Net non-interest income/total revenues 15.7% 21.1% +5.4*** Cost income (operating costs/total revenues) 62.5% 49.1% -13.4*** ROAA 2.2% 2.4% +.2 *** ROAE 17.2% 18.5% +1.3 *** * Includes net commissions, trading income and currency revaluation adjustments. Fees based on BAS, not IFRS ** Excluding restructuring cost, restructuring-related reserves and taxes *** Represents percentage-points change TP Bank 2 audited results 32

33 24 target growth rates TP Bank 2 audited results 33 Balance sheet related growth rates Bank Consolidated Growth rate Growth rate Total assets 3, % 4, % Total loans 1, % 2, % Corporate loans % Retail loans % Mortgage loans % 2.% Consumer loans % Municipality loans % Total deposits 2, % 2, % P&L related growth rates Net interest income % % Non interest income % % Fee & commission income % 15.% Insurance fee income n.a. 12.% Real estate trading income n.a. 1.% Total income % % Cost base with goodwill % % Cost base without goodwill % % Personnel expenses % 8.% Other expenses % 7-8% Other expenses w/o DSK n.a. 5.% Provisions % % Profits before taxes (incl dividend received) % % Profits after taxes (incl dividend received) % % Profit related performance indicators ROE 32.1% bp 3.7% + 1 bp ROA 3.14% +36 bp 2.71% + 5 bp Cost/income ratio 51.1% -3 bp 61.% - 1 bp Net interest margin 4.5% -15 bp %