OTP Bank Romania has registered an after tax profit of 34.6 million RON in 2022, 40 percent lower than the previous year. Operating profit in 2022 reached 217 million RON, 76 percent higher than in 2021, following the positive effect of a 23 percent increase in total revenues.
At the same time, operating expenses rose by 10 percent, an important part of these costs being correlated with investments for the bank’s development strategy. The cost/income ratio improved by 8.6 percentage points and reached 72.5 percent in 2022 compared to last year, while in the last quarter it dropped below 68 percent. Risk costs almost four times higher following a 50 percent increase in credit risk costs and other associated risk costs.
“Last year’s results prove for us the resilience of OTP Bank Romania’s strategy for local operations development and consolidation. The transformation we went through in recent years, adapting to a flexible organizational structure, the redesign of business processes and the direct involvement we have in the local economy, supported the solid growth in bank’s revenues and for the operational profitability indicator. This operational development and adaptability helped us during 2022 to propose an optimal banking products and services offer that could mitigate the shock of the general context with constant surges for all types of costs. We are committed to continue our balanced development in Romania, with a focus on the national network, optimizing the digital services portfolio and consistent investments in the bank’s team”. said Gyula Fatér, CEO OTP Bank Romania.
The net interest income increased by 35 percent, to a total of RON 672.7 million. The annual dynamic benefited from the expansion in performing loan volumes, and from the y-o-y 39 bps improvement in net interest margin, fuelled by the increase in reference interest rates, especially for three-month interbank transactions (the main benchmark for corporate loans) and of the IRCC index.
Total risk cost almost four times higher, amounting to RON -173.8 million, driven by credit risk cost of RON -139.0 million, due to the increase of the loan portfolio but also due to the declining economic outlook. The provisions for other risks amounting to RON -34.8 million, were influenced by the establishment of an extraordinary provision for an operational risk event amounting to RON -28 million.
The performing loan volumes increased by 10 percent y-o-y at the end of 2022, supported by growth on most business lines. The corporate lending segment grew by 15 percent, SME lending by 11 percent, leasing financing by 25 percent, while the retail sector slowed down to 4 percent.
According to local reporting standards, the bank´s assets reached the level of RON 19.9 billion, increasing by 8 percent compared to 2021.