OTP Bank Reports Record Profit for 2024 Exceeding One Trillion Forints
Hungary's largest bank achieved a net profit of 1,076 billion forints, marking a historic milestone in the country's banking sector.
OTP Bank has announced a record net profit of 1,076 billion forints for the fiscal year 2024, marking the first time in Hungary's banking history that a financial institution has surpassed the one trillion forint threshold.
This represents a 19% increase in profit compared to the previous year.
The success of OTP Bank reflects broader trends within the Hungarian banking sector, where many institutions also reported near-record or record profits for 2024. According to calculations by the Hungarian National Bank (MNB), the entire Hungarian banking system generated a net profit of 2,004 billion forints in 2024, indicating a 7.4% growth from the previous year.
OTP Bank contributed approximately half of this profit, although it is important to note that 68% of OTP's profit now comes from its foreign subsidiaries, a proportion expected to increase in the coming years, as all foreign subsidiaries reported profits in the preceding year.
Domestic operations in Hungary generated profits amounting to 270 billion forints without accounting for dividends received from subsidiaries, marking a 16% increase, as stated by László Bencsik, Deputy CEO of OTP Bank, during a press conference discussing the bank's performance.
However, the high tax burdens unique to Hungary have significantly impacted the profitability of the banking sector; in OTP’s case, these special taxes amounted to 172 billion forints last year, which reduced overall profits.
Bencsik noted that increased lending and improved cost efficiency contributed to the favorable results.
In Hungary, the volume of mortgage loan contracts more than doubled, while disbursements of personal loans increased by 65%.
Additionally, the total deposits from households grew by 3% in the last quarter, further enhancing OTP's market share in household deposits to 41.5%.
The management forecasts that strong performance will continue into this year due to robust demand for retail loans, with an expected increase in demand for corporate loans.
The board has proposed a dividend payment of 270 billion forints based on the previous year’s results, translating to 964 forints per share.
The final decision on the dividend proposal will be made by the board in March.
The annual results and dividend proposals align with market and analyst expectations, as indicated by the minor decline in OTP shares last Friday, which was less than the overall market decline.
This represents a 19% increase in profit compared to the previous year.
The success of OTP Bank reflects broader trends within the Hungarian banking sector, where many institutions also reported near-record or record profits for 2024. According to calculations by the Hungarian National Bank (MNB), the entire Hungarian banking system generated a net profit of 2,004 billion forints in 2024, indicating a 7.4% growth from the previous year.
OTP Bank contributed approximately half of this profit, although it is important to note that 68% of OTP's profit now comes from its foreign subsidiaries, a proportion expected to increase in the coming years, as all foreign subsidiaries reported profits in the preceding year.
Domestic operations in Hungary generated profits amounting to 270 billion forints without accounting for dividends received from subsidiaries, marking a 16% increase, as stated by László Bencsik, Deputy CEO of OTP Bank, during a press conference discussing the bank's performance.
However, the high tax burdens unique to Hungary have significantly impacted the profitability of the banking sector; in OTP’s case, these special taxes amounted to 172 billion forints last year, which reduced overall profits.
Bencsik noted that increased lending and improved cost efficiency contributed to the favorable results.
In Hungary, the volume of mortgage loan contracts more than doubled, while disbursements of personal loans increased by 65%.
Additionally, the total deposits from households grew by 3% in the last quarter, further enhancing OTP's market share in household deposits to 41.5%.
The management forecasts that strong performance will continue into this year due to robust demand for retail loans, with an expected increase in demand for corporate loans.
The board has proposed a dividend payment of 270 billion forints based on the previous year’s results, translating to 964 forints per share.
The final decision on the dividend proposal will be made by the board in March.
The annual results and dividend proposals align with market and analyst expectations, as indicated by the minor decline in OTP shares last Friday, which was less than the overall market decline.
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