Interior OTP 2012 · PDF fileSource: Reuters, OTP Research Source: NBR, OTP Research The leu...

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Transcript of Interior OTP 2012 · PDF fileSource: Reuters, OTP Research Source: NBR, OTP Research The leu...

2 Message from the Chairman of the Supervisory Board

5 Financial Highlights

6 OTP Group. Profit and Loss Account, Balance Sheet

7 Main Indicators of OTP Bank Romania S.A.

8 Macroeconomic and financial environment

13 Business Results

14 History of OTP Bank Romania

16 OTP Bank Romanias approach

16 Targets

17 Objectives

17 Quality Assurance Projects

20 Account Management, Sales Network and Bank Transactions

21 OTPdirekt

23 Bank Card Business

24 Individuals (Liabilities and Loans)

30 Retail Legal Entities

31 Private Banking

32 Corporate Banking

33 Treasury

34 OTP Bank Subsidiaries Present in Romania

36 Activities of other Foreign Subsidiaries of OTP Group

53 Financial Statements

54 Independent Auditors Report

55 Unconsolidated Income Statement and Statement of Comprehensive Income

as at December 31, 2012

56 Unconsolidated Statement of Financial Position as at December 31, 2012

57 Unconsolidated Statement of Cash Flows as at December 31, 2012

58 Unconsolidated Statement of Changes in Equity for the Period ended

December 31, 2012

59 Notes to Unconsolidated Financial Statements for the Period ended

December 31, 2012

115 Corporate Governance

116 Supervisory Board

123 Management Board

131 Corporate Social Responsibility

137 Compliance Function Provisions Against Money Laundering

Summary

2 OTP Bank Annual Report 2012

While the fiscal consolidation in countries from Central

and Eastern Europe, where OTP Group is present has

taken its toll through lower GDP growth, the economic

activity remained in the positive territory in most of the

markets.

2012 was a stabilizing year for OTP Group, following our

strategy of a cautious risk policy, high provisions and strict

cost control actions.

The nancial results of OTP Group for the year

2012 show a EUR 518,4 million adjusted after

tax pro t (excluding the special banking levy),

the impact of early repayment of FX mortgages,

dividends and positive tax shield of investment

impairment charges). The accounting pro t

including all the adjustments represented EUR

423.7 million, which is by 46% higher than in

2011. The key reason behind the improvement

was the base effect of the early FX prepayment

and goodwill impairment.

In 2012, OTP Bank Romania further

consolidated its position on the local market,

turning challenges into real opportunities to

develop and strengthen our relations with our

customers.

Thus, we successfully continued the Customer

Protection Program, ensuring both customer

care and the banks safety. Another strategic

project that we are proud of is OTP Mentor, a

program that allows us to assume the role of

nancial advisors, offering integrated solutions

to our clients.

OTP Bank Romania continued its social

involvement activities, gaining international

recognition and impressive results through

the Right to Read campaign, the banks first

national CSR program.

The Right to Read campaign managed to

reach out to 143 disadvantaged schools in

rural areas, providing library equipment and

books. More than 29,000 children regained

their right to read, having access to over

92,000 books, by December 31, 2012.

The Right to Read was awarded the gold

medal during the prestigious international

competition SABRE Awards and was

nominated to the PR News CSR Awards,

one of the major social responsibility

competitions in the US.

2012 also brought predictable satisfactory

financial results for the Romanian subsidiary

of OTP Group:

OTP Bank Romania registered assets in

value of EUR 1,585.7 million

The deposit portfolio of

OTP Bank Romania, for both retail and

corporate segments registered a significant

growth, of 46%, respectively 21%. The

success of the deposit collection was

marked by the increasing market share

Message from the Chairman of the Supervisory Board

MESSAGE FROM THE CHAIRMAN OF THE SUPERVISORY BOARD 3

in 2012, supported by the 41% volume

expansion. Household deposits showed a

9% growth in the fourth quarter, due to

deposit collection and retention campaigns.

Regarding the lending activity, in

2012 the re-launch and upswing of RON

consumer lending was the key milestone.

Due to continuous lending campaigns,

consumer loans gained fur ther ground in

4Q, even af ter the interest rate hikes in 3Q.

The market share on this segment rose

from 3,5% to 4%, in 2012.

The aggregated volumes of micro and

small companies and corporate loans

expanded by 10%, in 2012.

In 2012, the operating expenses went

up by 2%, which reflects solid cost

control, bearing in mind the inflationary

environment.

The net interest income decreased

by 14%, while the after tax profit w/o

dividends, net cash transfers and one-offs

decreased to EUR 19.68 million in 2012.

The setback can be partially explained by

the elevated provisions. Moreover, the

risk cost was set aside by the loan quality

deterioration seen in previous quarters,

while the DPD90+ ratio remained Q-o-Q

flat at 15.9%.

In 4Q 2012, OTP Group increased the

registered capital of OTP Bank Romania

by EUR 11.09 million, giving a boost to the

capital adequacy ratio that reached 15.6%,

af ter a previous capital increase of EUR

31,05 million registred in February, 2012.

In 2012, the biggest challenge for

OTP Bank Romania was to develop and

introduce a new strategy, which corresponds

to the changing global and local economic

environment. The major aspects of this

strategy are: self funding, higher yield

products, more focus on active customer

relationships, clearer customer approach on a

better segmentation basis and rigorous cost

measures.

In 2013, we will continue our prudent

strategy and at the same time take advantage

of the extending loans volume and of the

fact that OTP Bank Romania is a self-financed

bank.

Further more, we will focus on those

products that have gained the title of best-

sellers in the banking sector - personal

loans and credit cards. Moreover, our clients

are showing an increasing interest in our

port folio of salary cards, investment funds

and deposits.

Therefore, we strongly believe that we have

the best premises for a good year, with

positive results, satisfied customers and

efficient employees.

We trust that our business approach conveys

a win-win situation and brings benefits for

both the company and our most important

partners, our customers.

Kovcs Antal Gyrgy

Chairman of the Supervisory Board

6 OTP Bank Annual Report 2012 All amounts are expressed in RON thousands, unless otherwise stated

According to IFRS Group Audited Annual Report

According to IFRS Group Audited Annual Report

Profit and Loss Account (in RON thousands)

Note 2011 2012 Variation (%)

Net interest income 10,505,896 10,327,770 -1.7%

Net interest income after provisioning 5,231,880 6,647,973 27.1%

Non-interest Income 24 2,440,244 2,469,471 1.2%

Total income (with net fees) 12,946,139 12,797,242 -1.2%

Operating cost 25 6,706,332 6,775,849 1.0%

Profit before tax 2,048,431 2,330,859 13.8%

Profit after tax 1,395,643 1,947,102 39.5%

Balance Sheet (in RON thousands) Note 2011 2012 Variation (%)

Total assets 141,536,381 153,910,607 8.7%

Loans and advances to customers 8 111,661,857 114,853,858 2.9%

Retail loans 37,151,131 40,692,726 9.5%

Corporate loans 35,342,348 35,300,837 -0.1%

Housing loans 34,288,664 34,217,547 -0.2%

Municipal loans 4,879,714 4,642,596 -4.9%

Interbank loans and advances 5 5,866,200 5,430,924 -7.4%

Deposits from customers 14 88,786,638 99,691,189 12.3%

Retail deposits 60,267,740 65,228,321 8.2%

Corporate deposits 24,971,999 29,851,514 19.5%

Municipal deposits 3,069,543 3,987,262 29.9%

Issued securities 15 11,278,798 9,787,293 -13.2%

Provisions for possible loan losses 8 4,393,964 3,454,269 -21.4%

Shareholders equity 19,679,617 23,049,049 17.1%

Note*: The Information presented above was computed based on data extracted from OTP Group Consolidated Financial StatementsExchange rates used to translate the OTP Group Consolidated Financial Statements from HUF foreign currency into RON are the following:

Considering the significant variation in currency exchange rate (HUF / RON) in 2012 compared to 2011, the Change in year 2012

2011 2012

Exchange rate HUF / RON for Profit and Loss Account translation (average year) 72.07 62.50

Exchange rate HUF / RON for Balance Sheet translation (closing rate) 60.04 65.71

OTP Group*

FINANCIAL HIG