OTP Bank Romania swings to Q1 loss as risk costs triple due to COVID-19

The total risk costs of OTP Bank Romania tripled year-on-year to 4 billion forints at end-March 2020, mainly due to additional provisioning in connection with the COVID-19 epidemic, OTP said in an interim financial report.

Operating profit was flat year-on-year at 2.56 billion forints in the first quarter of 2020. Total income grew 17% on the year to 10.4 billion forints, while operating expenses rose 25% to 7.8 billion forints.

Total net interest income rose by an annual 31% to 8.07 billion forints in the first quarter of 2020, positively affected by a dynamically expanding performing loan portfolio and an improving net interest margin.

OTP Bank Romania's gross loan portfolio adjusted for foreign exchange fluctuations totalled 786 billion forints at end-March, up 16% year-on-year, as both the corporate book and the retail portfolio expanded. Customer deposits rose by 27% on the year to 572 billion forints in the first three months of 2020. The net loan-to-deposit ratio was 129% at the end of the first quarter.

The bank's total assets rose by 29% on the year to 1.02 trillion forints at end-March.

OTP Bank Romania had a network of 95 branches and 1,496 employees at the end of March.

OTP Romania's net profit soared 64% year-on-year to 6.3 billion Hungarian forints in 2019.

In February, Romanian media reported that OTP Bank and Italy's Intesa Sanpaolo are the two bidders remaining in the final stage of the race for the purchase of Garanti BBVA's Romanian unit.

(1 euro = 349.6 forints)