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OTP Bank Romania's profit surges in 2017 on higher income, stable costs

OTP Bank Romania's profit surges in 2017 on higher income, stable costs OTP Bank Author ( License: all rights reserved.

BUCHAREST (Romania), March 8 (SeeNews) - Hungarian banking group OTP said on Thursday the consolidated adjusted after-tax profit of its Romanian unit surged 88% year-on-year in 2017, reaching 44.85 million lei ($11.9 million/9.62 million euro).

OTP Bank Romania's operating profit rose by 12% on the year to 138 million lei in 2017, as a result of stable operating expenses and higher total income, while the net interest income did not change, the bank said in a press release.

Total income grew 4% on the year to 401 million lei, while net interest income stood at 292 million lei in 2017.

Total risk costs fell by 14% on the year to 80 million lei, supported by both lower provision for possible loan losses, which fell by an annual 6%, and other provisions, which dropped by 61% year-on-year.

The FX-adjusted loan portfolio grew by 8% in 2017, supported by a dynamic expansion of retail and corporate segments. Within retail, the consumer and small and medium sized enterprises (SMEs) segments were the key drivers of growth, with an increase of 5% and 18%, respectively. As for new loan disbursements, the cash loan sales improved by 47% on the year, while mortgages increased by 69% year-on-year in 2017.

At the same time, the non-performing loans ratio declined to by 3.9 points on the year to 13.5% at the end of 2017.

OTP Bank Romania's capital adequacy ratio was 14.5% at end-December 2017 on a standalone basis under Basel III regulations, well above the regulatory requirement of 10%.

The bank's total assets increased 9% on the year to 9.3 billion lei at end-2017.

In December, Romania's anti-trust regulator approved the takeover of Banca Romaneasca (BROM) by OTP Bank Romania for an undisclosed sum. OTP Bank Romania signed the takeover agreement with National Bank of Greece (NBG), the owner of Banca Romaneasca, at the end of July.

The transaction involves the shares in BROM held by NBG, as well as the purchase of additional exposures in Romania belonging to other subsidiaries of NBG.

At the beginning of 2016, OTP Bank Romania acquired Millennium Bank from Portugal's Banco Comercial Portugues for 39 million euro ($43.7 million).

(1 euro=4.6597 lei)