OTP Bank Plc

OTP Group is one of the leading financial groups in the Central and Eastern Europe region. The group provides universal financial services in 11 countries to nearly 16 million customers, with about 36,000 employees (December 2022 data). The group has acquired and integrated 23 banks since the early 2000s. The banking group has been listed on the Budapest Stock Exchange since 1995.

History

2024: Sale of Romanian business to local Banca Transilvania for €350m

In February 2024, it was announced that OTP Bank was leaving Romania after 20 years of work. The Hungarians sold their business for 350 million euros to the largest Romanian bank Banca Transilvania. About this writes Daily News Hungary with reference to the site 444.hu. OTP Bank, leaves Romania after 20 years of work.

OTP Bank Romania SA controls 2.64% of the Romanian market by total net assets. At this time, it serves about 420 thousand retail clients and more than 22 thousand corporate clients. The bank employs 1,800 employees. At the time of the merger, Romania had 96 OTP Bank branches.

The agreement is already closed, but several Romanian regulators, including the national bank, must approve it. Banca Transilvania plans to absorb all OTP subsidiary banks and integrate them into its network.

The buyer promised to keep the service in several languages. The OTP Group brand will temporarily remain to ensure a smooth transition for customers and partners until the merger is completed.

2022

Signing an agreement on the purchase of 100% of the state stake in Ipoteka Bank

On December 12, 2022, information appeared that the Hungarian OTP Bank and the Government of Uzbekistan signed a purchase and sale agreement on the privatization of Ipoteka Bank. The signing of the document took place in Tashkent. The amount of the transaction was not disclosed. In accordance with the agreement, OTP Bank will acquire 100% of the shares owned by the Ministry of Finance of the Republic of Uzbekistan (almost 97% of the total stake) in two stages. Read more here.

OTP postpones the purchase of 75% in the Uzbek Mortgage Bank due to the special operation of the Russian Federation in Ukraine

In April 2022, the Hungarian OTP Bank appealed to Uzbekistan with a request to postpone the purchase of 75% in Ipoteka Bank. The portal Spot.uz writes about this with reference to the Bloomberg Law message, which, in turn, quotes the general director of the Hungarian bank Sandor Chanyi.

The reason for the postponement, the interlocutor of the publication called the hostilities in Ukraine and the uncertainty caused by them. According to him, the deal, announced in September 2021, was at the final stage.

"The purchase was ready for signing when war broke out in Ukraine," Chanyi said. Since February 24 - the day the special operation began in Ukraine - OTP Bank shares collapsed by 30%. The Hungarian side applied for a delay of 2 − 3 months to clarify the situation.

2021

Purchase of the Albanian subsidiary bank of the Greek Alpha Bank for 55 million euros

In December 2021, OTP Bank announced the purchase Albanian of a subsidiary bank Greek Alpha Bank, the group said in a statement. The transaction amount will be 55 million. euro

"After entering the Albanian market more than three years ago, OTP Bank buys another bank there... Alpha Bank is an Albanian subsidiary of Greek Alpha Bank and the eighth largest bank in Albania. It is a universal credit institution providing a wide range of banking services and products for corporate clients and individuals, "it said.

It is noted that the acquisition of Alpha Bank Albania will allow the OTP group to become the fifth largest total assets in Albania and the second largest loan portfolio.

The deal is expected to be approved by regulators in Q2 2022. After the transaction, the market share of the OTP group in Albania will exceed 11%, and the loan portfolio will increase by one and a half times.

"In line with the OTP Group's strategy, we have considered opportunities for further growth in Albania since entering this market in 2018. At the same time, we acquired the subsidiary bank Societe Generale, successfully integrating it into our business, "said Laszlo Wolf, Deputy Chairman of the Board of OTP Bank.

Alpha Bank Albania was founded in 1998. The universal credit institution operates in the segment of lending to legal entities and financing large-scale infrastructure projects, and also provides deposit, investment and financial products for retail clients. The bank's network has 34 branches.

Agreement on the acquisition of 75% of the state stake in Uzbek Ipoteka Bank

Hungarian OTR Bank, as part of the privatization of Ipoteka Bank, will become the owner of 75% of the state share in this bank. This was announced on September 29, 2021 by Deputy Prime Minister, Minister of Economic Development and Poverty Reduction of Uzbekistan Jamshid Kuchkarov. Read more here.

2020: Plans to open in Uzbekistan

OTP Hungary Bank plans to enter the market. Uzbekistan The prospects for opening bank in the country were discussed at a meeting of Deputy Prime Minister S. Uzbekistan Umurzakov with Minister of Foreign Economic Relations and Foreign Affairs of Hungary P. Siyyarto in. Tashkent This became known on July 16, 2020. More. here

2019

Acquisition of Societe Generale Serbia

On September 26, 2019, it became known that the OTP Group closed the transaction on the acquisition of Societe Generale Serbia. Read more here.

Purchase of Slovenian SKB Banka

On May 7, 2019, it became known that the Hungarian OTP Bank agreed to buy the Slovenian SKB Banka. Read more here.

Agreement with Societe Generale to purchase Societe Generale Albania

On April 3, 2019, it became known that OTP Bank (Hungary) became 100% owner of Societe Generale Albania, an Albanian subsidiary of Societe Generale Group. Read more here.

Agreement with Societe Generale to buy Societe Generale banka Montenegro

On March 18, 2019, it became known that the Montenegrin subsidiary of OTP Bank Crnogorska Komercijalna Banka signed an agreement to acquire a controlling stake in Societe Generale banka Montenegro - a branch of Société Générale Group in Montenegro. Read more here.

Agreement with Societe Generale to buy Mobiasbanca's majority stake and cooperate

February 8, 2019 HungarianOTR Bank Plc. announced the signing of an agreement on the purchase of a majority stake in Mobiasbanca - Groupe Societe Generale, the Moldavian subsidiary of Societe Generale Group. Read more here.

In addition, OTP Group and Societe Generale Group signed a cooperation agreement, mainly to support the services of international companies in key areas such as international cash and capital markets management, structuring finance and investment banking management.

On July 30, 2019, it became known that OTP Bank (Hungary) announced the financial closure of the transaction for the acquisition of the bank in the Republic of Moldova. As a result of the transaction, OTP Bank became the 96.69% owner of Mobiasbanca - Groupe Societe Generale S.A. (MBSG), a subsidiary of Societe Generale Group in Moldova. Read more here.

2018

Profit growth to 318.3 billion forints

On April 12, 2019, it became known that the adjusted profit of OTP Group in 2018 amounted to 325.3 billion forints. Pre-tax profit rose 13% from 2017. OTP Group's accounting profit in 2018 amounted to 318.3 billion forints, surpassing the 2017 result - 281.3 billion forints.

The financial results within the framework of annual income are as follows: the profit of OTP Core amounted to 180 billion forints, DSK Bank - 47.3 billion forints. Croatian, Ukrainian and Russian subsidiaries showed the best results - 25 billion forints, 24.4 billion forints and 16.4 billion forints, respectively.

Of these banks, only the Russian subsidiary showed a negative trend compared to the same period in 2017. At that time, other subsidiaries made a large profit compared to 2017:

Ukraine became the absolute leader with a result of + 73%, and the annual return on equity was 56%. As a result, the share of foreign subsidiaries in 2018 increased from 35% to 38% compared to 2017.

In 2018, the total loan portfolio, adjusted for currency fluctuations, increased by 15% on an annualized basis and by 3% on a quarterly basis. All members of the Group showed an increase in loan portfolios in all major segments. OTP Core (+ 18%), Serbia (+ 31%), Ukraine (+ 30%), Russia (+ 30%) and Bulgaria (+ 11%) have significant indicators.

OTP Group's deposit portfolio, adjusted for currency fluctuations, grew by 8% in 2018.

In 2018, the Group maintained a stable liquidity position. At the end of 2018, gross reserves of the Group's liquid assets amounted to the equivalent of EUR 7.8 billion. At the end of December 2018, the consolidated core capital adequacy ratio of the first level of OTP Group under IFRS (Common Equity Tier 1) amounted to 16.5%^[1].

Purchase of Bulgarian Societe Generale Expressbank AD

In August 2018, OTP Bank Plc. announced that DSK Bank, a Bulgarian subsidiary of OTP Bank, signed an agreement to acquire a 99.74% stake in Societe Generale Expressbank AD, a Bulgarian subsidiary of Societe Generale Group, as well as other local subsidiaries owned by the group.

Acting as a universal bank developing both retail and corporate segment, Societe Generale Expressbank is the seventh largest bank in the Bulgarian market with a market share of about 6.7%. Present in Bulgaria since 2003, OTP Bank has consistently demonstrated profitable activities. According to the results of work in the first quarter of 2018, the adjusted profit of OTP Group after taxation amounted to 79.3 billion forints, and the contribution of the OTP subsidiary bank in Bulgaria to this result exceeded 11 billion forints.

The financial closing of the transaction is scheduled for the fourth quarter of 2018, subject to receipt of all necessary regulatory approvals.

Along with this deal, Societe Generale and OTP Bank are discussing entering into a service agreement that will cover the provision of mutual services in various areas (including, but not limited to, investment banking, capital markets, financing and global transactional banking) in Albania, Bulgaria, Croatia and Hungary.

On January 15, 2019, OTP Group announced the financial closure of the transaction in Bulgaria.

2017: Purchase of Serbian Vojvodjanska Banka for €125m

In August 2017, National Bank of Greece signed an agreement with OTP banka Serbia to sell 100% in its Serbian subsidiary Vojvodjanska Banka.

As a result of this acquisition, OTP banka Serbia became the 7th largest participant in the country's market with a market share of 5.7%.

In addition to the banking institution Vojvodjanska banka, OTP Group acquires the ownership of other assets of NBG Group in Serbia, in particular, the leasing company NBG Leasing.

The cost of the acquisition, which OTP banka Serbia will pay after the transaction closes, is 125 million euros. The deal was closed in December 2017.

2016

Purchase of Croatian Splitska Banka

In December 2016, it was announced that a subsidiary bank of the Hungarian OTP Group in Croatia had signed an agreement to buy a 100% stake from the French conglomerate Societe Generale, one of the largest Croatian credit institutions - Splitska Banka.

Splitska Banka is Croatia's fifth largest bank. The credit institution operates in both retail and corporate segments. The bank was profitable even in the 2008 crisis. The sale of Splitska Banka should be closed in the summer of 2017, and the integration processes of this credit institution with OTP Banka Hrvatska will be completed by the summer of 2018.

"As a result of the transaction, OTP Bank's market share will reach (in Croatia. - Approx. ed.) approximately 10%, "are given in the assessment materials

Moody's upgraded the bank to investment grade

On November 8, 2016, it became known that the rating agency Moody's raised the Hungarian OTP Bank (OTP Bank is represented in Russia) a long-term rating of bank deposits in foreign currency by two steps at once - from "Ba2" to "Baa3," that is, to investment level, with a stable forecast, follows from the agency's message.

Short-term bank deposit rating upgraded from Not Prime to Prime-3^[2].

"These decisions definitely reflect an improving macroeconomic situation, strong balance sheets and a significant reduction in vulnerability. The decisions to increase ratings were the result of a positive impact caused by an improvement in the operating environment of the Hungarian banking sector and a gradual increase in credit activity. On November 8, a number of Hungarian banks, including OTP Bank, also raised their ratings, "RIA Novosti commented on the press service of the OTP group

In 2016, Hungary's country rating was raised three times. First, in May, Fitch assigned the country an investment rating of "BBB-," then in June followed the rating of "BBB-" from Standard & Poor's. Later on November 4, Moody's assigned the Baa3 rating, and thus Hungary had investment ratings from the three largest rating agencies. The outlook is stable for all ratings.

Bank deposit ratings express Moody's opinion on the credit institution's ability to meet its payment obligations on foreign or national currency deposits. These ratings take into account factors such as independent financial stability, sovereign transfer risk (for foreign currency ratings), as well as elements of possible or already provided external support.

Plans to buy a bank in Russia

Chairman of the Board of the Hungarian OTP Group Sandor Chaini in October 2016 announced that he plans to buy a retail bank in Russia, which is considered a large one for the segment in which the Russian OTP Bank operates.

Purchase of AXA Bank Europe branches in Hungary

In early February 2016, it was announced that OTP Bank Plc. and AXA Bank Europe SA signed an agreement to buy AXA Bank's Hungary unit. Under the terms of the agreement, OTP Bank managed retail and corporate loan and deposit portfolios together with the staff of AXA Bank.

"The decision to buy the AXA Bank portfolio is a logical step by the largest Hungarian bank, the leader of the financial sector of this country with a market share of more than 25%, towards a constant search for opportunities to increase lending in the Hungarian market," the statement said.

According to the press service, after the completion of the purchase procedure, OTP Bank's mortgage portfolio will increase by almost 25%.

"In line with the strategy of increasing market share in a number of countries where the group is present, including Hungary, we are exploring various possibilities. The acquisition of this portfolio is an important step for further activities in the Hungarian market. We are confident that AHA Bank customers will find optimal solutions for themselves among the wide range of financial services offered by OTP Bank, "said Laszlo Wolf, Deputy CEO of OTP Bank Plc

The parties agreed not to disclose the financial details of the transaction.

Notes