OTP Group: full year 2024 results

In 2024 OTP Group’s profit after tax exceeded EUR 2.72 billion, which is consistent with 9% annual profit growth, while annual ROE reached 23.5%. All geographical segments reported positive results, the share of foreign profit contribution reached 68%.

Cumulated adjusted profit after tax improved by 19%, whereas the organic[1] and FX-adjusted growth was 10% y-o-y.

The full-year operating profit increased by 22%, within that total revenues grew by 17% mainly driven by the 22% increase in net interest income (+20% organically and FX-adjusted), boosted by both expanding business volumes and improving margins. It was the margin improvement at OTP Core (Hungary) that was particularly salient: from the lows hit in 1Q 2023, it improved gradually and by 4Q 2024 it even surpassed the level prevailing before the war and the extremely high rate environment.

Net fees and commissions grew by 13% organically and FX-adjusted. Operating costs went up by 11% organically and FX-adjusted. The annual cost to income ratio (CIR) improved by 2.3 pps to 41.3%. Total risk costs increased by 83% to EUR 400 million.

Consolidated credit quality remained stable, main credit quality indicators continued to develop favourably. Consolidated deposits expanded by 6% y-o-y organically, on an FX-adjusted basis, so without the effect of the divestment of Romania. The Group’s net loan to deposit ratio hit 74% at the end of 2024, up by 1 pp y-o-y.

The EUR 614 million profit after tax realized in the fourth quarter of 2024 marked a 22% q-o-q setback, mainly on the back of higher operating expenses and impairment charges.

At the end of 2024, the consolidated Common Equity Tier 1 (CET1) ratio according to IFRS and under the prudential scope of consolidation was 18.9%, marking 2.3 pps increase against the end of 2023. The consolidated capital adequacy ratio (CAR) stood at 20.3% at the end of December, underpinning an increase of 1.4 pps y-o-y.

In 2025 the management expects marginal improvement in the operating environment. The FX-adjusted organic performing loan volume growth may be above 9% reported in 2024 while the net interest margin may be similar to the 4.28% achieved last year. Similar to this, CIR may be somewhat higher and ROE may be lower than in 2024 (41.3% and 23.5% respectively), due to the expected decrease in leverage.