Hungary’s OTP Bank posts record Q2 profit despite windfall tax

Hungarian banking giant posts stellar results in the second quarter

editor: REMIX NEWS
author: Mandiner

Despite the war in Ukraine and a one-off windfall tax imposed on it by the state, OTP, Hungary’s largest commercial bank group, has posted a record profit in the second quarter of the year, the company reported on the Budapest Stock Exchange homepage.

OTP Group achieved a consolidated adjusted after-tax profit of 162.128 billion forints (€410 million) in the second quarter, which was better than analysts’ expectations while also exceeding the previous quarter by 83 percent and the same quarter in 2021 by 26 percent.

Analysts’ consensus had calculated a quarterly consolidated adjusted after-tax result of 136.541 billion forints, which assumed an increase of 6 percent year-over-year and 54 percent on a quarterly basis.

Based on the international financial reporting standards (IFRS) report published on the website of the Budapest Stock Exchange early Thursday, OTP achieved a taxable profit of 250.752 billion forints in January-June 2022, which is 2 percent higher than in the same period of 2021.

In addition to the typically large negative individual items (Hungarian special taxes, Russian goodwill write-off), the first half-year post-tax result was mainly shaped by risk costs and the growing bank income due to continued dynamic business activity, they wrote. In contrast to the significant Ukrainian and Russian losses suffered in the first quarter, in the second quarter, the adjusted results of both the Ukrainian and Russian operations turned positive while risk losses decreased significantly.

OTP is the largest Hungarian-owned bank group, which, besides its retail banking operations in Hungary, has retail branches in nine regional countries.

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