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Share Name | Share Symbol | Market | Type |
---|---|---|---|
OTP Bank Ltd (PK) | USOTC:OTPIY | OTCMarkets | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 24.65 | 27.65 | 0.00 | 21:08:16 |
By Margit Feher
BUDAPEST--OTP Bank Nyrt. (OTP.BU), Hungary's largest bank by assets and market share, swung in the fourth quarter of last year to a lower-than-expected net profit as the result of prudent loan-loss provisioning.
Consolidated net profit was 26.15 billion forints ($113.9 million) in the fourth quarter, compared with a year-earlier net loss of HUF25.84 billion caused by retail foreign-currency mortgage loan repayments and the booking of a special bank tax. That was well below the HUF30.0 billion profit forecast in a poll of 18 analysts provided by the company. On a per-share basis, net profit was HUF97, swinging from a loss of HUF98 a share.
Banking in Hungary has come under pressure due in part to a hefty banking-sector tax as well as a late-2010 government program that eroded banks' profitability. OTP booked all of the banking tax for 2012 in a lump sum in the first quarter, leaving the most recent quarter unburdened by the levy.
Net profit fell sharply from HUF42.54 billion in the previous quarter on the management's prudent provisioning of possible loan losses, a seasonal rise in operating costs, and an increase in the effective corporate tax rate to 33% from 23%, the company said.
Consolidated loan-loss provisions and risk costs amounted to HUF70.28 billion in the October-December period, up 16% from the previous quarter and 4% higher than a year earlier. Analysts, who had said they would watch the level of provisions closely, had forecast it at HUF67.99 billion.
Banks and homeowners in Hungary are dealing with the effects of foreign-currency mortgages. Banks were asked to shoulder the cost of a government program designed to help foreign currency borrowers who took out loans, mostly in Swiss francs, and ran into trouble as the franc's big gains pushed up the costs of their forint-denominated loans. Other factors weighing on the Hungarian portfolio were the recessionary economic environment and high unemployment. Facing difficulties in their finances, both Hungarian households and companies have been trying to reduce their loans.
OTP's shares closed up 0.3% Thursday at HUF4,835, while the exchange's benchmark BUX index closed 0.8% higher.
Write to Margit Feher at margit.feher@dowjones.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
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