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Investing.com -- OTP Bank shares rose 0.5% after the company reported second-quarter pre-tax profit of HUF394.3 billion, exceeding consensus forecasts by 4%.
The Hungarian bank’s performance was driven by stronger-than-expected revenues and controlled costs. Net interest income came in 1% above consensus, while net fees and commissions were 2% better than anticipated. Trading and other income significantly outperformed expectations, exceeding forecasts by 24%.
The bank reported 4% quarter-on-quarter loan growth, primarily fueled by the retail segment which grew 4%, while corporate loans increased by 2%. Regional growth was particularly strong in several markets, with Ukraine showing 8% quarterly growth and Russia posting 11% growth. Croatia, Serbia, Montenegro, and Uzbekistan also contributed to the bank’s loan expansion.
OTP Bank’s CET1 ratio remained flat quarter-on-quarter at 18.0%, slightly below analyst expectations by approximately 27 basis points.
The bank updated its 2025 guidance, revising its cost-to-income ratio projection downward. OTP now expects the ratio to be close to the 41.3% reported in 2024, compared to its previous guidance of "somewhat higher than 41.3%."
However, the bank raised its cost of risk outlook, indicating that portfolio risk profile may be higher than the 38 basis points reported in 2024. OTP also noted that leverage is expected to decline, which may result in a return on equity lower than the 23.5% reported in 2024.
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