Summary - OTP Group’s First half 2025 results

Summary - OTP Group’s First half 2025 results

In the first six months of 2025 OTP Group achieved outstanding results with semi-annual profit after tax amounting to EUR 1.46 billion and ROE hitting 23.2%, assuming the even recognition within the year of the special expenditure items booked in lump-sum for the whole year.

These special items (special banking taxes in Hungary, supervisory charges in Bulgaria and Slovenia) reduced the semi-annual consolidated profit after tax by altogether EUR 304 million. Had these special items recognized in one sum for the whole year been booked evenly within the year, the semi-annual profit after tax would have been higher by EUR 181 million.

The reported half-year profit after tax, so unfiltered of the distorting effect of these above-mentioned special items, reached EUR 1.28 billion, up by 2% y-o-y, resulting in an ROE of 20.3%.

Semi-annual profit before tax improved by 13% y-o-y, fuelled by the 20% increase in operating profit. Within that, total income grew by 15% y-o-y in HUF terms, and by 16% FX-adjusted and organically, so without the effect of the sale of the Romanian operation. Within core banking revenues, the semi-annual net interest income advanced by 8% y-o-y (+9% adjusted for FX and the Romanian divestment). The key driver behind this was the expansion of business volumes, whereas the net interest margin stayed flat.

Cumulated net fees and commissions went up by 12% y-o-y (+11% organically and FX-adjusted), driven primarily by the expansion of business volumes as well as transactional turnover. Semi-annual operating expenses grew by 10% y-o-y organically and FX-adjusted, mainly due to the double-digit increase in both personnel expenses and depreciation. The half-year cost to income ratio stood at 38.8% assuming the even recognition of the already mentioned special items, the full annual amount of which were accounted in 1H in one sum. This marks an improvement compared to the full-year 2024 indicator of 41.3%.

Consolidated credit quality remained stable, and the main credit quality indicators continued to show favourable trends. Consolidated performing (Stage 1+2) loans expanded by 4% q-o-q, bringing semi-annual growth rate to 7%, and yearly growth of 12%, on an FX-adjusted basis and excluding the effect of the Romanian deconsolidation.

At the end of June 2025, the consolidated Common Equity Tier 1 (CET1) ratio according to IFRS and under the prudential scope of consolidation reached 18.0%, marking 0.9 pp decrease against the end of 2024, and stayed flat q-o-q. The consolidated capital adequacy ratio (CAR) stood at 19.8% at the end of June, underpinning a year-to-date decrease of 0.5 pp.

In light of 1H 2025 results and trends, OTP’s management – as a meaningful change in the operating environment is not expected while geopolitical uncertainties persisting – amended its previous expectations for the Group’s 2025 financial performance in two areas:

• In 1H 2025 consolidated credit risk cost rate reached 66 bps, which is higher than the 38 bps hit in full-year 2024. Management doesn’t expect such an improvement in this ratio in the second half of the year that could bring the full-year indicator to close to the previous year’s level.
• The semi-annual cost-to-income ratio stood at 38.8% with even distribution of special expenditure items booked in one sum for the whole year, which is better than the full-year 2024 level of 41.3%.

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