Summary - OTP Group’s Semi-annual 2026 results

Summary - OTP Group’s Semi-annual 2026 results

OTP Group maintained its strong underlying financial performance in the first half of 2026. Profit after tax amounted to HUF 580 billion/EUR 1.56 billion with the prorated recognition of special items booked in a lump sum at the beginning of the year. Although this was 2% lower y-o-y, the normalized return on equity remained high at 21.0%. Reported consolidated profit after tax reached HUF 483 billion/EUR 1.30 billion, mainly reflecting the front-loaded impact of annual special taxes, supervisory fees and other specific items.

Semi-annual profit before tax increased by 3% y-o-y in HUF terms and by 8% on an FX-adjusted basis. Total income grew by 5%, primarily driven by net interest income, which increased by 13% y-o-y and by 19% on an FX-adjusted basis. The net interest margin improved by 31 basis points to 4.61%, supported by expanding business volumes and favourable margin trends in several markets, including Hungary and Uzbekistan.

Operating expenses increased by 12% y-o-y, or by 16% on an FX-adjusted basis. The increase was mainly related to wage inflation, a larger workforce, the depreciation of IT investments, and higher infrastructure, software and marketing costs. The cost-to-income ratio nevertheless remained at a moderate 42.0%.

Underlying credit quality trends continued to be favourable. The Stage 3 loan ratio improved by 0.3 percentage points from the end of 2025 to 3.2%, while the share of Stage 2 loans also declined. Total risk costs fell by 16% y-o-y, despite specific provisions related to the Hungarian interest rate cap.

Lending momentum strengthened during the second quarter. Consolidated performing customer loans increased by 8% in the first half of the year and by 17% y-o-y on an FX-adjusted basis. Mortgage loans remained the main engine of growth, rising by 12% over six months, supported by the Home Start Programme in Hungary. Consumer loans grew by 7%, while corporate and MSE loan growth accelerated in the second quarter. Leasing exposures also expanded dynamically.

Customer deposits increased by 6% during the first half of the year on an FX-adjusted basis. The Group’s net loan-to-deposit ratio stood at 78% at the end of June, confirming that the rapid expansion in lending continued to be supported by a balanced and stable funding structure.

OTP Group maintained its strong capital position. At the end of June, the CET1 ratio stood at 17.6%, while the total capital adequacy ratio improved to 20.3%. With the prorated recognition of annual special items, the CET1 ratio would have reached 17.9%. The EUR 1 billion Tier 2 issuance completed in June was the largest capital market transaction ever executed by OTP Bank and contributed significantly to the improvement in total capital adequacy.

In light of the first-half 2026 performance and underlying trends, management revised one element of its guidance for 2026: in 1H 2026 the consolidated net interest margin reached 4.61%, which is higher than the 4.34% recorded in full-year 2025; considering the expected margin dynamics in the second half of the year, management now expects the full-year margin to be higher than the 4.34% achieved in 2025. FX-adjusted organic growth in performing loans may remain around 15%, while the credit risk profile is expected to be broadly similar to last year. The cost-to-income ratio may be somewhat higher than in 2025, and ROE may moderate as a result of the expected decline in leverage.

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