Second-quarter net income was over the HUF 38.1bn estimate by analysts polled by Portfolio.hu. The management reaffirmed its full-year targets, based on performance in H1, in the report. First-half net income fell 35pc to HUF 84.1bn, also because of rapidly growing risk provisions. Second-quarter profits were practically level with those in Q1. Diluted earnings per share fell to HUF 157 in Q2 from HUF 292 in the same period a year earlier. First-half EPS fell to HUF 322 from HUF 506. Provisions for possible loan losses jumped 250pc to HUF 55.5bn in Q2 from the same period a year earlier. The ratio of loans in the portfolio more than 90 days past due rose to 7.4pc in Q2 from 5.7pc in Q1 and 3.7pc in Q2 2008. The group set aside additional risk provisions of HUF 6.6bn.

Total income rose…

Total income rose 7pc to HUF 192bn in Q2 from the same period a year earlier. Net interest income rose 14pc to HUF 141.1bn Net interest margin narrowed 23bp to 5.77pc. Net revenue from fees and commissions slipped 3pc to HUF 33.5bn. Operating costs were reduced 5pc to HUF 86.8bn, partly because of staff cuts. Payroll costs fell 8pc to HUF 38.2bn. ROE fell to 14.7pc in Q2 2009 from 27.6pc. ROA dropped to 1.7pc from 2.9pc. OTP Bank booked a net forex loss of just under HUF 1bn, compared to a loss of HUF 7.8bn in Q2 2008. Total assets stood at HUF 9,504.1bn on June 30, 7pc more than twelve months earlier. Net assets climbed 19pc to HUF 1,125.5bn. Gross client loans increased 14pc to HUF 6,998.2bn. Retail loan stock grew 17pc to HUF 4,293.3bn and corporate loan stock rose 9pc to HUF 2,316.2bn. OTP Bank noted that a key priority of asset-liability management at group level in the first half of 2009 was to maintain a safe liquidity level by holding back lending activity and through deposit campaigns.

What is bank said?

While lending stock grew in a year-on-year comparison in Q2, the level fell 9pc from HUF 7,719.4bn in Q1 as retail loan stock dropped 10pc from HUF 4,763.0bn and corporate loan stock slipped 8pc from HUF 2,524.7bn. Stock of client deposits rose 4pc to HUF 5,296.6bn. Retail deposit stock increased 11pc to HUF 3,956.6bn. Corporate deposit stock dropped 11pc to HUF 1,339.9bn. „The liquidity reserves of the Bank have been held successfully above the safety level, providing an acceptable buffer even for unexpected shocks,” the bank said. OTP Bank’s capital adequacy ratio rose to 15.9pc from 12.5pc in the period. OTP Bank also said it had aimed to minimise risks take by its different business lines in H1, adding that its short positions had decreased further. The bank had short positions of EUR 310m and USD 61.5m from January, down from EUR 515m and USD 80m during most of 2008.