First-quarter after-tax profit of OTP Bank, Hungary's biggest commercial lender, fell 6% year-on-year to HUF 177.0 billion as the lender booked the full-year amount of sectoral taxes during the period, an earnings report released ahead of the opening bell on Friday shows.
If OTP had booked the prorated amount of the bank levy and windfall profit tax, after-tax profit would have been HUF 324.4 billion, HUF 147.4 billion higher than the accounted profit and up 9% from the base period.
Net interest income increased 13% to HUF 527.3 billion and net revenue from commissions and fees edged down 1% to HUF 137.9 billion. Total risk costs came to HUF 15.4 billion, more than halved from HUF 32.9 billion in the base period. Diluted earnings per share came to HUF 692.
OTP booked a HUF 14.2 billion loss at its core business in Hungary because of the sectoral taxes accounting measure. Adjusted for that impact, after-tax profit surged 87% to 119.7 billion.
Profit of OTP Bank Russia declined 18% to HUF 50.4 billion and profit of its Bulgarian unit, DSK Group, slipped 10% to HUF 43.8 billion. Profit of Ipoteka Bank, in Uzbekistan, climbed 34% to HUF 17.4 billion. Profit of OTP Bank Ukraine dropped 38% to HUF 9.2 billion.Considering the loss booked in Hungary, OTP's foreign units generated all of the lender's profits in Q1.
OTP had total assets of HUF 47,861 billion at the end of March, up 8% from twelve months earlier. Gross stock of client loans rose 16% to HUF 27,793 billion and client deposits increased 11% to HUF 34,847 billion. The ratio of stage 3 loans under IFRS 9 edged down 0.2pp to 3.4%.
OTP's management affirmed full-year guidance, putting FX-adjusted organic performing loan volume growth around the 15% achieved in 2025. They also put net interest margin around the 4.34% in 2025, while flagging a "somewhat higher" cost-to-income ratio and lower ROE due to an expected decrease in leverage.
At a press conference after the report was released, deputy CEO Lászloó Bencsik said the windfall profit tax OTP must pay in 2026 had more than doubled to HUF 115 billion. That additional burden, he said, raised legal questions as well as hurt the local banking sector's international competitiveness, and he expressed hope Hungary would return to "Western European" banking sector practices.
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