The current economic environment in Hungary is not favourable - OTP CEO

The head of the financial institution pointed out that, although the banking group is present in 11 countries, only a third of its profits come from Hungary.

"OTP stands on several legs, it is present in 11 countries. About one third of its profits come from Hungary alone, with the remaining two thirds coming from abroad, so in this respect OTP is in a stable position. It has a strong capital position, a good liquidity position, and it has achieved significant profitability in the first half of the year, which was not typically due to Hungary or the domestic operation, but rather to the foreign subsidiaries," the CEO said.

According to Péter Csányi, the current domestic economic environment is unfavourable, with GDP growth below expectations. Although household consumption remains at an acceptable level, corporate investment has fallen significantly over the past two years, which has had a negative impact on growth prospects. However, he stressed:

We can operate in a relatively predictable economic environment in other countries, so the results of the OTP Group will be less affected there.

The Group will continue to focus on three strategic pillars: growth (total assets and profits have quadrupled over the past decade); maintaining high profitability (last year's return on equity was 24%, and this is expected to remain at a similar level this year); and maintaining a conservative risk profile.

We want to remain independent and make autonomous decisions, even in an unfavourable economic environment,

the CEO stressed.

The bank's head sees positive trends in retail lending, with housing and personal loans performing particularly well and unsecured loans showing a positive trend in the first half of the year. In contrast, corporate lending has fallen behind more significantly due to a drop in investment. Péter Csányi is optimistic about the future outlook.

If economic policies are predictable, if conditions are stimulative and interest rates are appropriate, and if firms decide to launch ten-, twenty- or even thirty-year investment projects, then lending volumes can bounce back quite quickly.

Cover photo: Portfolio