OTP BANK PLC.
INTEGRATED ANNUAL REPORT 2024
BUDAPEST, 25 APRIL 2025
INTEGRATED ANNUAL REPORT 2024
2
Dear Shareholders!
OTP Bank Plc. hereby provides you with the Integrated Annual Report of OTP Bank Plc. for the year
2024, which is based on the audited financial statements approved by the Annual General Meeting
of the Company on 25 April 2025.
On behalf of OTP Bank Plc. we declare that, to the best of our knowledge, the separate and
consolidated financial statements which have been prepared in accordance with the applicable
accounting standards, present a true and fair view of the assets, liabilities, financial position and
profit and loss of OTP Bank Plc. and its consolidated subsidiaries and associates, and give a fair
view of the position, development and performance of OTP Bank Plc. and its consolidated
subsidiaries and associates, describing the principal risks and uncertainties, and do not conceal
facts or information which are relevant to the evaluation of the Issuer’s position. Moreover, on
behalf of OTP Bank Plc. we also declare that the Sustainability Reports, as part of the Management
Reports, were prepared in accordance with sustainability reporting standards of the Accounting
Act (Act C of 2000 on Accounting), the European Sustainability Reporting Standards (ESRS), and
with the provisions of Article 8 of Regulation (EU) 2020/852 of the European Parliament and of the
Council (EU Taxonomy Regulation).
25 April 2025, Budapest
dr. Sándor Csányi
László Bencsik
Chairman & CEO
Deputy CEO
INTEGRATED ANNUAL REPORT 2024
3
CONTENTS
MANAGEMENT REPORT 2024 (STAND-ALONE) ...................................................................... 3
MANAGEMENT REPORT 2024 (CONSOLIDATED) ................................................................ 100
INDEPENDENT AUDITOR’S REPORTS 2024 ....................................................................... 344
SEPARATE FINANCIAL STATEMENS IN ACCORDANCE WITH IFRS (2024) .............................. 380
CONSOLIDATED FINANCIAL STATEMENTS IN ACCORDANCE WITH IFRS (2024) ..................... 541
ANNEX TO SUSTAINABILITY REPORT ................................................................................ 775
RESPONSIBLE BANKING PROGRESS STATEMENT FOR PRB SIGNATORIES ......................... 776
INTEGRATED ANNUAL REPORT 2024
4
MANAGEMENT REPORT 2024 (STAND-ALONE)
MANAGEMENT REPORT (STAND-ALONE)
INTEGRATED ANNUAL REPORT 2024
5
In accordance with the recommendation stated in the current circular of the MNB on the application of MoF
Decree no. 24/2008 on the detailed rules regarding the disclosure requirements applicable to publicly offered
securities, OTP Bank Plc. as issuer prepares and publishes this Management Report combined with the
Business Report required in the Accounting Act in a single document, stating in dedicated chapters the
subjects required in the MoF Decree.
SEPARATE STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2024
(in HUF million)
Note
31 December 2024
31 December 2023
Cash, amounts due from banks and balances with the National
Bank of Hungary
5.
2,075,179
2,708,232
Placements with other banks
6.
2,948,536
2,702,433
Repo receivables
7.
238,079
201,658
Financial assets at fair value through profit or loss
8.
651,236
257,535
Financial assets at fair value through other comprehensive
income
9.
592,602
559,527
Securities at amortised cost
10.
3,334,145
2,710,848
Loans at amortised cost
11.
4,670,795
4,681,359
Loans mandatorily measured at fair value through profit or loss
11.
998,410
934,848
Investments in subsidiaries
12.
2,169,031
2,001,952
Property and equipment
13.
111,772
107,306
Intangible assets
13.
137,860
98,115
Right of use assets
35.
58,956
66,222
Investment properties
14.
4,227
4,203
Deferred tax assets
34.
-
408
Current tax assets
34.
-
-
Derivative financial assets designated as hedge accounting
relationships
15.
43,130
21,628
Non-current assets held for sale
46.
-
130,718
Other assets
16.
357,095
365,961
TOTAL ASSETS
18,391,053
17,552,953
Amounts due to banks and deposits from the National Bank of
Hungary and other banks
17.
1,606,969
1,761,579
Repo liabilities
18.
227,632
443,694
Deposits from customers
19.
10,891,924
10,734,241
Fair value changes of the hedged items in portfolio hedge of
interest rate risk
19.
4,303
84
Leasing liabilities
35.
64,380
68,282
Liabilities from issued securities
20.
1,750,893
1,163,109
Financial liabilities designated at fair value through profit or loss
21.
17,024
19,786
Derivative financial liabilities designated as held for trading
22.
144,499
183,565
Derivative financial liabilities designated as hedge accounting
relationships
23.
19,438
27,423
Deferred tax liabilities
34.
1,707
-
Current tax liabilities
34.
23,591
14,393
Provisions
24.
25,647
22,497
Other liabilities
24.
449,522
295,399
Subordinated bonds and loans
25.
362,271
520,296
TOTAL LIABILITIES
15,589,800
15,254,348
Share capital
26.
28,000
28,000
Retained earnings and reserves
27.
2,896,319
2,276,759
Treasury shares
28.
(123,066)
(6,154)
TOTAL SHAREHOLDERS' EQUITY
2,801,253
2,298,605
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
18,391,053
17,552,953
MANAGEMENT REPORT (STAND-ALONE)
INTEGRATED ANNUAL REPORT 2024
6
SEPARATE STATEMENT OF PROFIT OR LOSS FOR THE YEAR ENDED
31 DECEMBER 2024
(in HUF million)
Note
Year ended 31
December 2024
Year ended 31
December 2023
Interest Income:
Interest income calculated using the effective interest method
29.
1,040,534
1,227,173
Income similar to interest income
29.
585,619
795,906
Interest income and similar to interest income total
1,626,153
2,023,079
Interest Expense:
Interest expenses total
29.
(1,107,551)
(1,556,361)
NET INTEREST INCOME
518,602
466,718
(Loss allowance) / Release of loss allowance on loan,
placement and repo receivables losses
6., 7., 11.,
30.
(19,955)
8,616
(Loss allowance) / Release of loss allowance on securities at
fair value through other comprehensive income and on
securities at amortised cost
9., 10.,
30.
(35,128)
11,879
(Provision) / Release of provision for loan commitments and
financial guarantees given
24., 30.
(2,565)
7,172
Change in the fair value attributable to changes in the credit
risk of loans mandatorily measured at fair value through profit
of loss
45.4.
4,193
(980)
Risk cost total
(53,455)
26,687
NET INTEREST INCOME AFTER RISK COST
465,147
493,405
LOSSES ARISING FROM DERECOGNITION OF
FINANCIAL ASSETS MEASURED AT AMORTISED COST
(9,856)
(19,707)
MODIFICATION LOSS
4.
(1,999)
(9,017)
Income from fees and commissions
31.
468,566
402,885
Expenses from fees and commissions
31.
(92,217)
(78,755)
NET PROFIT FROM FEES AND COMMISSIONS
376,349
324,130
Foreign exchange losses
32.
(6,885)
(12,269)
Gains on securities, net
32.
120,863
7,073
Gains on financial instruments at fair value through profit or
loss
32.
27,377
91,268
Net results on derivative instruments and hedge relationships
32.
(6,063)
13,055
Dividend income
32.
413,262
275,705
Other operating income
33.
18,380
26,184
Other operating expenses
33.
(37,072)
63,590
NET OPERATING INCOME
529,862
464,606
Personnel expenses
33.
(200,268)
(195,404)
Depreciation and amortization
33.
(63,551)
(50,814)
Other administrative expenses
33.
(284,128)
(281,918)
OTHER ADMINISTRATIVE EXPENSES
(547,947)
(528,136)
PROFIT BEFORE INCOME TAX
811,556
725,281
Income tax expense
34.
(66,557)
(70,293)
PROFIT AFTER INCOME TAX
744,999
654,988
Earnings per share (in HUF)
Basic
43.
2,692
2,344
Diluted
43.
2,692
2,344
MANAGEMENT REPORT (STAND-ALONE)
INTEGRATED ANNUAL REPORT 2024
7
SEPARATE STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED
31 DECEMBER 2024
(in HUF million)
Note
Year ended 31
December 2024
Year ended 31
December 2023
PROFIT AFTER INCOME TAX
744,999
654,988
Items that may be reclassified subsequently to profit or loss:
Fair value adjustment of debt instruments at fair value through other
comprehensive income
9,751
37,917
Deferred tax related to fair value adjustment of debt instruments at
fair value through other comprehensive income
34.
(848)
(3,503)
Gains / (Losses) on separated currency spread of financial
instruments designated as hedging instrument
(359)
3,752
Deferred tax related to (losses) / gains on separated currency spread
of financial instruments designated as hedging instrument
34.
32
(338)
(Losses) / Gains on derivative financial instruments designated as
cash flow hedge
136
5,700
Deferred tax related to gains on derivative financial instruments
designated as cash flow hedge
34.
-
-
Items that will not be reclassified to profit or loss:
Gains on equity instruments at fair value through other
comprehensive income
-
-
Fair value adjustment of equity instruments at fair value through
other comprehensive income
11,547
3,308
Deferred tax related to equity instruments at fair value through other
comprehensive income
34.
(1,305)
(374)
Total
18,954
46,462
TOTAL COMPREHENSIVE INCOME
763,953
701,450
MANAGEMENT REPORT (STAND-ALONE)
INTEGRATED ANNUAL REPORT 2024
8
POST-BALANCE SHEET EVENTS
Post-balance sheet events cover the period until 21 February 2025.
Hungary
• On 13 January 2025 OTP Bank’s share buyback program approved by the central bank on 22 August 2024
reached its maximum available amount of HUF 60 billion.
• On 24 January 2025 the Bank got another approval from the Hungarian National Bank to repurchase own
shares in the amount of HUF 60 billion. The available amount was exhausted on 10 February 2025.
• From 13 January 2025 the consolidated MREL requirement is determined at 18.60% of the total risk
exposure amount (RWA) and 6.02% of the total exposure measure (TEM) of the Resolution Group. The
consolidated MREL requirement of OTP Bank applicable until this date was 18.94% and 5.78%.
OTP Bank’s Resolution Group consists of entities included in the prudential scope of consolidation of OTP
Bank without the Slovenian OTP banka d.d. and its subsidiaries. Pursuant to the CRD OTP Bank has to
meet the combined buffer requirement in addition to its MREL TREA requirement as institutions shall not
use CET1 capital that is maintained to meet the combined buffer requirement to meet the risk-based
component of the MREL requirement. This principle is applicable to the MREL TREA subordination
requirement as well.
• On 30 January Tier 2 notes have been issued in the aggregate nominal amount of USD 750 million. The
notes carry an annual coupon of 7.3% due semi-annually. The tenor was 10.5NC5.5, i.e. in the period
between five and five and a half years the bonds can be redeemed on any day. The notes were listed on
the Luxembourg Stock Exchange.
• On 7 February the EUR 500 million Fixed to Floating Rate Perpetual Subordinated Notes have been
redeemed and the principal amount, together with accrued and unpaid interest was paid to the holders of
the Notes.
• On 17 February OTP Bank announced the redemption of its €650,000,000 7.350 per cent. Senior Preferred
Fixed-to-Floating Callable Notes due 2026 with the optional redemption date of 4 March 2025.
• As of end of February, the banking sector related key initiatives of the 'New Economic Policy Action Plan'
launched by government decree 1311/2024 (X. 21.), are as follows (based on the communication of the
Government and submitted bills):
o
From 1 January 2025, minimum wage increased by 9%. For 2026 and 2027 further 13% and 14%
hikes have been agreed as part of the three-year wage agreement, assuming that economic growth
and inflation will be in line with the expectations.
o
From 2 January 2025 the Workers’ Loan Program is available at Hungarian banks. The loan is
designed for young people aged 17-25 who are not eligible for student loans and who are employed
in Hungary for at least 20 hours a week, or entrepreneurs who have an average income and undertake
to work or run a business in Hungary for a minimum of five years. The maximum amount of the interest-
free, free use, state-guaranteed loan facility is HUF 4 million, with a term of 10 years. The scheme also
provides support for childbearing, with repayments suspended for two years following the birth of the
first and second child, and half of the current debt waived for the second child and the full debt waived
after the third one.
o
From 1 January 2025, in case of green loans the loan-to-value limit was increased to 90%, furthermore
the payment-to-income limit was increased to 60% regardless of the income.
o
On 1 January 2025, the home renovation program was reintroduced to support families in towns with
less than 5,000 residents, covering up to 50% of labor- and material costs with a cap of HUF 3 million.
Those who have already availed themselves of the 2021-2022 home renovation subsidy are only
eligible to utilize the new subsidy up to the amount of the HUF 3 million that remains unused at that
time. From 1 February 2025, a state subsidized home renovation mortgage loan with a client interest
rate of 3% and with up to HUF 6 million loan amount is available to finance investment costs.
o
In 2025, voluntary pension fund savings can be used free of tax for housing loan repayments,
repayment of secured loans, and modernization or renovation of existing homes. The total amount of
voluntary pension savings could be utilized, but only up to the balance available as of 30 September
2024.
MANAGEMENT REPORT (STAND-ALONE)
INTEGRATED ANNUAL REPORT 2024
9
o
From 1 January 2025, monthly HUF 150,000 fringe benefit can be paid to the employees under the
age of 35 in order to support housing expenses (home rental or loan installment) above the current
preferential upper limit of HUF 450,000 per year.
o
Half of the accumulated amount on SZÉP Cards can be used for home renovation in 2025.
o
Between 1 April and 31 October 2025, based on the individual decision of the participating banks, 5%
interest rate cap will be available for under 35 years old, first-time home buyers for newly granted
green housing loans, with properties under 60 square meter and price lower than HUF 1.2 million per
square meter. The rate cap will be applied in the first 5 years of the loan, the product has neither
disbursement nor credit assessment fees.
o
From 6 January 2025, as part of the Demján Sándor program, export stimulating loan and leasing
structures are available in the total sum of HUF 400 billion, partly refinanced by EXIM Hungary. Some
of the products are also available for enterprises planning to start export activities in the future.
o
The interest rate of certain products under the Széchenyi Card Program MAX+ scheme was
significantly reduced for contracts concluded after 1 March 2025: the interest rate on investment loans
(Agricultural Investment Loan, Investment Loan) and the leasing scheme was reduced to 3%, while
the interest rate on the Széchenyi Card Overdraft MAX+ (including the Tourism Card) and the Liquidity
Loan was reduced to 4.5%. The uniform 0.5 pp reduction in client interest rates was facilitated by the
burden sharing of KAVOSZ Ltd. (0.1 pp) and the banking sector (0.4 pp). The investment loans with
the exceptionally favorable interest rate of the “GREEN” sub-structure are an exception to this, which
are still available to businesses with a rate of 1.5%.
• Changes in the economic policy leadership:
o
As of 31 December 2024, pursuant to Act LXXXVI of 2024, the Ministry of Finance ceased to exist by
merging into the Ministry of National Economy. Minister Márton Nagy remained in office unchanged
as head of the Ministry of National Economy.
o
As of 4 March 2025, the President of the Republic appointed Mihály Varga, the former Minister of
Finance, to head the National Bank of Hungary.
• Based on preliminary data published by the Central Statistical Office on 30 January 2025, the performance
of the Hungarian economy increased by 0.5% q-o-q and 0.4% y-o-y in the fourth quarter. With this, the
annual growth in 2024 was 0.6%. The average inflation in 2024 was 3.7%.
• The Financial Stability Council of the Hungarian National Bank announced an extension to the central
bank's green capital requirement relief programs for credit institutions. The deadline for these programs
was extended by one year, until the end of December 2026. The decision on whether to grant further annual
extensions will be made based on a professional indicator system. Additionally, from 31 January 2025, the
range of exposures that can be included in the discount program was further expanded.
An event, that occurred in January 2025 regarding an item reported in the Group’s books as a receivable
from lending activities, was identified by the Group as a post-balance sheet event. The Group believes that
the event has no retrospective effect for 2024 concerning Stage classification, therefore the Group did not
change the Stage 2 classification of the affected receivable as of 31 December 2024. However, given that
the Group obtained additional information regarding the circumstances that previously justified the Stage 2
classification, the Group recognized an additional HUF 13.9 billion impairment loss for the receivable in the
Stage 2 category for 2024.
MANAGEMENT REPORT (STAND-ALONE)
INTEGRATED ANNUAL REPORT 2024
10
MAIN CHANGES CONCERNING INVESTMENTS IN SUBSIDIARIES
On 30 July 2024 the financial closure of the sale of the Romanian bank was completed, consequently starting
from 3Q the consolidated financial statements no longer include the contribution from the Romanian segment.
On 22 August 2024 the legal merger of the two Slovenian subsidiary banks of the Group, SKB Banka and
Nova KBM was successfully completed. Following this, the operational merger was also successfully
concluded.
MACROECONOMIC OVERVIEW
In 2024, inflation in advanced economies continued to fall, so the Fed and the ECB both started their interest
rate cut cycles. The US presidential election and the expectations ahead of it led to a sharp turnaround in
bond markets and interest rate expectations, as the victory of Donald Trump, whose election promises
included several highly inflationary elements, became increasingly likely. In mid-September, yields started
to rise after a slide since spring, and expectations of further rate cuts began to ease. Growth remained
strong in the United States, but the euro area continued to struggle to recover from the crisis, where the
energy crisis and the inflation shock of the Russia-Ukraine war had thrown it. Meanwhile, labour markets
remained tight on both sides of the Atlantic, with low unemployment and strong wage dynamics.
As the year was nearing its end, it became clear that growth in the US was strong, as consumer spending
and private investment continued to drive the growth, and the US economy expanded by 2.8%, well above
the 1-1.5% expected at the beginning of the year. Labour market conditions were also more favourable than
expected: except for some minor temporary volatility, employment growth remained strong, unemployment
remained low, and wages grew by 4%. Disinflation stalled in the autumn, and core inflation was still 3-3.5%,
well above the inflation target. Nevertheless, the Fed cut its base rate by 100 basis points to 4.25-4.5% by
the end of the year, in line with expectations.
In the euro area, the recovery was also driven by consumption, but the pace of the rebound was far below
that of the USA and was not homogeneous across the euro area. The best performers were tourism-driven
southern member states, while the industry-heavy economies struggled to recover from the shock of the
energy crisis. Political crises are also weighing on the recovery, with two major economies, Germany and
France, both facing government crises. Inflation temporarily fell below target in the autumn, but has been
accelerating again since October as the food and energy price fall fades; still, the ECB continued its interest
rate cut cycle, bringing the effective rate down to 3% by the end of 2024, in a 100 basis point cut for the
year overall.
The Hungarian economy started to recover in 2024 after a longer and deeper recession than other countries
in the region in 2023 but, just like in Europe, it was uneven and fragile, growing by just 0.5% in full year
2024, compared with expectations of around 3% at the start of the year. With rising real wages and low
unemployment, consumption gradually picked up, although households’ precautionary savings remained
high. Despite expanding consumption, the high exposure to the automotive sector, the eroded room for
manoeuvre in fiscal policy, the falling exports and a more than 10% drop in investment pushed the economy
back into technical recession in the second and third quarters, from which it recovered only in the fourth
quarter. Net exports’ contribution to growth was positive, but it did not stem from exports’ robust performance
– it was only because imports fell sharper than exports did. As a result of the government's stimulus
measures, the housing market picked up along with household loan demand, while the corporate loan
market stagnated. Labour market tensions have clearly eased, as employment declined in the second half
of the year, but the unemployment rate did not rise significantly.
Inflation also slowed in Hungary and reached the 3% target in September, giving the MNB room to cut
interest rates from 10.75% at the end of 2023 to 6.5%. But inflation picked up in October and the escalation
of the Middle East conflict and the rise in US yields forced the MNB to pause the easing cycle. The EUR/HUF
was at around 380 at the beginning of 2024, but it rose persistently above the 400 level in the second half
of the year.
After years of deficits of 7-8%, the primary balance improved to close to zero in 2024, despite the
unfavourable macroeconomic environment, and the headline deficit fell to 4.8% of GDP, close to the
increased deficit target, but still far from the 3% Maastricht criterion. The decline in government debt stalled
in 2024, with the debt-to-GDP ratio rising to 73.9%-74% from 73.4% in 2023. Hungary’s external balance
started to improve rapidly after the energy price shock faded and domestic demand declined; the deficit
swung from above 8% of GDP in 2022 to a slight surplus in 2023, by rising to 2.5% of GDP in 2024, and
external debt started to slowly decline.
MANAGEMENT REPORT (STAND-ALONE)
INTEGRATED ANNUAL REPORT 2024
11
DIGITAL AND IT INNOVATIONS
OTP Bank broadens the range of remotely available services continually. The number of our digitally active
retail clients has far exceeded 2 million, and most of our clients now contact our Bank through mobile
banking.
Through the mobile application, in addition to the daily banking functions, our clients can purchase
investment funds, bonds, car prize deposits, or apply for a new home savings product or travel insurance.
In addition, thanks to the piggy bank function, our customers can set up savings goals and put money aside
little by little for it, while selecting ‘Split the Bill’, they can easily allocate the costs of a dinner among the
participants. Daily banking functionality has been recently expanded with the introduction of qvik payment
options.
The Bank focuses on the continuous upgrades of the Personal Finance Management (PFM) toolset, which
supports our users in making more conscious financial decisions. The expense tracker service is already
capable of handling user generated, personalized categories as well.
The constant ascent in the ratio of our digitally active clients is supported by targeted online campaigns and
continuous user education. Machine learning algorithms help the Bank processing all digital data for
displaying relevant, personalized offers to the clients.
Several products are available via end-to-end online processes for example: retail clients can open a new
account with selfie-identification, or contract for a personal loan or travel insurance digitally. With OTP
Mobilbank, it takes a few minutes only for parents to open a Junior account for their children under the age
of 14.
VideoBank provides consulting service and application process for mortgages as well. We received
numerous positive feedback from clients using the channel. Our customers have access to the chat feature
on the website, via our internet banking service and in the mobile application as well, therefore we serve
client needs also via identified conversations.
We are constantly improving our fraud prevention platform to better identify and prevent fraudulent activity
targeting our digital service. As a preventive measure, in 2024 we introduced a new Mobilbank feature,
which displays for the customer when OTP Bank's call management system initiates a call.
In addition to our internet and mobile banking developments, we created a so-called Merchant Portal for
partners holding card acceptance contracts, where they can reach analytics, statements and all related
documents of card transactions made with us.
MANAGEMENT REPORT (STAND-ALONE)
INTEGRATED ANNUAL REPORT 2024
12
BRANCH NETWORK OF OTP BANK
The Bank provides a full range of commercial banking services through a nationwide network and its
branches are available to customers in Hungary.
1011 Budapest, Iskola utca 38-42.
1015 Budapest, Széna tér 7.
1021 Budapest, Hüvösvölgyi út 138.
1024 Budapest, Fény utca 11-13.
1025 Budapest, Szépvölgyi út 4/b.
1025 Budapest, Törökvész út 1/a
1026 Budapest, Szilágyi Erzsébet fasor
121.
1033 Budapest, Flórián tér 15.
1033 Budapest, Szentendrei utca 115.
1037 Budapest, Bécsi út 154.
1039 Budapest, Heltai Jenő tér 2.
1041 Budapest, Erzsébet utca 50.
1042 Budapest, Árpád út 63-65.
1048 Budapest, Kordován tér 4.
1051 Budapest, Nádor utca 16.
1052 Budapest, Deák Ferenc utca 7-9.
1054 Budapest, Szabadság tér 7-8.
1055 Budapest, Nyugati tér 9.
1055 Budapest, Szent István krt. 1.
1062 Budapest, Váci út 1-3.
1066 Budapest, Oktogon tér 3.
1075 Budapest, Károly krt. 1.
1075 Budapest, Károly krt. 25.
1076 Budapest, Thököly út 4
1081 Budapest, Népszínház utca 3-5.
1083 Budapest, Futó utca 35-45
1085 Budapest, József krt. 33.
1085 Budapest, Kálvin tér 12-13.
1094 Budapest, Ferenc krt. 13.
1097 Budapest, Könyves Kálmán krt. 12-
14.
1102 Budapest, Kőrösi Csoma sétány 6.
1103 Budapest, Sibrik Miklós utca 30.
1106 Budapest, Örs vezér tere 25
1115 Budapest, Bartók Béla út 92-94.
1117 Budapest, Hunyadi János út 19.
1117 Budapest, Móricz Zsigmond körtér
18.
1117
Budapest,
Október
huszonharmadika utca 8-10.
1119 Budapest, Hadak útja 1.
1123 Budapest, Alkotás utca 53
1124 Budapest, Apor Vilmos tér 11.
1126 Budapest, Böszörményi út 9-11.
1133 Budapest, Váci út 80.
1134 Budapest, Váci út 17.
1135 Budapest, Lehel út 70-76.
1137 Budapest, Pozsonyi út 38.
1138 Budapest, Váci út 135-139
1146 Budapest, Thököly út 102/b.
1148 Budapest, Nagy Lajos király útja 19-
21.
1149 Budapest, Bosnyák tér 17.
1149 Budapest, Fogarasi út 15/b.
1152 Budapest, Szentmihályi út 131.
1157 Budapest, Zsókavár utca 28.
1163 Budapest, Jókai Mór utca 3/b.
1173 Budapest, Ferihegyi út 93.
1173 Budapest, Pesti út 5-7.
1181 Budapest, Üllői út 377.
1191 Budapest, Üllői út 201.
1195 Budapest, Üllői út 285.
1195 Budapest, Vak Bottyán út 75 a-c
1203 Budapest, Bíró Mihály utca 7.
1204 Budapest, Kossuth Lajos utca 44-
46.
1211 Budapest, Kossuth Lajos utca 86.
1211 Budapest, Kossuth Lajos utca 99.
1221 Budapest, Kossuth Lajos utca 31.
1222 Budapest, Nagytétényi út 37-45.
1238 Budapest, Grassalkovich út 160.
1239 Budapest, Bevásárló utca 2.
2000 Szentendre, Pannónia út 1-3.
2013 Pomáz, József Attila utca 17.
2030 Érd, Budai út 24.
2030 Érd, Iparos út 5.
2040 Budaörs, Sport út 2-4.
2040 Budaörs, Szabadság utca 131/a.
2060 Bicske, Bocskai köz 1.
2083 Solymár, Szent Flórián utca 2.
2085 Pilisvörösvár, Fő utca 60
2092 Budakeszi, Fő utca 174.
2100 Gödöllő, Szabadság tér 12-13.
2112 Veresegyház, Fő út 52
2120 Dunakeszi, Barátság utca 29.
2120 Dunakeszi, Nádas utca 6.
2141 Csömör, Határ út 6.
2151 Fót, Móricz Zsigmond utca 23/A
2170 Aszód, Kossuth Lajos utca 42-46.
2200 Monor, Kossuth Lajos utca 67.
2220 Vecsés, Fő utca 170.
2220 Vecsés, Fő utca 246-248
2225 Üllő, Pesti út 92/b.
2230 Gyömrő, Szent István út 17.
2234 Maglód, Esterházy utca 1.
2300 Ráckeve, Szent István tér 3.
2310 Szigetszentmiklós, Ifjúság útja 17.
2330 Dunaharaszti, Dózsa György út 25.
2340 Kiskunlacháza, Dózsa György út
219.
2360 Gyál, Kőrösi út 160.
2370 Dabas, Bartók Béla út 46.
2400 Dunaújváros, Dózsa György út 4/e.
2440 Százhalombatta, Szent István tér 8.
2457 Adony, Petőfi Sándor utca 2.
2483 Gárdony, Szabadság út 18.
2500 Esztergom, Rákóczi tér 2-4.
2510 Dorog, Bécsi út 33.
2536 Nyergesújfalu, Kossuth Lajos utca
126.
2600 Vác, Széchenyi utca 3-7.
2651 Rétság, Rákóczi út 28-30.
2660
Balassagyarmat,
Rákóczi
fejedelem utca 44.
2700 Cegléd, Szabadság tér 6.
2730 Albertirsa, Vasút utca 4/a.
2750 Nagykőrös, Szabadság tér 2.
2760 Nagykáta, Bajcsy-Zsilinszky utca 1.
2800 Tatabánya, Bárdos László utca 2.
2800 Tatabánya, Fő tér 32.
2840 Oroszlány, Rákóczi Ferenc út 84.
2870 Kisbér, Batthyány tér 5.
2890 Tata, Ady Endre utca 1-3.
2900 Komárom, Mártírok útja 23.
2941 Ács, Gyár utca 14.
3000 Hatvan, Kossuth tér 8.
3021 Lőrinci, Szabadság tér 25/A
3060 Pásztó, Fő utca 73/a.
3070 Bátonyterenye, Bányász utca 1/a.
3100 Salgótarján, Rákóczi út 22.
MANAGEMENT REPORT (STAND-ALONE)
INTEGRATED ANNUAL REPORT 2024
13
3170 Szécsény, Feszty Árpád utca 1.
3200 Gyöngyös, Fő tér 1.
3245 Recsk, Kossuth Lajos út 93.
3300 Eger, Törvényház utca 4.
3360 Heves, Hősök tere 4.
3390 Füzesabony, Rákóczi Ferenc út 77.
3400 Mezőkövesd, Mátyás király út 149.
3527 Miskolc, József Attila utca 87.
3530 Miskolc, Rákóczi Ferenc utca 1.
3530 Miskolc, Uitz Béla utca 6.
3535 Miskolc, Árpád út 2.
3580 Tiszaújváros, Szent István út 30.
3600 Ózd, Városház tér 1/a.
3630 Putnok, Kossuth Lajos utca 45.
3700 Kazincbarcika, Egressy Béni út 50.
3770 Sajószentpéter, Bethlen Gábor utca
1/a.
3780 Edelény, Tóth Árpád út 1.
3800 Szikszó, Kassai út 16.
3860 Encs, Bem József utca 1.
3900 Szerencs, Kossuth tér 3/a.
3910 Tokaj, Rákóczi út 37.
3950 Sárospatak, Eötvös utca 2.
3980 Sátoraljaújhely, Széchenyi tér 13.
4025 Debrecen, Hatvan utca 2-4.
4025 Debrecen, Pásti utca 1-3.
4025 Debrecen, Piac utca 45-47.
4031 Debrecen, Kishatár utca 7.
4032 Debrecen, Egyetem tér 1.
4032 Debrecen, Füredi út 43.
4060 Balmazújváros, Veres Péter utca 3.
4080 Hajdúnánás, Köztársaság tér 17-
18/a.
4087 Hajdúdorog, Petőfi tér 9.
4100 Berettyóújfalu, Oláh Zsigmond utca
1.
4110 Biharkeresztes, Kossuth utca 4.
4130 Derecske, Köztársaság út 111.
4150 Püspökladány, Kossuth utca 2.
4181 Nádudvar, Fő út 119.
4200 Hajdúszoboszló, Szilfákalja utca 6-
8.
4220 Hajdúböszörmény, Kossuth Lajos
utca 3.
4242 Hajdúhadház, Kossuth utca 2.
4244 Újfehértó, Fő tér 15.
4254 Nyíradony, Árpád tér 6.
4300 Nyírbátor, Zrínyi utca 1.
4320 Nagykálló, Árpád utca 10.
4400 Nyíregyháza, Rákóczi utca 1.
4440 Tiszavasvári, Kossuth Lajos utca 6.
4501 Kemecse, Móricz Zsigmond utca
18.
4561 Baktalórántháza, Köztársaság tér
4.
4600 Kisvárda, Szent László utca 30.
4625 Záhony, Ady Endre út 27-29.
4700 Mátészalka, Szalkay László utca
34.
4765 Csenger, Ady Endre utca 1.
4800 Vásárosnamény, Szabadság tér 33.
4900 Fehérgyarmat, Móricz Zsigmond
utca 4.
5000 Szolnok, Nagy Imre krt. 2/a.
5000 Szolnok, Szapáry utca 31.
5100 Jászberény, Lehel vezér tér 28.
5123 Jászárokszállás, Rákóczi Ferenc
utca 4-6.
5130 Jászapáti, Kossuth Lajos út 2-8.
5200 Törökszentmiklós, Kossuth Lajos
utca 141.
5300 Karcag, Kossuth Lajos tér 15.
5310 Kisújszállás, Szabadság tér 6.
5340 Kunhegyes, Szabadság tér 4.
5350 Tiszafüred, Piac tér 3.
5400 Mezőtúr, Szabadság tér 29.
5420 Túrkeve, Széchenyi utca 32-34.
5430 Tiszaföldvár, Kossuth Lajos út 191.
5440 Kunszentmárton, Kossuth Lajos út
2.
5500 Gyomaendrőd, Szabadság tér 7
5510 Dévaványa, Árpád utca 32.
5520 Szeghalom, Tildy Zoltán utca 4-8.
5530 Vésztő, Kossuth Lajos utca 72.
5540 Szarvas, Kossuth Lajos tér 1.
5600 Békéscsaba, Andrássy út 37-43.
5600 Békéscsaba, Szent István tér 3.
5630 Békés, Széchenyi tér 2.
5650 Mezőberény, Kossuth Lajos tér 12.
5700 Gyula, Bodoky utca 9.
5720 Sarkad, Árpád fejedelem tér 5.
5742 Elek, Gyulai út 5.
5800 Mezőkovácsháza, Árpád utca 177.
5820 Mezőhegyes, Zala György ltp. 7.
5900 Orosháza, Kossuth Lajos utca 20.
6000 Kecskemét, Dunaföldvári út 2.
6000 Kecskemét, Korona utca 2.
6000 Kecskemét, Szabadság tér 5.
6050 Lajosmizse, Dózsa György út
102/a.
6060 Tiszakécske, Béke tér 6.
6070 Izsák, Szabadság tér 1.
6080 Szabadszállás, Dózsa György út 1.
6090 Kunszentmiklós, Kálvin tér 11.
6100 Kiskunfélegyháza, Petőfi tér 1
6120 Kiskunmajsa, Csendes köz 1.
6200 Kiskőrös, Petőfi Sándor tér 13.
6230 Soltvadkert, Szentháromság utca 2.
6237 Kecel, Császártöltési utca 1.
6300 Kalocsa, Szent István király út 43-
45.
6320 Solt, Kossuth Lajos utca 48-50.
6400 Kiskunhalas, Sétáló utca 7
6430 Bácsalmás, Szent János utca 32.
6440 Jánoshalma, Rákóczi Ferenc utca
10.
6500 Baja, Deák Ferenc utca 1.
6600 Szentes, Kossuth Lajos utca 26.
6640 Csongrád, Szentháromság tér 2-6.
6720 Szeged, Aradi vértanúk tere 3.
6720 Szeged, Takaréktár utca 7.
6724 Szeged, Londoni krt. 3.
6724 Szeged, Rókusi krt. 42-64.
6760 Kistelek, Kossuth Lajos utca 6-8
6782 Mórahalom, Szegedi út 3.
6800 Hódmezővásárhely, Andrássy út 1.
6900 Makó, Széchenyi tér 14-16.
7000 Sárbogárd, Ady Endre út 172.
7020 Dunaföldvár, Béke tér 11.
7030 Paks, Dózsa György út 33.
7090 Tamási, Szabadság utca 33
7100 Szekszárd, Szent István tér 5-7.
7130 Tolna, Kossuth Lajos utca 31.
7140 Bátaszék, Budai utca 13.
7150 Bonyhád, Szabadság tér 10.
7200 Dombóvár, Dombó Pál utca 3.
7300 Komló, Kossuth Lajos utca 95/1.
7400 Kaposvár, Széchenyi tér 2.
7500 Nagyatád, Korányi Sándor utca 6.
7561 Nagybajom, Fő utca 107
7570 Barcs, Séta tér 5.
7621 Pécs, Rákóczi út 1.
7621 Pécs, Rákóczi út 44.
7622 Pécs, Bajcsy-Zsilinszky utca 11/1.
7632 Pécs, Diána tér 14.
7633 Pécs, Ybl Miklós utca 7/3.
MANAGEMENT REPORT (STAND-ALONE)
INTEGRATED ANNUAL REPORT 2024
14
7700 Mohács, Széchenyi tér 1
7754 Bóly, Hősök tere 8/b.
7773 Villány, Baross Gábor utca 36.
7800 Siklós, Felszabadulás utca 60-62.
7900 Szigetvár, Vár utca 4.
7940 Szentlőrinc, Munkácsy Mihály utca
16/A
7960 Sellye, Köztársaság tér 4.
8000 Székesfehérvár, Holland fasor 2.
8000 Székesfehérvár, Ősz utca 13.
8060 Mór, Deák Ferenc utca 2.
8100 Várpalota, Újlaky út 2.
8130 Enying, Kossuth Lajos utca 43.
8154 Polgárdi, Deák Ferenc utca 16.
8200 Veszprém, Brusznyai Árpád utca 1.
8220 Balatonalmádi, Baross Gábor út 2.
8230 Balatonfüred, Petőfi Sándor utca 8.
8300 Tapolca, Fő tér 2.
8330 Sümeg, Kisfaludy Sándor tér 1.
8360 Keszthely, Kossuth Lajos utca 38.
8380 Hévíz, Erzsébet királyné utca 11.
8400 Ajka, Szabadság tér 18.
8420 Zirc, Rákóczi tér 15.
8500 Pápa, Fő tér 22.
8600 Siófok, Fő tér 10/a
8630 Balatonboglár, Dózsa György utca
1.
8640 Fonyód, Ady Endre utca 25.
8660 Tab, Kossuth Lajos utca 96.
8700 Marcali, Rákóczi utca 6-10.
8790 Zalaszentgrót, Batthyány Lajos
utca 11.
8800 Nagykanizsa, Deák tér 15.
8800 Nagykanizsa, Erzsébet tér 23.
8840 Csurgó, Petőfi tér 20/A
8900 Zalaegerszeg, Kisfaludy Sándor
utca 15-17.
8960 Lenti, Dózsa György út 1.
9022 Győr, Teleki László utca 51.
9024 Győr, Bartók Béla út 53/b.
9024 Győr, Kormos István utca 6.
9026 Győr, Egyetem tér 1.
9027 Győr, Budai út 1.
9200 Mosonmagyaróvár, Fő utca 24
9300 Csorna, Soproni út 58.
9330 Kapuvár, Szent István király utca 4-
6.
9400 Sopron, Teleki Pál út 22./A
9400 Sopron, Várkerület út 96.
9431 Fertőd, Fő utca 7.
9500 Celldömölk, Kossuth Lajos utca 18.
9600 Sárvár, Batthyány utca 2.
9700 Szombathely, Fő tér 3-5.
9700 Szombathely, Király utca 10.
9700 Szombathely, Rohonci út 52.
9730 Kőszeg, Kossuth Lajos utca 8.
9737 Bük, Kossuth utca 1-3.
9800 Vasvár, Alkotmány utca 2.
9900 Körmend, Vida József utca 12.
9970 Szentgotthárd, Mártírok út 2
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15
STATEMENT ON CORPORATE GOVERNANCE PRACTICE
Corporate governance practice
OTP Bank Plc., being registered in Hungary, has a corporate governance policy that complies with the
provisions on companies of the act applicable (Civil Code). As the company conducts banking operations, it
also adheres to the statutory regulations pertaining to credit institutions.
Beyond fulfilling the statutory requirements, as a listed company on the Budapest Stock Exchange (BSE), the
company also makes an annual declaration on its compliance with the BSE’s Corporate Governance
Recommendations. After being approved by the General Meeting, this declaration is published on the websites
of both the Stock Exchange (www.bet.hu) and the Bank (www.otpbank.hu).
System of internal controls
OTP Bank Plc., as a provider of financial and investment services, operates a closely regulated and state-
supervised system of internal controls.
OTP Bank Plc. has detailed risk management regulations applicable to all types of risks (credit, country,
counterparty, market, liquidity, operational, compliance), which are in compliance with the regulations on
prudent banking operations. The Bank Group pays special attention to the management of ESG risks and the
implementation of climate protection aspects in business practice. Its risk management system extends to
cover the identification of risks, the assessment and analysis of their impact, elaboration of the required action
plans and the monitoring of their effectiveness and results. The business continuity framework is intended to
provide for the continuity of services. Developed on the basis of international methodologies, the lifecycle
model includes process evaluation, action plan development for critical processes, the regular review and
testing of these, as well as related DRP activities.
OTP Bank Plc.'s internal audit system is realised on several levels of control built on each other. The system
of internal checks and balances includes process-integrated control, management control, independent
internal audit and executive information system. The independent internal audit organisation as a key element
of internal lines of defence promotes the statutory and efficient management of assets and liabilities, the
defence of property, the safe course of business, the efficient operation of internal control systems, the
minimisation of risks, moreover it reveals and reports deviations from statutory regulations and internal rules,
makes proposal to abolish deficiencies and follows up the execution of actions. The independent internal audit
organisation annually and quarterly prepares group-level reports on control actions and audit results for the
executive boards. Once a year, the internal audit organisation with the prior opinion of the Audit Committee
draws up, for the Supervisory Board, the Board of Directors and the Risk Assumption and Risk Management
Committee, objective and independent reports in respect of the operation of risk management, internal control
mechanisms and corporate governance functions. Furthermore, in line with the provisions of the Credit
Institutions Act, reports, once a year, to the Supervisory Board and the Board of Directors on the regularity of
internal audit tasks, professional requirements and the conduct of audits, and on the review of compliance with
IT and other technical conditions needed for the audits.
In line with the regulations of the European Union, the applicable Hungarian laws and supervisory
recommendations, OTP Bank Plc. operates an independent organisational unit with the task of identifying and
managing compliance risks. The Compliance Directorate prepares a report quarterly to the Board of Directors,
and annually to the Supervisory Board, about the Bank’s and the Bank Group’s compliance activities and
position.
IT Controls
Applications are developed by either in-house group resources or by third parties. OTP Bank applies
administrative, logical and physical control measures commensurate with the risk in order to protect the IT
systems storing and processing data, as follows:
•
access to data/systems is only possible on the basis of a predefined authorisation management process
that applies the principle of least privilege, ensures segregation of responsibilities, that has regular access
right reviews and ensures that dismissed employees’ access is revoked in a timely manner;
•
user authentication, authorisation and password management processes are controlled by policies and
audited;
•
the systems have test and development environments with appropriate separation from the production
environments that have a secure change management procedure, which ensures that program
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developments or modifications can only be deployed to the operational environment after proper,
controlled testing and approval;
•
systems are protected by appropriate network perimeter protection, various security devices and network
segmentation, furthermore all network communications are protected with state-of-the-art encryption;
•
the IT systems that store and process data are regularly backed up and backup media is stored in
controlled premises with adequate protection for long-term retention, and the organisation carries out
regular backup restore tests;
•
adequate redundancy is applied for IT systems that store and process data to ensure business continuity
and disaster resiliency;
•
has developed DRPs and BCPs for critical systems and critical business processes, which are regularly
tested and reviewed;
•
the Bank collects and retains the complete log of all major IT operations and IT security relevant data
processing activities and the confidentiality, availability, integrity, authenticity and non-repudiation of these
audit logs are ensured;
•
there is a continuous, up-to-date protection against malicious codes;
•
it ensures the regular implementation of vendor patches and updates for the environments used;
•
it uses a data leakage protection (DLP) solution to reduce the risk of inadvertent data loss;
•
it ensures the continuous monitoring of the operation events of the physical and virtual environment
system elements with automated event detection and management tools;
•
the above measures are documented at an appropriate level, which ensures the traceability of the
implementation of data security requirements in a transparent manner;
•
it ensures permanent secure deletion of the data stored on the media, the destruction of the media and
the documentation of the destruction of the media during secure operational media disposal processes;
•
it enforces data protection requirements already at the design stage of the implementation of the
IT systems storing and processing personal data and of the systems operational processes related to
them;
•
acquire and maintain ability to adequately handle application related security events (including cyber
threats), entailing prevention, detection, identification, isolation, analysis, recovery and reporting;
•
remote work is regulated in a controlled and documented way, remote device and user access is protected
with multi-factor authentication;
•
ensures IT security compliance by its managed regulative framework;
•
revision and update of IT security regulations bi-yearly or in a frequency complying legislative
requirements or upon major changes;
•
ensures vulnerability assessments and penetration tests are carried out as planned;
•
defines pools for categorization of installed software into preferred, allowed and prohibited and ensures
compliance to that policy.
•
it ensures that its employees have adequate knowledge of data protection requirements and provides
regular data protection and information security awareness training for them.
General Meeting
The General Meeting is the supreme governing body of OTP Bank Plc. The regulations pertaining to its
operation are set forth in the Company’s Articles of Association, and comply fully with both general and special
statutory requirements. Information on the General Meeting is available in the Corporate Governance Report.
Regulations and information to be presented in the Business Report concerning securities
conferring voting rights issued by the Company and senior officials, according to the effective
Articles of Association, and ownership structure
The Company’s registered capital is HUF 28,000,001,000, that is twenty-eight thousand million one
thousand Hungarian forint, divided into 280,000,010 that is Two hundred and eighty million and ten
dematerialised ordinary shares with a nominal value of HUF 100 each, and a total nominal value of
HUF 28,000,001,000, that is twenty-eight billion one thousand Hungarian forint.
The ordinary shares of the Company specified all have the same nominal value and bestow the same rights
in respect of the Company.
There are no restrictions in place concerning the transfer of issued securities constituting the registered
capital of the Company.
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No securities with special control rights have been issued by the Company.
Special Employee Partial Ownership Plan Organization No. I. of OTP Employees and Special Employee
Partial Ownership Plan Organization No. II. of OTP Employees (hereinafter referred to as: OTP SEPOPs)
were established based on the decision of the Company’s certain employees and executives considered as
employees pursuant to the Act XLIV of 1992 on Employee Partial Ownership Plan. Management rights of
OTP SEPOPs are exercised by a trust named Alapítvány az OTP Munkavállalók Különleges Résztulajdonosi
Programjáért, founded by the same employees setting up OTP SEPOPs. The Company did not participate
either in foundation or in management of OTP SEPOPs.
The Company in line with the ESOP Act initiated an employee share ownership plan having a remuneration
purpose and founded OTP Bank ESOP Organization for its execution (hereinafter referred to as ESOP
Organization). Pursuant to the laws, the management rights over the ESOP Organization are exercised by
a law firm, the so called trustee. In the case of the ESOP Organization Szűcs Law Firm is entitled to exercise
the authorities of the trustee. The Company participated in the foundation of the ESOP Organization,
however, after its foundation it cannot participate in its management, and according to the laws, it is not
entitled to either give orders or to recall the trustee.
Rules on the restrictions of the voting rights:
The Company’s ordinary shares confer one vote per share.
An individual shareholder or group of shareholders may not exercise voting rights in respect of in an extent
exceeding 25%, or – if the voting rights of another shareholder or group of shareholders exceed
10% – exceeding 33% of the total voting rights represented by the shares conferring voting rights at the
Company’s General Meeting.
The shareholder is obliged to notify the Company’s Board of Directors without delay if the shareholder
directly or indirectly, or together with other shareholders in the same group of shareholders, holds more than
2% of the voting rights represented by the shares conferring voting rights at the Company’s General Meeting.
Concurrently with this, the shareholder is obliged to designate the shareholders through which the indirect
voting right exists, or the members of the group of shareholders. In the event of a failure to provide such
notification, or if there are substantive grounds for assuming that the shareholder has made a misleading
declaration regarding the composition of the shareholder group, then the shareholder’s voting right shall be
suspended and may not be exercised until the shareholder has met the above obligations. The notification
obligation stipulated in this paragraph and the related legal consequences are also incumbent upon
individuals who are classified or may be classified as the Company’s shareholders under Article 61 of the
Capital Markets Act. The Company must also be provided with proof of the conditions for exemption from
the notification obligation in accordance with Section 61 (7)-(8) and (11) and Section 61 (10), (11a) and (12),
of the Capital Markets Act.
Shareholder group: the shareholder and another shareholder, in which the former has either a direct or
indirect shareholding or has an influence without a shareholding (collectively: a direct and/or indirect
influence); furthermore: the shareholder and another shareholder who is exercising or is willing to exercise
its voting rights together with the former shareholder, regardless of what type of agreement between the
participants underlies such concerted exercising of rights.
For determining the existence and extent of the indirect holding, the rules of the Credit Institutions Act
relating to the calculation of indirect ownership shall be applied.
If the voting rights that may be exercised by a shareholder group exceed the threshold stipulated above, the
voting rights shall be reduced in such a way that the voting rights relating to the shares most recently
acquired by the group of shareholders shall not be exercisable.
If there are substantive grounds to presume that the exercising of voting rights by any shareholder or
shareholders might result in a breach of the rules of the Capital Markets Act relating to the acquisition of a
controlling interest, the Board of Directors’ authorised representative responsible for the registration of
shareholders at the venue of the General Meeting, or the Chairman of the General Meeting, may exclude
the affected shareholders from attending the General Meeting or exercising voting rights.
The General Meeting has exclusive authority with respect to the following matters:
•
changes to the rights associated with specific series of shares, or the transformation of certain
categories or classes of shares; (qualified majority)
•
the decision regarding the delisting of the shares (qualified majority). When making the decisions,
shares embodying multiple voting rights shall represent one share.
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The Company is not aware of any kind of agreements among the owners that could give rise to the restriction
of the transfer of issued securities and/or the voting rights.
Rules on the appointment and removal of executive officers, and rules on amendment of the Articles of
Association:
The Board of Directors has at least 5, and up to 11 members.
When making the decisions, shares embodying multiple voting rights shall represent one share. The
members of the Board of Directors are elected by the General Meeting based on its decision uniformly either
for an indefinite period or for five years; in the latter case the mandate ends with the General Meeting
concluding the fifth financial year following the election. The mandate of a member elected during this period
expires together with the mandate of the Board of Directors.
The Board of Directors elects a Chairman and may elect one or more Deputy Chairmen, from among its own
members, whose period of office shall be equal to the mandate of the Board of Directors. The Chairman of
the Board of Directors is also the Chief Executive Officer (Chairman & CEO) of the Company, unless the
Board of Directors decides within its competence that the position of Chairman of the Board of Directors and
the Chief Executive Officer of the Company are held by separate persons.
The membership of the Board of Directors ceases to exist by
a. expiry of the mandate,
b. resignation,
c. recall,
d. death,
e. the occurrence of grounds for disqualification as regulated by law.
f.
termination of the employment of internal (executive) Board members.
The General Meeting has exclusive authority with respect to the following matters:
• the recall of members of the Board of Directors, the Supervisory Board and Audit Committee, and of
the auditor; (qualified majority)
More than one third of the members of the Board of Directors and the non-executive members of the
Supervisory Board may be recalled within a 12-month period only if any shareholder holds more than
33% of the shares issued by the Company, which have been obtained by the shareholder by way of
a public purchase offer.
• except in the cases referred by these Articles of Association to the authority of the Board of Directors,
the establishment and amendment of the Articles of Association; (qualified majority); the General
Meeting decides on proposals concerning the amendment of the Articles of Association – based on a
resolution passed by shareholders with a simple majority – either individually or en masse.
The Board of Directors is obliged to
• prepare the Company’s financial statements in accordance with the Accounting Act, and make a
proposal for the use of the profit after taxation;
• prepare a report once a year for the General Meeting, and once every three months for the
Supervisory Board, concerning management, the status of the Company’s assets and business policy;
• provide for the proper keeping of the Company's business books;
• perform the tasks referred to its authority under the Credit Institutions Act, in particular:
-
ensuring the integrity of the accounting and financial reporting system;
-
elaborating the appropriate strategy and determining risk tolerance levels for each business unit
concerned;
-
setting risk assumption limits;
-
providing the necessary resources for the management or risk, the valuation of assets, the use of
external credit ratings and the application of internal models.
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The following, in particular, come under the exclusive authority of the Board of Directors:
• election of the Chairman & Chief Executive Officer of the Company, and exercising employer’s right
in respect thereof;
• election of one or more Deputy Chairmen of the Board of Directors;
• determination of the annual plan;
• the analysis and assessment of the implementation of business-policy guidelines, on the basis of the
Company’s quarterly balance sheet;
• decisions on transactions referred to the authority of the Board of Directors by the Company's
organisational and operational regulations;
• decision on launching, suspending, or terminating the performance of certain banking activities within
the scope of the licensed activities of the Company;
• designation of the employees entitled to sign on behalf of the Company;
• decision on the increasing of registered capital at the terms set out in the relevant resolution of the
General Meeting;
• decision to acquire treasury shares at the terms set out in the relevant resolution of the General
Meeting;
• decision on approving internal loans in accordance with the Credit Institutions Act;
• decision on the approval of regulations that fundamentally determine banking operations, or are
referred to its authority by the Credit Institutions Act. The following shall qualify as such regulations:
-
the collateral evaluation regulations,
-
the risk-assumption regulations,
-
the customer rating regulations,
-
the counterparty rating regulations,
-
the investment regulations,
-
the regulations on asset classification, impairment and provisioning,
-
the organisational and operational regulations, which contain the regulations on the procedure for
assessing requests related to large loans,
-
the regulations on the transfer of signatory rights;
• the decision on approving the Rules of Procedure of the Board of Directors;
• decision on steps to hinder a public takeover procedure;
• decision on the acceptance of a public purchase offer received in respect of treasury shares;
• decision on the commencement of trading in the shares in a regulated market (flotation);
• decision on the cessation of trading in the shares in a given regulated market, provided that the shares
are traded in another regulated market (hereinafter: transfer).
The Board of Directors is exclusively authorised to:
• decide, in the cases specified in the Civil Code, on acceptance of the Company’s interim balance
sheet, subject to the prior approval of the Supervisory Board;
• decide, instead of the General Meeting, to pay an advance on dividends, subject to the preliminary
approval of the Supervisory Board;
• make decisions regarding any change in the Company’s name, registered office, permanent
establishments and branches, and in the Company’s activities – with the exception of its core activity
– and, in relation to this, to modify the Articles of Association should it become necessary to do so on
the basis of the Civil Code or the Articles of Association;
• make decision on mergers (if, according to the provisions of the law on the transformation, merger
and demerger of legal entities, the approval of the General Meeting is not required in order for the
merger to take place).
The Board of Directors directly exercises employer's rights in respect of the Chairman & CEO. The person
affected by a decision may not participate in the decision making. Employer rights in respect of the executive
directors of the Company are exercised by the Board of Directors through the Chairman & CEO, with the
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proviso that the Board of Directors must be notified in advance of the appointment and dismissal of the
Deputy CEOs. With regard to issues related to the exercising of employer's rights in respect of employees,
the Company is represented by the Chief Executive Officer and by the senior company employees defined
in the Organisational and Operational Regulations of the Company, in accordance with the delegation of
authority approved by the Board of Directors. If the Chairman of the Board of Directors and the CEO are
different persons, the employer rights in respect of the other executive directors of the Company (CEO,
deputy CEOs) are exercised by the Board of Directors through the Chairman of Board of Directors, with the
proviso that the Board of Directors shall be notified in advance of the appointment and dismissal of the CEO
and Deputy CEOs. With regard to issues related to the exercising of employer's rights in respect of
employees, the Company is represented by the persons defined in the Organisational and Operational
Regulations of the Company, in accordance with the delegation of authority approved by the Board of
Directors.
The Board of Directors may delegate, to individual members of the Board of Directors, to executive directors
employed by the Company, and to the heads of the individual service departments, any task that does not
come under the exclusive authority of the Board of Directors in accordance with these Articles of Association
or a General Meeting resolution.
The Company may acquire treasury shares in accordance with the rules of the Civil Code. The prior
authorisation of the General Meeting is not required for the acquisition of treasury shares if the acquisition
of the shares is necessary in order to prevent a direct threat of severe damage to the Company (this
provision is not applicable in the event of a public purchase offer aimed at buying up the Company’s shares),
as well as if the Company acquires the treasury shares in the context of a judicial procedure aimed at the
settlement of a claim to which the Company is entitled, or in the course of a transformation.
The Company has not made agreements in the meaning of points (j) and (k) in paragraph 95/A of
Act No. C of 2000 on Accounting.
Ownership structure of OTP Bank Plc.
Description of owner
Total equity
1 January 2024
31 December 2024
Ownership
share
Voting
rights1
Quantity
Ownership
share
Voting
rights 1
Quantity
Domestic institution/company
31.40%
31.46%
87,914,205
31.57%
32.39%
88,395,584
Foreign institution/company
54.43%
54.54%
152,405,042
54.53%
55.94%
152,679,265
Domestic individual
12.93%
12.96%
36,217,730
10.31%
10.58%
28,878,581
Foreign individual
0.48%
0.48%
1,349,320
0.36%
0.37%
998,943
Employees, senior officers
0.48%
0.48%
1,338,715
0.51%
0.53%
1,435,703
Treasury shares2
0.20%
0.00%
572,746
2.52%
0.00%
7,049,823
Government held owner
0.05%
0.05%
139,036
0.05%
0.05%
139,036
International Development Institutions
0.01%
0.01%
28,603
0.00%
0.00%
3,251
Other3
0.01%
0.01%
34,613
0.15%
0.15%
419,824
TOTAL
100.00%
100.00%
280,000,010
100.00%
100.00%
280,000,010
1 Voting rights in the General Meeting of the Issuer for participation in decision-making.
2 Treasury shares do not include the OTP shares held by ESOP (OTP Bank Employee Stock Ownership Plan Organization). Pursuant to Act V of 2013 on
the Civil Code, OTP shares held by the ESOP are not classified as treasury shares, but the ESOP must be consolidated in accordance with IFRS 10
Consolidated Financial Statements standard. On 31 December 2024 ESOP owned 11,965,796 OTP shares.
3 Non-identified shareholders according to the shareholders’ registry.
Number of treasury shares held in the year under review (2024)
1 January
31 March
30 June
30 September
31 December
OTP Bank
572,746
1,452,570
3,443,352
4,762,756
7,049,823
Subsidiaries
0
0
0
0
0
TOTAL
572,746
1,452,570
3,443,352
4,762,756
7,049,823
Shareholders with over/around 5% stake as at 31 December 2024
Name
Nationality1
Activity2
Number of
shares
Ownership3
Voting
rights3,4
Notes5
MOL (Hungarian Oil and Gas Company Plc.)
D
C
24,000,000
8.57%
8.79%
Groupama Group
F/D
C
14,260,181
5.09%
5.22%
Groupama Gan Vie SA
F
C
14,140,000
5.05%
5.18%
Groupama Biztosító Ltd,
D
C
120,181
0.04%
0.04%
1 Domestic (D), Foreign (F).
2 Custodian (CU), Public Institution (PU), International Development Institutions (ID), Institutional (I), Company (C), Private (PR), Employee or senior officer
(E).
3 Rounded to two decimals.
4 Voting rights in the General Meeting of the Issuer for participation in decision-making.
5 Eg, professional investor, financial investor, etc.
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Senior officers, strategic employees and their shareholding of OTP shares as at 31 December 2024
Type1
Name
Position
Commencement
date of the term
Expiration/termination
of the term
Number of
shares
IG
dr. Sándor Csányi 2
Chairman and CEO
15/05/1992
2026
76,887
IG
Tamás Erdei
Deputy Chairman
27/04/2012
2026
59,685
IG
Gabriella Balogh
member
16/04/2021
2026
27,393
IG
Mihály Baumstark
member
29/04/1999
2026
58,800
IG
Péter Csányi
member, Deputy CEO
16/04/2021
2026
49,429
IG
dr. István Gresa
member
27/04/2012
2026
195,058
IG
Antal Kovács3
member
15/04/2016
2026
114,940
IG
György Nagy4
member
16/04/2021
2026
13,000
IG
dr. Márton Gellért Vági
member
16/04/2021
2026
22,600
IG
dr. József Vörös
member
15/05/1992
2026
204,914
IG
László Wolf
member, Deputy CEO
15/04/2016
2026
554,412
FB
Tibor Tolnay
Chairman
15/05/1992
2026
54
FB
dr. Gábor Horváth
Deputy Chairman
19/05/1995
2026
0
FB
Klára Bella
member
12/04/2019
2026
491
FB
dr. Tamás Gudra
member
16/04/2021
2026
0
FB
András Michnai
member
25/04/2008
2026
1,410
FB
Olivier Péqueux
member
13/04/2018
2026
0
SP
András Becsei
Deputy CEO
11,649
SP
László Bencsik
Deputy CEO
16,003
SP
György Kiss-Haypál
Deputy CEO
15,995
SP
Imre Bertalan
MC member
0
SP
dr. Bálint Csere
MC member
12,983
TOTAL No. of shares held by management
1,435,703
1 Board Member (IG), Supervisory Board Member (FB), Employee in strategic position (SP)
2 Number of OTP shares owned by Dr. Sándor Csányi, Chairman and CEO, directly or indirectly: 5,276,887
3 Number of OTP shares owned by Antal Kovács, Member of Board of Directors, directly or indirectly: 119,240
4 Number of OTP shares owned by György Nagy, Member of Board of Directors, directly or indirectly: 980,000
Committees1
Members of the Board of Directors
Dr. Sándor Csányi – Chairman
Mr. Tamás Erdei – Deputy Chairman
Ms. Gabriella Balogh
Mr. Mihály Baumstark
Mr. Péter Csányi
Dr. István Gresa
Mr. Antal Kovács
Mr. György Nagy
Dr. Márton Gellért Vági
Dr. József Vörös
Mr. László Wolf
Members of the Supervisory Board
Mr. Tibor Tolnay – Chairman
Dr. József Gábor Horváth – Deputy Chairman
Ms. Klára Bella
Dr. Tamás Gudra
Mr. András Michnai
Mr. Olivier Péqueux
Members of the Audit Committee
Dr. József Gábor Horváth – Chairman
Mr. Tibor Tolnay – Deputy Chairman
Dr. Tamás Gudra
Mr. Olivier Péqueux
The résumés of the committee and board members are available in the Corporate Governance Report/Annual
Report.
1 Personal changes can be found in the „Personal and organizational changes” chapter.
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Auditor
On 26 April 2024, concerning the audit of OTP Bank Plc.’s separate and consolidated annual financial
statements in accordance with International Financial Reporting Standards for the year 2024, the Annual
General Meeting elected Ernst & Young Ltd. (001165, H-1132 Budapest, Váci út 20.) as the Company’s auditor
from 1 May 2024 until 30 April 2025.
Operation of the executive boards
OTP Bank Plc. has a dual governance structure, in which the Board of Directors is the Company’s executive
management body in its managerial function, while the Supervisory Board is the management body in its
supervisory function of the Company. It controls the supervision of the lawfulness of the Company’s operation,
its business practices and management, performs oversight tasks and accepts the provisions of the Bank
Group's Remuneration Policy. The effective operation of Supervisory Board is supported by the Audit
Committee, as a committee, which also monitors the internal audit, the risk management, the reporting systems
and the activities of the auditor.
In order to assist the performance of the governance functions the Board of Directors founded and operates,
as permanent or other committees, such as the Management Committee, the Executive Steering Committee,
the Remuneration Committee, the Nomination Committee and the Risk Assumption and Risk Management
Committee.
To ensure effective operation OTP Bank Plc. also has a number of further permanent committees.
OTP Bank Plc. gives an account of the activities of the executive boards and the committees every year in its
Corporate Governance Report.
The Board of Directors held 6, the Supervisory Board held 7 meetings, while the Audit Committee held 2
meetings in 2024. In addition, resolutions were passed by the Board of Directors on 149, by the Supervisory
Board on 73 and by the Audit Committee on 24 occasions by written vote.
Policy of diversity
OTP Bank Plc. determines and regulates the criteria for the selection of senior executives in line with European
Union as well as domestic legal requirements and directives fundamentally determining the operation of credit
institutions.
When designating members of the management bodies (Board of Directors, Supervisory Board) as well as
appointing members of the Board of Directors and administrative members (Management), OTP Bank Plc.
considers the existence of professional preparation, the high-level human and leadership competence, the
versatile educational background, the widespread business experience and business reputation of the utmost
importance, at the same time, it is also highly committed to taking efficient measures in order to ensure diversity
with regard to corporate operation, including the gradual improvement in women’s participation rate.
OTP Bank Plc.’s Nomination Committee continuously keeps tracking the European Union and domestic
legislation relating to women’s quota on its agenda, in that when unambiguously worded expectations are
announced, it promptly takes the necessary measures. In accordance with OTP Bank Plc.’s currently approved
strategy, the goal is to have at least one female member in both the Bord of Directors and the Supervisory
Board.
It is important to note, however, that, as a public limited company, the selection of the members of the
management bodies falls within the exclusive competence of the General Meeting upon which – beyond its
capacity to designate enforcing the above aspects to maximum effect – OTP Bank Plc. has no substantive
influence.
According to OTP Bank Plc.’s Articles of Association, a Board of Directors comprising 5-11 members and a
Supervisory Board comprising 5-9 members are set up at OTP Bank Plc. Currently the Board of Directors
operates with 11 members and has one female member, the Supervisory Board comprises 6 members and
has one female member. The management of OTP Bank Plc. currently comprises 6 members and has no
female member.
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NON-FINANCIAL STATEMENT – OTP BANK PLC. (STAND-ALONE)
ENVIRONMENTAL POLICY, ENVIRONMENTAL PROJECTS
The operational functioning of OTP Group and OTP Bank requires the use of natural resources and energy,
however, the resulting environmental impact is significantly lesser than the indirect impacts associated with
the provision of financial services. Of the operational impacts, OTP Group considers greenhouse gas (GHG)
emissions to be the most significant, but we are also working on reducing our impacts beyond this. Emissions
contribute to climate change and damage natural resources. Reducing emissions helps fight climate change.
However, the practices of the Bank also have an awareness raising impact in the field of environmental
protection and the enforcement of environmental awareness in its operations is a key element of the regional
leading role undertaken by OTP Group in relation to green transition.
In the context of the provision of financial services, environmental risks are managed and business
opportunities related to environmental protection are exploited within the ESG strategy and are not covered
in this chapter.
In 2024, OTP Group again participated in the CDP's environmental disclosure scheme, maintaining its "B"
rating achieved in the previous year.
OTP Bank mitigates environmental impacts through the following activities:
•
Efficient use of resources
•
Carbon-neutral operation
•
Energy efficiency investment projects
•
Purchase of green electricity, use of renewable energy sources
•
Reducing paper use through digitalisation; using recycled paper
•
Rationalising business travel
•
Improving waste management
•
Transparent reporting on the environmental impacts of operation
•
Awareness-raising activities for employees and customers
OTP Bank members operate in maximum compliance with environmental legislation and no related fines
were imposed in 2024 either. Environmental protection at the Bank is governed by an Environmental Policy.
OTP Bank prepares annual internal reports on the environmental impact of its operation, for approval by the
manager in charge of this function. To enhance knowledge relating to the performance of work, along with
general knowledge, every OTP Bank employee is provided with environmental training once every two
years.
Energy consumption and carbon dioxide emissions
In 2021 OTP Bank set a goal in its ESG strategy to achieve carbon-neutral operations by 2030. This absolute
goal covers Scope 1-2 emissions, with a target of 0 tCO2e, zero net emissions, without specifying a base
year. Zero net emissions involve reducing greenhouse gas emissions as much as possible and neutralizing
unavoidable emissions through carbon removal. The goal is not based on scientific evidence, and
OTP Bank's relevant departments participated in its development. The goal of net carbon neutrality was also
achieved in 2024. OTP Bank's market-based Scope 1-2 emissions in 2024 were 6,688 tCO2e. In terms of
electricity, OTP Bank mainly uses green energy, with about three-quarters of emissions coming from natural
gas use and vehicle fuel consumption. The preparation of the Bank's emission intensity reduction plan
related to properties and fleet has begun, with an ESG Committee decision to complete it in 2025.
Primarily, the larger banks within the Bank Group implement and plan measures to reduce carbon dioxide
emissions. Among the planned measures, the purchase of green electricity has the greatest impact, and
OTP Bank mainly covered its consumption with green electricity in 2024. This practice is planned to continue
in 2025. Additionally, planned measures include lighting replacement, boiler replacements, optimization of
heating and cooling, insulation, and solar panel installation.
To offset its 2023 Scope 1 and Scope 2 emissions OTP Bank purchased carbon credits in 2024, amounting
to 7,000 tCO2e. This amount covers OTP Bank's total Scope 1-2 emissions. The carbon credits retired during
the reporting period were verified by the Verified Carbon Standard, by Verra. The Bank considers it important
that the project supported through offsetting is implemented in the country of the Bank Group's operations.
Therefore, the only project supported by the purchase is the Sant Nikola Wind Farm near Kavarna, Bulgaria,
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the largest wind farm in the country. The project is a reduction project and does not qualify as an appropriate
adjustment under Article 6 of the Paris Agreement 2.
OTP Bank’s goal of carbon-neutral operations includes the use of carbon credits. The use of carbon credits
does not hinder the achievement of the zero-emission goal for Scope 1-2 by 2030, as OTP Bank has begun
developing emission reduction plans based on energy efficiency and renewable energy use. Additionally,
the Bank plans to replace the carbon credits purchased to offset its operational carbon footprint with
so-called "habitat restoration certificates" in line with its previous practice.
In collaboration with Pilisi Parkerdő Zrt. as a partner, we aim to develop a 400-hectare nature conservation
area, the so-called Budakeszi Game Reserve, with a complex urban forest approach. This development
prioritizes the preservation and enhancement of the forest's natural and ecological values over economic
aspects, aiming for eco-tourism development in harmony with the forest's natural values. The project's goals
are multiple: providing a platform for professional collaborations and scientific work in biodiversity, climate
adaptation, carbon sequestration, and ecosystem services, promoting sustainability awareness among our
employees by integrating the use of the forest area into a non-financial recognition system, and shaping the
Bank's image.
OTP Bank’s Scope 1 and Scope 2 CO2e emissions (t)
20201
2021
2022
2023
2024
Direct (Scope 1)
6,078
6,548
6,670
6,005
5.565
Indirect (Scope 2)
Indirect location-based
9,883
9,904
11,496
11,648
8.170
Indirect market-based
8,350
8,369
1,005
1,110
1.124
Total (Scope 1 + 2) location-based
15,961
16,452
18,165
17,653
13.735
Total (Scope 1 + 2) market-based
14,428
14,917
7,675
7,115
6.689
Total (Scope 1 + 2) with carbon offset
14,428
14,917
675
- 485
-312
1 Also includes the consumption of the former Monicomp and eBIZ.
The figures shown are calculated from energy consumption, in all cases based on the applicable statutory regulations and the factors stipulated by
authorities and industry organisations (National Inventory Reports (NIR), IPCC, DEFRA, EU Regulation, AIB, IFI, and data from suppliers for electricity
and district heating). For Scope 1 emissions, country-specific factors are applied subject to availability from 2022. We calculate electricity-related
emissions using country-specific factors. For district heating use, from 2020 onwards we use the Hungarian, Slovenian and Croatian factors, and for all
other countries, we uniformly use the data published by DEFRA, while in previous years we used the Hungarian emission factors , except for Ukraine,
Russia and Serbia, in the absence of other reliable data.
Scope 1 emissions and, in 2022 and 2023, even district heating cover all GHG emissions. For Scope 2 emissions, the previous y ears of district heating
in Hungary and electricity factors only cover CO2. For the emission factors used, we do not have information on the GWP values considered in each and
every case.
Awareness-raising
The members of the Banking Group have launched numerous programmes, awareness-raising campaigns
and involved employees to promote environmental awareness and the protection of natural values. To enhance
knowledge relating to the performance of work, along with general knowledge, every OTP Bank employee is
provided with environmental training once every two years.
During the Green Challenge idea contest announced in 2023, a total of 136 forward-looking and creative ideas
and suggestions were received. Due to the great interest, in 2024 we created a dedicated virtual suggestion
box for this topic, where colleagues can share their proposals to make the bank and its processes greener at
any time.
We expect ideas from colleagues that contribute to the bank's carbon footprint reduction efforts, are
sustainable in the long term, and can be integrated into daily operations. The submitted proposals are
evaluated by a committee that meets monthly after an initial expert assessment, and then prepared for
implementation. The most frequently submitted request last year, the installation of a MOHU REpoint, will be
implemented in the bank's office building in 2025.
2 The project is 100% a reduction project, implemented entirely within the European Union, and certified based on 100% recogniz ed quality standards
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Go Greener – Commute More Sustainably Challenge
OTP Bank also joined the "Go Greener – Commute More Sustainably" environmental community-building
campaign announced by Mastercard, which aimed to set an example among colleagues to choose more
sustainable modes of transportation instead of car use. More than 300 of our colleagues actively participated
in the challenge, diligently collecting "green" kilometers, and ultimately covered 76,199 km with sustainable
transportation during the one-month campaign.
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OTP BANK’S SUSTAINABILITY REPORT 2024
1. General information
1.1. Basis for preparation of the report
ESRS3 2 BP-1: General basis for preparing sustainability statements
OTP Bank Plc. has also prepared its CSRD Sustainability Statement (in accordance with the European
Sustainability Reporting Standards, ESRS) at the individual level, covering the individual operations of the
parent bank (hereinafter “the Bank”, “OTP Bank”), with the same scope as the individual-level financial
statement.
The consolidated Management Report covering the entire Banking Group (hereinafter referred to as 'the
Group', 'OTP Group') is available in the OTP Group's sustainability report (OTP Group Sustainability report)
Company names used in the report:
•
OTP Bank Plc.: OTP Bank, the Bank
•
a consolidated group of companies: OTP Group, Banking Group, Group
OTP Bank has not made use of the possibility to omit specific information corresponding to intellectual
property, know-how or innovation results, nor has it made use of the exemption from disclosure of information
on pending developments or matters under negotiation.
Section 95/I (1) of the Hungarian Accounting Law requires that the Company must prepare its business report
including the sustainability statement in the electronic reporting format (XHTML) set out in Commission
Delegated Regulation (EU) 2019/815(ESEF Regulation), and the sustainability disclosures defined by the
ESEF taxonomy, including those required according to article 8 of Regulation (EU) 2020/852, must be tagged
in the sustainability statement using the XBRL markup language. Given that the ESEF taxonomy for
sustainability reporting has not been adopted yet, the Company, was unable to carry out the XBRL tagging.
Managing the value chain
OTP Bank's materiality analysis at group level took into account the material impacts, risks and opportunities
relating to its upstream and downstream value chain. As the parent company of the banking group, OTP Bank
Plc. played a key role in the materiality assessment, so the relevance of the value chain assessed for the
Group should be interpreted at an individual level as well (for more details on the coverage of the value chain,
please refer to subsection 1.1. Basis for preparation of the report in the OTP Group Sustainability Report).
ESRS 2 BP-2: Disclosures relating to specific circumstances
The time horizons, value chain estimation and actionment uncertainty information defined by OTP Bank at the
individual level are consistent with the methodology used by the Group (see subsection 1.1. Basis for
preparation of the report in the OTP Group Sustainability Report).
This is the first time that OTP Bank discloses sustainability information at an individual level as well, as required
by ESRS, so no change from the previous period can be identified and therefore no revised comparative figure
is available (see subsection 1.1. Basis for preparation of the report in the OTP Group Sustainability Report).
Forward-looking information always carries a certain degree of uncertainty, which is not separately
disclosed.
For the previous period, a material error is considered to be one which, on the basis of an individual
assessment of the error and under reasonable assumption, could affect the user's decisions made on the basis
of the Sustainability Statement.
No other reporting standard indicators are presented in the sustainability report prepared at the individual level.
Disclosures that are incorporated by reference are displayed in the ESRS content index table (see section 5.
ESRS Index).
The Bank has made use of the phasing-in option in its individual-level sustainability report, and the ESRS
content index table (see section 5. ESRS Index) shows the sustainability subtopics and items for which it has
applied this in the first reporting period. For more detail see subsection ESRS 2 BP-2 Disclosures relating to
specific circumstances in the OTP Group sustainability report.
3 European Sustainability Reporting Standards
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1.2. Governance
ESRS 2 GOV-1: Role of governing bodies
Composition and diversity
The management, executive and supervisory bodies of OTP Bank Plc. are the Supervisory Board, the Board
of Directors and all their committees, including the Audit Committee and the special and permanent committees
listed in the Responsible Corporate Governance Report, which are the same as the management bodies of
the OTP Group. Detailed information on the composition and experience of the governing and supervisory
bodies can be found in subsection 1.2. Governance – Role of Governing Bodies in the OTP Group
Sustainability Report, as well as in the individual financial report.
The composition and the diversity of the Bank's management, executive and supervisory bodies are presented
in the subsection and table 1.2. Governance – Composition and diversity in the OTP Group Sustainability
Report.
Sustainability roles
In 2021, the Board of Directors decided to establish the bank ESG organisation, whose tasks, responsibilities
and reporting obligations cover the whole Group, thus also covering the operations of OTP Bank. The ESG
Committee and the ESG Sub-Committee have been included as permanent committees in the Organisational
and Operational Rules, the tasks of the relevant organisational units and specialised areas, their
responsibilities, reporting obligations and actions taken to ensure sustainability expertise have been defined,
which are described in detail in subsection 1.2. Governance - Role of Governing Bodies in the OTP Group
Sustainability Report.
ESRS G1 GOV-1: Role of governing bodies in business conduct
The Supervisory Board, the Board of Directors and the Ethics Committee have a prominent role in the
enforcement of ethical business conduct and compliance. For the Bank, an essential element of responsible
business conduct is the fight against money laundering, in which the Money Laundering Prevention Committee
plays an important role. In terms of compliance, governance and organisational responsibility is taken by the
Board of Directors and the Supervisory Board.
For more information on the role of governing bodies in business conduct, please refer to subsection 1.2.
Governance – The role of governing bodies in business conduct in the OTP Group Sustainability Report.
ESRS 2 GOV-2: Informing governing bodies on sustainability
Information on the impacts, risks and opportunities identified in the materiality assessment is communicated
in different ways for each topic, not through a separate channel but integrated into sectoral information
practices. The governing bodies' communication on sustainability, risk management practices and procedures
for strategic decisions are consistent with those of the OTP Group. The remuneration policy and the criteria
and details of executive remuneration also follow the Group's practices. More information on these can be
found in the OTP Group Sustainability Report, subsection 1.2. Governance – Informing governing bodies on
sustainability.
ESRS 2 GOV-3, E1 GOV-3: Sustainability and Climate Change in Incentive Mechanisms
A summary of the remuneration system specific to OTP Bank can be found in subsection 1.2. Governance –
Sustainability in incentive mechanisms in the OTP Group Sustainability Report, which describes the main
guidelines of the Remuneration Policy developed by the parent bank and followed at group level. The Policy
includes considerations related to sustainability and climate change targets, which are taken into account as
part of the “Environmental and Social Responsibility (ESG-CSR)” indicator.
Climate considerations are taken into account as part of this indicator for persons covered by the Policy. No
GHG emission reduction target is included in the benchmarking.
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ESRS 2 GOV-4: Due diligence
In OTP Bank's operations, certain elements of the due diligence process are integrated into the Group's
operations (not as a separate and interrelated process).
The Bank acts in accordance with its Compliance Policy, which also serves as the basis for group-wide
practices, as described in detail in subsection 1.2, Governance – Due diligence in the OTP Group Sustainability
Report.
ESRS 2 GOV-5: Risk management in relation to sustainability reporting
The sustainability reporting process (both at individual and group level) is coordinated by the Marketing and
Communications Directorate of OTP Bank, which is responsible for the development and operation of internal
controls. As an important tool for risk management and internal control procedures, reporting is carried out in
close engaging with the parent bank's business areas and, based on the OTP Group's governance model,
OTP Bank, as the parent company, provides strategic control and professional/functional guidance and
cooperates with the group members.
Following the annual reporting, OTP Bank's Marketing and Communications Directorate assesses the
sustainability reporting process and reviews the risks arising from the expected changes in the next period.
This assessment also covers the technical, administrative and substantive conditions for reporting. The factors
causing difficulties and risks are identified, and steps for improvement are defined. The risks identified and the
control actions taken to address them are realised similarly to those used in the preparation of the consolidated
report (see subsection 1.2. Governance – Risk management in relation to sustainability reporting in the OTP
Group Sustainability Report).
1.3. Strategy
ESRS 2 SBM-1: Strategy, business model and value chain
Business model, products and services
OTP Bank is the leading credit institution in Hungary. OTP Bank's business model is focused on providing a
high level of service to the financial needs of Hungarian retail, private banking, micro and small enterprises,
medium and large enterprises and municipal customers through the Bank's branch network and the constantly
evolving digital and innovative remote service channels, with a focus on ease of use and reliability. The Bank
offers a wide range of modern banking and financial services to both retail and corporate customers, collecting
demand and fixed deposits from customers and offering a wide range of other savings products, including,
country dependent treasury services, treasury services, government securities, investment funds, equities and
corporate bonds, as well as other securities and structured investments. In line with the strategy, the Bank
aims to maintain a stable liquidity position across economic cycles to ensure conditions for stable operations
and growth. The Bank and the other domestic members of the Group served the financial needs of more than
4.3 million customers at the end of 2024. A detailed description of the financial services provided by the
Banking Group and the related data are presented in the OTP Group Sustainability Report, section 1.3.
Strategy, subsection ESRS 2 SBM-1: Strategy, business model and value chain.
The Bank aims to continuously improve its services in a constantly evolving digital and technological
environment, so that they are clear and easily accessible and secure for a broader range of customers. In
addition to digitalisation, OTP Bank places a strong emphasis on sustainability, aiming to avoid negative
environmental and social impacts, realise positive impacts and leverage potential business benefits. The Bank
is committed to offering products that are tailored to the real needs of its customers, in line with their capabilities
and contribute to their financial well-being.
Our employees are a key asset, and their high performance is a guarantee of OTP Bank's results. As a
responsible employer, the aim is to improve employee well-being. The Bank plays an active role in developing
the financial awareness of the population and enriching cultural values.
OTP Bank in Hungary employed 10,820 people at the end of 2024.
Value chain
Upstream value chain
The core business of OTP Bank is the provision of financial services, and, in the value chain part preceding
this activity, suppliers of products and services necessary for its operations, products and services are
appearing. Procurement of services dominates, in particular marketing communications, IT and
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telecommunications services. The real-estate used for operational purposes includes both intra-group property
and leased space. Company cars are typically owned within the group.
Downstream value chain
This includes the value chain part following OTP Bank's activities, those involved in the sale of products and
services, and those who use the products and services, i.e. customers. The agency channel (third-party sales
channel) plays an essential role in the intermediation of financial services. Within the agency sales channel,
mortgage brokerage is the most important product. In 2024, OTP Bank's third-party sales within product
reached 58% of the contracted amount. The agents of OTP Financial Point (477 persons), who are dependent
agents working as self-employed persons and broker the products of OTP Bank, are included in own workforce
under the ESRS (see Materiality assessment ESRS2 SBM-3).
The Bank's most significant environmental and social impacts are experienced through its financial services
customers, mainly in the area of lending which is the most impactful part of the value chain.
OTP Bank is part of the OTP Banking Group, which has domestic and foreign subsidiaries, most of which are
active in the provision of financial services, but there are also entities active in other sectors such as property
management and agriculture. The double materiality assessment conducted at group level has fully considered
the activities of the subsidiaries. For OTP Bank, the impacts and risks identified pertain to its financial services
activities. OTP Bank, as the parent bank of the Banking Group, plays a steering and coordinating role in most
areas (typically also in ESG issues), while at the same time it provides opportunities for subsidiary banks to
channel and implement their own initiatives. The policies related to the material topics are extended at group
level, and, for the related actions, the specificities of the subsidiary banks and the group-level indicators are
presented in the OTP Group Sustainability Report.
ESG strategy
OTP Bank plays a leading role in the development and implementation of the group-level sustainability
strategy (four-year ESG strategy adopted in 2021), the main target of which is to ensure that the Group is a
regional leader in financing a fair and gradual transition to a low-carbon economy and to support ethical,
socially and environmentally sound financial choices through responsible solutions.
The Banking Group's ESG strategy (vision, mission, goals and challenges) is detailed in subsection 1.3.
Strategy – Strategy, business model and value chain – ESG strategy in the OTP Group Sustainability Report.
ESRS 2 SBM-2: Stakeholders
OTP Bank's group-wide corporate strategy (see the Corporate Strategy section of the consolidated
Management Report) aims to serve the needs and expectations of its customers, investors and employees at
the highest possible level.
In addition, the Group's ESG strategy expresses the commitment of the Group and its members to act as
responsible partners with all its stakeholders, as reflected in the three pillars of the strategy: responsible service
provider, responsible employer and responsible social actor.
The Code of Ethics of the OTP Group states that the aim is to apply the principles of ethical business conduct
in relations with stakeholders, and that compliance with these principles is a mandatory requirement for all
employees and agents4.
The Bank cooperates with its key stakeholders, and seeking their views is a priority, as meeting their
expectations ensures the Bank's social legitimacy and business success. It continuously seeks and takes into
account feedback in the design and development of its strategy, activities and programmes.
The materiality assessment and due diligence did not explore the views and interests of stakeholders on the
strategy and business model.
4 who perform contractual obligations for the OTP Group and in the course of these activities meet a wide range of customers or potential customers of
the OTP Group, perform services on behalf of the OTP Group for them or, in the performance of their contractual obligations, clearly appear in public as
representatives of the OTP Group
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Stakeholders identified by OTP Bank:
Key stakeholders
Purpose of communication and
engaging
Ways of communication and
engaging
Taking account of an opinion
Subsidiaries (foreign
and domestic)
Developing unified corporate
governance, sharing experiences,
implementing cross-border
engaging
Through representatives of subsidiaries, in
engaging with professional teams
Commenting on initiatives
identified by the parent bank,
presenting operational practices,
sharing experiences
Clients, customers
(retail, corporate)
Improving service quality,
providing quality information on
services, understanding customer
needs, protecting customer
privacy
Customer satisfaction surveys, market
research
Information and educational materials,
videos
Information on services (e.g. account
statement)
Customer service (branch, telephone,
video, internet)
Complaint management
Consideration of needs, their
integration into the service model
and product range
Equity and bond
investors (and
analysts)
Information on the Group's
activities and operating
environment, the Group's financial
performance, the evolution of
external and internal factors
affecting it, the outlook, and ESG
performance.
Understanding expectations.
Annual report, stock exchange reports and
presentations
General Meeting
Face-to-face and virtual meetings
Answering investor and analyst questions
Consideration of expectations,
compliance, transparent
information
Employees
Responsible employer practices,
employee well-being and
development, inclusion, diversity
and strengthening employee
engagement. Healthy and safe
working environment that provides
equal opportunities, fair
employment practices
Measuring employee engagement,
providing possibilities for feedback
Performance review
Meetings and consultations with employee
representatives (e.g. trade unions)
Intranet, internal communication
Considering and implementing
actions to increase employee
engagement, experience and
well-being
Regulatory bodies,
authorities
Fight against money laundering,
fair market competition, ensuring
access to financial services, equal
opportunities, economic
intermediation, contribution to
achieving social goals, regulatory
compliance, expanding green
finance
Reports in compliance with legal
requirements
Ensuring the availability of state-
subsidised products
Engaging to prevent crime
Consultations through representative
bodies (banking associations)
Prudent behaviour, high level of
compliance
NGOs / professional
organisations
Equal opportunities, improving
service delivery, managing
environmental and social impacts
Membership of professional organisations
Face-to-face meetings, consultations
Learning and applying good
practices
Sponsored
organisations
Contributing as an active social
actor to social and environmental
goals, with a focus on developing
financial awareness
Extensive, typically long-term engaging
Implementing practices that help
the efficient and effective use of
aid
Education and
research institutions
Participating in research, ensuring
labour supply
Building engaging
Reception of students
Evolution of corporate practices
Retail
Developing financial culture,
education, meeting corporate
responsibility expectations
Research on the financial literacy of the
population
Information and educational materials,
videos
Training, education
Developing customer information
and education practices based
on research findings
Suppliers
Developing and expecting ethical
partner behaviour
Regulations, policies, contracts
Personal consultations
Implementing ethical business
conduct
Competitors
Joint advocacy, joint action
against money laundering
Membership of representative
organisations
Learning and applying good
practices
The Board of Directors, the Supervisory Board and the individual committees are informed of matters relating
to stakeholders through regular reports. For more details on these reports, please refer to chapter 1.3.
Strategy, subsection Stakeholders in the OTP Group Sustainability Report.
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1.4. Materiality assessment
ESRS 2, E1, E2, E3, E4, E5, G1 IRO-1
The purpose of the materiality assessment is to enable OTP Bank to identify material impacts, risks and
opportunities arising from its activities. The materiality assessment focused on the question of whether a topic
is material, with the depth of the assessment of each impact, risk and opportunity being done with this in mind.
The materiality analysis of OTP Bank is based on the double materiality analysis prepared at the level of the
Banking Group. The methodology for the process of identifying and assessing impacts, risks and opportunities
for the group-level reporting process has been developed in line with the ESRS requirements.
OTP Bank, as the parent bank, played a key role in identifying material impacts, risks and opportunities in the
Group's dual materiality analysis. Building on the Group's top-down approach to materiality analysis at the
consolidated level, OTP Bank, in relation to its own operations, considers the impacts, risks and opportunities
identified in the provision of financial services as its core business as the basis for its reporting at the individual
level.
The methodology of the dual materiality analysis of the Banking Group is described in detail in chapter 1.4
Materiality Assessment of the OTP Group Sustainability Report and related to the assessment of climate
change-related topics can also be found in section 1.4 Materiality Assessment of the OTP Group Sustainability
Report
Identifying and assessing impacts
E1 IRO-1, E2 IRO-1, E3 IRO-1, E4 IRO-1, E5 IRO-1, G1-IRO-1
The materiality assessment focused on factors that are associated with an increased risk of adverse impacts.
The scope of activities was a good starting point for identifying the increased risk of adverse impacts, thus,
OTP Group grouped its subsidiaries by scope of activities, along which it identified the impacts related to its
own activities and value chain. Regarding OTP Bank no new impacts have been identified; all group-level
impacts are applicable to the Bank as well.
The OTP Group has identified three relevant scopes of activity: the most prominent are (1) financial services;
followed by (2) real-estate and (3) agriculture.
OTP's group-level assessment includes the member companies related to the Bank's operations (as internal
members of its value chain, thus providing a more complete picture of the Bank's operational scope). Thus,
the Bank relies on the group-level assessment in its individual reporting, however, the impacts identified in the
agricultural and real-estate sectors are not relevant for the Bank.
The methodology of the process for identifying and assessing impacts, risks and opportunities is described in
detail in section 1.4 Materiality assessment of the OTP Group Sustainability Report.
Consultation with stakeholders
E2 IRO-1, E3 IRO-1, E4 IRO-1, E5 IRO-1
The Bank has used a wide range of sources to understand the views and expectations of stakeholders and
has taken them into account in identifying and assessing material impacts at group level.
Among other things, we have used:
−
ESG assessments, questionnaires: Sustainalytics, MSCI, Moody’s.
−
Retail TRI*M Index surveys (nationally representative residential survey) measuring brand,
satisfaction and loyalty.
−
Employee engagement surveys, with a particular focus on OTP Bank’s engagement survey relating
to 2024, with 8,596 responses and a 79% response rate.
For its materiality assessment, it also took into account the views of NGOs, universities; public authorities,
regulators, public administrations; financial analysts, stock exchanges; media; employee representatives, as
requested through an online stakeholder questionnaire. Based on the feedback, one topic was included in the
list of material topics (employees: work-life balance), as it was considered material by more than a third of the
respondents. The views of financial analysts and stock market stakeholders were also sought from a financial
materiality perspective.
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Identifying and assessing financial risks and opportunities
The identification of financial risks and opportunities for sustainability issues was the result of an iterative
process.
As a starting point for identifying financial risks and opportunities (long list):
-
we used the themes identified by the ESRS
-
adding the source points also used for the impact materiality,
-
the SASB standards for the financial sector, and
-
ESG assessment topics.
Based on the last two sources, there was no need to add a new topic.
Sustainability issues where a relevant risk or opportunity (either from impacts or dependencies) may arise for
the OTP Group (short list) were identified through a workshop and subsequent consultations with the
assistance of OTP Bank's experts. Participants considered whether the risks and opportunities are relevant in
the short, medium or long term, furthermore no additional risks or opportunities have been identified from OTP
Bank’s perspective.
For the methodology of a more in-depth exploration and assessment of the risks and opportunities arising from
the relevant topics, please refer to subsection 1.4. Materiality assessment – Identification and assessment of
financial risks and opportunities in the OTP Group Sustainability Report.
Validation of the assessment and approval
The assessment of impacts, risks and opportunities was followed by a series of internal reviews. This included
a review of the assessment of impacts below the materiality threshold, but close to it, in relation to the results
corrected with stakeholder feedback. The Hungarian subsidiaries as well as the relevant representatives of
foreign subsidiaries provided feedback on the materiality assessment.
The ESG Sub-Committee discussed the list of material impacts, risks and opportunities and approved it by
majority decision, subject to one modification, in accordance with the Sub-Committee's rules of procedure.
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ESRS 2 SBM-3: Material impacts, risks and opportunities and their relationship to strategy and business model
The OTP Group’s Material Sustainability Impacts, risks and opportunities
Impact/Risk/Opportunity
Management (The report will elaborate
further in line with disclosure
requirements.)
Type of
Impact/Risk/opportunity
Concentration of Impact,
Risk, Opportunity
Time period
Up-
stream
OTP
Group
Down-
stream5
Short
term
Medium
term
Long
term
E1 Climate Change
Climate Change Mitigation
The OTP Group's impact stems from direct and indirect
greenhouse gas emissions, exacerbating climate
change.
The OTP Group's indirect emissions related to its loan
portfolio (Scope 3) exceed Scope 1-2 emissions by
several orders of magnitude, and significant Scope 3
emissions are also associated with asset managers.
Direct emissions from operations and indirect emissions
from energy consumption (Scope 1-2) are relatively
small for most companies, given that they provide
financial or other services. However, due to the Group's
size, these emissions are significant overall. This impact
is material for the entire group. Several group members,
which are significantly smaller compared to financial
institutions, 6 operate in the agricultural and food sectors,
as well as the real-estate sector, where these emissions
are also relatively higher.
The Bank Group aims to facilitate climate
change mitigation by reducing emissions
associated with its lending and operations.
By the end of 2024, it prepared a
decarbonization (transition) plan for its loan
portfolio. The Bank Group continuously aims
to reduce its Scope 1-2 emissions, with
emission reduction plans currently being
prepared on a company-by-company basis,
available for some subsidiaries by the end of
2024. In addition to efficiency measures, the
use of green electric energy plays a
significant role.
Actual negative impact
x
x
x
x
x
OTP Group, through its financial products, encourages
the mitigation of climate change within its portfolio.
Through its applied practices, the Bank Group also has a
significant exemplary and awareness-raising impact,
considering its wide customer base
Actual positive impact
x
x
x
x
x
A significant business opportunity for the Bank Group is
the expansion of green lending that facilitates climate
change mitigation in the countries where it engages in
corporate lending and retail mortgage lending (there is
no active green lending according to OTP standards in
Ukraine).
Opportunity
x
x
x
x
5 For client-related topics, we have indicated only where the impact depends on the client's practice, the influence of the Group is indir ect.
6 revenue, balance sheet total, headcount
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Impact/Risk/Opportunity
Management (The report will elaborate
further in line with disclosure
requirements.)
Type of
Impact/Risk/opportunity
Concentration of Impact,
Risk, Opportunity
Time period
Up-
stream
OTP
Group
Down-
stream5
Short
term
Medium
term
Long
term
E1-SBM-3 18 This is material for the OTP Group's
lending activities because, in connection with climate
change mitigation, transition risks arise for a portion of
the customer base, which indirectly also poses a risk to
the Bank Group. The extent of this risk is estimated
through stress testing of the corporate portfolio..
Risk management is conducted within the
framework of ESG risk management.
Risk
x
x
x
Adaptation to Climate Change
The OTP Group's lending practices impact adaptation,
either facilitating (by expecting or supporting with
favorable conditions), hindering, or remaining neutral
towards clients' adaptation efforts. The need for
adaptation is strongly necessary in several sectors within
the portfolio (e.g. mortgage loans, agriculture, real-
estate, construction sectors.
The Bank Group aims to facilitate adaptation
to climate change through green lending.
Risk management is conducted within the
framework of ESG risk management.
Actaul positive impact
x
x
x
x
The Bank Group strives to leverage the business
opportunity arising from lending that facilitates
adaptation to climate change.
Opportunity
x
x
x
E1-SBM-3 This also includes the physical risks
associated with lending activities, as well as some
transition risks (investments necessary for adaptation).
Risk
x
x
x
Energy
Through financing energy-intensive industries, the Bank
Group influences the environmental impact of clients'
activities
Within green loans, these goals represent a
particularly large proportion, and financing is
also significant in the affected sectors. The
Banking Group addresses this topic through
the methods and tools presented in the
previous two topics.
Actual negative impact
x
x
x
x
The Group has a positive impact by providing incentive
loans for renewable, carbon-free energy sources
considered green during the transition, and by
encouraging energy efficiency.
Actual postive impact
x
x
x
x
Similar to climate change mitigation and adaptation, the
business opportunity arises within green lending, where
the expansion of the use of renewable and green-
certified energy sources plays a significant role.
Opportunity
x
x
x
Financing energy-intensive and fossil fuel-using
companies poses credit and reputational risks for OTP
Bank and its subsidiaries.
Risk
x
x
x
E3 Water and Marine Resources
Water Withdrawal
In the OTP Group's corporate loan portfolio, the
presence of sectors with high water withdrawal is
significant. To better understand the impacts, it is
necessary to investigate the practices employed by
these companies.
There is an opportunity to finance these
goals within green lending. The Bank
Group's minimum expectation for its clients,
which is monitored, is compliance with
relevant environmental and social laws and
regulations, as well as possessing the
necessary permits and authorizations for
Actual negative impact
x
x
x
x
Green lending finances activities that have a positive
impact.
Actual postive impact
x
x
x
x
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Impact/Risk/Opportunity
Management (The report will elaborate
further in line with disclosure
requirements.)
Type of
Impact/Risk/opportunity
Concentration of Impact,
Risk, Opportunity
Time period
Up-
stream
OTP
Group
Down-
stream5
Short
term
Medium
term
Long
term
Financial risk primarily arises in relation to those loan
clients who are unable to adequately manage changing
or existing environmental expectations (e.g., stricter
regulations, changing consumer preferences, fines) or
face difficulties in ensuring the water needs of their
activities. A deeper understanding of the risk requires
further analysis.
their operations. Understanding clients'
practices beyond these requirements is
ongoing, in parallel with the evolving and
strengthening regulatory expectations. Based
on this, expectations that encourage
responsible behavior can be formulated.
Risk
x
x
x
x
E4 Biodiversity and Ecosystems 7
The direct drivers of biodiversity loss
In the corporate loan portfolio of the OTP Group, sectors
potentially negatively impacting biodiversity and
ecosystems are significant. To better understand these
impacts, it is necessary to uncover the practices
employed by the companies.
The minimum expectations set and
monitored by the Bank Group for its clients
include compliance with relevant
environmental and social laws and
regulations, as well as possessing the
necessary permits and licenses for their
operations (currently, there are significantly
fewer requirements related to biodiversity
compared to water).
Actual negatíve impact
x
x
x
x
The Banking Group indirectly influences the extent of
these impacts through financing conditions and can
encourage positive effects.
Understanding clients' practices beyond
these requirements is ongoing alongside the
evolving and strengthening regulatory
expectations, which will form the basis for
articulating expectations that encourage
responsible behavior.
Potential positíve impact
x
x
x
x
S1 Own Workforce
The OTP Group employs more than 43,000 people,
making numerous impacts on its own workforce
significant..
Working conditions: Work-life balance
The Bank Group influences work-life balance through
the provision of overtime, flexible employment
opportunities, and access to childcare facilities. The
family-related commitments of female employees are
typically stronger, and the fact that approximately two-
thirds of the Group's employees are women amplifies
these impacts.
At OTP Group, various employee benefits
and support systems are continuously
available to help maintain employee well-
being. The measures focus on the areas of
working hours and flexibility, holidays and
absences, well-being and recreation.
Actual positíve impact
x
x
x
x
The effects may be negative if OTP Group practices do
not adequately take employee considerations into
account.
Potential negative impact
x
x
x
x
7 E4 SBM-3 No significant negative impacts were identified in terms of lnd degradation, desertification/soil sealing.
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Impact/Risk/Opportunity
Management (The report will elaborate
further in line with disclosure
requirements.)
Type of
Impact/Risk/opportunity
Concentration of Impact,
Risk, Opportunity
Time period
Up-
stream
OTP
Group
Down-
stream5
Short
term
Medium
term
Long
term
Working conditions: Health and safety
Stress emerges as a relevant risk for a significant portion
of employees, considering that most staff at the member
companies work in non-hazardous positions.
Occupational safety risks are more significant in
agricultural companies.
OTP Group operates occupational health
and safety programs to maintain a safe and
healthy working environment. It is a common,
ongoing practice within the group to conduct
regular, preventive health examinations for
employees and stress management is also
supported by action packages.
Actual negatíve impact
x
x
x
x
Equal treatment and equal opportunities: Gender equality and equal pay for work of equal value
This is a topic that strongly influences employee well-
being, made even more important by the high proportion
of female employees. The corporate group monitors the
pay ratio between men and women in the same
positions, and at the parent bank and most subsidiaries,
this difference is minimal.
OTP Bank has a strategy for creating gender
equality, and several subsidiary banks have
specific diversity policies in place.
The majority of group members continuously
implement measures to promote equal
opportunities and diversity.
Leadership training and internal awareness
campaigns are implemented to strengthen an
inclusive mindset.
Actual positíve impact
x
x
x
x
The proportion of female managers is consistently lower
at higher levels. At some subsidiary banks, the
difference is greater for employees in the same position.
Actual negative impact
x
x
x
x
Equal treatment and equal opportunities: Training and skills development
The OTP Group's training and skills development
practices influence the sector and other employers due
to its significant role as an employer. Access to training
is always ensured. Performance evaluations at the
Group's member companies follow different
methodologies, with a smaller proportion of employees
participating in this process at several member
companies.
The OTP Group provides a wide training
portfolio for its employees. Professional and
personal development training, as well as
other (e.g. mandatory) training, are typically
conducted according to annual training
plans. These plans are developed with
employee involvement and take into account
the results of performance evaluations. The
results of the engagement survey show an
average level in this area.
Actual positive impact
x
x
x
x
The impacts may be negative if OTP Group practices do
not ensure equal access to training.
Potential negative impact
x
x
x
Equal treatment and equal opportunities: Employment and inclusion of persons with disabilities
Due to its size and scope of activities (as a wide range of
society interacts with its employees), the Bank Group
could have a significant impact on the employment of
persons with disabilities and the change in this
employment culture.
The Bank Group prohibits all forms of
discrimination, but measures to support the
employment of persons with disabilities are
not widely implemented.
Actual positive impact
x
x
x
x
Currently, the employment of these individuals is low at
the group level.
Actual negative impact
x
x
x
Equal treatment and equal opportunities: Measures against violence and harassment in the workplace
The large number of employees and the high proportion
of female employees make this topic important, further
emphasized by the lower proportion of female
employees in higher positions (increasing the risk of
abuse). No reported and confirmed cases of abuse have
occurred
The Bank Group implements measures
related to the application of the Code of
Ethics.
Potential negatve impact
x
x
x
x
MANAGEMENT REPORT (STAND-ALONE)
INTEGRATED ANNUAL REPORT 2024
37
Impact/Risk/Opportunity
Management (The report will elaborate
further in line with disclosure
requirements.)
Type of
Impact/Risk/opportunity
Concentration of Impact,
Risk, Opportunity
Time period
Up-
stream
OTP
Group
Down-
stream5
Short
term
Medium
term
Long
term
Equal treatment and equal opportunities: Diversity
Due to the significant number of employees, the member
companies of the Banking Group have both the
opportunity and the role to implement diversity. (This
topic partially overlaps with gender equality and the
employment of persons with disabilities.)
See: Gender Equality and Equal Pay for
Equal Work
Actual positive impact
x
x
x
x
The Bank Group's practices provide room for
improvement in implementing diversity.
Actaul negative impact
x
x
x
S4 Consumers and end-users
These topics are material for member companies
providing financial products and services.
Information security and data protection 8
The banks within the Bank Group hold a large amount of
sensitive data about their customers. By protecting
personal data and implementing information security and
cyber protection, the Banking Group has a positive
impact on its customers.
Security systems and workflows are
constantly evolving, and staff training is also
regular. The Group aims to use the most
modern solutions for data management, data
security and data leakage prevention,
supported by organizational development,
technical, customer education and engaging
measures. The parent bank continuously
supports and monitors the anti-fraud efforts
of its subsidiaries.
The Bank Group's data management
processes operate within a permanent
framework, according to regular activities
Actual positive impact
x
x
x
x
Despite OTP Group's practices that prioritize safety and
secure operations, it sometimes happens that customers
suffer losses.
Actual negative impact
x
x
x
x
A breach of personal data protection, fraud, or violation
of legal requirements, as well as successful attacks and
incidents in the field of information security and
cybersecurity, can cause significant losses to both the
banks of the OTP Group and their customers. Data
protection deficiencies, violations, and potential incidents
not only carry the risk of significant financial penalties
but can also lead to customer complaints and loss of
customers. Consequently, the reputation of the banks
would decrease.
Risk
x
x
x
Access to quality information9
Quality information provision ensures objective
information and understanding of financial products for
all customers. Its implementation affects customers' well-
being and financial situation, as a financial product can
have a significant impact on a customer's life. This topic
is primarily important for retail and SME customers, and
its significance is even more pronounced for vulnerable
Information and communication about
banking products and services are highly
regulated areas in most countries where the
OTP Group operates. Responsible
communication aims to ensure clarity and
attract attention while adhering to these
regulations. Member companies support
Actual positive impact
x
x
x
x
8 ESRS: Impacts related to information disclosure on consumers and/or end-users: Privacy protection (ESRS 1 AR 16). At OTP Group, this topic includes not only the protection of personal data but also information security
and cyber defense, as these are interconnected topics within the Bank Group. However, the ESRS does not specifically name the latter
9 ESRS: Impacts related to information disclosure on consumers and/or end-users: Access to (quality) information (ESRS 1 AR 16)."
MANAGEMENT REPORT (STAND-ALONE)
INTEGRATED ANNUAL REPORT 2024
38
Impact/Risk/Opportunity
Management (The report will elaborate
further in line with disclosure
requirements.)
Type of
Impact/Risk/opportunity
Concentration of Impact,
Risk, Opportunity
Time period
Up-
stream
OTP
Group
Down-
stream5
Short
term
Medium
term
Long
term
social groups. The practices of the OTP Group have a
positive impact.
good financial decisions and knowledge
expansion through educational videos and
calculators, among other tools. The Group's
member companies are continuously
improving the understandability of financial
services.
Despite the efforts made, opportunities for development
can always be identified, given the complexity of
financial products, information obligations and their
continuous changes.
Actual negatíve impacts
x
x
x
x
Access to financial products and services 10
Access to financial products and services can support
customers' well-being and prosperity. In addition,access
for residents of disadvantaged areas and those in
disadvantaged social situations ismaterial. Ensuring
access to financial products for disadvantaged
customers requires careful consideration and strict
regulation to protect the interests of depositors and
prevent excessive indebtedness. The Bank Group can
also support adequate housing, as mortgage loans are
an important market segment in most areas of operation.
At the group level, the goal is to expand the
range of products that are partially or fully
available digitally, ensuring that these
processes are as convenient and accessible
to as many customers as possible. These
solutions can also facilitate access for
residents of disadvantaged areas. The Bank
Group pays attention to imparting knowledge
related to the use of online channels.
Accessibility is continuously improving.
In addition to market-based products, the
Bank Group ensures the availability of
significant state-supported mortgage loan
schemes in several countries.
Actual positive impact
x
x
x
x
The accessibility cannot be considered comprehensive.
Actual negative impact
x
x
x
x
G1 Business Conduct
Corporate culture, compliance, anti-money laundering
The business conduct of the OTP Group not only affects
its direct partners and stakeholders but also influences
the attitude of employees and customers towards ethical
business conduct. Corporate governance characteristics
and transparent decision-making are also important to
investors.
The fight against money laundering is essential for the
banks within the Bank Group, aiming to prevent
customers' attempts at money laundering. From a
societal perspective, careful and prudent practice is
particularly important.
Implementing ethical business conduct and ensuring
legal operations are of utmost importance to OTP Group.
The foundations and guidelines for ethical
business conduct are summarized in the
Code of Ethics
OTP Group operates an ethics reporting
system and conducts annual ethics training
for all employees.
The Bank Group conducts regular mandatory
training to increase the awareness of its
relevant employees on AML/CFT. OTP Bank
operates a separate whistleblowing system
in relation to AML/CFT.
Actual positive impact
x
x
x
x
Despite the OTP Group's emphasis on striving for ethical
business operations, non-compliances cannot be
completely eliminated.
Actual negative impact
x
x
x
10 ESRS: Social inclusion of consumers and/or end-users: Access to products and services (ESRS 1 AR 16)
MANAGEMENT REPORT (STAND-ALONE)
INTEGRATED ANNUAL REPORT 2024
39
Impact/Risk/Opportunity
Management (The report will elaborate
further in line with disclosure
requirements.)
Type of
Impact/Risk/opportunity
Concentration of Impact,
Risk, Opportunity
Time period
Up-
stream
OTP
Group
Down-
stream5
Short
term
Medium
term
Long
term
Non-compliance with laws and regulations can result in
fines and reputational loss. Banks are also expected to
play an active role in preventing money laundering.
Violating anti-money laundering rules can lead to
liquidity problems and the termination of correspondent
banking relationships. Breaching business ethics rules
can cause dissatisfaction and complaints from
employees and business partners
Risk
x
x
x
x
Corruption and bribery
The effectiveness of corruption prevention impacts the
efficiency of resource utilization. Due to its size, the OTP
Group's anti-corruption practices can influence economic
morale (especially within the sector). The practices
implemented by OTP Group have a positive impact.
The fight against corruption is supported by
an anti-corruption training system, the
application of an anti-corruption clause
among contractual partners, the expansion of
which at group level is in progress, and
regular risk assessments.
Actual positive impact
x
x
x
x
Even with careful and constantly evolving practices,
abuse can occur.
Potential negative impact
x
x
x
x
MANAGEMENT REPORT (STAND-ALONE)
INTEGRATED ANNUAL REPORT 2024
40
The material sustainability impacts identified by the OTP Group, which are related to financial services
(mostly lending activities), have been identified as impacts, risks and opportunities that are also
assessed as relevant to the core business of OTP Bank. The material impacts identified by the OTP
Group are detailed in subsection 1.4. Materiality assessment – Material sustainability impacts of the
OTP Group in the OTP Group Sustainability Report.
As regards the management of the potential financial impact of ESG-related risks, no provision was
made for ESG-related risks during 2024 and no capital buffer was set by the management for such risks.
Operational risks are flagged (ESG flag) in the context of loss data collection if an ESG risk factor can
be identified behind the loss event. No significant losses on material issues were realised in 2024. An
analysis of the expected financial impacts and an estimate of the expected financial impacts will be
made in 2025.
OTP Bank's risk management processes, prudent behaviour and business planning practices ensure
its resilience to manage sustainability impacts, risks and take opportunities. The Bank, as part of the
Group, carried out a stress test to assess the potential impact of climate change, which was justified by
both regulatory and business considerations (see subsection 2.4.2. Credit Risk – Stress test in the OTP
Group Sustainability Report). No resilience assessment was carried out for the biodiversity and
ecosystem themes, which were not considered to be financially material. Addressing complex
environmental challenges adequately also requires the involvement of the banking sector, and further
resilience analyses are likely to be warranted in the future. The Bank continuously monitors market
opportunities to take advantage of them and keeps abreast of regulatory requirements to ensure that it
can respond appropriately.
OTP Bank has not previously prepared a sustainability report at an individual level, its activities were
presented as part of the group-level consolidated report, in accordance with GRI Standard 2021.
OTP Bank follows the application of group-level entity specific disclosures (@ESRS Index) to
characterise the impact of the following material topics:
•
Water withdrawal – material regarding the value chain, entity-specific disclosure will be
developed later
•
Direct drivers of biodiversity loss – material regarding the value chain, entity-specific
disclosure will be developed later
•
Information security and data protection
•
Quality information
•
Access to financial products and services
•
Corporate culture, compliance, fight against money laundering
1.5. List of ESRS requirements covered and general reporting policy
ESRS 2 IRO-2
In preparing its sustainability statement, OTP Bank has determined the list of disclosure requirements
based on the results of the materiality assessment carried out by the Group, which are also relevant at
an individual level. OTP Bank, as the parent bank, manages and coordinates the group-wide reporting
processes and the development of methodological approaches to data collection and disclosure. Thus,
in its reporting at the individual level, it also follows the practice developed at the group level (to the
extent of OTP Bank), which is presented in subsection 1.5. Disclosure Requirements in ESRS covered
by the undertaking’s sustainability statement and general reporting policy in the OTP Group
Sustainability Report.
Among the disclosure requirements and data points in the ESRS thematic standards, the disclosure
requirements that are linked to sub-topic material for OTP Bank are presented in the individual report,
based on the identification of data points at the group level and the interpretation of the data point
expectations (based on guidelines EFRAG ID 177 – Links between AR16 and Disclosure requirements).
The Bank has also developed a group-level reporting practice for individual level disclosures, which are
indicated under the chapters Data Points, Policy, Action, Target, Metrics, Entity-specific Disclosures
(subsection 1.5. Disclosure Requirements in ESRS covered by the undertaking’s sustainability
statement and general reporting policy in the OTP Group Sustainability Report), covering OTP Bank
(parent bank). Where the information for the Group is also applicable to the Bank, the information is
presented by referring back to the group-level report.
The use of individual-level ESRS requirements, related references and phase-in options, as well as the
tabulation of data points from EU legislation, are presented in chapter 5. ESRS Index.
MANAGEMENT REPORT (STAND-ALONE)
INTEGRATED ANNUAL REPORT 2024
41
2. Environmental information
2.1. Publications under the Taxonomy Regulation
2.1.1. Disclosure under the EU Taxonomy Regulation
0. Summary of KPIs to be disclosed by credit institutions under Article 8 Taxonomy Regulation
Total environmentally
sustainable assets,
(million HUF)
[turnover based]
Total environmentally
sustainable assets,
(million HUF)
[capex based]
KPI¹
KPI²
% coverage
(over total assets)³
% of assets excluded from the
numerator of the GAR (Article 7(2) and
(3) and Section 1.1.2. of Annex V)
% of assets excluded from the
denominator of the GAR (Article 7(1)
and Section 1.2.4 of Annex V)
Main KPI Green asset ratio
(GAR) stock
21,669
66,252
0.17% 0.51%
68.25%
33.43%
31.75%
Total environmentally
sustainable activities,
(million HUF)
[turnover based]
Total environmentally
sustainable activities
(million HUF)
[capex based]
KPI
KPI
% coverage
(over total assets)
% of assets excluded from the
numerator of the GAR (Article 7(2) and
(3) and Section 1.1.2. of Annex V)
% of assets excluded from the
denominator of the GAR (Article 7(1)
and Section 1.2.4 of Annex V)
Additional
KPI-s
GAR (flow)
8,779
33,225
0.32% 1.20%
89.52%
23.47%
10.48%
Financials guarantees
0
0
0.00% 0.00%
Asset under management
0
0
0.00% 0.00%
¹ based on the Turnover KPI of the counterparty
² based on the CapEx KPI of the counterparty, except for lending activities where for general lending Turnover KPI is used
³ % of assets covered by the KPI over banks´ total assets
Notes:
•
Across the reporting templates: cells shaded in grey should not be reported.
•
Fees and Commissions (sheet 6) and Trading Book (sheet 7) KPIs shall only apply starting 2026. SMEs’ inclusion in these KPI will only apply subject to a positive result of an impact assessment.
MANAGEMENT REPORT (STAND-ALONE)
INTEGRATED ANNUAL REPORT 2024
42
1. Assets for the calculation of GAR
- Turnover based data
HUF million
Disclosure reference date 31 December 2024
Total [gross]
carrying amount
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
Water and marine resources (WTR)
of which towards taxonomy relevant sectors (Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which environmentally sustainable (Taxonomy-
aligned)
of which environmentally
sustainable (Taxonomy-aligned)
of which environmentally
sustainable (Taxonomy-aligned)
of which use of
proceeds
of which
transitional
of which
enabling
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
enabling
GAR - Covered assets in both numerator and denominator
1
Loans and advances, debt securities and
equity instruments not HfT eligible for GAR
calculation
6,588,317
66,779
21,663
146
5,702
11,930
31
6
0
0
884
0
0
0
2
Financial undertakings
4,415,867
17,225
667
146
146
346
31
6
0
0
0
0
0
0
3
Credit institutions
3,581,461
17,225
667
146
146
346
31
6
0
0
0
0
0
0
4
Loans and advances
3,190,833
17,225
667
146
146
346
31
6
0
0
0
0
0
0
5
Debt securities, including UoP
390,628
0
0
0
0
0
0
0
0
0
0
0
0
0
6
Equity instruments
0
0
0
0
0
0
0
0
0
0
0
7
Other financial corporations
834,405
0
0
0
0
0
0
0
0
0
0
0
0
0
8
of which investment firms
0
0
0
0
0
0
0
0
0
0
0
0
0
0
9
Loans and advances
0
0
0
0
0
0
0
0
0
0
0
0
0
0
10
Debt securities, including UoP
0
0
0
0
0
0
0
0
0
0
0
0
0
0
11
Equity instruments
0
0
0
0
0
0
0
0
0
0
0
12
of which management companies
0
0
0
0
0
0
0
0
0
0
0
0
0
0
13
Loans and advances
0
0
0
0
0
0
0
0
0
0
0
0
0
0
14
Debt securities, including UoP
0
0
0
0
0
0
0
0
0
0
0
0
0
0
15
Equity instruments
0
0
0
0
0
0
0
0
0
0
0
16
of which insurance undertakings
459,120
0
0
0
0
0
0
0
0
0
0
0
0
0
17
Loans and advances
459,120
0
0
0
0
0
0
0
0
0
0
0
0
0
18
Debt securities, including UoP
0
0
0
0
0
0
0
0
0
0
0
0
0
0
19
Equity instruments
0
0
0
0
0
0
0
0
0
0
0
20
Non-financial undertakings
317,186
33,626
20,996
0
5,555
11,584
0
0
0
0
884
0
0
0
21
Loans and advances
317,186
33,626
20,996
0
5,555
11,584
0
0
0
0
884
0
0
0
22
Debt securities, including UoP
0
0
0
0
0
0
0
0
0
0
0
0
0
0
23
Equity instruments
0
0
0
0
0
0
0
0
0
0
0
24
Households
1,855,264
15,928
0
0
0
0
0
0
0
0
25
of which loans collateralised by
residential immovable property
44,356
14,881
0
0
0
0
0
0
0
0
26
of which building renovation loans
1,047
1,047
0
0
0
0
0
0
0
0
27
of which motor vehicle loans
0
0
0
0
0
0
28
Local governments financing
0
0
0
0
0
0
0
0
0
0
0
0
0
0
29
Housing financing
0
0
0
0
0
0
0
0
0
0
0
0
0
0
30
Other local government financing
0
0
0
0
0
0
0
0
0
0
0
0
0
0
31
Collateral obtained by taking
possession: residential and
commercial immovable properties
0
0
0
0
0
0
0
0
0
0
0
0
0
0
MANAGEMENT REPORT (STAND-ALONE)
INTEGRATED ANNUAL REPORT 2024
43
HUF million
Disclosure reference date 31 December 2024
Total [gross]
carrying amount
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
Water and marine resources (WTR)
of which towards taxonomy relevant sectors (Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which environmentally sustainable (Taxonomy-
aligned)
of which environmentally
sustainable (Taxonomy-aligned)
of which environmentally
sustainable (Taxonomy-aligned)
of which use of
proceeds
of which
transitional
of which
enabling
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
enabling
32 Assets excluded from the numerator for GAR calculation
(covered in the denominator)
6,327,477
33
Financial and non-financial
undertakings
3,047,538
34
SMEs and NFCs (other than SMEs)
not subject to NFRD disclosure
obligations
2,846,798
35
Loans and advances
2,447,767
36
of which loans collateralised by
commercial immovable property
0
37
of which building renovation loans
0
38
Debt securities
332,645
39
Equity instruments
66,386
40
Non-EU country counterparties not
subject to NFRD disclosure obligations
200,740
41
Loans and advances
200,740
42
Debt securities
0
43
Equity instruments
0
44
Derivatives
47,425
45
On demand interbank loans
123,681
46
Cash and cash-related assets
125,765
47
Other categories of assets
(e.g. Goodwill, commodities etc.)
2,983,067
48 Total GAR assets
12,915,794
66,779
21,663
146
5,702
11,930
31
6
0
0
884
0
0
0
49 Assets not covered for GAR calculation
6,009,433
50
Central governments and
Supranational issuers
3,506,456
51
Central banks’ exposure
1,872,566
52
Trading book
630,412
53 Total assets
18,925,227
66,779
21,663
146
5,702
11,930
31
6
0
0
884
0
0
0
Off-balance sheet exposures - Undertakings subject to NFRD
disclosure obligations
54 Financial guarantees
0
0
0
0
0
0
0
0
0
0
0
55 Assets under management
56
Of which debt securities
57
Of which equity instruments
MANAGEMENT REPORT (STAND-ALONE)
INTEGRATED ANNUAL REPORT 2024
44
HUF million
Disclosure reference date 31 December 2024
Total [gross]
carrying
amount
Circular economy (CE)
Pollution (PPC)
Biodiversity and Ecosystems
(BIO)
TOTAL
(CCM + CCA + WTR + CE + PPC + BIO)
of which towards taxonomy relevant
sectors
(Taxonomy-eligible)
of which towards taxonomy relevant
sectors
(Taxonomy-eligible)
of which towards taxonomy relevant
sectors
(Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which environmentally
sustainable
(Taxonomy-aligned)
of which environmentally
sustainable
(Taxonomy-aligned)
of which environmentally
sustainable
(Taxonomy-aligned)
of which environmentally sustainable (Taxonomy-
aligned)
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
transitional
of which
enabling
GAR - Covered assets in both numerator and
denominator
1
Loans and advances, debt securities and
equity instruments not HfT eligible for GAR
calculation
6,588,317
114
0
0
0
0
0
0
0
1
0
0
0
67,809
21,669
146
5,702
11,930
2
Financial undertakings
4,415,867
0
0
0
0
0
0
0
0
0
0
0
0
17,257
673
146
146
346
3
Credit institutions
3,581,461
0
0
0
0
0
0
0
0
0
0
0
0
17,257
673
146
146
346
4
Loans and advances
3,190,833
0
0
0
0
0
0
0
0
0
0
0
0
17,257
673
146
146
346
5
Debt securities, including UoP
390,628
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
6
Equity instruments
0
0
0
0
0
0
0
0
0
0
0
0
0
0
7
Other financial corporations
834,405
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
8
of which investment firms
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
9
Loans and advances
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
10
Debt securities, including UoP
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
11
Equity instruments
0
0
0
0
0
0
0
0
0
0
0
0
0
0
12
of which management companies
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
13
Loans and advances
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
14
Debt securities, including UoP
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
15
Equity instruments
0
0
0
0
0
0
0
0
0
0
0
0
0
0
16
of which insurance undertakings
459,120
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
17
Loans and advances
459,120
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
18
Debt securities, including UoP
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
19
Equity instruments
0
0
0
0
0
0
0
0
0
0
0
0
0
0
20
Non-financial undertakings
317,186
114
0
0
0
0
0
0
0
1
0
0
0
34,625
20,996
0
5,555
11,584
21
Loans and advances
317,186
114
0
0
0
0
0
0
0
1
0
0
0
34,625
20,996
0
5,555
11,584
22
Debt securities, including UoP
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
23
Equity instruments
0
0
0
0
0
0
0
0
0
0
0
0
0
0
24
Households
1,855,264
0
0
0
0
15,928
0
0
0
0
25
of which loans collateralised by
residential immovable property
44,356
0
0
0
0
14,881
0
0
0
0
26
of which building renovation loans
1,047
0
0
0
0
1,047
0
0
0
0
27
of which motor vehicle loans
0
0
0
0
0
0
28
Local governments financing
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
29
Housing financing
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
30
Other local government financing
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
31
Collateral obtained by taking
possession: residential and
commercial immovable properties
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
MANAGEMENT REPORT (STAND-ALONE)
INTEGRATED ANNUAL REPORT 2024
45
HUF million
Disclosure reference date 31 December 2024
Total [gross]
carrying
amount
Circular economy (CE)
Pollution (PPC)
Biodiversity and Ecosystems
(BIO)
TOTAL
(CCM + CCA + WTR + CE + PPC + BIO)
of which towards taxonomy relevant
sectors
(Taxonomy-eligible)
of which towards taxonomy relevant
sectors
(Taxonomy-eligible)
of which towards taxonomy relevant
sectors
(Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which environmentally
sustainable
(Taxonomy-aligned)
of which environmentally
sustainable
(Taxonomy-aligned)
of which environmentally
sustainable
(Taxonomy-aligned)
of which environmentally sustainable (Taxonomy-
aligned)
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
transitional
of which
enabling
32 Assets excluded from the numerator for GAR
calculation (covered in the denominator)
6,327,477
33
Financial and non-financial
undertakings
3,047,538
34
SMEs and NFCs (other than SMEs)
not subject to NFRD disclosure
obligations
2,846,798
35
Loans and advances
2,447,767
36
of which loans collateralised by
commercial immovable property
0
37
of which building renovation loans
0
38
Debt securities
332,645
39
Equity instruments
66,386
40
Non-EU country counterparties not
subject to NFRD disclosure obligations
200,740
41
Loans and advances
200,740
42
Debt securities
0
43
Equity instruments
0
44
Derivatives
47,425
45
On demand interbank loans
123,681
46
Cash and cash-related assets
125,765
47
Other categories of assets
(e.g. Goodwill, commodities etc.)
2,983,067
48 Total GAR assets
12,915,794
114
0
0
0
0
0
0
0
1
0
0
0
67,809
21,669
146
5,702
11,930
49 Assets not covered for GAR calculation
6,009,433
50
Central governments and
Supranational issuers
3,506,456
51
Central banks’ exposure
1,872,566
52
Trading book
630,412
53 Total assets
18,925,227
114
0
0
0
0
0
0
0
1
0
0
0
67,809
21,669
146
5,702
11,930
Off-balance sheet exposures - Undertakings subject to
NFRD disclosure obligations
54 Financial guarantees
0
0
0
0
0
0
0
0
0
55 Assets under management
56
Of which debt securities
57
Of which equity instruments
MANAGEMENT REPORT (STAND-ALONE)
INTEGRATED ANNUAL REPORT 2024
46
1. Assets for the calculation of GAR
– Capex based
HUF million
Disclosure reference date 31 December 2024
Total [gross]
carrying amount
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
Water and marine resources (WTR)
of which towards taxonomy relevant sectors (Taxonomy-eligible)
of which towards taxonomy relevant
sectors (Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which environmentally sustainable (Taxonomy-
aligned)
of which environmentally
sustainable (Taxonomy-aligned)
of which environmentally
sustainable (Taxonomy-aligned)
of which use of
proceeds
of which
transitional
of which
enabling
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
enabling
GAR - Covered assets in both numerator and denominator
1
Loans and advances, debt securities and
equity instruments not HfT eligible for GAR
calculation
6,588,317
113,300
66,233
136
40,693
10,410
69
19
0
0
0
0
0
0
2
Financial undertakings
4,415,867
18,171
1,230
136
263
553
69
19
0
0
0
0
0
0
3
Credit institutions
3,581,461
18,171
1,230
136
263
553
69
19
0
0
0
0
0
0
4
Loans and advances
3,190,833
18,171
1,230
136
263
553
69
19
0
0
0
0
0
0
5
Debt securities, including UoP
390,628
0
0
0
0
0
0
0
0
0
0
0
0
0
6
Equity instruments
0
0
0
0
0
0
0
0
0
0
0
7
Other financial corporations
834,405
0
0
0
0
0
0
0
0
0
0
0
0
0
8
of which investment firms
0
0
0
0
0
0
0
0
0
0
0
0
0
0
9
Loans and advances
0
0
0
0
0
0
0
0
0
0
0
0
0
0
10
Debt securities, including UoP
0
0
0
0
0
0
0
0
0
0
0
0
0
0
11
Equity instruments
0
0
0
0
0
0
0
0
0
0
0
0
12
of which management companies
0
0
0
0
0
0
0
0
0
0
0
0
0
0
13
Loans and advances
0
0
0
0
0
0
0
0
0
0
0
0
0
0
14
Debt securities, including UoP
0
0
0
0
0
0
0
0
0
0
0
0
0
0
15
Equity instruments
0
0
0
0
0
0
0
0
0
0
0
16
of which insurance undertakings
459,120
0
0
0
0
0
0
0
0
0
0
0
0
0
17
Loans and advances
459,120
0
0
0
0
0
0
0
0
0
0
0
0
0
18
Debt securities, including UoP
0
0
0
0
0
0
0
0
0
0
0
0
0
0
19
Equity instruments
0
0
0
0
0
0
0
0
0
0
0
20
Non-financial undertakings
317,186
79,201
65,002
0
40,430
9,857
0
0
0
0
0
0
0
0
21
Loans and advances
317,186
79,201
65,002
0
40,430
9,857
0
0
0
0
0
0
0
0
22
Debt securities, including UoP
0
0
0
0
0
0
0
0
0
0
0
0
0
0
23
Equity instruments
0
0
0
0
0
0
0
0
0
0
0
24
Households
1,855,264
15,928
0
0
0
0
0
0
0
0
25
of which loans collateralised by
residential immovable property
44,356
14,881
0
0
0
0
0
0
0
0
26
of which building renovation loans
1,047
1,047
0
0
0
0
0
0
0
0
27
of which motor vehicle loans
0
0
0
0
0
0
28
Local governments financing
0
0
0
0
0
0
0
0
0
0
0
0
0
0
29
Housing financing
0
0
0
0
0
0
0
0
0
0
0
0
0
0
30
Other local government financing
0
0
0
0
0
0
0
0
0
0
0
0
0
0
31
Collateral obtained by taking
possession: residential and
commercial immovable properties
0
0
0
0
0
0
0
0
0
0
0
0
0
0
MANAGEMENT REPORT (STAND-ALONE)
INTEGRATED ANNUAL REPORT 2024
47
HUF million
Disclosure reference date 31 December 2024
Total [gross]
carrying amount
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
Water and marine resources (WTR)
of which towards taxonomy relevant sectors (Taxonomy-eligible)
of which towards taxonomy relevant
sectors (Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which environmentally sustainable (Taxonomy-
aligned)
of which environmentally
sustainable (Taxonomy-aligned)
of which environmentally
sustainable (Taxonomy-aligned)
of which use of
proceeds
of which
transitional
of which
enabling
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
enabling
32 Assets excluded from the numerator for GAR calculation
(covered in the denominator)
6,327,477
33
Financial and non-financial
undertakings
3,047,538
34
SMEs and NFCs (other than SMEs)
not subject to NFRD disclosure
obligations
2,846,798
35
Loans and advances
2,447,767
36
of which loans collateralised by
commercial immovable property
0
37
of which building renovation loans
0
38
Debt securities
332,645
39
Equity instruments
66,386
40
Non-EU country counterparties not
subject to NFRD disclosure obligations
200,740
41
Loans and advances
200,740
42
Debt securities
0
43
Equity instruments
0
44
Derivatives
47,425
45
On demand interbank loans
123,681
46
Cash and cash-related assets
125,765
47
Other categories of assets
(e.g. Goodwill, commodities etc.)
2,983,067
48 Total GAR assets
12,915,794
113,300
66,233
136
40,693
10,410
69
19
0
0
0
0
0
0
49 Assets not covered for GAR calculation
6,009,433
50
Central governments and
Supranational issuers
3,506,456
51
Central banks’ exposure
1,872,566
52
Trading book
630,412
53 Total assets
18,925,227
113,300
66,233
136
40,693
10,410
69
19
0
0
0
Off-balance sheet exposures - Undertakings subject to NFRD
disclosure obligations
54 Financial guarantees
0
0
0
0
0
0
0
0
0
0
0
55 Assets under management
0
0
0
0
0
0
0
0
0
0
0
0
0
0
56
Of which debt securities
0
0
0
0
0
0
0
0
0
0
0
0
0
0
57
Of which equity instruments
0
0
0
0
0
0
0
0
0
0
0
0
0
0
MANAGEMENT REPORT (STAND-ALONE)
INTEGRATED ANNUAL REPORT 2024
48
HUF million
Disclosure reference date 31 December 2024
Total [gross]
carrying
amount
Circular economy (CE)
Pollution (PPC)
Biodiversity and Ecosystems
(BIO)
TOTAL
(CCM + CCA + WTR + CE + PPC + BIO)
of which towards taxonomy relevant
sectors (Taxonomy-eligible)
of which towards taxonomy relevant
sectors (Taxonomy-eligible)
of which towards taxonomy relevant
sectors (Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which environmentally
sustainable (Taxonomy-aligned)
of which environmentally
sustainable (Taxonomy-aligned)
of which environmentally
sustainable (Taxonomy-aligned)
of which environmentally sustainable (Taxonomy-
aligned)
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
transitional
of which
enabling
GAR - Covered assets in both numerator and
denominator
1
Loans and advances, debt securities and
equity instruments not HfT eligible for GAR
calculation
6,588,317 2,358
0
0
0
0
0
0
0
3
0
0
0 115,729
66,252
136
40,693
10,410
2
Financial undertakings
4,415,867
0
0
0
0
0
0
0
0
0
0
0
0
18,240
1,250
136
263
553
3
Credit institutions
3,581,461
0
0
0
0
0
0
0
0
0
0
0
0
18,240
1,250
136
263
553
4
Loans and advances
3,190,833
0
0
0
0
0
0
0
0
0
0
0
0
18,240
1,250
136
263
553
5
Debt securities, including UoP
390,628
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
6
Equity instruments
0
0
0
0
0
0
0
0
0
0
0
0
0
0
7
Other financial corporations
834,405
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
8
of which investment firms
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
9
Loans and advances
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
10
Debt securities, including UoP
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
11
Equity instruments
0
0
0
0
0
0
0
0
0
0
0
0
0
0
12
of which management companies
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
13
Loans and advances
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
14
Debt securities, including UoP
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
15
Equity instruments
0
0
0
0
0
0
0
0
0
0
0
0
0
0
16
of which insurance undertakings
459,120
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
17
Loans and advances
459,120
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
18
Debt securities, including UoP
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
19
Equity instruments
0
0
0
0
0
0
0
0
0
0
0
0
0
0
20
Non-financial undertakings
317,186 2,358
0
0
0
0
0
0
0
3
0
0
0
81,562
65,002
0
40,430
9,857
21
Loans and advances
317,186 2,358
0
0
0
0
0
0
0
3
0
0
0
81,562
65,002
0
40,430
9,857
22
Debt securities, including UoP
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
23
Equity instruments
0
0
0
0
0
0
0
0
0
0
0
0
0
0
24
Households
1,855,264
0
0
0
0
15,928
0
0
0
0
25
of which loans collateralised by
residential immovable property
44,356
0
0
0
0
14,881
0
0
0
0
26
of which building renovation loans
1,047
0
0
0
0
1,047
0
0
0
0
27
of which motor vehicle loans
0
0
0
0
0
0
28
Local governments financing
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
29
Housing financing
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
30
Other local government financing
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
31
Collateral obtained by taking
possession: residential and
commercial immovable properties
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
MANAGEMENT REPORT (STAND-ALONE)
INTEGRATED ANNUAL REPORT 2024
49
HUF million
Disclosure reference date 31 December 2024
Total [gross]
carrying
amount
Circular economy (CE)
Pollution (PPC)
Biodiversity and Ecosystems
(BIO)
TOTAL
(CCM + CCA + WTR + CE + PPC + BIO)
of which towards taxonomy relevant
sectors (Taxonomy-eligible)
of which towards taxonomy relevant
sectors (Taxonomy-eligible)
of which towards taxonomy relevant
sectors (Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which environmentally
sustainable (Taxonomy-aligned)
of which environmentally
sustainable (Taxonomy-aligned)
of which environmentally
sustainable (Taxonomy-aligned)
of which environmentally sustainable (Taxonomy-
aligned)
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
transitional
of which
enabling
32 Assets excluded from the numerator for GAR
calculation (covered in the denominator)
6,327,477
33
Financial and non-financial
undertakings
3,047,538
34
SMEs and NFCs (other than SMEs)
not subject to NFRD disclosure
obligations
2,846,798
35
Loans and advances
2,447,767
36
of which loans collateralised by
commercial immovable property
0
37
of which building renovation loans
0
38
Debt securities
332,645
39
Equity instruments
66,386
40
Non-EU country counterparties not
subject to NFRD disclosure obligations
200,740
41
Loans and advances
200,740
42
Debt securities
0
43
Equity instruments
0
44
Derivatives
47,425
45
On demand interbank loans
123,681
46
Cash and cash-related assets
125,765
47
Other categories of assets
(e.g. Goodwill, commodities etc.)
2,983,067
48 Total GAR assets
12,915,794 2,358
0
0
0
0
0
0
0
3
0
0
0 115,729
66,252
136
40,693
10,410
49 Assets not covered for GAR calculation
6,009,433
50
Central governments and
Supranational issuers
3,506,456
51
Central banks’ exposure
1,872,566
52
Trading book
630,412
53 Total assets
18,925,227 2,358
0
3
115,729
66,252
136
40,693
10,410
Off-balance sheet exposures - Undertakings subject to
NFRD disclosure obligations
54 Financial guarantees
0
0
0
0
0
0
0
0
0
55 Assets under management
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
56
Of which debt securities
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
57
Of which equity instruments
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
MANAGEMENT REPORT (STAND-ALONE)
INTEGRATED ANNUAL REPORT 2024
50
2. GAR Sector information
– Turnover based data
Breakdown by sector -
NACE 4 digits level
(code and label)
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
Water and marine resources (WTR)
Non-Financial corporates (Subject
to NFRD)
SMEs and other NFC not subject to
NFRD
Non-Financial corporates (Subject
to NFRD)
SMEs and other NFC not subject to
NFRD
Non-Financial corporates (Subject
to NFRD)
SMEs and other NFC not subject to
NFRD
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
HUF
million
of which environmentally
sustainable (CCM)
HUF
million
of which environmentally
sustainable (CCM)
HUF
million
of which environmentally
sustainable (CCA)
HUF
million
of which environmentally
sustainable (CCA)
HUF
million
of which environmentally
sustainable (WTR)
HUF
million
of which environmentally
sustainable (WTR)
1
7022
131
3
24
2
2932
62
30
3
2511
4
1920
5
0
1
5
4711
40
8
6
4730
7
4646
8
2120
9
1062
3,444
3,251
10
2016
20
0
4
11
3811
64
2
12
12
2059
2,524
62
467
13
4531
14
2720
0
15
1039
16
3511
9,066
1,994
17
4519
72
2
13
18
4931
1,354
33
251
19
3523
224
205
20
6420
5,502
5,044
21
4950
0
0
0
22
2910
0
0
0
23
5510
24
7010
9,494
9,494
25
8020
15
0
3
26
5310
27
6492
587
14
109
28
3514
0
0
29
2442
30
3513
17
17
31
6110
64
1
32
6120
33
6203
34
4520
35
1082
36
2351
37
2221
38
0520
39
3522
7
4
0
40
6820
21
19
41
6831
42
3020
17
8
43
3512
867
794
44
2443
45
4671
46
6920
1
1
47
8220
8
8
48
6209
18
0
49
2012
50
6201
MANAGEMENT REPORT (STAND-ALONE)
INTEGRATED ANNUAL REPORT 2024
51
Breakdown by
sector - NACE
4 digits level
(code and
label)
Circular economy (CE)
Pollution (PPC)
Biodiversity and Ecosystems (BIO)
TOTAL (CCM + CCA + WTR + CE + PPC + BIO)
Non-Financial corporates
(Subject to NFRD)
SMEs and other NFC not
subject to NFRD
Non-Financial corporates
(Subject to NFRD)
SMEs and other NFC not
subject to NFRD
Non-Financial corporates
(Subject to NFRD)
SMEs and other NFC not
subject to NFRD
Non-Financial corporates
(Subject to NFRD)
SMEs and other NFC not
subject to NFRD
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
HUF
million
of which
environmentally
sustainable (CE)
HUF
million
of which
environmentally
sustainable (CE)
HUF
million
of which
environmentally
sustainable (PPC)
HUF
million
of which
environmentally
sustainable (PPC)
HUF
million
of which
environmentally
sustainable (BIO)
HUF
million
of which
environmentally
sustainable (BIO)
HUF
million
of which
environmentally
sustainable (CCM +
CCA + WTR + CE +
PPC + BIO)
HUF
million
of which
environmentally
sustainable (CCM +
CCA + WTR + CE +
PPC + BIO)
1
7022
156
3
2
2932
62
30
3
2511
4
1920
6
0
5
4711
40
8
6
4730
7
4646
8
2120
9
1062
3,444
3,251
10
2016
24
0
11
3811
76
2
12
2059
2,992
62
13
4531
14
2720
0
15
1039
16
3511
9,066
1,994
17
4519
86
2
18
4931
1,605
33
19
3523
224
205
20
6420
5,502
5,044
21
4950
0
0
22
2910
0
0
23
5510
24
7010
9,494
9,494
25
8020
18
0
26
5310
27
6492
696
14
28
3514
0
0
29
2442
30
3513
17
17
31
6110
89
153
1
32
6120
33
6203
34
4520
35
1082
36
2351
37
2221
38
0520
39
3522
0
1
8
4
40
6820
21
19
41
6831
42
3020
17
8
43
3512
867
794
44
2443
45
4671
46
6920
1
1
47
8220
8
8
48
6209
25
43
0
49
2012
50
6201
MANAGEMENT REPORT (STAND-ALONE)
INTEGRATED ANNUAL REPORT 2024
52
2. GAR Sector information
– Capex based
Breakdown by
sector - NACE 4
digits level
(code and label)
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
Water and marine resources (WTR)
Non-Financial corporates (Subject
to NFRD)
SMEs and other NFC not subject to
NFRD
Non-Financial corporates (Subject
to NFRD)
SMEs and other NFC not subject to
NFRD
Non-Financial corporates (Subject
to NFRD)
SMEs and other NFC not subject to
NFRD
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
HUF
million
of which environmentally
sustainable (CCM)
HUF
million
of which environmentally
sustainable (CCM)
HUF
million
of which environmentally
sustainable (CCA)
HUF
million
of which environmentally
sustainable (CCA)
HUF
million
of which environmentally
sustainable (WTR)
HUF
million
of which environmentally
sustainable (WTR)
1
7022
326
139
2
2932
53
18
3
2511
4
1920
13
5
5
4711
1,126
185
6
4730
7
4646
8
2120
9
1062
3,958
3,617
10
2016
50
21
11
3811
160
68
12
2059
6,264
2,680
13
4531
14
2720
0
15
1039
16
3511
9,066
5,077
17
4519
179
77
18
4931
3,361
1,438
19
3523
559
522
20
6420
13,755
12,838
21
4950
0
0
22
2910
0
0
23
5510
24
7010
36,476
35,477
25
8020
38
16
26
5310
27
6492
1,456
623
28
3514
1
1
29
2442
30
3513
64
63
31
6110
13
13
32
6120
33
6203
34
4520
35
1082
36
2351
37
2221
38
0520
39
3522
9
9
40
6820
52
49
41
6831
42
3020
15
5
43
3512
2,167
2,022
44
2443
45
4671
46
6920
3
3
47
8220
32
31
48
6209
4
4
49
2012
50
6201
MANAGEMENT REPORT (STAND-ALONE)
INTEGRATED ANNUAL REPORT 2024
53
Breakdown by
sector - NACE
4 digits level
(code and
label)
Circular economy (CE)
Pollution (PPC)
Biodiversity and Ecosystems (BIO)
TOTAL (CCM + CCA + WTR + CE + PPC + BIO)
Non-Financial corporates
(Subject to NFRD)
SMEs and other NFC not
subject to NFRD
Non-Financial corporates
(Subject to NFRD)
SMEs and other NFC not
subject to NFRD
Non-Financial corporates
(Subject to NFRD)
SMEs and other NFC not
subject to NFRD
Non-Financial corporates
(Subject to NFRD)
SMEs and other NFC not
subject to NFRD
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
HUF
million
of which
environmentally
sustainable (CE)
HUF
million
of which
environmentally
sustainable (CE)
HUF
million
of which
environmentally
sustainable (PPC)
HUF
million
of which
environmentally
sustainable (PPC)
HUF
million
of which
environmentally
sustainable (BIO)
HUF
million
of which
environmentally
sustainable (BIO)
HUF
million
of which
environmentally
sustainable (CCM +
CCA + WTR + CE +
PPC + BIO)
HUF
million
of which
environmentally
sustainable (CCM +
CCA + WTR + CE +
PPC + BIO)
1
7022
65
391
139
2
2932
53
18
3
2511
4
1920
3
15
5
5
4711
1,126
185
6
4730
7
4646
8
2120
9
1062
3,958
3,617
10
2016
10
60
21
11
3811
32
192
68
12
2059
1,247
7,511
2,680
13
4531
14
2720
0
15
1039
16
3511
9,066
5,077
17
4519
36
215
77
18
4931
669
4,029
1,438
19
3523
559
522
20
6420
13,755
12,838
21
4950
0
0
0
22
2910
0
0
0
23
5510
24
7010
36,476
35,477
25
8020
8
46
16
26
5310
27
6492
290
1,746
623
28
3514
1
1
29
2442
30
3513
64
63
31
6110
13
13
32
6120
33
6203
34
4520
35
1082
36
2351
37
2221
38
0520
39
3522
3
12
9
40
6820
52
49
41
6831
42
3020
15
5
43
3512
2,167
2,022
44
2443
45
4671
46
6920
3
3
47
8220
32
31
48
6209
4
4
49
2012
50
6201
MANAGEMENT REPORT (STAND-ALONE)
INTEGRATED ANNUAL REPORT 2024
54
3. GAR KPI Stock
– Turnover based data
%
(compared to total covered assets in the denominator)
Disclosure reference date 31 December 2024
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
Water and marine resources (WTR)
of which towards taxonomy relevant sectors (Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which environmentally sustainable (Taxonomy-
aligned)
of which environmentally sustainable
(Taxonomy-aligned)
of which environmentally sustainable
(Taxonomy-aligned)
of which use of
proceeds
of which
transitional
of which
enabling
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
enabling
GAR - Covered assets in both numerator and
denominator
1
Loans and advances, debt securities and equity
instruments not HfT eligible for GAR calculation
1.0%
0.3%
0.0%
0.1%
0.2%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
2
Financial undertakings
0.4%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
3
Credit institutions
0.5%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
4
Loans and advances
0.5%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
5
Debt securities, including UoP
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
6
Equity instruments
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
7
Other financial corporations
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
8
of which investment firms
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
9
Loans and advances
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
10
Debt securities, including UoP
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
11
Equity instruments
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
12
of which management companies
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
13
Loans and advances
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
14
Debt securities, including UoP
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
15
Equity instruments
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
16
of which insurance undertakings
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
17
Loans and advances
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
18
Debt securities, including UoP
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
19
Equity instruments
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
20
Non-financial undertakings
10.6%
6.6%
0.0%
1.8%
3.7%
0.0%
0.0%
0.0%
0.0%
0.3%
0.0%
0.0%
0.0%
21
Loans and advances
10.6%
6.6%
0.0%
1.8%
3.7%
0.0%
0.0%
0.0%
0.0%
0.3%
0.0%
0.0%
0.0%
22
Debt securities, including UoP
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
23
Equity instruments
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
24
Households
0.9%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
25
of which loans collateralised by
residential immovable property
33.5%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
26
of which building renovation loans
100.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
27
of which motor vehicle loans
0.0%
0.0%
0.0%
0.0%
0.0%
28
Local governments financing
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
29
Housing financing
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
30
Other local government financing
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
31
Collateral obtained by taking possession:
residential and commercial immovable
properties
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
32 Total GAR assets
0.5%
0.2%
0.0%
0.0%
0.1%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
MANAGEMENT REPORT (STAND-ALONE)
INTEGRATED ANNUAL REPORT 2024
55
% (compared to total covered assets in the
denominator)
Disclosure reference date 31 December 2024
Circular economy (CE)
Pollution (PPC)
Biodiversity and Ecosystems
(BIO)
TOTAL
(CCM + CCA + WTR + CE + PPC + BIO)
of which towards taxonomy relevant
sectors (Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which towards taxonomy relevant
sectors (Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which environmentally
sustainable (Taxonomy-
aligned)
of which environmentally
sustainable (Taxonomy-
aligned)
of which environmentally
sustainable (Taxonomy-
aligned)
of which environmentally sustainable
(Taxonomy-aligned)
Proportion
of total
assets
covered
of which
use of
proceeds
of which
enabling
of which
use of
proceeds
of which
enabling
of which
use of
proceeds
of which
enabling
of which
use of
proceeds
of which
transitional
of which
enabling
GAR - Covered assets in both numerator and
denominator
1
Loans and advances, debt securities and
equity instruments not HfT eligible for GAR
calculation
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
1.0%
0.3%
0.0%
0.1%
0.2%
34.81%
2
Financial undertakings
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.4%
0.0%
0.0%
0.0%
0.0%
23.33%
3
Credit institutions
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.5%
0.0%
0.0%
0.0%
0.0%
18.92%
4
Loans and advances
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.5%
0.0%
0.0%
0.0%
0.0%
16.86%
5
Debt securities, including UoP
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
2.06%
6
Equity instruments
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
7
Other financial corporations
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
4.41%
8
of which investment firms
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
9
Loans and advances
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
10
Debt securities, including UoP
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
11
Equity instruments
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
12
of which management companies
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
13
Loans and advances
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
14
Debt securities, including UoP
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
15
Equity instruments
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
16
of which insurance undertakings
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
2.43%
17
Loans and advances
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
2.43%
18
Debt securities, including UoP
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
19
Equity instruments
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
20
Non-financial undertakings
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
10.9%
6.6%
0.0%
1.8%
3.7%
1.68%
21
Loans and advances
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
10.9%
6.6%
0.0%
1.8%
3.7%
1.68%
22
Debt securities, including UoP
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
23
Equity instruments
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
24
Households
0.0% 0.0%
0.0%
0.0%
0.9%
0.0%
0.0%
0.0%
0.0%
9.80%
25
of which loans collateralised by
residential immovable property
0.0% 0.0%
0.0%
0.0%
33.5%
0.0%
0.0%
0.0%
0.0%
0.23%
26
of which building renovation loans
0.0% 0.0%
0.0%
0.0%
100.0% 0.0%
0.0%
0.0%
0.0%
0.01%
27
of which motor vehicle loans
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
28
Local governments financing
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
29
Housing financing
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
30
Other local government financing
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
31
Collateral obtained by taking
possession: residential and
commercial immovable properties
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
32 Total GAR assets
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.5%
0.2%
0.0%
0.0%
0.1%
68.25%
MANAGEMENT REPORT (STAND-ALONE)
INTEGRATED ANNUAL REPORT 2024
56
3. GAR KPI Stock
– Capex based
% (compared to total covered assets in the denominator)
Disclosure reference date 31 December 2024
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
Water and marine resources (WTR)
of which towards taxonomy relevant sectors (Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which environmentally sustainable (Taxonomy-
aligned)
of which environmentally sustainable
(Taxonomy-aligned)
of which environmentally sustainable
(Taxonomy-aligned)
of which use of
proceeds
of which
transitional
of which
enabling
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
enabling
GAR - Covered assets in both numerator and
denominator
1
Loans and advances, debt securities and equity
instruments not HfT eligible for GAR calculation
1.7%
1.0%
0.0%
0.6%
0.2%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
2
Financial undertakings
0.4%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
3
Credit institutions
0.5%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
4
Loans and advances
0.6%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
5
Debt securities, including UoP
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
6
Equity instruments
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
7
Other financial corporations
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
8
of which investment firms
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
9
Loans and advances
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
10
Debt securities, including UoP
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
11
Equity instruments
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
12
of which management companies
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
13
Loans and advances
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
14
Debt securities, including UoP
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
15
Equity instruments
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
16
of which insurance undertakings
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
17
Loans and advances
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
18
Debt securities, including UoP
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
19
Equity instruments
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
20
Non-financial undertakings
25.0%
20.5%
0.0%
12.7%
3.1%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
21
Loans and advances
25.0%
20.5%
0.0%
12.7%
3.1%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
22
Debt securities, including UoP
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
23
Equity instruments
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
24
Households
0.9%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
25
of which loans collateralised by
residential immovable
property
33.5%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
26
of which building renovation loans
100.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
27
of which motor vehicle loans
0.0%
0.0%
0.0%
0.0%
0.0%
28
Local governments financing
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
29
Housing financing
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
30
Other local government financing
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
31
Collateral obtained by taking possession:
residential and commercial immovable
properties
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
32 Total GAR assets
0.9%
0.5%
0.0%
0.3%
0.1%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
MANAGEMENT REPORT (STAND-ALONE)
INTEGRATED ANNUAL REPORT 2024
57
% (compared to total covered assets in the
denominator)
Disclosure reference date 31 December 2024
Circular economy (CE)
Pollution (PPC)
Biodiversity and Ecosystems (BIO)
TOTAL
(CCM + CCA + WTR + CE + PPC + BIO)
of which towards taxonomy relevant
sectors (Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which towards taxonomy relevant
sectors (Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which environmentally
sustainable (Taxonomy-
aligned)
of which environmentally
sustainable (Taxonomy-
aligned)
of which environmentally
sustainable (Taxonomy-
aligned)
of which environmentally sustainable
(Taxonomy-aligned)
Proportion
of total
assets
covered
of which use
of proceeds
of which
enabling
of which use
of proceeds
of which
enabling
of which use
of proceeds
of which
enabling
of which use
of proceeds
of which
transitional
of which
enabling
GAR - Covered assets in both numerator and
denominator
1
Loans and advances, debt securities and
equity instruments not HfT
eligible for GAR calculation
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
1.8%
1.0%
0.0%
0.6%
0.2%
34.81%
2
Financial undertakings
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.4%
0.0%
0.0%
0.0%
0.0%
23.33%
3
Credit institutions
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.5%
0.0%
0.0%
0.0%
0.0%
18.92%
4
Loans and advances
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.6%
0.0%
0.0%
0.0%
0.0%
16.86%
5
Debt securities, including UoP
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
2.06%
6
Equity instruments
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
7
Other financial corporations
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
4.41%
8
of which investment firms
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
9
Loans and advances
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
10
Debt securities, including UoP
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
11
Equity instruments
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
12
of which management companies
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
13
Loans and advances
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
14
Debt securities, including UoP
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
15
Equity instruments
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
16
of which insurance undertakings
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
2.43%
17
Loans and advances
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
2.43%
18
Debt securities, including UoP
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
19
Equity instruments
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
20
Non-financial undertakings
0.7% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
25.7% 20.5%
0.0%
12.7%
3.1%
1.68%
21
Loans and advances
0.7% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
25.7% 20.5%
0.0%
12.7%
3.1%
1.68%
22
Debt securities, including UoP
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
23
Equity instruments
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
24
Households
0.0% 0.0%
0.0%
0.0%
0.9%
0.0%
0.0%
0.0%
0.0%
9.80%
25
of which loans collateralised by
residential immovable
property
0.0% 0.0%
0.0%
0.0%
33.5%
0.0%
0.0%
0.0%
0.0%
0.23%
26
of which building renovation loans
0.0% 0.0%
0.0%
0.0%
100.0% 0.0%
0.0%
0.0%
0.0%
0.01%
27
of which motor vehicle loans
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
28
Local governments financing
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
29
Housing financing
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
30
Other local government financing
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
31
Collateral obtained by taking
possession: residential and
commercial immovable properties
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
32 Total GAR assets
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.9%
0.5%
0.0%
0.3%
0.1%
68.2%
MANAGEMENT REPORT (STAND-ALONE)
INTEGRATED ANNUAL REPORT 2024
58
4.2. GAR KPI Stock,
– Turnover based data
% (compared to total covered assets in the
denominator)
Disclosure reference date 31 December 2024
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
Water and marine resources (WTR)
of which towards taxonomy relevant sectors (Taxonomy-eligible)
of which towards taxonomy relevant sectors (Taxonomy-
eligible)
of which towards taxonomy relevant sectors (Taxonomy-
eligible)
of which environmentally sustainable (Taxonomy-aligned)
of which environmentally sustainable
(Taxonomy-aligned)
of which environmentally sustainable
(Taxonomy-aligned)
of which use of
proceeds
of which
transitional
of which
enabling
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
enabling
GAR - Covered assets in both numerator
and denominator
1
Loans and advances, debt securities
and equity instruments not HfT eligible
for GAR calculation
0.5%
0.4%
0.0%
0.0%
0.4%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
2
Financial undertakings
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
3
Credit institutions
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
4
Loans and advances
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
5
Debt securities, including UoP
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
6
Equity instruments
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
7
Other financial corporations
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
8
of which investment firms
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
9
Loans and advances
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
10
Debt securities, including
UoP
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
11
Equity instruments
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
12
of which management
companies
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
13
Loans and advances
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
14
Debt securities, including
UoP
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
15
Equity instruments
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
16
of which insurance
undertakings
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
17
Loans and advances
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
18
Debt securities, including
UoP
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
19
Equity instruments
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
20
Non-financial undertakings
7.0%
5.7%
0.0%
0.5%
4.9%
0.0%
0.0%
0.0%
0.0%
0.2%
0.0%
0.0%
0.0%
21
Loans and advances
7.0%
5.7%
0.0%
0.5%
4.9%
0.0%
0.0%
0.0%
0.0%
0.2%
0.0%
0.0%
0.0%
22
Debt securities, including UoP
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
23
Equity instruments
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
24
Households
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
25
of which loans collateralised
by residential immovable
property
1.4%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
26
of which building renovation
loans
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
27
of which motor vehicle loans
0.0%
0.0%
0.0%
0.0%
0.0%
28
Local governments financing
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
29
Housing financing
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
30
Other local government
financing
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
31
Collateral obtained by taking
possession:
residential and commercial
immovable properties
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
32
Total GAR assets
0.4%
0.3%
0.0%
0.0%
0.3%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
MANAGEMENT REPORT (STAND-ALONE)
INTEGRATED ANNUAL REPORT 2024
59
% (compared to total covered assets in the
denominator)
Disclosure reference date 31 December 2024
Circular economy (CE)
Pollution (PPC)
Biodiversity and Ecosystems (BIO)
TOTAL (CCM + CCA + WTR + CE + PPC + BIO)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
Proportion
of total
assets
covered
of which environmentally sustainable
(Taxonomy-aligned)
of which environmentally sustainable
(Taxonomy-aligned)
of which environmentally sustainable
(Taxonomy-aligned)
of which environmentally sustainable (Taxonomy-
aligned)
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
transitional
of which
enabling
GAR - Covered assets in both
numerator and denominator
1
Loans and advances, debt securities
and equity instruments not HfT
eligible for GAR calculation
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.6% 0.4%
0.0%
0.0%
0.4%
66.05%
2
Financial undertakings
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
47.46%
3
Credit institutions
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
32.40%
4
Loans and advances
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
32.40%
5
Debt securities, including
UoP
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.00%
6
Equity instruments
0.0% 0.0%
0.0%
0.0% 0.0%
0.0%
0.0% 0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.00%
7
Other financial corporations
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
15.07%
8
of which investment firms
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.00%
9
Loans and advances
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.00%
10
Debt securities, including
UoP
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.00%
11
Equity instruments
0.0% 0.0%
0.0%
0.0% 0.0%
0.0%
0.0% 0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.00%
12
of which management
companies
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.00%
13
Loans and advances
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.00%
14
Debt securities, including
UoP
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.00%
15
Equity instruments
0.0% 0.0%
0.0%
0.0% 0.0%
0.0%
0.0% 0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.00%
16
of which insurance
undertakings
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
14.89%
17
Loans and advances
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
14.89%
18
Debt securities, including
UoP
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.00%
19
Equity instruments
0.0% 0.0%
0.0%
0.0% 0.0%
0.0%
0.0% 0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.00%
20
Non-financial undertakings
0.1% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
7.3% 5.7%
0.0%
0.5%
4.9%
4.95%
21
Loans and advances
0.1% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
7.3% 5.7%
0.0%
0.5%
4.9%
4.95%
22
Debt securities, including
UoP
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.00%
23
Equity instruments
0.0% 0.0%
0.0%
0.0% 0.0%
0.0%
0.0% 0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.00%
24
Households
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
13.65%
25
of which loans collateralised
by residential immovable
property
0.0% 0.0%
0.0%
0.0%
1.4% 0.0%
0.0%
0.0%
0.0%
0.02%
26
of which building renovation
loans
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.00%
27
of which motor vehicle loans
0.0% 0.0%
0.0%
0.0%
0.0%
0.00%
28
Local governments financing
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.00%
29
Housing financing
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.00%
30
Other local government
financing
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.00%
31
Collateral obtained by taking
possession:
residential and commercial
immovable properties
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.00%
32 Total GAR assets
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.4% 0.3%
0.0%
0.0%
0.3%
89.52%
MANAGEMENT REPORT (STAND-ALONE)
INTEGRATED ANNUAL REPORT 2024
60
4.2. GAR KPI Stock,
– Capex based
% (compared to total covered assets in the
denominator)
Disclosure reference date 31 December 2024
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
Water and marine resources (WTR)
of which towards taxonomy relevant sectors (Taxonomy-eligible)
of which towards taxonomy relevant sectors (Taxonomy-
eligible)
of which towards taxonomy relevant sectors (Taxonomy-
eligible)
of which environmentally sustainable (Taxonomy-aligned)
of which environmentally sustainable
(Taxonomy-aligned)
of which environmentally sustainable
(Taxonomy-aligned)
of which use of
proceeds
of which
transitional
of which
enabling
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
enabling
GAR - Covered assets in both numerator
and denominator
1
Loans and advances, debt securities
and equity instruments not HfT eligible
for GAR calculation
1.9%
1.6%
0.0%
1.3%
0.1%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
2
Financial undertakings
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
3
Credit institutions
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
4
Loans and advances
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
5
Debt securities, including UoP
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
6
Equity instruments
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
7
Other financial corporations
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
8
of which investment firms
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
9
Loans and advances
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
10
Debt securities, including
UoP
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
11
Equity instruments
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
12
of which management
companies
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
13
Loans and advances
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
14
Debt securities, including
UoP
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
15
Equity instruments
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
16
of which insurance
undertakings
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
17
Loans and advances
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
18
Debt securities, including
UoP
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
19
Equity instruments
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
20
Non-financial undertakings
24.7%
21.7%
0.0%
17.3%
1.4%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
21
Loans and advances
24.7%
21.7%
0.0%
17.3%
1.4%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
22
Debt securities, including UoP
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
23
Equity instruments
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
24
Households
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
25
of which loans collateralised
by residential immovable
property
1.4%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
26
of which building renovation
loans
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
27
of which motor vehicle loans
0.0%
0.0%
0.0%
0.0%
0.0%
28
Local governments financing
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
29
Housing financing
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
30
Other local government
financing
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
31
Collateral obtained by taking
possession:
residential and commercial
immovable properties
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
32
Total GAR assets
1.4%
1.2%
0.0%
1.0%
0.1%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
MANAGEMENT REPORT (STAND-ALONE)
INTEGRATED ANNUAL REPORT 2024
61
% (compared to total covered assets in the
denominator)
Disclosure reference date 31 December 2024
Circular economy (CE)
Pollution (PPC)
Biodiversity and Ecosystems (BIO)
TOTAL (CCM + CCA + WTR + CE + PPC + BIO)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which towards taxonomy relevant sectors (Taxonomy-
eligible)
Proportion
of total
assets
covered
of which environmentally sustainable
(Taxonomy-aligned)
of which environmentally sustainable
(Taxonomy-aligned)
of which environmentally sustainable
(Taxonomy-aligned)
of which environmentally sustainable (Taxonomy-
aligned)
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
transitional
of which
enabling
GAR - Covered assets in both
numerator and denominator
1
Loans and advances, debt securities
and equity instruments not HfT
eligible for GAR calculation
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
1.9% 1.6%
0.0%
1.3%
0.1%
66.05%
2
Financial undertakings
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
47.46%
3
Credit institutions
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
32.40%
4
Loans and advances
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
32.40%
5
Debt securities, including
UoP
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.00%
6
Equity instruments
0.0% 0.0%
0.0%
0.0% 0.0%
0.0%
0.0% 0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.00%
7
Other financial corporations
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
15.07%
8
of which investment firms
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.00%
9
Loans and advances
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.00%
10
Debt securities, including
UoP
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.00%
11
Equity instruments
0.0% 0.0%
0.0%
0.0% 0.0%
0.0%
0.0% 0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.00%
12
of which management
companies
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.00%
13
Loans and advances
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.00%
14
Debt securities, including
UoP
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.00%
15
Equity instruments
0.0% 0.0%
0.0%
0.0% 0.0%
0.0%
0.0% 0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.00%
16
of which insurance
undertakings
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
14.89%
17
Loans and advances
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
14.89%
18
Debt securities, including
UoP
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.00%
19
Equity instruments
0.0% 0.0%
0.0%
0.0% 0.0%
0.0%
0.0% 0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.00%
20
Non-financial undertakings
0.6% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
25.3% 21.7%
0.0%
17.3%
1.4%
4.95%
21
Loans and advances
0.6% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
25.3% 21.7%
0.0%
17.3%
1.4%
4.95%
22
Debt securities, including
UoP
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.00%
23
Equity instruments
0.0% 0.0%
0.0%
0.0% 0.0%
0.0%
0.0% 0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.00%
24
Households
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
13.65%
25
of which loans collateralised
by residential immovable
property
0.0% 0.0%
0.0%
0.0%
1.4% 0.0%
0.0%
0.0%
0.0%
0.02%
26
of which building renovation
loans
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.00%
27
of which motor vehicle loans
0.0% 0.0%
0.0%
0.0%
0.0%
0.00%
28
Local governments financing
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.00%
29
Housing financing
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.00%
30
Other local government
financing
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.00%
31
Collateral obtained by taking
possession: residential and
commercial immovable
properties
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.00%
32 Total GAR assets
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
1.4% 1.2%
0.0%
1.0%
0.1%
89.52%
MANAGEMENT REPORT (STAND-ALONE)
INTEGRATED ANNUAL REPORT 2024
62
5. KPI off-balance sheet exposures (Stock)
– Turnover based data
% (compared to total eligible off-balance
sheet assets)
Disclosure reference date 31 December 2024
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
Water and marine resources (WTR)
of which towards taxonomy relevant sectors (Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which environmentally sustainable (Taxonomy-aligned)
of which environmentally sustainable
(Taxonomy-aligned)
of which environmentally sustainable
(Taxonomy-aligned)
of which use of
proceeds
of which
transitional
of which
enabling
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
enabling
1 Financial guarantees (FinGuar KPI)
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
2 Assets under management (AuM
KPI)
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
% (compared to total eligible off-
balance sheet assets)
Disclosure reference date 31 December 2024
Circular economy (CE)
Pollution (PPC)
Biodiversity and Ecosystems (BIO)
TOTAL (CCM + CCA + WTR + CE + PPC + BIO)
of which towards taxonomy relevant
sectors (Taxonomy-eligible)
of which towards taxonomy relevant
sectors (Taxonomy-eligible)
of which towards taxonomy relevant
sectors (Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which environmentally
sustainable (Taxonomy-aligned)
of which environmentally
sustainable (Taxonomy-aligned)
of which environmentally
sustainable (Taxonomy-aligned)
of which environmentally sustainable
(Taxonomy-aligned)
of which use
of proceeds
of which
enabling
of which use
of proceeds
of which
enabling
of which
use of
proceeds
of which
enabling
of which use
of proceeds
of which
transitional
of which
enabling
1 Financial guarantees (FinGuar KPI) 0.00% 0.00%
0.00%
0.00% 0.00% 0.00%
0.00%
0.00% 0.00% 0.00%
0.00%
0.00% 0.00% 0.00%
0.00%
0.00%
0.00%
2 Assets under management (AuM
KPI)
0.00% 0.00%
0.00%
0.00% 0.00% 0.00%
0.00%
0.00% 0.00% 0.00%
0.00%
0.00% 0.00% 0.00%
0.00%
0.00%
0.00%
MANAGEMENT REPORT (STAND-ALONE)
INTEGRATED ANNUAL REPORT 2024
63
5. KPI off-balance sheet exposures (Stock)
– Capex based
% (compared to total eligible off-balance
sheet assets)
Disclosure reference date 31 December 2024
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
Water and marine resources (WTR)
of which towards taxonomy relevant sectors (Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which environmentally sustainable (Taxonomy-aligned)
of which environmentally sustainable
(Taxonomy-aligned)
of which environmentally sustainable
(Taxonomy-aligned)
of which use of
proceeds
of which
transitional
of which
enabling
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
enabling
1 Financial guarantees (FinGuar KPI)
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
2 Assets under management (AuM
KPI)
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
% (compared to total eligible off-
balance sheet assets)
Disclosure reference date 31 December 2024
Circular economy (CE)
Pollution (PPC)
Biodiversity and Ecosystems (BIO)
TOTAL (CCM + CCA + WTR + CE + PPC + BIO)
of which towards taxonomy relevant
sectors (Taxonomy-eligible)
of which towards taxonomy relevant
sectors (Taxonomy-eligible)
of which towards taxonomy relevant
sectors (Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which environmentally
sustainable (Taxonomy-aligned)
of which environmentally
sustainable (Taxonomy-aligned)
of which environmentally
sustainable (Taxonomy-aligned)
of which environmentally sustainable
(Taxonomy-aligned)
of which use
of proceeds
of which
enabling
of which use
of proceeds
of which
enabling
of which
use of
proceeds
of which
enabling
of which use
of proceeds
of which
transitional
of which
enabling
1 Financial guarantees (FinGuar KPI) 0.00% 0.00%
0.00%
0.00% 0.00% 0.00%
0.00%
0.00% 0.00% 0.00%
0.00%
0.00% 0.00% 0.00%
0.00%
0.00%
0.00%
2 Assets under management (AuM
KPI)
0.00% 0.00%
0.00%
0.00% 0.00% 0.00%
0.00%
0.00% 0.00% 0.00%
0.00%
0.00% 0.00% 0.00%
0.00%
0.00%
0.00%
MANAGEMENT REPORT (STAND-ALONE)
INTEGRATED ANNUAL REPORT 2024
64
5.2 KPI off-balance sheet exposures (Flow)
– Turnover based data
% (compared to total eligible off-balance
sheet assets)
Disclosure reference date 31 December 2024
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
Water and marine resources (WTR)
of which towards taxonomy relevant sectors (Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which environmentally sustainable (Taxonomy-aligned)
of which environmentally sustainable
(Taxonomy-aligned)
of which environmentally sustainable
(Taxonomy-aligned)
of which use of
proceeds
of which
transitional
of which
enabling
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
enabling
1 Financial guarantees (FinGuar KPI)
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
2 Assets under management (AuM
KPI)
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
% (compared to total eligible off-
balance sheet assets)
Disclosure reference date 31 December 2024
Circular economy (CE)
Pollution (PPC)
Biodiversity and Ecosystems (BIO)
TOTAL (CCM + CCA + WTR + CE + PPC + BIO)
of which towards taxonomy relevant
sectors (Taxonomy-eligible)
of which towards taxonomy relevant
sectors (Taxonomy-eligible)
of which towards taxonomy relevant
sectors (Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which environmentally
sustainable (Taxonomy-aligned)
of which environmentally
sustainable (Taxonomy-aligned)
of which environmentally
sustainable (Taxonomy-aligned)
of which environmentally sustainable
(Taxonomy-aligned)
of which use
of proceeds
of which
enabling
of which use
of proceeds
of which
enabling
of which
use of
proceeds
of which
enabling
of which use
of proceeds
of which
transitional
of which
enabling
1 Financial guarantees (FinGuar KPI) 0.00% 0.00%
0.00%
0.00% 0.00% 0.00%
0.00%
0.00% 0.00% 0.00%
0.00%
0.00% 0.00% 0.00%
0.00%
0.00%
0.00%
2 Assets under management (AuM
KPI)
0.00% 0.00%
0.00%
0.00% 0.00% 0.00%
0.00%
0.00% 0.00% 0.00%
0.00%
0.00% 0.00% 0.00%
0.00%
0.00%
0.00%
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65
5.2 KPI off-balance sheet exposures (Flow)
– Capex based
% (compared to total eligible off-balance
sheet assets)
Disclosure reference date 31 December 2024
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
Water and marine resources (WTR)
of which towards taxonomy relevant sectors (Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which environmentally sustainable (Taxonomy-aligned)
of which environmentally sustainable
(Taxonomy-aligned)
of which environmentally sustainable
(Taxonomy-aligned)
of which use of
proceeds
of which
transitional
of which
enabling
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
enabling
1 Financial guarantees (FinGuar KPI)
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
2 Assets under management (AuM
KPI)
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
% (compared to total eligible off-
balance sheet assets)
Disclosure reference date 31 December 2024
Circular economy (CE)
Pollution (PPC)
Biodiversity and Ecosystems (BIO)
TOTAL (CCM + CCA + WTR + CE + PPC + BIO)
of which towards taxonomy relevant
sectors (Taxonomy-eligible)
of which towards taxonomy relevant
sectors (Taxonomy-eligible)
of which towards taxonomy relevant
sectors (Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which environmentally
sustainable (Taxonomy-aligned)
of which environmentally
sustainable (Taxonomy-aligned)
of which environmentally
sustainable (Taxonomy-aligned)
of which environmentally sustainable
(Taxonomy-aligned)
of which use
of proceeds
of which
enabling
of which use
of proceeds
of which
enabling
of which
use of
proceeds
of which
enabling
of which use
of proceeds
of which
transitional
of which
enabling
1 Financial guarantees (FinGuar KPI) 0.00% 0.00%
0.00%
0.00% 0.00% 0.00%
0.00%
0.00% 0.00% 0.00%
0.00%
0.00% 0.00% 0.00%
0.00%
0.00%
0.00%
2 Assets under management (AuM
KPI)
0.00% 0.00%
0.00%
0.00% 0.00% 0.00%
0.00%
0.00% 0.00% 0.00%
0.00%
0.00% 0.00% 0.00%
0.00%
0.00%
0.00%
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66
2.2. Climate change and environment
Climate Change: Mitigation of Climate Change –Impacts, Risks, and Opportunities
The impact of OTP Bank arises from direct and indirect greenhouse gas emissions, exacerbating climate
change. The direct emissions from operations and indirect emissions from energy consumption (Scope 1-2)
are relatively small. However, the indirect emissions associated with OTP Bank's loan portfolio (Scope 3)
exceed Scope 1-2 emissions by several orders of magnitude.
In addition to emissions, the exemplary and awareness-raising impact that can be represented through its
practices is also significant, considering the Bank's wide customer base.
Expanding green lending to facilitate climate change mitigation represents a significant business opportunity
for the Bank.
It is significant for OTP Bank's lending activities because, in relation to climate change mitigation, a transition
risk arises for a portion of its customer base, which indirectly poses a risk to the Bank as well. The extent of
this risk is estimated through stress testing in relation to the corporate portfolio.
Mitigating climate change as a material topic at OTP Bank
The Bank Group aims to facilitate climate change mitigation by reducing emissions associated with its lending
and own operations, a goal supported by OTP Bank as well. At the end of 2024, a climate target was set for
the loan portfolio, and the OTP Group also aims to play a leading financing role in the green and just transition
in the long term. In the ESG strategy, a KPI has been set for green lending for the period up to 2025: OTP
plans to build a green loan portfolio of HUF 1,500 billion by 2025. The portfolio is continuously growing, with
the OTP Group's balance sheet green exposure amounting to HUF 1,027 billion at the end of 2024.
The green lending targets are currently linked to the EU Taxonomy's mitigation and adaptation goals. The key
sectors for green lending in the group's portfolio are: energy (renewable energy production, distribution,
storage, and related lending goals), real-estate (construction, purchase, and sale of green properties, as well
as financing renovations that result in significant building energy improvements), and transportation (electro-
mobility).
In terms of green lending, the Bank strives to take advantage of regulatory incentives.
The Bank continuously strives to reduce its Scope 1-2 emissions. In addition to efficiency-enhancing actions,
the use of green electric energy plays a significant role.
OTP Bank has incorporated ESG risks into its risk management policies and procedures at the group level,
enabling the identification and management of these risks to minimize emerging credit, reputational, regulatory,
and legal risks. The management of ESG risks is integrated into various levels of the risk ecosystem. Since
2021, the Bank has been applying its ESG risk management framework in corporate lending to address the
credit risk aspect of ESG risks.
Risks arising from the Bank's own operations are managed within the framework of operational risks. The
assessment of these risks is carried out through the Annual Group-level Risk and Control Self-Assessment
and scenario analysis, based on the results of which risk mitigation actions are determined.
Climate Change: Adaptation to Climate Change –Impacts, Risks, and Opportunities
OTP Bank's lending practices impact adaptation, either by facilitating (expecting or supporting with favorable
conditions), hindering, or remaining neutral towards customers' adaptation efforts. The necessity for adaptation
is strongly required in several sectors within the portfolio (e.g., housing loans, agriculture, real-estate,
construction sectors).
The Bank strives to utilize the business opportunities arising from lending that facilitates adaptation to climate
change.
The physical risks associated with lending activities, as well as some of the transition risks (investments
necessary for adaptation), are also related to this.
Managing climate change adaptation as a material topic at OTP Bank
The Bank strives to support adaptation to climate change through green lending. Risk management is
conducted within the framework of ESG risk management.
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67
Climate Change: Energy –Impacts, Risks, and Opportunities
Through the financing of energy-intensive industries, the Bank influences the environmental impact of its
clients' activities. By providing loans that encourage the use of renewable, carbon-free, and transitionally green
energy sources, the Bank significantly contributes to mitigating this impact. These goals represent a substantial
proportion of green loans, and financing in these sectors is also significant.
Similar to climate change mitigation and adaptation, business opportunities arise within green lending, where
expanding the use of renewable and green-certified energy sources plays a significant role.
Financing energy-intensive and fossil fuel-using companies poses credit and reputational risks for OTP Bank.
Managing energy as a material topic at OTP Bank
The Bank addresses this topic through the methods and tools presented in the previous two topics.
30.23% of the Bank's green loan portfolio finances renewable energy.
Water and Marine Resources: Water Withdrawal –Impacts, Risks, and Opportunities
In OTP Bank's corporate loan portfolio, the presence of sectors with high water withdrawal is significant. To
better understand the impacts, it is necessary to explore the practices employed by these companies.
Financial risk primarily arises in relation to those clients who are unable to adequately manage changing or
existing environmental expectations (e.g., tightening regulations, shifting consumer preferences, fines), or
whose activities face difficulties in ensuring water supply. A deeper understanding of the risk requires further
analysis.
Managing water withdrawal is a material topic at OTP Bank
The minimum expectations imposed and monitored by the Bank towards its clients include compliance with
relevant environmental and social laws and regulations, as well as possessing the necessary permits and
authorizations for their operations. Understanding clients' practices beyond these requirements is ongoing
alongside the evolving and strengthening regulatory expectations, based on which expectations promoting
responsible behavior can be formulated.
There is an opportunity to finance these goals within green lending. The Banking Group's minimum expectation
for its clients, which is monitored, is compliance with relevant environmental and social laws and regulations,
as well as possessing the necessary permits and authorizations for their operations. Understanding clients'
practices beyond these requirements is ongoing, in parallel with the evolving and strengthening regulatory
expectations. Based on this, expectations that encourage responsible behavior can be formulated.
Risk management is conducted within the framework of ESG risk management.
Biodiversity and ecosystems: Direct impact drivers of biodiversity loss –impacts, risks, and
opportunities
The presence of sectors potentially having a negative impact on biodiversity and ecosystems is significant in
OTP Bank's corporate loan portfolio. The Bank indirectly influences the extent of these impacts through its
financing conditions and can also encourage positive impacts. A more precise understanding of these impacts
requires uncovering the practices employed by the companies.
Managing direct impact drivers of biodiversity loss as a material topic at OTP Bank
The minimum expectations imposed and monitored by the Bank towards its clients include compliance with
relevant environmental and social laws and regulations, as well as possessing the necessary permits and
authorizations for their operations (currently, there are significantly fewer requirements related to biodiversity
compared to water). Understanding clients' practices beyond these requirements is ongoing alongside the
evolving and strengthening regulatory expectations, based on which expectations promoting responsible
behavior can be formulated.
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ESRS E1-2, E3-1, E4-2: Policies
The OTP Group has a Group Credit Risk Policy and a Corporate Lending Policy / Operational Lending Limits
and Guidelines, which also apply to OTP Bank. A detailed description of the policies can be found in subsection
2.2. Climate change and environment – Policies in the OTP Group Sustainability Report.
OTP Bank does not have a policy on water and biodiversity and ecosystems. The development of policies on
water and biodiversity and ecosystems should be preceded by a deeper analysis of the risks involved in these
two areas.
In addition, the OTP Group’s Code of Ethics declares the Group's commitment to environmental sustainability
and environmental values (see Governance Information).
ESRS E1-4, E3-3, E4-4, E1-9: Targets
OTP Bank also contributes to the Group's two main climate change targets: GHG emission reduction target
concerning the portfolio defined under climate targeting, and the green lending target11. The content of these
is briefly described below.
Climate targeting
In line with regulatory requirements, a plan to reduce the OTP Group's financed GHG emissions was defined
in 2024. The plan sets targets to be achieved by 2030, based on the International Energy Agency's (IEA) Net
Zero 2050 (NZE 2050) scenarios and national decarbonisation plans, and takes into account the current
portfolio composition of OTP Group. OTP Bank follows the targets set by the Group, which are described in
detail in subsection 2.2. Climate and Environment – Targets in the OTP Group Sustainability Report.
Actions to reduce financed emissions
The OTP Group continuously monitors progress towards the 2030 climate target, taking into account whether
external conditions allow the target to be met.
In order to achieve its target, the OTP Group has set actions to reduce its financed emissions, which are also
being followed by OTP Bank. A detailed description of the actions can be found in subsection 2.2. Climate
change and environment – Actions to mitigate financed emissions of the OTP Group Sustainability Report.
Approval of the climate target document by the Executive Steering Committee is planned for 05.02.2025.
Green lending target
OTP Bank also contributes to the OTP Group's goal, declared in its ESG strategy in 2021 and unchanged
since then, to be a regional leader in financing a fair and gradual transition to a low-carbon economy and
building a sustainable future through responsible solutions12. The targets of the Banking Group are presented
in detail in subsection 2.2. Climate change and environment – Green lending target in the OTP Group
Sustainability Report.
Further purposes
In its ESG strategy for 2021, OTP Bank has set a target of achieving carbon-neutral operation by 2030. This
absolute value target covers Scope 1-2 emissions, and a related target of 0 tCO2e, net zero emission is fixed,
without identifying a base year. Net zero emissions is the reduction of greenhouse gas emissions where
possible and the neutralisation of non-avoidable emissions through carbon dioxide removal. The target is not
based on scientific evidence, OTP Bank's relevant departments were involved in its development. OTP Bank’s
Scope 1-2 market-based emissions in 2024 were 6,644 tCO2e13. In terms of electricity, OTP Bank uses mostly
green energy, with around three quarters of emissions coming from natural gas usage and vehicle fuel
consumption. Preparation of the Bank's emissions intensity reduction plan for real-estate and fleet has started,
and an ESG Committee decision has been taken to prepare it in 2025.
11 These objectives are to be understood as objectives under sub-topic Climate change mitigation and Climate change adaptation and Energy.
12 Green finance is an objective of all three climate change sub-topic identified in the ESRS, and the OTP Bank does not address these issues separately.
No base year has been identified for the target, and green exposures in the stock are measured from 2022 onwards.
13 Comparability with previous years is not feasible due to the different reporting methodology required by the ESRS.
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OTP Bank does not currently have targets for water, biodiversity and ecosystems, and the development of
such targets will require a deeper analysis. The Bank does not currently monitor the effectiveness of its policies
and actions in these areas (the Group at present only has actions in relation to water).
ESRS E1-3, E3-2, E4-3: Actions and resources
OTP Bank has identified two main packages of actions to tackle climate change: firstly, actions relating to the
portfolio as specified within the frameworks of climate targeting detailed under the Environmental information
@E1-4 disclosure requirement, and the green lending actions detailed below14. Of lesser importance are
actions to reduce operational GHG emissions, which are presented in aggregate.
Green lending
For up-to-date information on the Green Portfolio, see section 2.1. Publications under the Taxonomy
Regulation.
Green financing is ongoing. OTP Bank is integrating green/climate-conscious lending15 into its business and
aims to ensure that, over time, any customer in any sector can obtain credit on green terms, provided the
customer has a green/sustainable goal that they wish to achieve with the credit. The maturity of this process
varies by industry and customer segment.
The expected impact of green credits on GHG emission reductions is presented under the Environmental
information @E1-4 disclosure requirement, this has not been actiond so far.
The resources currently needed to implement green financing are available, and the possibility of targeted
mobilisation of resources in line with market opportunities is ensured by the Sustainable Finance Framework.
Actions to help reduce Scope 1-2 emissions
Of the planned actions, green electricity procurement has had the biggest impact, OTP Bank's consumption
was covered mainly by green electricity in 2024. These practices are planned to continue in 2025. Other
planned actions include lighting replacement, boiler replacement, optimisation of heating and cooling,
insulation and solar panel installation.
OTP Bank has not yet decided on any actions on biodiversity and ecosystems. A more detailed impact
assessment is needed before appropriate actions can be developed.
ESRS E1-6: GHG emissions, GHG intensity
For the calculation of GHG emissions, OTP Bank has applied the group-wide data collection and calculation
methodology, which is described in detail in subsection 2.3 Reporting policy regarding chapter E in the OTP
Group Sustainability Report.
14 These measures should also be understood as measures under the sub-topic Climate change mitigation and Climate change adaptation
and Energy.
15 The Group does not specifically address the sub-topic set out in the ESRS.
Emission of Scope 1, Scope 2 and Scope 3 by OTP Bank Plc. at individual level
Retrospective
Milestones and target years
Base year
2023
Comparison
20231
2024
change %
2025
2030
annual
change %
Scope 1 GHG emissions
Scope 1 gross GHG emissions (tCO2eq)
n.a.
n.a.
118,470
n.a.
n.a.
n.a.
n.a.
Percentage of Scope 1 GHG
emissions from regulated emissions
trading schemes (%)
0
0
0
0
0
0
0
Scope 2 GHG emissions
Scope 2 gross GHG emissions (tCO2eq)
n.a.
n.a.
58,076
n.a.
n.a.
n.a.
n.a.
Scope 2 market-based GHG emissions
(tCO2eq)
n.a.
n.a.
48,834
n.a.
n.a.
n.a.
n.a.
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1 Note: Without the data of OTP Bank, all companies included in the consolidated group and companies under the operational control of OTP Bank
GHG intensity based on
revenue
Comparison
2024
2024/2023
Total GHG emissions per net
revenue (local basis) (tonnes of
carbon dioxide equivalent per
monetary unit)
N/A
11.84
N/A
Total GHG emissions per net
revenue (market-based) (tonnes
of carbon dioxide equivalent per
monetary unit)
N/A
11.83
N/A
The GHG intensity of OTP Bank is significantly higher than the OTP Group’s GHG intesity because, while the
numerator includes the total emissions of OTP Group, the denominator only includes the net revenue of OTP
Bank.
Estimated Scope 3 emissions
The bulk of Scope 3 emissions by credit institutions is in category 15, that is, it is generated by loans and other
investments. Therefore, the OTP Group did not estimate the emissions in categories 1 to 14 by category, but
in aggregate. Estimation was based on revenue-related GHG intensity factors and own revenue data provided
by the PCAF/Exiobase database16.
OTP Bank has applied the Group's approach in determining Scope 3 emissions, which is described in
subsection 2.2. Climate change -Emissions, GHG Intensity in the OTP Group Sustainability Report.
The table below shows the OTP Bank's funded emissions (Scope 3 / 15. Investments) broken down by PCAF
asset classes and by the emission scopes of customers. OTP Bank considers its customers' Scope 1 and
Scope 2 emission, excluding funding to sovereigns, as the most reliable and relevant indicator of its funded
emissions. This indicator is the most informative to show the Bank's funded emissions, as in general, Scope 3
emissions and sovereign emissions are largely based on estimates and assumptions.
16 The PCAF/Exiobase database is a database issued by the PCAF containing proxies for various corporate emissions for PCAF signa tories.
Emission of Scope 1, Scope 2 and Scope 3 by OTP Bank Plc. at individual level
Retrospective
Milestones and target years
Base year
2023
Comparison
20231
2024
change %
2025
2030
annual
change %
Significant Scope 3 GHG emissions
Total2 gross indirect (Scope 3) GHG
emissions (tCO2eq)
25,007,832
25,007,832
24,835,989
-1%
n/a
16,855,279
-5.5%
15. Investments
25,007,832
25,007,832
24,835,989
-1%
n/a
16,855,279
-5.5%
Total GHG emissions
Total GHG emissions (local basis)
(tCO2eq)
n.a.
n.a.
25,012,535
n.a.
n.a.
n.a.
n.a.
Total GHG emissions (market-based)
(tCO2eq)
n.a.
n.a. 25,003,293
n.a.
n.a.
n.a.
n.a.
1 Note: In this year's report, the base year and the previous year are the same. The 2023 data does not include the values of the OBR Group. In 2024, biogenic
emissions were 734 tons.
2 Note: The OTP Group's total indirect gross (Scope 3) emissions do not include the financed emissions related to the assets managed by the Group's
subsidiaries acting as asset managers, as these assets are not part of the Group's consolidated assets (since their owner is not the OTP Group)
3 The total emissions of OTP Bank are equal to the total emissions of the OTP Group due to methodological reasons
OTP Bank Scope 1-2 emissions, 2024
OTP Bank
OTP Group without
OTP Bank1
Scope 1 GHG emissions (tCO2e)
5,565
112,905
Scope 2 location-based GHG emissions (tCO2e)
8,170
49,906
Scope 2 market-based GHG emissions (tCO2e)
1,079
47,755
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71
OTP Group's financed GHG emissions broken down by PCAF asset classes, 2023 (w/o OBR Group)
PCAF asset class
PCAF
average
data
quality
score
Total
exposure
Financed
Scope 1
emission
Financed
Scope 2
emission
Financed
Scope 3
emission
Total
finance
emissions
(Unit of actionment):
(million
HUF)
(tons
CO2eq)
(tons
CO2eq)
(tons
CO2eq)
(tons
CO2eq)
Listed equity and corporate bonds
4.4
488,160
158,577
31,489
451,391
641,457
Business loans, unlisted equity and project loans
4.2
8,284,605
5,266,204
1,222,157
10,763,652
17,252,014
Commercial real-estate financing
5.0
570,766
44,075
n/a
44,075
Mortgages
4.1
5,134,422
651,600
n/a
651,600
Vehicle loans
4.8
1,546,814
1,809,803
n/a
1,809,803
Total without sovereign debt
4.3
16,024,767
9,183,905
11,215,043
20,398,948
Sovereign debt
1.4
6,033,682
2,543,807
487,273
1,577,804
4 608 884
Total (all PCAF asset classes)
3.5
22,058,449
12,214,985
12,792,847
25,007,832
Financed GHG intensity (financed emissions / loan volume provided) of OTP Group's portfolio in 2023, w/o OBR Group
PCAF asset class
Financed Scope 1
intensity
Financed Scope 2
intensity
Financed Scope 3
intensity
Total emission
intensity
(Unit of actionment):
(g CO2eq / HUF)
(g CO2eq / HUF)
(g CO2eq / HUF)
(g CO2eq / HUF)
Listed equity and corporate bonds
0.32
0.06
0.92
1.31
Business loans, unlisted equity and project loans
0.64
0.15
1.30
2.08
Commercial real-estate financing
0.08
n/a
0.08
Mortgages
0.13
n/a
0.13
Vehicle loans
1.17
n/a
1.17
Total without sovereign debt
0.57
0.70
1.27
Sovereign debt
0.42
0.08
0.26
0,76
Total (all PCAF asset classes)
0.55
0.58
1.13
In terms of financed GHG intensity (financed emissions / outstanding loans), which forms the basis of the OTP
Group's climate targeting, the only informative indicator is the Bank's financed Scope 1 and 2 GHG intensity,
excluding the sovereign portfolio.
OTP Group's financed GHG emissions broken down by PCAF asset classes, 2024
PCAF asset class
PCAF
average
data
quality
score
Total
exposure
Financed
Scope 1
emission
Financed
Scope 2
emission
Financed
Scope 3
emission
Total
finance
emissions
(Unit of actionment):
(1-5)
(million
HUF)
(tons
CO2eq)
(tons
CO2eq)
(tons
CO2eq)
(tons
CO2eq)
Listed equity and corporate bonds
4.4
549,420
169,045
32,618
472,556
674,219
Business loans, unlisted equity and project loans
4.1
8,558,410
4,339,808
1,095,399
10,094,675
15,529,883
Commercial real-estate financing
4.8
706,425
47,570
n/a
47,570
Mortgages
4.1
6,035,650
586,892
n/a
586,892
Vehicle loans
4.6
1,980,147
2,025,430
n/a
2,025,430
Total without sovereign debt
4.2
17,830,052
8,296,763
10,567,231
18,863,994
Sovereign debt
1.4
8,871,078
3,312,631
623,254
2,036,110
5,971,995
Total (all PCAF asset classes)
3.3
26,701,130
12,232,648
12,603,341
24,835,989
ESRS E1-7, E1-8: Carbon credits, GHG removals and internal carbon pricing
OTP Bank has purchased 7,000 tCO2e of carbon credits in 2024. This volume covers the entire Scope 1-2
emissions of OTP Bank. Carbon credits retired during the reporting period are verified according to the Verified
Carbon Standard by Verra. The Bank considers it essential that the project supported by the counterpart is
located in the country of operation of the Banking Group, and therefore the only project supported by the
purchase is the Sant Nikola Wind Farm near the town of Kavarna in Bulgaria, which is the largest wind farm in
the country. The project is a mitigation project and does not qualify as an appropriate adaptation under Article
6 of the Paris Agreement17.
17 The project is 100% reduction project, 100% implemented in the European Union, 100% certified to recognised quality standards .
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OTP Bank's carbon neutrality target includes the use of carbon credits as well. The use of carbon credits does
not prevent the achievement of the Scope 1-2 2030 target of zero emissions, given that OTP Bank has started
to develop emission reduction plans based on energy efficiency and renewable energy use. In addition, the
Bank plans to redeem carbon credits purchased in line with its existing practice as compensation for its own
operational carbon footprint with a “habitat restoration certificate”.
Together with the Pilisi Parkerdő Zrt. as a cooperating partner, we aim at the development of a 400 ha nature
conservation area, the so-called Budakeszi Wildlife Garden, with a complex urban forest approach, which
somewhat puts the economic aspects of the classic triple function of forests, i.e. economic-nature
conservation-welfare, into the background in order to preserve and enrich the natural-ecological values of
forests and to develop the forest area in line with its natural values in the field of ecotourism. The Bank's target
with the project is multiple: on the one hand, it offers a platform for building professional engaging and scientific
work on biodiversity, climate adaptation, carbon sequestration and ecosystem services, and on the other hand,
it can promote sustainability among our employees by integrating the use of forest land into a non-financial
recognition scheme, and it can also shape the Bank's image.
The company does not apply internal carbon pricing.
ESRS E4-1: Transition plan and biodiversity in the strategy and business model, significant negative
impacts
The disclosure requirement is presented as part of the information in the @Materiality assessment ESRS 2
SBM3
2.3. ESG risk management
OTP Bank pays particular attention to managing ESG risks and implementing climate change considerations
into business practices. The Bank's risk management and business area pays particular attention to integrating
the different risks associated with green lending. The Bank's ESG risk assessment and management process
is the basis of the group-wide practice, so its detailed presentation, as regulatory and organisational
operational foundations, together with the identified risks (credit, operational, market, liquidity) and the actions
to manage them are presented in detail in the OTP Group Sustainability Report, in chapter 2.4. ESG Risk
Management.
Reporting policy in connection with Chapter E
The Bank has also developed a group-level reporting practice for individual-level disclosures (see subsection
IRO-2), so the definitions, calculation methodologies and data requirements for environmental information
follow the guidelines set out in subsection 2.3 Reporting policy regarding chapter E in the OTP Group
Sustainability Report, extending to OTP Bank.
3. Social information
3.1. Own workforce
ESRS S1 SBM-3: Material impacts, risks and opportunities
Among the topics identified by the ESRS, the following are material for OTP Bank: (1) gender equality and
equal pay for work of equal value, (2) diversity, (3) employment and inclusion of people with disabilities, (4)
training and skills development, (5) health and safety, (6) work-life balance and (7) measures against violence
and harassment in the workplace. The treatment of these topics is presented in this section, with the first three
treated together.
The own workforce is the total of employees and non-employee agency workers, as well as self-employed
individuals who have contracted with OTP Bank as individuals to perform specific work (hereinafter non-
employee workers are presented at the external employees group level, the Bank has made use of the
possibility to phase them in its individual reporting). With respect to the Bank's own workforce, the material
impacts identified in the dual materiality analysis are known and intended to cover all persons in the Bank's
own workforce who may be materially affected by the Bank.
The vast majority of own workforce, 10 820 people, are employees, working on full or part-time contracts. The
Bank's practices focus on employees within its own workforce.
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The material or potentially material impacts affect most employees, no such material impacts have been
identified that are specific to certain regions, thus, the same impacts apply to OTP Bank, which have been
defined at group level.
The operations of the Bank do not involve significant negative human rights aspects, such as the risk of child
labor, forced labor, or compulsory labor. Additionally, there are no negative impacts on the workforce resulting
from the implementation of transition plans aimed at reducing negative environmental impacts. The material
impacts identified for OTP Bank's own workforce can be both positive and negative, depending on the Bank’s
practices. The Bank strives to achieve positive impacts while mitigating or avoiding negative impacts.
Identifiable negative impacts18, such as health and safety risks and workplace violence and harassment risks,
primarily occur in individual cases, while stress risk affects a broader range of employees.
We aim to achieve positive impacts in work-life balance, gender equality and equal pay for work of equal value,
training and skills development, and the employment and diversity of people with disabilities. Activities aimed
at achieving positive impacts do not differ based on employees' contractual relationships, although most
actions have a well-identified target group (e.g., women, people with disabilities). Positive impacts vary by
country, depending on which area or activity a particular group member places greater emphasis on.
To protect vulnerable groups (gender, ethnicity, religion, age, disability, family status), a group-level policy
(Code of Ethics) is in place, which includes the prohibition of discrimination and actions against violence and
harassment in the workplace, applicable to the entire workforce. Regarding the impacts on its own workforce,
the job position is fundamentally the determining factor, not the form of employment. For temporary workers,
the working conditions are, in many respects, the same as for the permanent. OTP Bank members identify
and manage health and safety impacts differently, in compliance with local regulatory requirements. Most
companies conduct regular risk assessments to ensure a safe working environment.
ESRS S1-1: Policies related to own workforce
OTP Bank's overall policy for its own workforce is the Code of Ethics of OTP Bank Plc. and OTP Group, which
expects respect for human rights, emphasises the principles of equal treatment, job security, prevention of
harassment and fair employment. A detailed description of the Code of Ethics (its content and scope) can be
found in subsection 4.1. Corporate Governance – Policies on Corporate Culture and Business Conduct in the
OTP Group Sustainability Report. Policies outside the Code of Ethics are described in the following
subsections.
ESRS S1-2: Processes of engaging with own workforce
Engaging with own workforce and employee representatives takes several forms. This engaging also includes
interest representatives, the opportunities for which are provided by OTP Bank in accordance with the relevant
Hungarian legislation.
Employee engagement survey
As a member of the OTP Group, the Bank is also part of the annual engagement survey, to which all employees
of the member companies participating in the survey are invited. At OTP Bank it has achieved a response rate
of more than 80%. OTP Bank conducted the annual engagement survey according to the methodology
described in the OTP Group Sustainability Report subsection 3.1. Own workforce – Processes for engaging
with own workforce.
Consultation
The Managing Director of the Human and Organisational Development Directorate of OTP Bank holds regular
formal and informal consultations with the President of the OTP Bank Employees' Trade Union to jointly
discuss labour law, remuneration, work organisation and human capital development issues affecting central
and branch workforce.
OTP Bank has not concluded a global framework agreement with employee representatives on respect for the
human rights of its own workforce.
18 In the materiality assasment, we identified that most impacts can be both positive and negative. The negative impact mentione d above should be
understood as focusing on avoiding negative impacts in these topics, while the goal for other topics is to achiev e positive impacts.
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ESRS S1-3, S1-17: Channels for raising concerns, complaints
OTP Bank uses a variety of mechanisms to provide complaint-handling facilities for both employees and
external employees. These mechanisms include anonymous options, and complaint handling also addresses
the need for employees to use these channels with confidence. The Ethics Reporting system is available to all
our own workforce (see Governance Information).
Trade unions, as well as labour representatives, also have an important role to play in raising employees'
concerns and remedying any negative impacts (@Own workforce S1-2). In addition to the internal channels
provided by the Bank, employees also have the legal means to directly initiate proceedings before the courts,
therefore we consider this to be a suitable channel for raising concerns.
Employee complaints are handled in accordance with the procedures and deadlines set out in the law and in
the ethics and internal labour regulation documents. Employees can submit a complaint about the protection
of their rights under the Code of Ethics, the internal labour regulations and the collective agreement, which are
accessible and available to all employees.
Nearly 16% of OTP Bank's ethics complaints, identified as 3219, were received from its own employees. In
neither case was any financial compensation paid. Within OTP Bank, there have been no reports of
discrimination or cases of justified discrimination against its own employees. No complaints of discrimination
against OTP Bank's own employees have been received by the national contact points, which follow the OECD
guidelines for multinational companies. No internal occupational safety or union complaints were received in
the reporting year. In 2024, no labor court proceedings were initiated or concluded against OTP Bank.
ESRS S1-5: Targets
The engagement survey is the primary tool OTP Bank uses to comprehensively action, assess and monitor
progress in all areas related to its employees, including the material issues identified in the double materiality
assessment In relation to employees, increasing the level of employee engagement is an target of OTP Bank.
OTP Bank, as the parent bank, is the initiator of the Group's target, which is presented in detail in the OTP
Group Sustainability Report chapter 3.1. Own workforce, subsection Targets.
ESRS S1-4: Actions to address significant impacts on own workforce
For OTP Bank, the employee engagement survey (Gender equality and diversity) serves as a basis for annual
action planning, process improvement, and realising further actions and programmes. The focus for
improvement—even with the improving values—remained unchanged in 2024 on providing career
opportunities, improving and streamlining processes for employee well-being and senior management
engagement in employee dialogue.
The material actions are presented by topic in the following subsections (@Gender equality and diversity,
@Training and skills development, @Occupational health and safety, @Work-life balance, @Workplace
violence and harassment In its policies, targets and practices, as set out in its Code of Ethics, OTP Group
places emphasis on not causing or contributing to material adverse impacts (see Materiality assessment S1
SBM-3).
OTP Bank also occasionally uses external audits and controls to ensure internal operational processes (see
health and safety).
19 The identity of the reporter shall not be accurate due to the possibility of anonymity.
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The Bank's HR area manages the impact on employees, the legal and compliance area supports the handling
of complaints, the investigation of ethics complaints, the assurance of legal compliance, and the compliance
area is responsible for actions against workplace violence and harassment. OTP Bank aims to employ
sufficient internal human resources with experience and expertise in these areas, and it uses external expertise
where necessary. Indirectly, the provision of adequate resources is characterised by the results of the
employee engagement survey, the employee complaints and legal compliance; there is an improvement in
engagement, the number of employee complaints is not considered high in relation to the number of
employees.
Workplace engagement at OTP Bank and its participating domestic companies20 – increased significantly, by
4 percentage points in 2024 (from 76% to 80%), exceeding the financial sector benchmark. There has been a
positive shift in all engagement issues (so-called drivers)21.
ESRS S1-6: Characteristics of employees
At the end of 2024, OTP Bank employed 10,820 people, an approximate 1% increase compared to a year ago.
OTP Bank Employee headcount data
(persons, as at 31 December)
2023
2024
Total
Men
Women
Total
Men
Women
Total employees
10,715
3,978
6,737
10,820
4,180
6,640
Full time employees
9,841
3,904
5,937
10,009
4,100
5,909
Part-time employees
874
74
800
811
80
731
Available
na
na
na
0
0
0
Permanent employees (permanent contract
employees)
10,433
3,917
6,516
10,542
4,097
6,445
Temporary employees (fixed-term contract
employees)
282
61
221
278
83
195
The turnover of OTP Bank was as follows:
Employees who left
OTP Bank
2024
Employee turnover rate (%)
13.34
Employees who left (person)
1,443
male
489
female
954
under 30 years
364
between 30–50 years
770
over 50 years
309
3.1.1. Gender equality and diversity
Own Workforce: Diversity – Impacts, Risks, and Opportunities
Due to its significant number of employees, the Bank has both the opportunity and the role to implement
diversity. (This topic partially overlaps with @Gender equality and diversityand the employment of people with
disabilities.)
Managing diversity as a material topicat OTP Bank
OTP Bank's diversity @strategy expresses its commitment to the diversity of board and management
members. The Bank operates diversity programs and publishes training materials that support diversity and
shape attitudes. According to the employee engagement survey, 84% of employees at the group level
experience that professional success at the company is independent of gender, age, cultural background,
ethnicity, and religion.
20 One of the key indicators of OTP's engagement model is the engagement score. This is an output score that cannot be directly improved.
21 The other elements of the survey are drivers: specific experiences (e.g. community building, empowerment, recognition, etc.) through which an
organisation can positively or negatively influence engagement. The key elements of the engagement survey are statements with which agreement is
measured on a 5-point scale. Engagement is a composite indicator that reflects the average of the proportion of positive responses given to t he
statements it contains.
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Own Workforce: Employment and Inclusion of People with Disabilities – Impacts, Risks, and
Opportunities
Due to its size and scope of activities (as a wide range of society interacts with its employees), the Bank could
have a material impact on the employment of people with disabilities and the change of this employment
culture. Currently, the employment of these individuals is low.
Managing the employment and inclusion of persons with disabilities as a material topic at OTP Bank
The Bank prohibits all forms of discrimination, and actions supporting the employment of people with
disabilities are not widely implemented.
Own Workforce: Gender Equality –Impacts, Risks, and Opportunities
This topic strongly influences employee well-being, which is also made important by the high proportion of
female employees. The Bank monitors the pay ratio of men and women in the same positions, which only
slightly differs. The proportion of female leaders at higher levels is consistently lower.
Managing gender equality as a material topic at OTP Bank
In line with legal requirements and its commitment to equal opportunities, OTP Bank consistently enforces the
principle of "equal pay for equal work." The Bank applies a gender-neutral remuneration policy. The Bank's
strategy for achieving gender equality includes a commitment to increasing the proportion of women in
leadership bodies. Leadership training and internal awareness campaigns are implemented to strengthen an
inclusive approach.
ESRS S1-1: Policy
The Code of Ethics includes the equal opportunities and diversity guidelines (III.15. Equal treatment, equal
opportunities, non-discrimination and III.16. Fair Employment Practices), in line with international guidelines
and local legislation. The relevant guidelines and policies are set out in the Code. In addition to the Code of
Ethics, the following policy governs diversity.
A strategy for creating gender equality
Key content: In 2021, OTP Bank Plc. created a gender equality strategy in order to promote the equal
inclusion of women as a group at risk of vulnerability. The Bank has set as a strategic goal to ensure equal
opportunities for all groups of employees, to create an open and inclusive workplace free from discrimination,
and to promote a diverse, professionally outstanding, collaborative work culture.
Scope: The strategy applies to OTP Bank.
Accountable for implementation: The Chief Compliance Officer, who is directly responsible to the Chairman
& CEO, is responsible for ethics issues and reports to the Ethics Committee.
Ensuring accessibility: The strategy is also publicly available on the Bank’s @website, and is available online
to stakeholders on an internal platform.
Reference to third-party standards: The strategy complies with the relevant Hungarian legal requirements
(Hpt.), and the work of the Nomination Committee follows the recommendation of the Hungarian National Bank
and the EBA-GL-2017-12 guidelines of the European Banking Authority. The handling of complaints of
discrimination is included in the @S1-3 Gender equality and diversity disclosure.
OTP Bank regularly analyses key indicators of talent attraction and opportunities for employee development,
with a particular focus on building a group-wide leadership community and building international professional
knowledge and community through the development of key competencies.
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ESRS S1-4: Actions: gender equality and diversity
In accordance with the principles of the Code of Ethics, OTP Bank's internal regulations stipulate that jobs
must be filled and performed according to specific criteria relating to the type and level of qualifications, work
experience and other criteria, in accordance with the complexity, responsibilities and specific job description,
without any discrimination.
OTP Bank continuously applies actions to promote equality and diversity, which are typically monitored,
however, criteria for effectiveness are not always set. Some of these programmes are presented here, without
claiming to be exhaustive:
In 2024, the Bank launched new diversity programmes:
•
With the launch of women's leadership development programmes and the international Women
Network,
it
prepares
and
encourages
women
for
more
senior
leadership
roles.
A series of webinars and a mentoring programme for women leaders help the most talented
women leaders develop their careers.
•
The Bank is strengthening the employment of women in the digital and IT fields by launching a
dedicated trainee programme, the OTP Digital GirlPower Programme.
•
Diversity awareness training materials are produced for managers and employees to help
overcome unconscious bias, on gender equality and diversity. The development of a digital
curriculum on “Openness and Inclusion” for the whole workforce also serves as a basis for future
inclusive leadership development programmes.
ESRS S1-5: Goals related to gender equality and diversity
A measurable target has been set by OTP Bank in 2021 (without a timeframe) in its Strategy for Gender
Equality.
There should be at least one female member on the Board of Directors and the Supervisory Board. The Bank
also takes into account the legal requirement that members of the Management Board should have the
appropriate knowledge, skills and experience, which remains a primary and essential condition for the selection
of suitable candidates. In setting this target, the Bank has taken into account the relevant Hungarian and
European Union recommendations22. Since 2021, the Board of Directors has one female member.
In order to ensure that the company's management succession includes a sufficient number of female
candidates to be appointed from within, OTP's group-wide management succession planning recommended
already in 2024 that at least 30% of the candidates should be women.
Diversity indicators
Gender distribution of senior management, OTP Bank 31.12.2024.
Men
Women
Number of senior managers (person)
6
0
Proportion of top managers
100%
-
Age distribution of employees 31.12.2024.
OTP Bank
Under 30 years
1,645
Between 30–49 years
6,438
Over 50 years
2,737
Total
10,820
OTP Bank employed 40 employees living with disabilities at the end of 2024.
ESRS S1-16: Remuneration indicators (pay gap and total remuneration)
The difference between the average wage level of female and male employees in the OTP Group, expressed
as a percentage of the average wage level of male employees, is 39.15%. The difference is due to the fact
that men and women tend to hold different jobs, with more men working in higher (paid) positions.
The ratio of the total annual remuneration of the highest-paid individual at OTP Bank to the median of the total
annual remuneration of all employees (excluding the highest-paid individual) is approximately 60% of the
group-level indicator, which is justified by the group's geographical diversity and the central, parent company
nature of the Bank.
22 Including Recommendation No 11/2019 (V.6.) of the Hungarian National Bank and Guideline No EBA-GL2017-12 of the European Banking Authority
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3.1.2. Training and skills development
Own Workforce: Training and skills development – Impacts, Risks and Opportunities
Due to its significant role as an employer, OTP Bank's training and skills development practices influence the
sector and other employers. Employees in the financial sector are generally more educated than the average
population. Access to training is always ensured.
Managing training and skills development as a material topic at OTP Bank
OTP Bank provides a wide training portfolio for its employees. Professional and personal development training
necessary for work, as well as other (e.g., mandatory) training, are typically implemented according to annual
training plans. These plans are developed with the involvement of employees, taking into account the results
of performance evaluations.
Training and skills development policies, targets and actions extend to OTP Bank and are presented at group
level in the OTP Group Sustainability Report, subsection 3.1. Own workforce – 3.1.2. Training and skills
development. The Bank makes use of the possibility of a gradual introduction regarding specific indicators.
3.1.3. Occupational health and safety
Own workforce: Health and Safety - Impacts, Risks, and Opportunities
For a significant portion of employees, stress emerges as a relevant risk, considering that the majority of
employees do not work in hazardous working environment.
Managing health and safety as a material topic at OTP Bank
The Bank supports employees in stress management in various ways. We provide health services (health
insurance and extensive screening tests) that exceed legal requirements. According to employee feedback
from the engagement survey, OTP Bank adequately manages occupational safety.
ESRS S1-1: Policy
The policy on occupational health and safety is the Bank's Occupational Health and Safety Regulation, which
is drawn up in accordance with local legislation to ensure compliance with the law.
Key content: OTP Bank's Occupational Health and Safety Regulation is a comprehensive occupational safety
and health prevention strategy, which is designed to achieve the requirements of safe and healthy working in
accordance with the Act on Occupational Safety and Health. The regulation defines the persons responsible
for the performance of safety and health tasks in a uniform manner throughout the workplace, and regulates
the processes for the performance of individual safety and health tasks. Subsidiary-level policies also focus
on creating and implementing safe working conditions.
Accountable for implementation: OTP Bank's policy was approved by the CEO, and the person responsible
for occupational safety activities at the Bank is the Head of the President-CEO's Cabinet. At the group
members, the CEOs are responsible for approving the policy, and they are supported in its implementation by
the heads of the operational areas and the local occupational safety officers..
Ensuring accessibility: OHS regulations are available in the internal regulatory repositories.
Reference to third-party standards: The framework for occupational health and safety is provided by local
legislation.
In 2023, OTP Bank's Occupational Health and Safety Regulation was revised in line with the changes in the
legislation amending the Act on Occupational Safety and Health, mainly with regard to occupational safety and
health training and medical fitness tests, before the entry into force in 2024.
The Bank has an internal regulatory system for occupational safety and health, which is based on the
legislation and guidelines in force.
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ESRS S1-4: Actions: health and safety at work
OTP Bank is committed to maintaining a safe and healthy working environment and as part of this, it operates
occupational health and safety programmes. These programmes include targeted actions to prevent accidents,
minimise risks at work and protect workers' physical and mental health. OTP Bank's employees work mainly
in low-risk jobs as regards health and safety, the framework of occupational safety is regulated in accordance
with the legal requirements, and occupational health and safety activities are also carried out in accordance
with these requirements.
Actions taken to prevent and mitigate risks to health and safety at work aim to reduce accidents and
occupational diseases at work, in line with the Bank's target of providing a safe and healthy working
environment.
OTP Bank also investigates the near miss incidents, and presents the lessons learned and good practices to
the affected employees in the context of special training.
The Bank's employees receive regular training on occupational safety and health in accordance with the
legal requirements, including occupational safety, fire safety and electrical safety. The internal regulations and
training materials related to the subject have been prepared, their content is familiarised and documented both
on entry and throughout the employment, and trainings are documented in the minutes. The referenced
regulations and educational materials are continuously available on internal communication platforms. The
completion of training courses is monitored and followed up. Separate training sessions are held when there
are changes to the renovation of a site.
Health promotion, health maintenance
It is common practice within the Group to hold regular preventive health checks for employees. OTP Bank
provides an occupational health check for all jobs, even though this is not a legal requirement. Preliminary and
periodic medical tests are carried out according to a schedule set by the health authorities. Within the
occupational health framework of OTP Bank, 9,540 inspections were carried out by the end of September.
The tests are adapted to the specificities of the job. Employees in office and customer areas have also
undergone basic tests, while employees in higher risk jobs have also undergone specific tests.
The Bank provides a high quality health insurance service for employees. As a result of the service, 5,908
employees have undergone tests, including 4,087 screenings and 20,278 complaint handlings.
The Bank pays attention to health promotion, making welfare programmes available to all employees. These
typically consist of various lectures, webinars, workshops, health days, and screening tests. The programmes
are varied, focusing on health promotion, mental and physical health and stress management.
Stress management
To promote mental wellbeing, OTP Bank conducted a renewed psychosocial risk survey in 2024, which
anonymously covered the topics of health, stress and workload. 12% of employees took part in the survey and
the results were used as a basis for further health programmes.
OTP Bank runs a programme of supportive conversations to help employees manage stress at work by
providing them with the support of a mental-health professional, psychologist or coach in difficult, mentally
stressful situations. The service is available free of charge to all employees. The service is provided by an
external partner (otp.meghallgatunk.online). The supportive conversations are conducted along the ICF
(International Coach Federation) guidelines and mental health framework, and are confidential. The service is
being used by more and more workers every year, with more than 1.398 interviews having taken place by the
end of 2024.
Employee skills training (e.g. mindfulness, stress management, effective and assertive communication, etc.)
is available twice a year for Bank employees. The training is organised on a demand-driven basis, with an
average of 350 employees taking part every six months.
The effectiveness of actions and initiatives is monitored and evaluated by the Bank through various processes.
Health and safety compliance is supported by internal audits, and feedback from stakeholders, particularly
employees, is used to evaluate initiatives.
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ESRS S1-5: Health and safety at work targets
The Bank has not set a specific target related to health and safety at work.
ESRS S1-14: Health and safety indicators
The percentage of persons covered by the company's health and safety management system, based on legal
requirements and/or recognised standards or guidelines, is 100% within the company's own workforce.
Working hours are mainly the number of hours actually worked, based on the timesheet.
3.1.4. Work-life balance
Own Workforce: Work-life balance –Impacts, Risks, and Opportunities
The Bank influences work-life balance through overtime, flexible employment opportunities, and access to
childcare options. The family-related commitments of female employees are typically stronger in society,
making these impacts more significant given that about two-thirds of the Bank's employees are women.
Managing work-life balance as a material topic at OTP Bank
As part of its annual employee engagement survey, the Bank Group also explores and monitors employee
opinions on work-life balance. The level of overtime at the Bank generally does not endanger work-life balance.
The achievement of work-life balance is supported by the availability of flexible employment opportunities and
access to childcare options, with approximately 8% of employees working part-time.
The work-life balance actions extend to the OTP Bank and are presented at group level in subsection 3.1.4
Own workforce – Work-life balance in the OTP Group Sustainability Report, with the Bank making use of the
possibility of a gradual introduction of specific indicators.
3.1.5. Workplace violence and harassment
Own Workforce: Measures against violence and harassment in the workplace –Impacts, Risks, and
Opportunities
The large number of employees and the high proportion of female employees make this topic important, which
is further intensified by the lower proportion of female employees at higher levels (increasing the risk of abuse).
No confirmed abuse has occured.
Managing material topic of measures against violence and harassment in the workplace at OTP
BankThe Banking Group's practice aims to ensure compliance.
The policies and actions against workplace violence and harassment extend to OTP Bank and are presented
at group level in subsection 3.1.5 Own workforce – Measures Against Workplace Violence and Harassment in
the OTP Group Sustainability Report.
ESRS S1-17: Incidents, complaints and serious human rights impacts
As for OTP Bank, no justified case of discrimination against its own employees was confirmed in 2024.
Reporting policy in connection with chapter S1
The Bank has also developed the group-level reporting practice for individual-level disclosures (see subchapter
IRO-2), so the definitions, calculation methodologies and data requirements for own workforce follow the
Accidents and illnesses at work, 31.12.2024
OTP Bank
2024
Number of accidents (nr)
employees
8
Accident rate (per 1 million working hours)
employees
0.44
Occupational illness (nr)
employees
0
Total number of calendar days lost due to accidents at work and
illness among employees (nr)
80
Number of fatal accidents and illnesses (nr)
employees
0
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guidelines set out in subchapter 3.2 Reporting policy regarding Chapter S1 in the OTP Group Sustainability
Report, extending to OTP Bank.
3.2. Customers
ESRS S4 SBM-3: Material impacts, risks
The section details the treatment of the material topics: (1) information security and privacy, (2) quality
information and (3) access to financial products and services, for which the impacts and the most affected
customer groups are detailed in subchapter 3.3. Clients – Material Impacts, Risks in the OTP Group
Sustainability Report.
ESRS S4-2: Customer engaging processes
20 OTP Bank regularly collects customer feedback and actions customer satisfaction to improve customer
experience. Retail customer satisfaction is actiond using the TRI*M methodology—complemented by the
NPS23 and the SQM24 methodologies for some of our member companies. Through the TRI*M, we action the
overall satisfaction, loyalty and the main factors of satisfaction of the Bank's customers, as well as those of all
relevant competitors. Information is also analysed by customer segment (e.g. career starters, juniors, premium
customers). We carry out a national survey every year on a representative sample of 1,000 people25.
Complaint handling is also one of the means of engaging with customers (see @Customers).
The Bank does not regularly cooperate with consumer organisations or consumer representatives.
Customer-focused product development
To support customer-focused product, process and service design, OTP Bank established a group-wide
framework in 2024, which is described in the OTP Group Sustainability Report, subsection 3.3. Clients –
Processes for engaging with consumers and end-users about impact.
ESRS S4-3: Channels for raising concerns
The Bank offers its customers a wide range of complaint procedures. Complaint-handling procedures are
regulated, complaint handling is in line with internationally recognised human rights and is non-discriminatory.
The Bank responds to complaints in accordance with the legal framework. The Bank seeks to engage in
dialogue with complainants in order to reach a prompt solution. In the case of legitimate complaints, OTP Bank
aims to restore the original situation or to restore the appropriate situation and, taking into account fairness
aspects, to apply compensation in individual cases.
Channels for customers to report complaints
Customers can make reports in the ethics reporting system (see @Governance Information) and through the
complaint reporting channels (website, call centre, in person at branches, postal mail). Customer access is not
restricted in any of the channels and enquiries from other channels (such as social media) are also forwarded
to the complaints area.
In the case of OTP Bank, in addition to the channels listed above, customers can also submit complaints to
the Hungarian National Bank.
OTP Bank informs customers about the channels for complaints and reporting, and the procedure for
investigating complaints on the website, in publications, in written communication with customers, in the
policies provided in bank branches and in social media. The channels are clearly usable by generally prepared
customers. The degree of trust in the channels is not examined separately, but the fact that complaints are
received by the channels implies that customers have trust in the company and the channels.
OTP Bank manages and stores the content of the notifications and the related data confidentially and in
accordance with the applicable legislation and its Code of Ethics (see @Governance Information).
23 Net Promoter Score – an indicator of customer satisfaction
24 Service Quality Management, examining the quality of customer service in retail and SME branches
25 Based on breakdown by age, sex, education, municipality type, region.
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Ensuring the effectiveness of complaint handling, following up problems
The tracking of complaints raised and handled is realised in the dedicated complaint handling system of OTP
Bank. Complaints are given a unique identifier so they can be easily tracked in the systems. Each case has a
clearly designated responsible employee or team to review and resolve the case. Customers are informed
about the complaint-handling process and any action to be taken.
Monthly, quarterly and annual reports are produced on the number of complaints received, their status and
resolution times. These reports help to monitor the effectiveness of the process and identify areas for
improvement. By analysing the aggregated data, we identify recurring problems that indicate potential systemic
weaknesses and allow corrective action to be taken. We track the frequency of the use of each channel. Traffic
analysis provides insights into which channels customers prefer and also helps to identify channel problems.
We assess response times: delays may indicate weaknesses that need to be addressed.
In the case of errors involving several customers or major losses, the complaint-handling department
cooperates with the relevant department and the errors are followed up.
Improving complaint handling
OTP Bank pays special attention to the continuous improvement of its services, based on the information and
experience gained from complaint investigations.
In 2024, OTP Bank started developing a new complaint-handling platform. The new structure will allow for the
automation and process control of various complaint-handling processes. Among other things, the aim is to
facilitate processing times and reportability.
Number of customer complaints
Customer complaints
2024
Number of complaints closed
~178,000
Number of legitimate complaints
~101,000
In addition to complaints, in 2024, OTP Bank received a total of 200 ethics reports through the ethics reporting
system.
No serious human rights incidents related to customers were confirmed in OTP Bank in 2024.
OTP Bank does not currently expect its business partners to have channels for submitting complaints. The
Bank shall make its proposal to terminate a business relationship with a customer taking into account all the
facts and circumstances relating to the customer and the customer relationship that are available and usable
by the Bank, including the actual or potential negative effects that the proposal to terminate or maintain the
customer relationship with that customer may have on other customers.
3.2.1. Information security and data protection
Clients – Information security and data protection – Impacts, Risks and Opportunities
This topic includes not only the protection of personal data but also the areas of information security and cyber
defense, as these are interconnected topics within the Bank Group. However, the ESRS does not specifically
name the latter. The Bank holds a large amount of sensitive data about its customers. The protection of
personal data, as well as the improper handling or breach of information security and cyber defense, can
undermine customers' sense of security and cause harm to them. Breaches of personal data protection,
misuse, or violations of legal expectations, as well as successful attacks and incidents in the field of information
security and cyber security, can cause significant losses to both OTP Bank and its customers.
Data protection deficiencies, violations, and potential incidents not only carry the risk of significant financial
penalties but can also lead to customer complaints and loss of customers. Consequently, the reputation of
banks would decrease.
Managing information security and data protection as a material topic at OTP Bank
OTP Bank prioritizes security and safe operations. The fundamental principles and main directions related to
security are defined by the Security Policy, while the handling and protection of personal data are carried out
according to the principles of the Compliance Policy. Security systems and workflows are continuously
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evolving, and employee training is regular. The Bank aims to apply the most advanced solutions for data
management, data security, and preventing data leakage.
The integration of the data protection and consumer protection departments ensures that data protection and
consumer protection aspects are more emphasized during product introductions and process development
than before.
The Bank manages risks within the framework of operational risks. Risk assessments are conducted as part
of the Annual Group-Level Risk and Control Self-Assessment and scenario analysis, based on which actions
to mitigate risks are determined.
ESRS S4-1: Policies
OTP Bank has an anti-fraud, security and data protection policy in relation to information security and data
protection, which is the same as the policy for the OTP Group.
The anti-fraud policy includes an assessment of current practices in fraud prevention and management,
identification of expected future fraud trends, the financial organisation's exposure to fraud, responses to
trends, and the definition of related goals and targets.
The purpose of the Bank's Security Policy is to summarise the Bank's security principles, taking into account
international and national legislation, recommendations, expectations and guidelines, and to set out the main
lines of security activity which together define, promote and support the proper, legal, safe and prudent
operation of the Bank.
The Data Protection Policy is part of OTP Bank Plc.’s Compliance Policy (see G1-1), which states that the
Bank respects fundamental rights and ensures full compliance with the principles of data protection at all times
when processing personal data and transmitting them to third parties.
A detailed description of the policies can be found in subsection 3.3.1. Information security and data protection
– Policies in the OTP Group Sustainability Report.
OTP Bank's customer policies are in line with the EU's relevant consumer protection-related regulations, which
have also been implemented in Hungarian law.26
2024, there has been no significant change in policies. The supervisory recommendations have been
incorporated into the procedures, but have not resulted in any material changes.
26 a./ Act XLVIII of 2008 on the Basic Conditions and Certain Restrictions on Commercial Advertising (Act XLVIII of 2008); Directive 2005/29/EC amending
Council Directive 84/450/EEC, Directives 97/7/EC, 98/27/EC and 2002/65/EC of the European Parliament and of the Council and R egulation (EC) No
2006/2004 of the European Parliament and of the Council
b./ Act LVII of 1996 on the Prohibition of Unfair and Restrictive Market Practices(Act on Unfair Competition); Articles 85 and 86 of the Treaty of Rome
(EEC Treaty); Council Regulation 19/65/EEC on the application of Article 85(3) of the Treaty to certain categories of agreements and concerted practices;
c./ Act XLVII of 2008 on the Prohibition of Unfair Commercial Practices against Consumers (Unfair Commercial Practices Act); DIRECTIVE 2005/29/EC
OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 11 May 2005 concerning unfair business-to-consumer commercial practices in the
internal market and amending Council Directive 84/450/EEC, Directives 97/7/EC, 98/27/EC and 2002/65/EC of the European Parliament and of the
Council and Regulation (EC) No 2006/2004 of the European Parliament and of the Council (Unfair Commercial Practices Directive )
d./ Act CVIII of 2001 on Electronic Commerce and on Information Society Services (E-commerce Act); DIRECTIVE 2000/31/EC OF THE EUROPEAN
PARLIAMENT AND OF THE COUNCIL of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the
Internal Market (Directive on electronic commerce)
e./ Act CCXXXVII of 2013 on Credit Institutions and Financial Enterprises (Hpt.); DIRECTIVE 2013/36/EU OF THE EUROPEAN PARLIAMENT AND OF
THE COUNCIL of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institu tions, amending Directive
2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC; REGULATION (EU) No 575/2013/EU OF THE EUROPEAN PARLIAMENT AND OF
THE COUNCIL of 26 June 2013 on prudential requirements for credit institutions and amending Regulation (EU) No 648/2012
f./ Act CLXII of 2009 on Consumer Credit (Fhtv.); DIRECTIVE 2008/48/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 23 April 2008
on credit agreements for consumers and repealing Council Directive 87/102/EEC
g./ Government Decree No 83/2010 (III. 25.) on the determination, calculation and publication of the annual percentage rate o f charge (THM Decree);
h./ Government Decree No 82/2010 (III. 25.) on calculating and announcing deposit interest rates and securities’ yields (EBKM Decree);
i./ Government Decree 144/2018 (VIII.13.) on certain issues related to the information on fees for payment connected to payme nt accounts held for
consumers (PAD Decree); Directive 2014/92/EU of the European Parliament and of the Council of 23 July 2014 on the comparability of fees related to
payment accounts, payment account switching and access to payment accounts with basic features
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ESRS S4-4: Actions
Information security, fraud management
It is part of the activities of the Executive Steering Committee (ESC), the coordination and operational decision-
making forum of the Bank's management, to discuss fraud-related issues, so coordination with the business
areas is carried out at the highest level.
The Bank's Security Directorate has implemented significant organisational changes in 2024, including
reallocation of human resources and increasing the number of workforce to reduce fraud against customers,
to ensure that fraudulent losses can be reported as soon as possible and to recover stolen funds. Units have
been set up with a dedicated task to combat fraud and to carry out certain sub-activities related to this (e.g.
Investigation Unit, Fraud Management Support Unit, Anti-Fraud Competence Centre).
The actions implemented by OTP Bank to manage information security and data protection are described in
detail in the subsection Actions of section 3.3.1. Information security and data protection in the OTP Group
Sustainability Report, which include the operation of the Bank's Cyber Security Centre, the investigation of
customer damage, customer education and related campaigns, the developments that have taken place, and
the way of engaging with regulatory and professional bodies.
GRI 418-1: In 2024, there were no incidents of misuse of personal data at OTP Bank.
Data protection
The Bank's data management processes are designed to comply with data protection legislation, are purpose-
driven and based on the principle of necessity. In all cases, customers are provided with information on the
data management processes relating to personal data concerning the customer. The adequacy of data
protection processes is checked using compliance control tools. The processes for ensuring data protection
policies, handling customer notifications and investigating complaints are described in detail in the subsection
Actions of section 3.3.1. Information security and data protection in the OTP Group Sustainability Report.
ESRS S4-5: Targets
The targets related to information security and data protection, partly directly and partly indirectly, are set out
in the Anti-Fraud Strategy, which is presented in detail in subsection 3.3.1. Information security and data
protection – Targets in the OTP Group Sustainability Report.
3.2.2. Quality information
Clients – Quality information – Impacts, Risks and Opportunities
Quality information provision ensures target information and understanding of financial products for all
customers. Its implementation affects customers' well-being and financial situation, as a financial product can
significantly impact a customer's life. This topic is primarily important for retail and SME customers, and its
significance is even more pronounced for vulnerable social groups.
Managing quality of information as a material topic at OTP Bank
The provision of information and communication about banking products and services is a highly regulated
area in our country. Responsible communication aims to ensure easier understanding and attention while
complying with these rules. The group-level Tone of Voice manual includes clear and understandable language
as a fundamental goal and expectation. The Bank supports good financial decisions and knowledge expansion
through educational videos and calculatirs.
ESRS S4-1: Policies
OTP Bank has a responsible marketing policy and a financial awareness strategy on quality information, which
are the same as the Group's policies.
The @responsible marketing policy sets out that OTP Bank is committed to the responsible marketing of its
products, giving priority to fair commercial communication, correct information and product offerings. OTP
Bank takes the utmost care to provide its existing and prospective customers with accurate, clear and
comprehensive information about its products and services and the conditions of their use, as well as to comply
with consumer protection regulations. The document that supports the implementation of the policy is the
group-level Tone of Voice Manual, which sets out the Bank's communication style.
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By implementing a financial awareness strategy, we aim to increase the number of customers who are
financially literate, confident and aware in managing their finances, with a product portfolio that supports their
goals. The creation of the strategy was motivated by OTP Bank's adherence to the UN Principles for
Responsible Banking (UNEP FI PRB), whereby it committed to reduce its negative and increase its positive
social impact on financial awareness and access. More details on the policy and strategy supporting quality
information can be found in the Policies subsection of section 3.3.2. Access to Quality Information in the OTP
Group Sustainability Report.
ESRS S4-4: Actions
OTP Bank's quality information actions include customer education on the use of various financial products,
digital channels and tools, as well as financial awareness campaigns. The Bank is implementing its actions in
line with the OTP Group, details of which can be found in the subsection Actions in section 3.3.2. Access to
Quality Information in the OTP Group Sustainability Report.
ESRS S4-5: Targets
A comprehensive, measurable target for quality information will be set in the Financial Awareness Strategy in
2025 in relation to the following:
•
increase the number of customers who are financially literate, confident and aware in managing their
finances,
•
customers have a product portfolio that supports their individual goals,
•
improve positive branding and the image of OTP Bank.
The targets will be quantified and operationalised in the future. The effectiveness of quality information policies
and actions was not actiond in 2024.
3.2.3. Access to financial products and services
Clients – Access to financial products and services – Impacts, Risks and Opportunities
Access to financial products and services can support or hinder customers' well-being and prosperity. In
addition to ensuring accessibility for people with disabilities, it is essential to provide access for residents of
disadvantaged areas and those in disadvantaged social situations. Ensuring access to financial products for
disadvantaged customers requires careful consideration and strict regulation to protect the interests of
depositors and prevent excessive indebtedness. The Bank can also support adequate housing, as mortgage
loans are an important market segment in most areas of operation.
Managing access to financial products and services as a material topic at OTP Bank
Our goal is to expand the range of products that are partially or fully available digitally, ensuring that these
processes are as convenient and accessible as possible for a wide range of customers. These solutions can
also help improve access for residents of disadvantaged areas. The Bank pays attention to imparting
knowledge related to the use of online channels. Accessibility is continuously improving. In addition to market-
based products, the Bank provides significant, state-supported mortgage loan options.
ESRS S4-1: Policies
The basic principles of access to products and services are also set out in the Compliance Policy (for a
detailed description see @Governance Information), with the provision, as already described, that in the
development of its products and access to its services, the Bank shall apply the ethical and consumer
protection principles and standards that ensure a modern, high-quality and fair service that meets the needs
of its customers. The Bank also has an accessibility strategy, in line with the Group's strategy. More details
can be found in chapter 3.3.3. Access to financial products and services, subsection Policies in the OTP
Group Sustainability Report.
ESRS S4-4: Actions
In order to ensure access to financial products, OTP Bank applies several actions. These include accessibility,
mobile branches, the Social Lab, customer-focused product development and subsidised housing loans.
A dedicated project to promote accessibility takes into account the support for visually impaired, deaf and hard
of hearing, and disabled customers. OTP Bank also informs its customers on the accessibility actions on its
website (https://www.otpbank.hu/portal/hu/Akadalymentesseg). In addition, OTP Bank informs its customers
about the facilities available for people living with reduced mobility, visual or hearing impairments in the
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“Accessibility
Information”
section
of
the
branch
locator
on
its
website
(https://www.otpbank.hu/portal/hu/Kapcsolat/Fiokkereso/) in the data sheets of each branch.
In order to establish and further develop appropriate service processes, the Bank is in regular contact with the
relevant advocacy organisations, such as the Hungarian Association of the Deaf and Hard of Hearing
(SINOSZ) and the Hungarian Federation of the Blind and Partially Sighted (MVGYOSZ).
The actions applied by OTP Bank in the area of physical and digital accessibility, as well as actions and
programmes to support access to financial products (mobile bank branch, Social Lab, housing loans,
prevention of over-indebtedness) and data are also presented in detail in the subsection Actions in section
3.3.3. Access to financial products and services in the OTP Group Sustainability Report.
ESRS S4-5: Targets
In addition to legal compliance, we will set targets for accessibility and availability of products and services we
have set targets and in 2025 in the context of Social Lab.
Access points in low-populated or economically disadvantaged areas
GRI G4: FS13 Due to its extensive branch network, OTP Bank provides significant access for the population
of disadvantaged areas to manage their finances in person. However, the density of bank branches and ATMs
is lower in these areas.
Access points in disadvantaged areas¹
Branches
ATM
OTP Bank
Number if access points – (as a % of total access points)
57
(18%)
197
(10%)
Number of new access points – (as a % of all new ones)
0
(0%)
11
(12%)
Number of terminated access point– (as a % of total closed)
6
(24%)
8
(22%)
Change from the previous year
-10%
+2%
¹ Areas defined by social, demographic, housing and living conditions, local economy and labor market, as well as infrastructural and environmental
indicators (see Reporting Policy in Chapter S4). (ld. @Riporting Policy Chapter Customers ).
Accessibility
The European Union Directive 2019/882 on the accessibility requirements for products and services also
applies to OTP Bank. The Directive covers the accessibility of branches, ATMs and digital platforms (website,
internet banking, mobile banking).
OTP Bank aims to design and develop (in line with the new legal requirements) both its physical, personal
(branch and contact centre, ATM network) and digital (mobile and internet banking) service channels in such
a way that customers living with disabilities can also use all services and products.
By June 2025, our accessibility target is to equip all OTP Bank branches with disability-support devices, such
as tactile indicators and customer-call systems, signage tablets and induction loops, as well as mobile ramps
and disabled bells for disabled access. Our aim is to provide the possibility of using text-to-speech software
and increasing font size (or using a large font size in the first place) on all ATMs, and to extend the functions
of the text-to-speech software to all available functions. Our goal is to bring the OTP Bank website and digital
channels to WCAG 2.1 Level A compliance. The Bank has been working towards accessibility since 2007 and
has an Accessibility Strategy. The strategy is reviewed and fine-tuned every two years, and developments are
adapted to this and to changes in legislation.
In terms of accessibility, we continuously monitor the deployment of support tools, and the current status is
recorded in the Unified Branch Master Database, on the basis of which we can show our customers the
accessibility framework for specific branches in our website branch locator. We also continuously monitor the
delivery of internal trainings to improve the awareness and preparedness of our branch employees, in line with
our standard training processes.
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Progress against the accessibility targets set is as follows:
Bank branches
Indicators
Status at 31.12.2024 (nr)
Status at 31.12.2024
Target by 01.06.2025
Number of bank branches
317
-
-
Number of wheelchair-accessible bank
branches
316
99.7%
100%
Number of bank branches with tactile
indicators
303
95.6%
100%
Number of bank branches with automatic
ticketing machines
263
83.0%
100%
Number of ticketing machines with physical
push-buttons
263
83.0%
100%
Number of bank branches with induction
loops
317
100%
100%
Number of bank branches equipped with a
sign language interpreting tablet
317
100%
100%
Number of bank branches accessible to the
hearing impaired
317
100%
100%
ATMs
Indicators
Status at 31.12.2024 (nr)
Status at 31.12.2024
Target
Number of ATMs
1,993
-
-
Number of wheelchair-accessible ATMs
1,475
76.3%
100%
Number of ATMs with Braille
1,411
73.0%
100%
number of ATMs equipped with a voice
module for visually impaired customers
(text-to-speech software)
1,411
73.0%
100%
During the design and development of the website and the content editing activities, we have taken into
account the WCAG 2.1 Level A (and in some cases AA) recommendations, thus supporting navigation with
alternative devices and the use of text-to-speech software. A comprehensive-complex accessibility test of the
site will be carried out in the first half of 2025 as part of the Accessibility Act Compliance Project. The OTP
Internetbank and Mobilbank applications are currently partially accessible, with full accessibility expected in
the first half of 2025.
Reporting policy in connection with chapter S4
The Bank has developed the group-level reporting practice for individual-level disclosures as well (see
subchapter IRO-2), so the definitions, calculation methodologies and data requirements for customers also
follow the guidelines set out in subchapter 3.4 Reporting Policy for heading S4 of the OTP Group Sustainability
Report, extending to OTP Bank.
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4. Governance Information
4.1 Business Conduct
During the Group's operations, we put primary focus on transparency, regulation, the definition of internal
responsibilities and, thus, the broadest effective compliance with environmental, social and regulatory
requirements.
Communicating and promoting these issues among employees is a priority for the Bank, and the ways in which
it seeks to inform and encourage its employees to comply with them include: intranet news and articles, branch
knowledge management, international conferences, e-learning trainings, compliance officer network, OTP
Gala, OTP Sports Day, OTP Family Day.
The chapter covers the material topics of corporate culture, compliance, anti-money laundering and corruption
and bribery. For a better overview, we use a threefold structure: (1) corporate culture, compliance, (2) anti-
money laundering, (3) corruption and bribery.
Business Conduct, compliance, AML – Impacts, Risks and Opportunities
OTP Bank's business conduct not only affects its direct partners and stakeholders but also influences
employees' and customers' attitudes towards ethical business conduct. Corporate governance characteristics
and transparent decision-making are also important to investors.
Anti-money laundering is crucial for the Bank, focusing on preventing customers' attempts at money
laundering. Prudent and cautious practices are particularly important from a societal perspective.
Non-compliance with laws and regulations can result in fines and reputational damage. There is a significant
expectation for the Bank to actively participate in preventing money laundering. Violations of anti-money
laundering rules can also cause liquidity problems and the termination of correspondent banking relationships.
Violations of business ethics rules can lead to dissatisfaction and complaints from employees and business
partners.
Managing corporate culture and business conduct as a material topic at OTP Bank
The Bank considers compliance with legal requirements, international standards, norms, including applicable
sanction rules, and ethical expectations as fundamental. The foundations and guidelines of ethical business
conduct are summarized in the Code of Ethics. Compliance awareness is continuously developed.
Preventing money laundering and terrorist financing (AML/CFT) is important, so the Bank acts prudently in
uncovering potential abuses and takes necessary steps. In accordance with AML/CFT laws and requirements,
one of the Bank's main obligations is to conduct appropriate customer due diligence actions; efficiency is
enhanced through engaging with authorities and advocacy organizations.
The Bank manages risks within the framework of operational risks. Risk assessment is carried out as part of
the Annual Group-level Risk and Control Self-Assessment and scenario analysis. Additionally, an annual AML
Risk Assessment is conducted and actions to mitigate risks are determined based on the results of these
assessments.
ESRS G1-1: Policies on Corporate Culture and Business Conduct 27
Two of the most important policies of OTP Bank, as defined by the OTP Group, regarding corporate culture
and business conduct are the Code of Ethics and the Compliance Policy. A Gift Policy is annexed to the Code
of Ethics. The Sanctions Policy, the Anti-Corruption Policy and the Anti-Money Laundering and Counter
Terrorist Financing Policy are parts of the Compliance Policy.
The most important policies and their extracts are publicly available on the OTP Bank website under the @Due
Diligence information.
The OTP Bank's policies and the included expectations on business conduct (including the Code of Ethics,
Partner Code of Ethics, Compliance Policy, Anti-Money Laundering and Counter Terrorist Financing Policy,
Anti-Corruption Policy) are the same as the Group's policies, details of which are presented in subsection 4.1.
Corporate Governance - Policies on Corporate Culture and Business Conduct in the OTP Group Sustainability
Report.
27 In addition to the policy, disclosure requirement G1-1 also requires the presentation of information to promote corporate culture, which are considered
actions and targets under the ESRS.
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Actions and targets
The actions and targets set for OTP Bank to promote corporate culture and compliance, to fight money
laundering and anti-corruption, such as the operation of an ethics reporting system, ethics training and
awareness raising, AML whistleblowing system, are in line with these actions of the OTP Group. A detailed
description of these is provided in subsection 4.1. Policies on corporate culture and business conduct in the
OTP Group Sustainability Report.
Activities aimed at combatting corruption
The anti-corruption training system, which is implemented in the framework of the ethics training, is considered
a action of OTP Group concerning anti-corruption behaviour.
Business Conduct: Corruption and Bribery – Impacts, Risks, and Opportunities
The effectiveness of corruption prevention impacts the efficiency of resource utilization. Due to its size, OTP
Bank's anti-corruption practices can influence economic morale, particularly within the sector.
Taking actions on Corruption and Bribery at OTP Bank
The Bank applies zero tolerance to all forms of bribery and unlawful advantage. The effectiveness is supported
by the implementation of a comprehensive anti-corruption program.
ESRS G1-3: Preventing and detecting corruption and bribery
The foundations of OTP Bank's anti-corruption practices are the requirements set out in the and the
@Compliance Policy as described in detail in subsection 4.1. Business conduct – Preventing and detecting
corruption and bribery in the OTP Group Sustainability Report. The same section presents the Bank's risk-
based assessment and the actions taken to detect and prevent corruption and bribery.
Violations of the provisions of the Anti-Corruption Policy may be reported through the channels set out in the
Code of Ethics and @Partner Code of Ethics and the investigation is also carried out in accordance with the
procedures for operating the ethics/whistleblowing system28 (see @Ethics whistleblowing system).
Additional practices relating to corruption and bribery are the same as those described in section 4.1.
Corporate Governance in the OTP Group Sustainability Report, reporting to governing bodies and committees
under G1 GOV-1, policies under G1-1, similar to the training, given that the topic of corruption and bribery is
part of the ethics training.
ESRS G1-4: Cases of corruption and bribery
During the reporting period, no confirmed cases of corruption or bribery were identified in the Bank's
operations, and therefore no related fines were incurred.
Information on the Group's other types of violations is presented in the subsection ESRS G1-4: Corruption and
bribery in section 4.1. Corporate Governance in the OTP Group Sustainability Report. This includes
competition, consumer protection and ethics investigations and their results.
28 In compliance with Article 116 of the Hpt. and the internal abuse reporting system under the Whistleblowing Act
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Summary of the completed regulatory proceedings and the total amount of fines paid by the members of the
OTP Bank.
GRI 2-27 Closed proceedings by authorities, and other legal procedures, fines paid, OTP Bank – 2024
All closed
cases
Number of
significant
cases
All cases closed
with fines
Total fine
paid
Fine
charged for
practice
applied in
2024
Fine
charged
for
practice
applied in
earlier
period
pcs
HUF Million
violation of competition rules ¹
0
0
0
0
0
0
violation of consumer protection rules
65
0
36
15.5
15.5
0
violation of rules on equal opportunity (own
workforce)
0
0
0
0
0
0
violation of rules on equal opportunity (not own
workforce
0
0
0
0
0
0
violation of accessibility rules
0
0
0
0
0
0
supervisory procedures
9
1
3
112
112
0
violation of IT security / Cyber security rules
0
0
0
0
0
0
violation of taxation rules
0
0
0
0
0
0
violation of environmental rules
0
0
0
0
0
0
violation of marketing communication rules
0
0
0
0
0
0
violation of information provision rules
1
0
1
0.6
0.6
0
violation of marketing communication and
information provision rules
0
0
0
0
0
0
violation of data protection rules
7
0
0
0
0
0
Violation of anti-corruption and anti-bribery rules
0
0
0
0
0
0
violation of labour law rules
0
0
0
0
0
0
violation of health and safety rules
1
0
1
0.34
0
0.34
other proceedings
0
0
0
0
0
0
Total 2024
83
1
41
128.44
128.1
0.34
The regulatory practices of individual countries can differ significantly, which contributes to the significant differences in the number of procedures.
¹ This also includes cases related to violations of antitrust and monopoly rules .
Reporting policy in connection with chapter G1
The Bank has developed the group-level reporting practice for individual-level disclosures as well (see
subchapter IRO-2), so the definitions, calculation methodologies and data requirements relating to governance
information also follow the guidelines presented in subchapter 4.1. Reporting policy for heading G1 in the OTP
Group Sustainability Report, extending to OTP Bank.
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5. ESRS Index
ESRS
Standard
code
ESRS Standard
name
Disclosure
requirement
code
Disclosure requirement name
Appearance in the report
Reference to
another document
Comment
sESRS 2
General disclosures
BP-1
General basis for preparing sustainability statements
General information
BP-2
Disclosures relating to specific circumstances
General information
GOV-1
The role of the administrative, management and supervisory bodies
General information
GOV-2
Information provided to the company's administrative, management or supervisory bodies and
the sustainability issues they address
General information
GOV-3
Building sustainability-related performance into incentive mechanisms
General information
GOV-4
Statement on due diligence
General information
GOV-5
Risk management and internal control over sustainability reporting
General information
SBM-1
Strategy, business model and value chain
General information
SBM-2
Interests and views of stakeholders
General information
SBM-3
Material impacts, risks and opportunities and their interaction with the strategy and business
model
General information
IRO-1
Description of procedures for identifying and assessing material impacts, risks and opportunities
General information
IRO-2
Disclosure requirements under ESRS covered by an enterprise's sustainability statements
General information
ESRS E1
Climate change
ESRS 2 GOV-3
Building sustainability-related performance into incentive mechanisms
General information
E1-1
Climate change mitigation transition plan
General information
ESRS 2 SBM-3
Material impacts, risks and opportunities and their interaction with the strategy and business
model
General information
ESRS 2 IRO-1
Description of procedures for identifying and assessing material climate-related impacts, risks
and opportunities
General information
E1-2
Climate change mitigation and adaptation policies
Environmental information
E1-3
Actions and resources related to climate change policies
Environmental information
E1-4
Targets set for climate change mitigation and adaptation
Environmental information
E1-6
Gross and total GHG emissions in Scope 1, 2, 3
Environmental information
E1-7
GHG mitigation projects financed through GHG removals and carbon credits
Environmental information
E1-8
Internal carbon pricing
Environmental information
E1-9
Expected financial impacts from material physical and transition risks and potential climate-
related opportunities
Not yet reported due to phased introduction
ESRS E2
Pollution
ESRS 2 IRO-1
Description of the procedures for identifying and assessing material impacts, risks and
opportunities associated with pollution
Environmental information
ESRS E3
Water and marine
resources
ESRS 2 IRO-1
Description of procedures for identifying and assessing material impacts, risks and opportunities
related to water and marine resources
Environmental information
E3-1
Policies on water and marine resources
Environmental information
E3-2
Actions and resources related to water and marine resources
Environmental information
E3-3
Water and marine resources targets
Environmental information
E3-5
Expected financial impacts from material impacts, risks and opportunities related to water and
marine resources
Not yet reported due to phased introduction
ESRS E4
Biodiversity and
ecosystems
ESRS 2 SBM-3
Material impacts, risks and opportunities and their interaction with the strategy and business
model
Environmental information
ESRS 2 IRO-1
Description of procedures for identifying and assessing material impacts, risks and opportunities
related to biodiversity and ecosystems
Environmental information
E4-1
A transition plan and the inclusion of biodiversity and ecosystems in the strategy and business
model
Environmental information
E4-2
Biodiversity and ecosystems policies
Environmental information
E4-3
Actions and resources related to biodiversity and ecosystems
Environmental information
E4-4
Biodiversity and ecosystems targets
Environmental information
MANAGEMENT REPORT (STAND-ALONE)
INTEGRATED ANNUAL REPORT 2024
92
ESRS
Standard
code
ESRS Standard
name
Disclosure
requirement
code
Disclosure requirement name
Appearance in the report
Reference to
another document
Comment
ESRS E5
Resource use and
circular economy
ESRS 2 IRO-1
Presentation of processes for identifying and assessing material impacts, risks and opportunities
related to resource use and circular economy
Environmental information
ESRS S1
Own workforce
ESRS 2 SBM-3
Material impacts, risks and opportunities and their interaction with the strategy and business
model
Social information
S1-1
Policies on own workforce
Social information
S1-2
Processes in place to engage with own employees and employee representatives on impacts
Social information
S1-3
Processes for correcting negative impacts and channels for employees to raise concerns
Social information
S1-4
Actions on the material impacts on own workforce and approaches to mitigate material risks and
exploit material opportunities related to own workforce and the effectiveness of these actions
Social information
S1-5
Targets to address material negative impacts, promote positive impacts and manage material
risks and opportunities
Social information
S1-6
Characteristics of the enterprise's employees
Social information
S1-7
Characteristics of non-employees within own workforce
Not yet reported due to phased introduction
S1-9
Diversity indicators
Social information
S1-12
People living with disabilities
Not yet reported due to phased introduction
S1-13
Training and skills development indicators
Not yet reported due to phased introduction
S1-14
Health and safety indicators
Social information
S1-15
Work-life balance indicators
Not yet reported due to phased introduction
S1-16
Income actions (pay gap and total income)
Social information
S1-17
Incidents, complaints and serious human rights impacts
Social information
ESRS S4
Consumers and end
users
ESRS 2 SBM-3
Material impacts, risks and opportunities and their interaction with the strategy and business
model
Social information
S4-1
Policies concerning consumers and end-users
Social information
S4-2
Processes in place to cooperate with consumers and end-users on impacts
Social information
S4-3
Processes to correct negative impacts and channels for consumers and end-users to raise
concerns
Social information
S4-4
Actions to address the material impacts on consumers and end-users, and approaches to
managing the material risks and exploiting the material opportunities for consumers and end-
users, and the effectiveness of these actions
Social information
S4-5
Targets to address material negative impacts, promote positive impacts and manage material
risks and opportunities
Social information
GRI G4: FS13*
Access points in low-populated or economically disadvantaged areas
Social information
ESRS G1
Business conduct
ESRS 2 GOV-1
The role of administrative, supervisory and management bodies
Governance information
ESRS 2 IRO-1
Description of the processes for identifying and assessing material impacts, risks and
opportunities
Governance information
G1-1
Policies on corporate culture and business conduct, and the corporate culture
Governance information
G1-3
Preventing and detecting corruption and bribery
Governance information
G1-4
Confirmed cases of corruption and bribery
Governance information
*entity specific disclosures
MANAGEMENT REPORT (STAND-ALONE)
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93
6. List of data points from EU legislation
Disclosure
requirement
Related datapoint
Appearance in the report
Reference to another
document
Comment
ESRS 2 GOV-1
Gender breakdown in the Board of Directors para 21. point d)
OTP Group
sustainability report
Percentage of independent board members referred to in point (e) of paragraph 21
OTP Group
sustainability report
ESRS 2 GOV-4
Due diligence statement paragraph 30
OTP Group
sustainability report
ESRS 2 SBM-1
Participation in fossil fuel activities Paragraph 40(d)(i)
not relevant
Participation in activities related to the production of chemicals Paragraph 40(d)(ii)
Participation in activities related to disputed weapons, paragraph 40(d)(iii)
Participation in activities related to tobacco production and production paragraph 40(d)(iv)
ESRS E1-1
2050 Climate neutrality transition plan paragraph 14
OTP
Group
sustainability report
Firms excluded from EU benchmarks aligned with the Paris Agreement paragraph 16, point (g)
ESRS E1-4
GHG emission reduction target paragraph 34
Environmental information
ESRS E1-5
Use of energy from fossil sources, broken down by source (only sectors with a significant impact
on climate) paragraph 38
not relevant
Energy consumption and structure, paragraph 37
Energy intensity in relation to activities in sectors with a high climate impact paragraphs 40 to
43
ESRS E1-6
Scope 1, 2, 3 gross and total GHG emissions paragraph 44
Environmental information
ESRS E1-6
Gross GHG intensity paragraphs 53 to 55
Environmental information
ESRS E1-7
GHG capture and carbon credits paragraph 56
Environmental information
ESRS E1-9
Exposure of the benchmark portfolio to climate-related physical risks paragraph 66
Not yet reported due to phase-in
Amounts of funds broken down into acute and chronic physical risk, paragraph 66(a)
Location of significant assets exposed to substantial physical risk paragraph 66(c)
Not yet reported due to phase-in
Real estate assets book value breakdown by energy efficiency class paragraph 67(c)
not relevant
Extent of portfolio exposure to climate-related opportunities paragraph 69
Not yet reported due to phase-in
ESRS E2-4
Emissions to air, water and land of each pollutant listed in Annex II to the European PRTR
Regulation European Pollutant Release and Transfer Register, paragraph 28
not relevant
MANAGEMENT REPORT (STAND-ALONE)
INTEGRATED ANNUAL REPORT 2024
94
Disclosure
requirement
Related datapoint
Appearance in the report
Reference to another
document
Comment
ESRS E3-1
Water and marine resources paragraph 9
Environmental information
Dedicated policy, paragraph 13
not relevant
Sustainable oceans and seas paragraph 14
Environmental information
ESRS E3-4
Total water recycled and reused paragraph 28(c)
not relevant
ESRS E3-4
Total water consumption in m3 per net revenue on own operations paragraph 29
ESRS 2 – IRO 1 – E4
Paragraph 16 (a) i
not relevant
Paragraph 16 (b)
Environmental information
Paragraph 16 (c)
not relevant
ESRS E4-2
Sustainable land / agriculture practices or policies paragraph 24 (b)
Sustainable oceans / seas practices or policies paragraph 24 (c)
Policies to address deforestation paragraph 24 (d)
ESRS E5-5
Non-recycled waste paragraph 37 (d)
not relevant
Hazardous waste and radioactive waste paragraph 39
ESRS 2- SBM3 - S1
Risk of incidents of forced labour paragraph 14 (f)
Social information
Risk of incidents of child labour paragraph 14 (g)
Social information
ESRS S1-1
Human rights policy commitments paragraph 20
Social information
Due diligence policies on issues addressed by the fundamental International Labor Organisation
Conventions 1 to 8, paragraph 21
Social information
processes and measures for preventing trafficking in human beings paragraph 22
not relevant
workplace accident prevention policy or management system paragraph 23
Social information
ESRS S1-3
grievance/complaints handling mechanisms paragraph 32 (c
Social information
ESRS S1-14
Number of fatalities and number and rate of work- related accidents paragraph 88 (b) and (c)
Social information
Number of days lost to injuries, accidents, fatalities or illness paragraph 88 (e)
Social information
ESRS S1-16
Unadjusted gender pay gap paragraph 97 (a)
Social information
Excessive CEO pay ratio paragraph 97 (b)
Social information
ESRS S1-17
Incidents of discrimination paragraph 103 (a)
Social information
Non-respect of UNGPs on Business and Human Rights and OECD paragraph 104 (a)
not relevant
ESRS 2- SBM3 – S2
Significant risk of child labour or forced labour in the value chain paragraph 11 (b)
not relevant
MANAGEMENT REPORT (STAND-ALONE)
INTEGRATED ANNUAL REPORT 2024
95
Disclosure
requirement
Related datapoint
Appearance in the report
Reference to another
document
Comment
ESRS S2-1
Human rights policy commitments paragraph 17
not relevant
Policies related to value chain workers paragraph 18
Non-respect of UNGPs on Business and Human Rights principles and OECD guidelines
paragraph 19
Due diligence policies on issues addressed by the fundamental International Labor Organisation
Conventions 1 to 8, paragraph 19
ESRS S2-4
Human rights issues and incidents connected to its upstream and downstream value chain
paragraph 36
not relevant
ESRS S3-1
Human rights policy commitments paragraph 16
not relevant
non-respect of UNGPs on Business and Human Rights, ILO principles or and OECD guidelines
paragraph 17
ESRS S3-4
Human rights issues and incidents paragraph 36
not relevant
ESRS S4-1
Policies related to consumers and end-users paragraph 16
Social information
Non-respect of UNGPs on Business and Human Rights and OECD guidelines paragraph 17
Social information
ESRS S4-4
Human rights issues and incidents paragraph 35
Social information
ESRS G1-1
United Nations Convention against Corruption paragraph 10 (b)
Social information
ESRS G1-1
Protection of whistleblowers paragraph 10 (d)
not relevant
ESRS G1-4
Fines for violation of anti- corruption and anti-bribery laws paragraph 24 (a)
Governance information
ESRS G1-4
Standards of anti- corruption and anti- bribery paragraph 24 (b)
Governance information
MANAGEMENT REPORT (STAND-ALONE)
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96
Fight against corruption and against the practice of bribery
The Code of Ethics (https://www.otpbank.hu/static/portal/sw/file/OTP_EtikaiKodex_EN.pdf) , the Partner Code
of Ethics (https://www.otpbank.hu/static/portal/sw/file/OTP_Partneri_EtikaiKodex_EN.pdf) published in 2023
and the Anti-Corruption Policy of OTP Bank Group, approved in 2019, contains provisions on the fight against
corruption and against the practice of bribery, as well as the enforcement of legal, fair and ethical conduct
(https://www.otpgroup.info/ethical-declaration). As it can be read in the foreword of the Code and the Anti-
Corruption Policy as well, the OTP Bank Plc. and its management have adopted the principle of zero tolerance
towards corruption and bribery, taking a definite stance against all forms of corruption and giving full support
to the fight against corruption. In addition, the Code states that "As an ethical and compliant institution, the
Bank and its management are fully committed to ensuring observance of all relevant legislation, including anti-
corruption statutes."
The OTP Bank Plc. has set up an ethics reporting system (whistleblowing), which is for the reporting and the
handling of the reports on suspected or actual violation of the values set forth in the Code of Ethics, where
anonymous reporting of ethics issues is also possible. The OTP Bank Plc. conducts inquiries for the purpose
of detecting, preventing anomalies in connection with reports made or anomalies it became aware of otherwise.
In 2024, a total of 200 reports were received through the ethics Whistleblowing System of OTP Bank Plc., of
which 44 reports were deemed necessary to conduct ethics proceedings. Ethical breaches were identified in
12 cases.
The OTP Bank Plc. has created and maintains its Code of Ethics to keep reputational risk and financial losses,
which may incur in relation to corruption, bribery and discrimination, on a minimum level. Both employees and
newcomers receive education on the Code of Ethics, and in addition, the acceptance to be bound by it is a
prerequisite for their employment.
In addition, all business partners and clients are communicated about the Anti-Corruption Policy and
procedures through the Code of Ethics and Anti-Corruption Policy published publicly on the OTP Bank Plc.'s
website and from 2023 the Partner Code of Ethics has been published on the Bank’s website as well. The
Anti-Corruption Policy stipulates that, in view of the fact that existing and established relationships with
contractual partners also contain the possibility of corruption, the OTP Bank Plc. will act prudently in its dealings
with contractors, in particular in the tendering and preparation process, to minimise the risk of corruption. The
OTP Bank Plc. establishes relationships with its contractual partners based on an assessment of
professionalism, competence and competitiveness, and does not apply other non-professional selection
criteria that contain the possibility of corruption.
Based on the Compliance’s proposal, the prohibition of corruption will be reflected in the contractual and
regulatory documents used by the OTP Bank Plc. in a clearer and well-defined manner from 2023 onwards,
through the inclusion of anti-corruption clauses in the business rules and standard contracts. The clause will
state from the very beginning of the business relationship that the contracting partner accepts OTP Bank Plc.'s
anti-corruption principles, including the prohibition of corruption and the consequences of breaching this
prohibition, which can even be termination of contract.
Any requests from third parties affecting human rights are treated by the OTP Bank Plc. as a priority.
We manage the risks regarding the fight against corruption and bribery within the framework of our operational
risk management process. Our quarterly compliance reports cover the changes in risks as well as the steps
necessary steps to manage them. The reports are presented to the Executive Steering Committee and the
Board of Directors; the annual report is also submitted to the Supervisory Board.
MANAGEMENT REPORT (STAND-ALONE)
INTEGRATED ANNUAL REPORT 2024
97
Non-financial performance indicators
• Internal audit: 208 closed audits, 1,193 recommendations, 1,193 accepted recommendations.
• Compliance with Budapest Stock Exchange (BSE) Recommendations (yes/no ratio): 72 yes, 0 no.
• Compliance: 11 closed data- and consumer protection related investigations by the Compliance.
• Bank security investigations, reports: In 2024, we made 1,049 reports, 20 additions to reports and
356 notifications. Of the reports, 889 were on suspicion of fraud, 39 on suspicion of money laundering and
122 on suspicion of other crimes.
In terms of financial abuse, there is an increasing trend in housing loans, which amounted to
approximately HUF 41 million in 2024. A detailed comparison of the development of losses from credit
fraud with the data of 2023 shows that in 2023 the loss from personal loan fraud was HUF 22 million,
while in 2024 it increased to HUF 39 million. In 2023, the loss due to fraud was HUF 852 thousand, while
in 2024 it increased to HUF 1.2 million.
In 2024, there were no losses related to overdrafts, baby loans, home loans and CSOK applications.
Considering corporate credit fraud in the MSE and MLE sectors, the bank's losses amounted to
HUF 4.7 billion in 2023, which decreased to HUF 1.2 billion in 2024.
In the area of online fraud against customers, as a result of the Bank's protective measures, the damage
caused by the misuse of cash flows to the detriment of customers decreased by 32% to HUF 7.2 billion
in 2024 compared to the data for 2023, when the damage to customers exceeded HUF 10 billion.
In addition, the operational fraud prevention measures and monitoring activities prevented customer
losses of HUF 21.7 billion, which is more than three times the previous year's figure of HUF 6.5 billion.
Compared to the data of 2023, in contrast to other domestic banks, a decrease can be observed in the
area of bank card fraud, both in terms of the number of fraud attempts and the value of successful fraud.
In 2024, the value of successful bank card misuse was HUF 3.5 billion, of which the value of successful
transactions with OTP-issued cards was HUF 3.2 billion.
As a result of the newly introduced rules and improvements, the ratio of bank card fraud to sales has
decreased compared to 2023, and is once again well below the European average published by
Mastercard: OTP Bank 0.0253%, European average 0.0407%.
• Ethics issues: 200 ethics reports, establishing ethics offense in 12 cases.
MANAGEMENT REPORT (STAND-ALONE)
INTEGRATED ANNUAL REPORT 2024
98
LIST OF NON-AUDIT SERVICES BY SERVICE CATEGORIES USED BY THE BANK
The statutory audit of OTP Bank is carried out by Ernst and Young Ltd., in addition to which the following
services were contracted:
•
Assurance engagements other than audits or reviews of historical financial information (ISAE 3000)
•
Advisory engagements relating to fraud detection (forensic services)
•
Issue of Comfort letters
•
Engagements to perform agreed-upon procedures regarding financial information (AUP according
to ISRS 4400)
•
Consultation relating to interpretation and implementation of accounting standards and relating to
accounting of potential future transaction
•
Reviewing the internal processes and compliance with laws and regulations
•
Trainings relating to changes in accounting regulations and professional interpretations - only
general not OTP Group specific matters
MANAGEMENT REPORT (STAND-ALONE)
INTEGRATED ANNUAL REPORT 2024
99
STATEMENT
On behalf of OTP Bank Plc. we declare that, to the best of our knowledge, the separate and consolidated
financial statements which have been prepared in accordance with the applicable accounting standards,
present a true and fair view of the assets, liabilities, financial position and profit and loss of OTP Bank Plc.
and its consolidated subsidiaries and associates, and give a fair view of the position, development and
performance of OTP Bank Plc. and its consolidated subsidiaries and associates, describing the principal
risks and uncertainties, and do not conceal facts or information which are relevant to the evaluation of the
Issuer’s position. Moreover, we declare that the Sustainability Report, as part of the Management Report,
was prepared in accordance with sustainability reporting standards of the Accounting Act (Act C of 2000 on
Accounting), the European Sustainability Reporting Standards (ESRS), and with the provisions of Article 8
of Regulation (EU) 2020/852 of the European Parliament and of the Council (EU Taxonomy Regulation).
Budapest, 19 March 2025
INTEGRATED ANNUAL REPORT 2024
100
MANAGEMENT REPORT 2024 (CONSOLIDATED)
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
101
CONSOLIDATED FINANCIAL HIGHLIGHTS29 AND SHARE DATA – NEW METHODOLOGY
In accordance with the recommendation stated in the current circular of the MNB on the application of MoF Decree no. 24/2008 on
the detailed rules regarding the disclosure requirements applicable to publicly offered securities, OTP Bank Plc. as issuer prepares
and publishes this Management Report combined with the Business Report required in the Accounting Act in a single document.
The scope of adjustment items presented on consolidated level changed from 2024. According to the new methodology applied from
2024, only the goodwill impairment and the direct effect of acquisitions adjustment items are carved out and presented on consolidated
level. For the sake of comparability, in the summary the relevant consolidated tables are presented in accordance with both the old
and the new methodologies. For details, see Supplementary data annex.
Main comonents of P&L account
2023
HUF million
2024
HUF million
Change
%
Consolidated profit after tax
990,459
1,076,139
9
Adjustments (after tax)
85,507
0
Consolidated adjusted profit after tax
904,952
1,076,139
19
Pre-tax profit
1,179,224
1,386,883
18
Operating profit
1,265,909
1,545,377
22
Total income
2,245,706
2,633,908
17
Net interest income
1,461,850
1,782,604
22
Net fees and commissions
478,119
545,631
14
Other net non-interest income
305,737
305,673
0
Operating expenses
(979,797)
(1,088,531)
11
Total risk costs
(86,685)
(158,494)
83
Corporate taxes
(274,272)
(310,743)
13
Main components of balance sheet
(closing balances)
2023
2024
%
Total assets
39,609,144
43,419,128
10
Total customer loans (net, FX adjusted)
22,549,534
23,361,638
4
Total customer loans (gross, FX adjusted)
23,610,743
24,334,694
3
Performing (Stage 1+2) customer loans (gross, FX-adjusted)
22,596,102
23,447,715
4
Allowances for possible loan losses (FX adjusted)
(1,061,208)
(973,056)
(8)
Total customer deposits (FX-adjusted)
30,937,627
31,666,399
2
Issued securities
2,095,548
2,593,124
24
Subordinated loans
562,396
369,359
(34)
Total shareholders' equity
4,094,793
5,120,012
25
Performance Indicators
2023
2024
pps
ROE (from profit after tax)
27.2%
23.5%
(3.7)
ROE (from adjusted profit after tax)
24.9%
23.5%
(1.4)
ROA (from profit after tax)
2.7%
2.6%
(0.1)
ROA (from adjusted profit after tax)
2.4%
2.6%
0.1
Operating profit margin
3.41%
3.71%
0.30
Total income margin
6.04%
6.32%
0.28
Net interest margin
3.93%
4.28%
0.34
Cost-to-asset ratio
2.64%
2.61%
(0.03)
Cost/income ratio
43.6%
41.3%
(2.3)
Provision for impairment on loan losses-to-average gross loans ratio
0.34%
0.38%
0.05
Total risk cost-to-asset ratio
0.23%
0.38%
0.15
Effective tax rate
23.3%
22.4%
(0.9)
Net loan/deposit ratio (FX-adjusted)
73%
74%
1
Capital adequacy ratio (consolidated, IFRS) - Basel3
18.9%
20.3%
1.4
Tier1 ratio - Basel3
16.6%
18.9%
2.3
Common Equity Tier 1 ('CET1') ratio - Basel3
16.6%
18.9%
2.3
Share data
2023
2024
%
EPS diluted (HUF) (from profit after tax)
3,693
4,050
10
EPS diluted (HUF) (from adjusted profit after tax)
3,380
4,066
20
Closing price (HUF)
15,800
21,690
37
Highest closing price (HUF)
16,030
22,100
38
Lowest closing price (HUF)
9,482
15,600
65
Market Capitalization (EUR billion)
11.6
14.8
28
Book Value Per Share (HUF)
15,294
19,346
26
Tangible Book Value Per Share (HUF)
14,589
18,511
27
Price/Book Value
1.0
1.1
9
Price/Tangible Book Value
1.1
1.2
8
P/E (trailing, from profit after tax)
4.5
5.6
26
P/E (trailing, from adjusted profit after tax)
4.9
5.6
15
Average daily turnover (EUR million)
15
18
23
Average daily turnover (million share)
0.5
0.4
(14)
29 Structural adjustments made on consolidated IFRS profit and loss statement as well as balance sheet, together with the calculation methodology of
adjusted indicators are detailed in the Supplementary data section.
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
102
CONSOLIDATED FINANCIAL HIGHLIGHTS AND SHARE DATA – OLD METHODOLOGY
Main components of P&L account
2023
HUF million
2024
HUF million
Change
%
Consolidated profit after tax
990,459
1,076,139
9
Adjustments (after tax)
(18,123)
(69,342)
283
Consolidated adjusted profit after tax
1,008,583
1,145,481
14
Pre-tax profit
1,222,328
1,415,617
16
Operating profit
1,260,850
1,521,636
21
Total income
2,224,584
2,607,481
17
Net interest income
1,459,694
1,778,520
22
Net fees and commissions
478,146
545,631
14
Other net non-interest income
286,745
283,329
(1)
Operating expenses
(963,734)
(1,085,845)
13
Total risk costs
(38,521)
(106,018)
175
Corporate taxes
(213,746)
(270,136)
26
Main components of balance sheet
(closing balances)
2023
2024
%
Total assets
39,609,144
43,419,128
10
Total customer loans (net, FX adjusted)
22,549,534
23,361,638
4
Total customer loans (gross, FX adjusted)
23,610,743
24,334,694
3
Performing (Stage 1+2) customer loans (gross, FX-adjusted)
22,596,102
23,447,715
4
Allowances for possible loan losses (FX adjusted)
(1,061,208)
(973,056)
(8)
Total customer deposits (FX-adjusted)
30,937,627
31,666,399
2
Issued securities
2,095,548
2,593,124
24
Subordinated loans
562,396
369,359
(34)
Total shareholders' equity
4,094,793
5,120,012
25
Performance Indicators
2023
2024
pps
ROE (from profit after tax)
27.2%
23.5%
(3.7)
ROE (from adjusted profit after tax)
27.7%
25.0%
(2.7)
ROA (from profit after tax)
2.7%
2.6%
(0.1)
ROA (from adjusted profit after tax)
2.7%
2.7%
0.0
Operating profit margin
3.39%
3.65%
0.26
Total income margin
5.99%
6.25%
0.27
Net interest margin
3.93%
4.27%
0.34
Cost-to-asset ratio
2.59%
2.60%
0.01
Cost/income ratio
43.3%
41.6%
(1.7)
Provision for impairment on loan losses-to-average gross loans ratio
0.16%
0.34%
0.18
Total risk cost-to-asset ratio
0.10%
0.25%
0.15
Effective tax rate
17.5%
19.1%
1.6
Net loan/deposit ratio (FX-adjusted)
73%
74%
1
Capital adequacy ratio (consolidated, IFRS) - Basel3
18.9%
20.3%
1.4
Tier1 ratio - Basel3
16.6%
18.9%
2.3
Common Equity Tier 1 ('CET1') ratio - Basel3
16.6%
18.9%
2.3
Share data
2023
2024
%
EPS diluted (HUF) (from profit after tax)
3,693
4,050
10
EPS diluted (HUF) (from adjusted profit after tax)
3,767
4,328
15
Closing price (HUF)
15,800
21,690
37
Highest closing price (HUF)
16,030
22,100
38
Lowest closing price (HUF)
9,482
15,600
65
Market Capitalization (EUR billion)
11.6
14.8
28
Book Value Per Share (HUF)
15,294
19,346
26
Tangible Book Value Per Share (HUF)
14,589
18,511
27
Price/Book Value
1.0
1.1
9
Price/Tangible Book Value
1.1
1.2
8
P/E (trailing, from profit after tax)
4.5
5.6
26
P/E (trailing, from adjusted profit after tax)
4.4
5.3
21
Average daily turnover (EUR million)
15
18
23
Average daily turnover (million share)
0.5
0.4
(14)
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
103
ACTUAL CREDIT RATINGS
S&P GLOBAL
OTP Bank and OTP Mortgage Bank – FX long-term issuer credit rating
BBB-
OTP Bank – Dated subordinated FX debt
BB
MOODY'S
OTP Bank – FX long term deposits
Baa1
OTP Bank – Dated subordinated FX debt
Ba2
OTP Mortgage Bank – Covered bonds
A1
SCOPE
OTP Bank – Issuer rating
BBB+
OTP Bank – Dated subordinated FX debt
BB+
LIANHE
OTP Bank – Issuer rating (China national scale)
AAA
ACTUAL ESG RATINGS
AWARDS
Members of the Group won the Bank of the Year award in four countries in the prestigious international competition
organised by The Banker magazine, part of the Financial Times Group: Albania, Bulgaria, Hungary and Slovenia.
PWM magazine, a sister publication of The Banker, selected OTP Bank as the best private bank in Central and Eastern
Europe in terms of customer service.
Global Finance magazine announced the winners of the Sustainable Finance Awards. OTP Group was chosen as the
winner in one global category ("The best bank in the world in terms of loans related to transition and sustainability"), in
two regional categories and in one country.
S&P GLOBAL MARKET INTELLIGENCE PERFORMANCE RANKING, 2024
In 2024, S&P Global Market Intelligence OTP Bank was
identified as the leading performer among the
50 largest publicly listed European banking institutions.
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
104
MANAGEMENT’S ANALYSIS OF THE FULL-YEAR 2024 RESULTS OF OTP GROUP
Consolidated earnings: HUF 1,076 billion profit after tax in 2024 with an ROE of 23.5%; 9% y-o-y
organic increase in performing loans, improving margin, cost efficiency and capital adequacy ratios
In 2024 the Group’s profit after tax exceeded HUF 1,076 billion, which is consistent with 9% annual profit
growth, while annual ROE reached 23.5%. The earnings per share (EPS) for 2024 hit HUF 4,050, whereas
the end-2024 book value per share amounted to HUF 19,346.
In 2024 all geographical segments reported positive results, the share of foreign profit contribution reached
68%.
On 30 July 2024 the financial closure of the sale of the Romanian bank was completed, consequently,
starting from 3Q the consolidated financial statements no longer include the contribution from the Romanian
segment.
On 22 August 2024 the legal merger of the two Slovenian subsidiary banks of the Group, SKB Banka and
Nova KBM was successfully completed. Following this, the operational merger was also successfully
concluded.
The annual P&L dynamics were shaped, on one hand, by the positive adjustment items in the amount of
HUF 85.5 billion (after tax) in the 2023 base period related to the direct effect of the two newly acquired
banks’ consolidation and the one-off direct effects of the sale of Romania. In 2024 no such adjustment items
were presented, given that they remained below the materiality threshold. The acquired banks were
conducive of the annual profit momentum through their on-going P&L contribution, too, whereas the
divestment of the Romanian operation influenced rather volume dynamics. As for FX rate changes, the
average rate of HUF weakened against the currencies of most foreign subsidiaries (by 3.4% against the
EUR), but strengthened against the UAH and RUB. Out of the altogether 9% growth in the Group’s profit
after tax, 2 pps was attributable to the FX translation effect.
Cumulated adjusted profit after tax improved by 19%, whereas the organic 30 and FX-adjusted growth was
10% y-o-y.
The full-year operating profit increased by 22%, within that total revenues grew by 17% mainly driven by the
22% increase in net interest income (+20% organically and FX-adjusted), boosted by both expanding
business volumes and improving net interest margin (by 34 bps to 4.28%). It was the margin improvement
at OTP Core (Hungary) that was particularly salient: from the lows hit in 1Q 2023, it improved gradually and
by 4Q 2024 it even surpassed the level prevailing before the war and the extremely high rate environment.
On the contrary, margin erosion, which has characterised the recent past continued in the Eurozone and
ERM 2 countries.
Net fees and commissions grew by 13% organically and FX-adjusted.
The other net non-interest income remained flat y-o-y despite significantly lower fair value adjustment of
subsidized housing and baby loans at OTP Core (2024: HUF 26 billion, -HUF 62 billion y-o-y).On the other
hand, in 3Q 2024 HUF 10.5 billion positive one-off item occurred on consolidated level in relation to the sale
of the Romanian bank, mainly presented on consolidated level amongst other net non-interest income.
Operating costs went up by 11% organically and FX-adjusted. The annual cost to income ratio improved by
2.3 pps to 41.3%.
Total risk costs increased by 83% to HUF 158 billion, within that credit risk costs amounted to HUF 90 billion
(+25%), corresponding with a credit risk cost ratio of 38 bps, against 34 bps in 2023. The impairment related
to the Hungarian rate cap scheme, which was extended two times during 2024, amounted to HUF 10 billion.
According to the effective regulation, in Hungary the interest rate cap on the affected Hungarian mortgage
loans is valid until 30 June 2025. Furthermore, in 4Q 2024 HUF 2.1 billion impairment was booked as a
result of the extension of the Serbian interest rate cap scheme. The jump in other risk costs was caused
mainly by the HUF 45 billion impairments created on Russian bonds held in the balance sheet of OTP Bank
(Hungary) and DSK Bank (Bulgaria), of which HUF 37.6 billion was booked at OTP Bank (Hungary) and
HUF 7.5 billion at DSK Bank (Bulgaria). At the end of 2024, the total gross Russian bond exposures at OTP
Core and DSK Bank amounted to HUF 135 billion equivalent, of which HUF 114 billion equivalent not due
exposures carried interest. As a result of the impairments made in the the course of 2024, the provision
coverage on Russian bonds increased to 73%.
30 Regarding the y-o-y changes in the different P&L lines in full-year 2024, organic growth is defined as follows: without the contribution of Ipoteka Bank
(consolidated from July 2023) and the Romanian bank sold in July 2024, and without the HUF 10.5 billion one-off gain presented on the other income
line in 3Q 2024 in the wake of the deconsolidation of Romania.
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
105
The full-year effective tax rate moderated by 0.9 pp y-o-y to 22.4%, as a result of several factors. Effective
from 2024, the statutory corporate income tax rate was raised from 19% to 22% in Slovenia, and from 10%
to 15% in Bulgaria as the global minimum corporate tax rate was adopted from 2024. In Ukraine the
previously effective 25% tax rate was lifted to 50% in 4Q 2024 retroactively for the full-year. As opposed to
this, total special banking taxes presented on the corporate income tax line moderated y-o-y. In 2024 HUF
51 billion special taxes on financial institutions weighed on earnings which incorporated both the old banking
tax in Hungary (HUF 31 billion) and the windfall tax on extra profits (HUF 7 billion, taking into account the
tax deduction opportunity). Outside of Hungary, in Slovenia (HUF 12 billion) and Romania (HUF 1 billion)
arose banking tax payment obligations.
Consolidated credit quality remained stable, main credit quality indicators continued to develop
favourably. The ratio of Stage 3 loans under IFRS 9 declined by 0.7 pp y-o-y to 3.6%. The own provision
coverage of Stage 3 loans moderated by 1.3 pps y-o-y to 59.5%.
Consolidated performing (Stage 1+2) loans expanded by 9% y-o-y FX-adjusted, without the effect of the
deconsolidation of Romania. Corporate + MSE loans posted 2% y-o-y growth, adjusted for the sale of
Romania as well as the repayment of a big-ticket corporate loan held in the Hungarian, Bulgarian and
Slovenian books, in the total amount of HUF 317 billion. It was also favourable that Ukrainian corporate
loans expanded by 20% in 2024. Household loan volumes showed stronger momentum: mortgage
exposures demonstrated a 14% y-o-y expansion organically and FX-adjusted, whereas consumer loans
grew by 23%. In Bulgaria the y-o-y household loan growth was outstanding, but in 4Q the pace of growth in
cash loans moderated in the wake of tightened macroprudential regulations. At the Uzbek Ipoteka Bank
household loan, especially consumer loan growth was modest in 2024 in comparison with the growth rates
prevalent in the previous year.
Consolidated deposits expanded by 6% y-o-y on an FX-adjusted basis and without the effect of the
divestment of Romania. The expansion was driven by the household segment (+10%), while corporate +
MSE deposits showed a more moderate pace (+2%), to a great extent driven by corporate deposit outflows
in Hungary. It was positive that Hungarian household deposits expanded by 10% y-o-y. Uzbek deposits
growth was outstanding (+48% y-o-y).
The Group’s net loan to deposit ratio hit 74% at the end of 2024, up by 1 pp y-o-y.
The volume of issued securities without retail bonds increased by 32% y-o-y. The volume of retail bonds
stood at HUF 85 billion at the end of 2024, down by 58% y-o-y. The subordinated bonds and loans line
declined by 34% y-o-y. All these changes were primarily attributable to OTP Bank (Hungary).
The full-year net comprehensive income exceeded HUF 1,290 billion. Shareholders’ equity increased by
more than HUF 1,000 billion or 25% over the last 12 month. In June 2024 altogether HUF 150 billion dividend
was paid to shareholders, equivalent of HUF 539.5 per dividend-eligible share. In 2024 the deduction from
shareholders’ equity due to treasury shares increased by HUF 125 billion: first, the available HUF 60 billion
amount under the first treasury share buyback program which started after the central bank’s single
permission dated 12 February 2024, was utilized on 13 August. Furthermore, on 22 August 2024 OTP Bank
received another single permission from the National Bank of Hungary to repurchase own shares in the total
amount of HUF 60 billion, under which treasury shares worth HUF 55 billion were repurchased until the end
of 2024, while the available amount was fully utilized on 13 January 2025.
Consolidated capital adequacy ratios (in accordance with BASEL III)
At the end of 2024, the consolidated Common Equity Tier 1 (CET1) ratio according to IFRS and under the
prudential scope of consolidation was 18.9%, marking 2.3 pps increase against the end of 2023. In the
absence of AT1 instruments, this equals to the Tier 1 ratio. The consolidated capital adequacy ratio (CAR)
stood at 20.3% at the end of December, underpinning an increase of 1.4 pps y-o-y.
At the end of 2024, the effective regulatory minimum requirement for the consolidated Tier 1 capital
adequacy ratio (without P2G) was 12.5% which also incorporated the effective SREP rate, whereas the
minimum CET1 requirement was 10.7%.
Consolidated risk weighted assets (RWA) under the prudential scope of consolidation grew by 8% in the
course of 2024. Within that, credit risk related RWA went up by 8%, or HUF 1,714 billion, mainly driven by
FX effect (+HUF 1,050 billion y-o-y RWA impact), organic and regulatory effects (+1,506) and the
deconsolidation of Romanian entities (-842).
The consolidated Common Equity Tier1 (CET1) capital grew by 23% or HUF 897 billion y-o-y, mainly due
to the eligible profit for the full-year amounting to HUF 815 billion after dividend deduction. In 2024 HUF 270
billion dividend was deducted, pursuant to the latest decision of the Management Committee. The final
decision on the dividend amount will be made by the Annual General Meeting, upon the proposal of the
Board of Directors.
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
106
Items related to the other comprehensive income induced altogether HUF 216 billion y-o-y increase in the
CET1 capital, mainly due to currency rate changes (revaluation reserves increased by HUF 190 billion
y-o-y). This was partly counterbalanced by the HUF 126 billion y-o-y increase in the deduction relating to
repurchased own shares.
MREL adequacy
As a result of recently raised MREL-eligible funds, against the mandatory minimum requirement of 24.2%
for 31 December 2024, the MREL adequacy ratio of OTP Group reached 30.1% at the end of 2024. The
ratio improved by 5.0 pps versus end-2023 . In the course of 2024, OTP Bank issued EUR 1.84 billion
equivalent MREL-eligible bonds. In 2024 OTP Bank redeemed altogether EUR 900 million MREL-eligible
bonds.
Credit rating, shareholder structure
At the end of 2024, the following credit ratings were in place:
• OTP Bank’s long-term issuer credit rating by S&P Global is ꞌBBB-ꞌ, the outlook is stable; the credit rating
of the dated Tier 2 instrument is ꞌBBꞌ;
• the Senior Preferred bond rating by Moody’s is ꞌBaa3ꞌ, while the dated subordinated FX debt rating is
ꞌBa2ꞌ. On 4 December 2024, Moody’s reaffirmed OTP Bank’s ratings, and changed the outlook on
long-term HUF and FX deposit ratings from stable to positive, and changed the outlook on the Senior
Preferred debt from stable to negative. The outlook on the ꞌBaa3ꞌ long term issuer rating of OTP Mortgage
Bank was also changed to negative; the mortgage bond rating is ꞌA1ꞌ;
• OTP Bank Plc’ issuer rating and Senior Preferred bond rating at Scope Ratings is ꞌBBB+ꞌ, the Senior
Non-Preferred rating is ꞌBBBꞌ and the subordinated debt rating is ꞌBB+ꞌ; all carry a stable outlook;
• OTP Bank Plc’s Long-Term Issuer Credit Rating (China national scale) by the Chinese Lianhe Credit
Rating Co. is ꞌAAAꞌ, the outlook is stable.
Regarding the ownership structure of the Bank, on 31 December 2024 the following investors had more
than 5% influence (voting rights) in the Company: MOL Plc. (the Hungarian Oil and Gas Company, 8.79%),
and Groupama Group (5.22%).
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
107
POST-BALANCE SHEET EVENTS
Post-balance sheet events cover the period until 21 February 2025.
Hungary
• On 13 January 2025 OTP Bank’s share buyback program approved by the central bank on 22 August 2024
reached its maximum available amount of HUF 60 billion.
• On 24 January 2025 the Bank got another approval from the Hungarian National Bank to repurchase own
shares in the amount of HUF 60 billion. The available amount was exhausted on 10 February 2025.
• From 13 January 2025 the consolidated MREL requirement is determined at 18.60% of the total risk
exposure amount (RWA) and 6.02% of the total exposure measure (TEM) of the Resolution Group. The
consolidated MREL requirement of OTP Bank applicable until this date was 18.94% and 5.78%. OTP
Bank’s Resolution Group consists of entities included in the prudential scope of consolidation of OTP Bank
without the Slovenian OTP banka d.d. and its subsidiaries. Pursuant to the CRD OTP Bank has to meet
the combined buffer requirement in addition to its MREL TREA requirement as institutions shall not use
CET1 capital that is maintained to meet the combined buffer requirement to meet the risk-based component
of the MREL requirement. This principle is applicable to the MREL TREA subordination requirement as
well.
• On 30 January Tier 2 notes have been issued in the aggregate nominal amount of USD 750 million. The
notes carry an annual coupon of 7.3% due semi-annually. The tenor was 10.5NC5.5, i.e. in the period
between five and five and a half years the bonds can be redeemed on any day. The notes were listed on
the Luxembourg Stock Exchange.
• On 7 February the EUR 500 million Fixed to Floating Rate Perpetual Subordinated Notes have been
redeemed and the principal amount, together with accrued and unpaid interest was paid to the holders of
the Notes.
• On 17 February OTP Bank announced the redemption of its €650,000,000 7.350 per cent. Senior Preferred
Fixed-to-Floating Callable Notes due 2026 with the optional redemption date of 4 March 2025.
• As of end of February, the banking sector related key initiatives of the 'New Economic Policy Action Plan'
launched by government decree 1311/2024 (X. 21.), are as follows (based on the communication of the
Government and submitted bills):
o
From 1 January 2025, minimum wage increased by 9%. For 2026 and 2027 further 13% and 14%
hikes have been agreed as part of the three-year wage agreement, assuming that economic growth
and inflation will be in line with the expectations.
o
From 2 January 2025 the Workers’ Loan Program is available at Hungarian banks. The loan is
designed for young people aged 17-25 who are not eligible for student loans and who are employed
in Hungary for at least 20 hours a week, or entrepreneurs who have an average income and undertake
to work or run a business in Hungary for a minimum of five years. The maximum amount of the
interest-free, free use, state-guaranteed loan facility is HUF 4 million, with a term of 10 years. The
scheme also provides support for childbearing, with repayments suspended for two years following
the birth of the first and second child, and half of the current debt waived for the second child and the
full debt waived after the third one.
o
From 1 January 2025, in case of green loans the loan-to-value limit was increased to 90%, furthermore
the payment-to-income limit was increased to 60% regardless of the income.
o
On 1 January 2025, the home renovation program was reintroduced to support families in towns with
less than 5,000 residents, covering up to 50% of labor- and material costs with a cap of HUF 3 million.
Those who have already availed themselves of the 2021-2022 home renovation subsidy are only
eligible to utilize the new subsidy up to the amount of the HUF 3 million that remains unused at that
time. From 1 February 2025, a state subsidized home renovation mortgage loan with a client interest
rate of 3% and with up to HUF 6 million loan amount is available to finance investment costs.
o
In 2025, voluntary pension fund savings can be used free of tax for housing loan repayments,
repayment of secured loans, and modernization or renovation of existing homes. The total amount of
voluntary pension savings could be utilized, but only up to the balance available as of 30 September
2024.
o
From 1 January 2025, monthly HUF 150,000 fringe benefit can be paid to the employees under the
age of 35 in order to support housing expenses (home rental or loan installment) above the current
preferential upper limit of HUF 450,000 per year.
o
Half of the accumulated amount on SZÉP Cards can be used for home renovation in 2025.
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
108
o
Between 1 April and 31 October 2025, based on the individual decision of the participating banks, 5%
interest rate cap will be available for under 35 years old, first-time home buyers for newly granted
green housing loans, with properties under 60 square meter and price lower than HUF 1.2 million per
square meter. The rate cap will be applied in the first 5 years of the loan, the product has neither
disbursement nor credit assessment fees.
o
From 6 January 2025, as part of the Demján Sándor program, export stimulating loan and leasing
structures are available in the total sum of HUF 400 billion, partly refinanced by EXIM Hungary. Some
of the products are also available for enterprises planning to start export activities in the future.
o
The interest rate of certain products under the Széchenyi Card Program MAX+ scheme was
significantly reduced for contracts concluded after 1 March 2025: the interest rate on investment loans
(Agricultural Investment Loan, Investment Loan) and the leasing scheme was reduced to 3%, while
the interest rate on the Széchenyi Card Overdraft MAX+ (including the Tourism Card) and the Liquidity
Loan was reduced to 4.5%. The uniform 0.5 pp reduction in client interest rates was facilitated by the
burden sharing of KAVOSZ Ltd. (0.1 pp) and the banking sector (0.4 pp). The investment loans with
the exceptionally favorable interest rate of the “GREEN” sub-structure are an exception to this, which
are still available to businesses with a rate of 1.5%.
• Changes in the economic policy leadership:
o
As of 31 December 2024, pursuant to Act LXXXVI of 2024, the Ministry of Finance ceased to exist by
merging into the Ministry of National Economy. Minister Márton Nagy remained in office unchanged
as head of the Ministry of National Economy.
o
As of 4 March 2025, the President of the Republic appointed Mihály Varga, the former Minister of
Finance, to head the National Bank of Hungary.
• Based on preliminary data published by the Central Statistical Office on 30 January 2025, the performance
of the Hungarian economy increased by 0.5% q-o-q and 0.4% y-o-y in the fourth quarter. With this, the
annual growth in 2024 was 0.6%. The average inflation in 2024 was 3.7%.
• The Financial Stability Council of the Hungarian National Bank announced an extension to the central
bank's green capital requirement relief programs for credit institutions. The deadline for these programs
was extended by one year, until the end of December 2026. The decision on whether to grant further annual
extensions will be made based on a professional indicator system. Additionally, from 31 January 2025, the
range of exposures that can be included in the discount program was further expanded.
Moldova
• On 10 January 2025, the National bank of Moldova raised the base interest rate by 200 basis points, from
3.6% to 5.6%.
• On 5 February 2025, the National Bank of Moldova further raised the base rate by 90 basis points to 6.5%.
Ukraine
• According to the announcement on 6 January 2025, the European Bank for Reconstruction and
Development (EBRD) will be supporting the lending activities of OTP's subsidiary bank in Ukraine through
a scheme that facilitates the sharing of portfolio risk. The risk-sharing instrument will enable the Ukrainian
subsidiary to provide new financing to the local private business sector, amounting to EUR 200 million. The
credit risks of these enterprises will be covered by the scheme, with the coverage amounting to 50 percent
of the outstanding debt.
• On 23 January 2025, the National Bank of Ukraine raised the policy rate by 100 basis points to 14.5%.
Slovenia
• On 30 January 2025, ECB cut the policy rate by 25 basis points from 3.00% to 2.75%.
An event, that occurred in January 2025 regarding an item reported in the Group’s books as a receivable
from lending activities, was identified by the Group as a post-balance sheet event. The Group believes that
the event has no retrospective effect for 2024 concerning Stage classification, therefore the Group did not
change the Stage 2 classification of the affected receivable as of 31 December 2024. However, given that
the Group obtained additional information regarding the circumstances that previously justified the Stage 2
classification, the Group recognized an additional HUF 13.9 billion impairment loss for the receivable in the
Stage 2 category for 2024.
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
109
CONSOLIDATED PROFIT AFTER TAX BREAKDOWN BY SUBSIDIARIES (IFRS)31 –
NEW METHODOLOGY
2023
HUF million
2024
HUF million
Change
%/pps
Consolidated profit after tax
990,459
1,076,139
9
Adjustments (after tax)
85,507
0
(100)
Consolidated adjusted profit after tax
904,952
1,076,139
19
Banks total1
848,803
1,001,112
18
OTP Core (Hungary)2
233,871
270,387
16
DSK Group (Bulgaria)3
198,182
200,765
1
OTP Bank Slovenia4
112,342
113,282
1
OBH (Croatia)5
53,333
61,743
16
OTP Bank Serbia6
58,211
66,496
14
Ipoteka Bank (Uzbekistan)7
(15,422)
52,893
OTP Bank Ukraine8
44,908
41,179
(8)
CKB Group (Montenegro)9
21,358
24,194
13
OTP Bank Albania10
11,603
19,686
70
OTP Bank Moldova
14,624
11,492
(21)
OTP Bank Russia11
95,674
136,946
43
OTP Bank Romania12
20,120
2,050
(90)
Leasing
6,647
10,842
63
Merkantil Group (Hungary)13
6,647
10,842
63
Asset Management
19,861
24,747
25
OTP Asset Management (Hungary)
19,673
24,624
25
Foreign Asset Management Companies14
188
123
(34)
Other Hungarian Subsidiaries
35,972
24,369
(32)
Other Foreign Subsidiaries15
986
(939)
Eliminations
(7,317)
16,009
Adjusted profit after tax of the Hungarian operation16
298,679
340,617
14
Adjusted profit after tax of the Foreign operation17
606,274
735,523
21
Share of Hungarian contribution to the adjusted profit after tax
33%
32%
(1)
Share of Foreign contribution to the adjusted profit after tax
67%
68%
1
31 Belonging footnotes are in the Supplementary data section of the Report.
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
110
CONSOLIDATED PROFIT AFTER TAX BREAKDOWN BY SUBSIDIARIES (IFRS) –
OLD METHODOLOGY
2023
HUF million
2024
HUF million
Change
%/pps
Consolidated profit after tax
990,459
1,076,139
9
Adjustments (after tax)
(18,123)
(69,342)
283
Consolidated adjusted profit after tax
1,008,583
1,145,481
14
Banks total1
946,279
1,079,094
14
OTP Core (Hungary)2
302,935
338,075
12
DSK Group (Bulgaria)3
201,992
204,648
1
OTP Bank Slovenia4
128,730
122,464
(5)
OBH (Croatia)5
53,959
61,743
14
OTP Bank Serbia6
68,026
66,496
(2)
Ipoteka Bank (Uzbekistan)7
(21,857)
48,809
OTP Bank Ukraine8
45,184
41,179
(9)
CKB Group (Montenegro)9
21,814
24,194
11
OTP Bank Albania10
15,032
19,686
31
OTP Bank Moldova
14,700
11,492
(22)
OTP Bank Russia11
95,665
136,946
43
OTP Bank Romania12
20,099
3,361
(83)
Leasing
10,267
12,326
20
Merkantil Group (Hungary)13
10,267
12,326
20
Asset Management
19,861
24,747
25
OTP Asset Management (Hungary)
19,673
24,624
25
Foreign Asset Management Companies14
188
123
(34)
Other Hungarian Subsidiaries
30,570
24,411
(20)
Other Foreign Subsidiaries15
986
(939)
Eliminations
620
5,842
842
Adjusted profit after tax of the Hungarian operation16
365,979
409,831
12
Adjusted profit after tax of the Foreign operation17
642,604
735,650
14
Share of Hungarian contribution to the adjusted profit after tax
36%
36%
(1)
Share of Foreign contribution to the adjusted profit after tax
64%
64%
1
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
111
CONSOLIDATED STATEMENT OF RECOGNIZED INCOME – NEW METHODOLOGY
Main components of the adjusted Statement of recognized income
2023
HUF million
2024
HUF million
Change
%
Consolidated profit after tax
990,459
1,076,139
9
Adjustments (after tax)
85,507
0
(100)
Goodwill impairment charges (after tax)
0
0
Direct effect of acquisitions (after tax)
85,507
0
(100)
Consolidated adjusted profit after tax
904,952
1,076,139
19
Profit before tax
1,179,224
1,386,883
18
Operating profit
1,265,909
1,545,377
22
Total income
2,245,706
2,633,908
17
Net interest income
1,461,850
1,782,604
22
Net fees and commissions
478,119
545,631
14
Other net non-interest income
305,737
305,673
0
Foreign exchange result, net
123,313
163,475
33
Gain/loss on securities, net
(2,999)
12,410
(514)
Net other non-interest result
185,423
129,788
(30)
Operating expenses
(979,797)
(1,088,531)
11
Personnel expenses
(506,465)
(564,374)
11
Depreciation
(100,458)
(118,628)
18
Other expenses
(372,874)
(405,529)
9
Total risk costs
(86,685)
(158,494)
83
Provision for impairment on loan losses
(71,690)
(89,864)
25
Other provision
(14,995)
(68,631)
358
Corporate taxes
(274,272)
(310,743)
13
Performance indicators
2023
2024
%/pps
ROE (from profit after tax)
27.2%
23.5%
(3.7)
ROE (from adjusted profit after tax)
24.9%
23.5%
(1.4)
ROA (from profit after tax)
2.7%
2.6%
(0.1)
ROA (from adjusted profit after tax)
2.4%
2.6%
0.1
Operating profit margin
3.41%
3.71%
0.30
Total income margin
6.04%
6.32%
0.28
Net interest margin
3.93%
4.28%
0.34
Net fee and commission margin
1.29%
1.31%
0.02
Net other non-interest income margin
0.82%
0.73%
(0.09)
Cost-to-asset ratio
2.64%
2.61%
(0.03)
Cost/income ratio
43.6%
41.3%
(2.3)
Provision for impairment on loan losses-to-average gross loans ratio
0.34%
0.38%
0.05
Total risk cost-to-asset ratio
0.23%
0.38%
0.15
Effective tax rate
23.3%
22.4%
(0.9)
Non-interest income/total income
35%
32%
(3)
EPS base (HUF) (from profit after tax)
3,695
4,052
10
EPS diluted (HUF) (from profit after tax)
3,693
4,050
10
EPS base (HUF) (from adjusted profit after tax)
3,382
4,068
20
EPS diluted (HUF) (from adjusted profit after tax)
3,380
4,066
20
Comprehensive Income Statement
2023
2024
%
Consolidated profit after tax
990,459
1,076,140
9
Fair value changes of financial instruments measured at fair
value through other comprehensive income
78,419
47,751
(39)
Net investment hedge in foreign operations
(2,707)
(27,310)
909
Foreign currency translation difference
(200,928)
195,152
(197)
Change of actuarial costs (IAS 19)
(400)
(923)
131
Net comprehensive income
864,843
1,290,810
49
o/w Net comprehensive income attributable to equity holders
863,714
1,286,097
49
Net comprehensive income attributable to non-controlling interest
1,129
4,713
317
Average exchange rate1 of the HUF
2023
HUF
2024
HUF
Change
%
HUF/EUR
382
395
3
HUF/CHF
393
415
6
HUF/USD
353
365
3
1 Exchange rates presented in the tables of this report should be interpreted as follows: the value of a unit of the other currency expressed in Hungarian forint
terms, i.e. HUF/EUR represents the HUF equivalent of one EUR.
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
112
CONSOLIDATED STATEMENT OF RECOGNIZED INCOME – OLD METHODOLOGY
Main components of the adjusted Statement of recognized income
2023
HUF million
2024
HUF million
Change
%
Consolidated profit after tax
990,459
1,076,139
9
Adjustments (after tax)
(18,123)
(69,342)
283
Dividends and net cash transfers (after tax)
(1,911)
0
(100)
Goodwill/investment impairment charges (after tax)
(3,919)
0
(100)
Special tax on financial institutions (after tax)
(62,551)
(45,452)
(27)
Expected one-off effect of the interest rate cap for certain loans in
Hungary and Serbia (after tax)
(32,898)
(9,411)
(71)
Effect of the winding up of Sberbank Hungary (after tax)
10,389
0
(100)
Effect of acquisitions (after tax)
64,886
12,033
(81)
Result of the treasury share swap agreement (after tax)
10,680
11,556
8
Impairments on Russian government bonds at OTP Core and DSK Bank (after tax)
(2,799)
(38,068)
Consolidated adjusted profit after tax
1,008,583
1,145,481
14
Profit before tax
1,222,328
1,415,617
16
Operating profit
1,260,850
1,521,636
21
Total income
2,224,584
2,607,481
17
Net interest income
1,459,694
1,778,520
22
Net fees and commissions
478,146
545,631
14
Other net non-interest income
286,745
283,329
(1)
Foreign exchange result, net
123,314
(13,754)
(111)
Gain/loss on securities, net
1,994
3,090
55
Net other non-interest result
161,436
293,993
82
Operating expenses
(963,734)
(1,085,845)
13
Personnel expenses
(503,959)
(564,374)
12
Depreciation
(95,561)
(118,628)
24
Other expenses
(364,215)
(402,844)
11
Total risk costs
(38,521)
(106,018)
175
Provision for impairment on loan losses
(34,781)
(79,522)
129
Other provision
(3,741)
(26,496)
608
Corporate taxes
(213,746)
(270,136)
26
Performance indicators
2023
2024
%/pps
ROE (from profit after tax)
27.2%
23.5%
(3.7)
ROE (from adjusted profit after tax)
27.7%
25.0%
(2.7)
ROA (from profit after tax)
2.7%
2.6%
(0.1)
ROA (from adjusted profit after tax)
2.7%
2.7%
0.0
Operating profit margin
3.39%
3.65%
0.26
Total income margin
5.99%
6.25%
0.27
Net interest margin
3.93%
4.27%
0.34
Net fee and commission margin
1.29%
1.31%
0.02
Net other non-interest income margin
0.77%
0.68%
(0.09)
Cost-to-asset ratio
2.59%
2.60%
0.01
Cost/income ratio
43.3%
41.6%
(1.7)
Provision for impairment on loan losses-to-average gross loans ratio
0.16%
0.34%
0.18
Total risk cost-to-asset ratio
0.10%
0.25%
0.15
Effective tax rate
17.5%
19.1%
1.6
Non-interest income/total income
34%
32%
(3)
EPS base (HUF) (from profit after tax)
3,695
4,052
10
EPS diluted (HUF) (from profit after tax)
3,693
4,050
10
EPS base (HUF) (from adjusted profit after tax)
3,769
4,330
15
EPS diluted (HUF) (from adjusted profit after tax)
3,767
4,328
15
Comprehensive Income Statement
2023
2024
%
Consolidated profit after tax
990,459
1,076,140
9
Fair value changes of financial instruments measured at fair value through
other comprehensive income
78,419
47,751
(39)
Net investment hedge in foreign operations
(2,707)
(27,310)
909
Foreign currency translation difference
(200,928)
195,152
Change of actuarial costs (IAS 19)
(400)
(923)
131
Net comprehensive income
864,843
1,290,810
49
o/w Net comprehensive income attributable to equity holders
863,714
1,286,097
49
Net comprehensive income attributable to non-controlling interest
1,129
4,713
317
Average exchange rate1 of the HUF
2023
HUF
2024
HUF
Change
%
HUF/EUR
382
395
3
HUF/CHF
393
415
6
HUF/USD
353
365
3
1 Exchange rates presented in the tables of this report should be interpreted as follows: the value of a unit of the other currency expressed in Hungarian forint
terms, i.e. HUF/EUR represents the HUF equivalent of one EUR.
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
113
ASSET-LIABILITY MANAGEMENT
Similar to previous periods OTP Group maintained a strong and safe liquidity position…
The primary objective of OTP Bank in terms of asset-liability management has not changed, that is to ensure
that the Group’s liquidity is maintained at a safe level.
Refinancing sources of the European Central Bank are available for OTP (ECB repo eligible securities
portfolio on Group level exceeded EUR 8.9 billion).
Total liquidity reserves of OTP Bank remained steadily and substantially above the safety level. As at
31 December 2024 the gross liquidity buffer was around EUR 9.8 billion equivalent. The level of these
buffers is significantly higher than the maturing debt within one year and the reserves required to manage
possible liquidity shocks.
As at 31 December 2024 OTP Group’s consolidated liquidity coverage (LCR) ratio was 266% (4Q 2023:
246%) while NSFR compliance has remained comfortable (4Q 2024: 158%).
In 2024, OTP Bank raised a total of EUR 1.88 billion in MREL funds from the international capital market, of
which public senior preferred bond issuances accounted for EUR 1.8 billion. The difference between these
two numbers was explained by a Chinese Yuan issuance equivalent of EUR 38 million and a bilateral loan
of EUR 50 million. Additionally, the Bank redeemed MREL funds in the notional amount of EUR 0.9 billion,
which included EUR 500 million in Tier 2 capital instruments and EUR 400 million in senior preferred bonds.
In the course of 2024 the volume of bonds issued under the Bank’s domestic bond program declined by
almost HUF 100 billion.
OTP Mortgage Bank issued mortgage bonds with a total face value of HUF 190 billion, while HUF 271 billion
matured during the year.
On the international capital market, OTP Bank Slovenia redeemed EUR 300 million Senior Preferred in
January 2024, which was replaced by a EUR 300 million Senior Preferred bond issuance in April,
furthermore, in October, it also redeemed a EUR 90.4 million Tier 2 capital instrument, which was not
refinanced. Ipoteka Bank executed a senior unsecured note issuance equivalent to USD 108 million in local
currency, refinancing a senior unsecured note maturity equivalent to USD 64 million.
…and kept its interest-rate risk exposures low
Due to the liabilities which respond to yield changes only to a moderate extent, the Bank has an interest-rate
risk exposure resulting from its business operations. The Bank considers the reduction and closing of this
exposure as a strategic matter.
The stock of HUF denominated variable interest rate assets stabilized in 2024, as with the normalization of the
yield environment, the balance sheet distorting effect of government interventions decreased somewhat
recently. Overall, HUF interest rate risk position can be considered currently nearly closed. However, due to
the upcoming maturities of the long-term HUF liquid asset portfolio and the operating profit accumulation, the
amount of variable rate asset surplus is expected to increase as time passes.
In case of EUR and BGN denominated volumes the Group has variable rate asset surplus, thus an open
interest rate risk position. The Group continued to purchase fixed rate EUR (and BGN) assets in 2024,
furthermore entered into fixed interest rate receiver swap positions, in order to hedge the Group’s net interest
income from the negative effects of potential decrease in the EUR yields.
Market Risk Exposure of OTP Group
The consolidated capital requirement of the trading book positions, the counterparty risk and the FX risk
exposure represented HUF 49.5 billion in total.
OTP Group is an active participant of the international FX and derivative market. Open FX positions of group
members are restricted to individual and global net open position limits (overnight and intraday), and to
stop-loss limits. The open positions of the group members outside Hungary except for the Bulgarian DSK Bank
– the EUR/BGN exposure of DSK under the current exchange rate regime does not represent real risk – were
negligible measured against either the balance sheet total or the regulatory capital. Therefore, the group level
FX exposure was concentrated at OTP Bank.
In order to mitigate the FX rate sensitivity of the consolidated equity, OTP Bank Plc. has opened a short euro
open FX position; the revaluation result of which is recognized directly against equity.
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
114
CONSOLIDATED STATEMENT OF FINANCIAL POSITION OF OTP GROUP
Main components of the adjusted balance sheet
2023
HUF million
2024
HUF million
Change
%
TOTAL ASSETS
39,609,144
43,419,128
10
Cash, amounts due from Banks and balances with the National Banks
7,324,636
6,079,032
(17)
Placements with other banks, net of allowance for placement losses
1,575,145
1,891,901
20
Securities at fair value through profit or loss
290,975
744,104
156
Securities at fair value through other comprehensive income
1,640,891
1,705,554
4
Net customer loans
21,447,380
23,361,638
9
Net customer loans (FX-adjusted1)
22,549,534
23,361,638
4
Gross customer loans
22,466,415
24,334,694
8
Gross customer loans (FX-adjusted1)
23,610,743
24,334,694
3
Gross performing (Stage 1+2) customer loans (FX-adjusted1)
22,596,102
23,447,715
4
o/w Retail loans
12,169,212
13,479,550
11
Retail mortgage loans (incl. home equity)
6,107,945
6,496,939
6
Retail consumer loans
5,034,799
6,070,193
21
SME loans
1,026,467
912,418
(11)
Corporate loans
8,914,511
8,321,927
(7)
Leasing
1,512,379
1,646,237
9
Allowances for loan losses
(1,019,035)
(973,056)
(5)
Allowances for loan losses (FX-adjusted1)
(1,061,208)
(973,056)
(8)
Associates and other investments
96,346
124,524
29
Securities at amortized costs
5,475,701
7,447,741
36
Tangible and intangible assets, net
878,949
985,886
12
o/w Goodwill, net
66,932
71,308
7
Tangible and other intangible assets, net
812,017
914,578
13
Other assets
879,121
1,078,749
23
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
39,609,144
43,419,128
10
Amounts due to banks, the National Governments, deposits from the National Banks and other banks,
and Financial liabilities designated at fair value through profit or loss
2,013,333
2,094,681
4
Deposits from customers
29,428,284
31,666,399
8
Deposits from customers (FX-adjusted1)
30,937,627
31,666,399
2
o/w Retail deposits
20,392,811
21,415,108
5
Household deposits
17,013,471
18,002,762
6
SME deposits
3,379,340
3,412,347
1
Corporate deposits
10,544,816
10,251,290
(3)
Accrued interest payable related to customer deposits
0
0
Liabilities from issued securities
2,095,548
2,593,124
24
o/w Retail bonds
201,131
85,401
(58)
Liabilities from issued securities without retail bonds
1,894,418
2,507,723
32
Other liabilities
1,414,790
1,575,553
11
Subordinated bonds and loans
562,396
369,359
(34)
Total shareholders' equity
4,094,793
5,120,012
25
Indicators
2023
2024
%/pps
Loan/deposit ratio
76%
77%
1
Loan/deposit ratio (FX-adjusted1)
76%
77%
1
Net loan/deposit ratio (FX adjusted)
73%
74%
1
Stage 1 loan volume under IFRS 9
18,570,222
20,279,860
9
Stage 1 loans under IFRS 9/gross customer loans
82.7%
83.3%
0.7
Own coverage of Stage 1 loans under IFRS 9
0.9%
0.8%
(0.1)
Stage 2 loan volume under IFRS 9
2,926,312
3,167,854
8
Stage 2 loans under IFRS 9/gross customer loans
13.0%
13.0%
0.0
Own coverage of Stage 2 loans under IFRS 9
9.2%
9.2%
0.1
Stage 3 loan volume under IFRS 9
969,881
886,981
(9)
Stage 3 loans under IFRS 9/gross customer loans
4.3%
3.6%
(0.7)
Own coverage of Stage 3 loans under IFRS 9
60.8%
59.5%
(1.3)
Consolidated capital adequacy - Basel3, IFRS,
according to prudential scope of consolidation
2023
2024
%/pps
Capital adequacy ratio
18.9%
20.3%
1.4
Tier1 ratio
16.6%
18.9%
2.3
Common Equity Tier 1 ('CET1') capital ratio
16.6%
18.9%
2.3
Own funds
4,475,380
5,200,375
16
o/w Tier1 Capital
3,945,570
4,842,978
23
o/w Common Equity Tier 1 capital
3,945,570
4,842,978
23
Tier2 Capital
529,810
357,397
(33)
Consolidated risk weighted assets (RWA) (Credit&Market&Operational risk)
23,700,282
25,576,776
8
o/w RWA - Credit risk RWA
21,275,002
22,988,686
8
RWA - Market & Operational risk
2,425,281
2,588,090
7
Closing exchange rate of the HUF
2023
HUF
2024
HUF
Change
%
HUF/EUR
383
410
7
HUF/CHF
412
435
6
HUF/USD
346
394
14
1 For the FX-adjustment, the closing cross currency rates for the current period were used in order to calculate the HUF equivalent of loan and deposit
volumes in the base periods.
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
115
OTP BANK’S HUNGARIAN CORE BUSINESS
Starting from the first quarter of 2024, Bajor-Polár Center Real Estate Management Ltd., CIL Babér Ltd., BANK CENTER No. 1.
Investment and Development Ltd., and MFM Project Investment and Development Ltd. were included into OTP Core. Previously,
these companies were presented in the Other Hungarian Subsidiaries segment, but their main business activity is letting property to
OTP Bank. In 4Q 2024, MFM Project Investment and Development Ltd and Bajor-Polár Center Real Estate Management Ltd merged
into BANK CENTER No. 1. Investment and Development Ltd. At the same time OTP Facility Management Ltd., which was already
part of OTP Core before 2024, merged into CIL Babér Ltd.
OTP Core Statement of recognized income:
Main components of P&L account
2023
HUF million
2024
HUF million
Change
%
Profit after tax
500,869
806,827
61
Dividend received from subsidiaries
187,726
424,380
126
Profit after tax without received dividend
313,143
382,447
22
Adjustments (without dividend received from subsidiaries, after tax)
79,272
112,060
41
Adjusted profit after tax
233,871
270,387
16
Profit before tax
359,862
374,636
4
Operating profit
360,944
425,303
18
Total income
774,869
868,382
12
Net interest income
432,651
578,001
34
Net fees and commissions
197,341
219,505
11
Other net non-interest income
144,877
70,876
(51)
Operating expenses
(413,925)
(443,078)
7
Total risk costs
(1,082)
(50,667)
Provision for impairment on loan losses
(11,164)
(994)
(91)
Other provisions
10,083
(49,673)
Corporate income tax
(125,991)
(104,250)
(17)
Indicators
2023
2024
pps
ROE (adjusted)
11.0%
9.6%
(1.4)
ROA (adjusted)
1.2%
1.3%
0.1
Operating profit margin
1.89%
2.12%
0.23
Total income margin
4.06%
4.32%
0.27
Net interest margin
2.26%
2.88%
0.61
Net fee and commission margin
1.03%
1.09%
0.06
Net other non-interest income margin
0.76%
0.35%
(0.41)
Operating costs to total assets ratio
2.2%
2.2%
0.0
Cost/income ratio
53.4%
51.0%
(2.4)
Provision for impairment on loan losses / average gross loans1
0.17%
0.01%
(0.16)
Effective tax rate
35.0%
27.8%
(7.2)
1 Negative Provision for impairment on loan and placement losses/average gross loans ratio implies positive amount on the Provision for impairment on loan
and placement losses line.
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
116
Main components of OTP Core’s Statement of financial position:
Main components of balance sheet
(closing balances)
2023
HUF million
2024
HUF million
Change
%
Total Assets
18,459,423
19,288,046
4
Financial assets¹ (net)
9,630,766
9,813,107
2
Net customer loans
6,329,293
6,812,154
8
Net customer loans (FX-adjusted)
6,429,314
6,812,154
6
Gross customer loans
6,597,968
7,077,532
7
Gross customer loans (FX-adjusted)
6,700,811
7,077,532
6
Stage 1+2 customer loans (FX-adjusted)
6,436,152
6,801,393
6
Retail loans
3,752,741
4,127,150
10
Retail mortgage loans (incl. home equity)
1,722,831
1,939,281
13
Retail consumer loans
1,515,044
1,667,716
10
SME loans
514,865
520,154
1
Corporate loans
2,683,411
2,674,243
0
Provisions
(268,675)
(265,378)
(1)
Provisions (FX adjusted)
(271,497)
(265,378)
(2)
Tangible and intangible assets (net)
296,425
403,473
36
Shares and equity investments (net)
1,890,681
1,995,219
6
Other assets (net)
312,258
264,094
(15)
Deposits from customers
10,780,256
10,913,995
1
Deposits from customers (FX-adjusted)
11,015,593
10,913,995
(1)
Retail deposits
6,264,408
6,794,456
8
Household deposits
4,831,762
5,311,198
10
SME deposits
1,432,646
1,483,258
4
Corporate deposits
4,751,185
4,119,506
(13)
Liabilities to credit institutions
2,326,311
1,903,955
(18)
Issued securities
1,877,094
2,397,615
28
o/w: Retail bonds
201,131
92,692
(54)
Subordinated bonds and loans
507,277
347,117
(32)
Total shareholders' equity
2,371,964
3,053,832
29
Loan Quality
2023
2024
%/pps
Stage 1 loan volume under IFRS 9 (in HUF million)
5,312,525
5,799,286
9
Stage 1 loans under IFRS 9/gross customer loans
80.5%
81.9%
1.4
Own coverage of Stage 1 loans under IFRS 9
0.8%
0.5%
(0.3)
Stage 2 loan volume under IFRS 9 (in HUF million)
1,023,157
1,002,107
(2)
Stage 2 loans under IFRS 9/gross customer loans
15.5%
14.2%
(1.3)
Own coverage of Stage 2 loans under IFRS 9
7.8%
7.3%
(0.5)
Stage 3 loan volume under IFRS 9 (in HUF million)
262,285
276,139
5
Stage 3 loans under IFRS 9/gross customer loans
4.0%
3.9%
(0.1)
Own coverage of Stage 3 loans under IFRS 9
55.9%
58.2%
2.4
Market Share
2023
2024
pps
Loans
26.2%
26.6%
0.4
Deposits
28.3%
27.1%
(1.2)
Total Assets
28.2%
28.1%
(0.1)
Performance Indicators
2023
2024
pps
Net loans to deposits (FX adjusted)
58%
62%
4
Leverage (closing Shareholder's Equity/Total Assets)
12.8%
15.8%
3.0
Leverage (closing Total Assets/Shareholder's Equity)
7.8x
6.3x
(1.5x)
Capital adequacy ratio (OTP Bank, non-consolidated, Basel3, IFRS)
27.6%
29.3%
1.7
Common Equity Tier1 ratio (OTP Bank, non-consolidated, Basel3, IFRS)
22.5%
25.8%
3.3
1 Cash, amounts due from banks and balances with the National Bank of Hungary; placements with other banks; repo receivables; securities and other
financial assets.
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
117
In 2024, OTP Core generated HUF 806 billion profit after tax, including HUF 424 billion dividends received
from subsidiaries.
During the year, items worth HUF 112 billion were presented amongst the adjustments at OTP Core, fully
related to revaluation effect of the merger of the two Slovenian subsidiaries at the end of August, and not
appearing at Group level. This item arose because a subsidiary directly owned by OTP Bank was merged
into another company that was indirectly owned by the Bank. The amount presented as adjustment item
was the result of the revaluation of SKB Banka to market value.
In 2024, OTP Core generated HUF 270 billion profit after tax without dividends from subsidiaries, 15% more
than the HUF 234 billion profit in the base period. The improvement was strongly supported by net interest
income, which surged by a third y-o-y from a low base. On the other hand, risk costs grew mainly as a result
of increasing provision coverage rate on the Russian bonds in the Bank’s balance sheet, and other income
halved, owing to the drop in the fair value adjustment of the subsidized housing (CSOK) and baby loans.
The full-year amount of the special tax on financial institutions and the windfall tax, presented on the
corporate tax line, totalled gross HUF 42.6 billion, and was accounted for in a lump sum in the first quarter.
OTP Bank took the possibility of reducing the windfall tax by increasing the stock of Hungarian government
bonds, as stipulated by the relevant regulation. In July 2024, the conditions for tax reduction were tightened;
yet OTP Core realized HUF 5.9 billion reduction from the initial HUF 12.4 billion windfall tax payment
obligation in 2024.
The adjusted profit before tax grew by 4% y-o-y. In 2024, operating profit improved by 18%, mainly as a
result of the 34% jump in net interest income. This was to a great extent due to the improvement in net
interest margin which hit rock bottom amid extremely high interest rate environment in the first half of 2023,
then started to improve from the second half of 2023 after interest rate cuts began. The margin was also
boosted by the turnaround in retail deposits: their declining trend that lasted until the end of 2023 broke in
4Q 2023, and the stock has been steadily expanding since then. Annual net interest margin rose by 61 basis
points, to 2.88%.
Full-year net fees and commissions rose by 11% y-o-y, mainly supported by stronger income from fees on
deposits, transactions, and securities commissions. Meanwhile, the financial transaction tax paid by the
Bank grew by 25%, or HUF 25 billion, as a result of an increase in the transaction tax rates from 1 August
2024 and the introduction of the new FX conversion tax on 1 October.
In 2024, other income halved y-o-y. The main reason behind the HUF 74 billion drop was that the
HUF 25.8 billion positive revaluation result of the subsidized CSOK and baby loans in 2024 was
HUF 61.5 billion lower than in the previous year.
Annual operating expenses were 7% higher than a year earlier: the jump in amortization caused by IT
investments was counterbalanced by moderately increasing personnel cost and other expenses growing at
inflation rate. The latter was influenced by the y-o-y decline in supervisory charges, which fully offset the
increase in IT and other costs. The annual cost/income ratio improved by 2.4 pps to 51%.
In 2024, total risk cost amounted to HUF 51 billion; of that, loan loss provisions made up HUF 1 billion, and
other risk costs totalled HUF 50 billion. In case of credit risk costs, releases induced by the revision of risk
parameters, as well as recoveries realized from receivables managed by OTP Factoring counterbalanced
the HUF 10.4 billion provisioning triggered by the extension of the interest rate cap. Other risk cost was
largely shaped by the HUF 38 billion impairment on the Bank’s Russian government bond portfolio, and the
revaluation of investments in 2Q.
Loan quality trends were favourable in 2024. In year-on-year comparison, the ratio of both Stage 3 (-0.1 pp)
and Stage 2 (-1.3 pps) loans declined, in which the positive development in household loan quality played
an eminent role. The drop in the Stage 3 ratio was supported by the sale of non-performing loans in 4Q. The
coverage of Stage 3 loans improved by 2.4 pps y-o-y, to 58.2%.
Issued securities and total shareholders' equity (via the inclusion of full-year profit) generated 4% y-o-y
growth in total liabilities and shareholders’ equity. On the asset side this materialized in the increase in
performing loans and financial assets.
The volume of performing (Stage 1+2) loans grew by 6% in 2024 (FX-adjusted), thanks to the strengthening
demand for retail loans.
In the retail segment, performing mortgage loans’ y-o-y growth rate accelerated to 13%. In 2024, 31% of
customers decided to sign housing loan contract with OTP Bank; thereby, the amount of new housing loan
contracts for both market-based and subsidized loans more than doubled y-o-y, in line with the market’s
growth. The voluntary interest rate cap on newly placed housing loans, applied by major banks in the first
half of the year, expired on 30 June, but this only slightly reduced applications for housing loans in the
second half of the year: after the decline in 3Q, the volume of loan applications picked up again in 4Q.
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
118
In 2024, the volume of CSOK subsidized housing loans applications amounted to HUF 126 billion. Thus the
CSOK Plus loans, which have been available since 2024, made up more than 80% of the HUF 157 billion
subsidized loan contracts signed in 2024.
Consumer loan volumes rose by 10% in 2024. The 15% y-o-y expansion in cash loans was the key driver
of growth, in 2024 new cash loan disbursements surpassed that of the preceding year by more than 65%,
exceeding the market dynamics. Baby loan disbursements were flat year-on-year, thus the stock grew by
7% y-o-y.
Corporate + MSE volumes stagnated y-o-y, affected by the repayment of a big ticket corporate loan in 3Q.
Without that effect, the y-o-y growth would have been 5%.
OTP Bank’s market share in loans to non-financial corporations rose by 0.3 pp, to 19.5% since the end of
2023. The Széchenyi Card MAX+ loan programme generated HUF 370 billion new placement in 2024,
resulting in 44% flow market share. Of the HUF 200 billion additional envelope of the Baross Gábor loan
programme available from 2024 (exhausted in February 2024), Eximbank approved HUF 33 billion worth of
deals for OTP Bank.
The FX-adjusted stock of deposits from customers was stable year-on-year. In a favourable development,
household deposits grew by 10% y-o-y, supported by an increase in current account volumes as well by the
‘Persely’ (Piggy Bank) feature launched at the end of 2023. There was an outflow from corporate + MSE
deposits at the end of the year, accordingly, the closing stock contracted by 9% compared to the end of
2023, but the annual average stock deposits from companies remained stable.
As a result of the Bank’s active presence on capital markets, the volume of issued securities (without retail
bonds) surged by 38% y-o-y. At the end of 2024 the volume of retail bonds reached HUF 85 billion. In 2024,
a total amount of EUR 1.8 billion international public bond issuances and a private placement of CNY 300
million were carried out; all bonds were MREL-eligible securities. The annual portfolio dynamics were
significantly influenced by the fact that the Bank exercised the call option for two previously issued securities
in July 2024, totalling EUR 900 million (of which EUR 500 million were Tier 2 bonds presented under
subordinated bonds and loans). In the course of 2024 the volume of bonds issued under the Bank’s domestic
bond program declined by almost HUF 100 billion. OTP Mortgage Bank issued mortgage bonds with a total
face value of HUF 190 billion, while HUF 271 billion matured during the year.
Recently the following relevant regulatory changes were announced in Hungary:
• Windfall tax:
o Government decree No. 206/2023 (V.31.) published on 31 May 2023 outlined the details of the extra
profit tax payable by credit institutions in 2024. The basis of the tax is the 2022 profit before tax adjusted
for several items. The tax rate is 13% for the part of the tax base not exceeding HUF 20 billion, and 30%
for the amount above that. According to the decree, if the average amount of Hungarian government
bonds owned by the financial institution increases over a certain period, the windfall tax payable by the
credit institution can be reduced. The reduction cannot be more than 10% of the increase in government
bond holdings and cannot exceed 50% of the windfall tax payment obligation calculated without the
reduction.
o The ruling was amended according to Government Decree No. 183/2024. (VII. 8.) as the windfall tax
burden in 2024 can be reduced in proportion to the growth of government bonds maturing after 2027
only if the total volume of government bonds increases at least with the same amount. The reduction
can be up to 10% of the growth in the notional of government bonds, but not more than 50% of the
windfall tax payment obligation.
o In 2024 the gross amount of the windfall tax was HUF 13 billion in the case of the Hungarian Group
members, from which the increase in government bond holdings allowed for HUF 6.2 billion reduction,
resulting in HUF 6.8 billion windfall tax burden.
o According to Government Decree No. 356/2024 (XI. 21.) published on 21 November 2024, in 2025 the
windfall profit tax burden payable by OTP Group’s Hungarian group members might be around
HUF 53 billion (before corporate income tax), assuming the full utilization of the reduction opportunity
related to the increase in the stock of government securities.
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
119
• Interest rate cap:
o Pursuant to Government Decree No. 522/2023. (XI. 30.):
▪ The interest rate cap for the outstanding volume of certain residential mortgage loans was extended
by six months, until 30 June 2024.
▪ The rate cap for the existing volume of certain MSE loans was extended until 1 April 2024, and it was
terminated that after.
o On 20 June 2024, Government Decree No. 130/2024 (VI.20) enacted the extension of the interest rate
cap on certain housing loans, until 31 December 2024.
o On 2 December 2024, Government Decree No. 374/2024 (XII.2) enacted the extension of the interest
rate cap on certain housing loans, until 30 June 2025.
• Voluntary interest rate cap on newly granted loans:
o At the beginning of October 2023, the Ministry of Economic Development proposed that banks impose
voluntary interest rate caps on newly granted HUF-denominated working capital loans for businesses,
and on residential housing loans. The voluntary interest rate cap expired on 30 June 2024. OTP Bank
participated in the initiative.
o Between 1 April and 31 October 2025, as part of the government’s 'New Economic Policy Action Plan',
based on the individual decision of the participating banks, 5% interest rate cap will be available for
under 35 years old, first-time home buyers for newly granted green housing loans, with properties under
60 square meter and price lower than HUF 1.2 million per square meter. The rate cap will be applied in
the first 5 years of the loan, and the product will be free of disbursement and credit assessment fees.
• Family support schemes and economic stimulus measures:
o The government extended childbirth pledge deadline until 1 July 2026, for all baby loan borrowers whose
deadline was or will be between 1 July 2024 and 30 June 2026, based on Government Decree No.
190/2024. (VII. 8.).
The government decrees of 388/2024 (XII. 11.) and 437/2024 (XII. 23.) have amended the terms and
conditions for the subsidized baby loan so the interest-free feature of the loan may be regained in certain
cases and the eligibility age limit for wives increased from 30 the 35 years.
o On 5 April 2024, the government announced a new subsidized home renovation loan programme, which
began on 1 July 2024. The loan, with maximum amount of HUF 7 million and up to 12 years term, is
available in OTP Bank’s branches that function as ‘MFB points’, for the purpose of energy efficiency
improvement of family houses built before 1990.
o From 1 November 2024, the client interest rate of Széchenyi Card Programme’s investment loan
products for Hungarian micro, small and medium-sized enterprises was lowered to fixed 3.5%, from the
previous 5%.
• Capital regulation:
o On 20 June 2024, the National Bank of Hungary raised the countercyclical capital buffer rate to 1%,
effective from 1 July 2025. In its meeting of 27 June 2024, the central bank left the systemic risk capital
buffer unchanged at 0%.
o MREL minimum requirement: effective from 1 January 2025, the National Bank of Hungary imposed the
below additional capital requirements for OTP Group, on consolidated level:
o
1.01%-points in case of the Common Equity Tier1 (CET1) capital, accordingly the minimum
requirement for the consolidated CET1 ratio is 5.51% (without regulatory capital buffers);
o
1.34%-points in case of the Tier1 capital, accordingly the minimum requirement for the consolidated
Tier1 ratio is 7.34% (without regulatory capital buffers);
o
1.79%-points in case of the Total SREP Capital Requirement (TSCR), accordingly the minimum
requirement for the consolidated capital adequacy ratio is 9.79% (without regulatory capital
buffers).
• In government decision 1311/2024. (X. 21.), Hungary’s government announced the 21-step 'New Economic
Policy Action Plan’, the elements of which, launched after 1 January 2025, are detailed in the Post-balance
sheet events section.
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
120
OTP FUND MANAGEMENT (HUNGARY)
Changes in assets under management and financial performance of OTP Fund Management:
Main components of P&L account
2023
HUF million
2024
HUF million
Change
%
Profit after tax
19,673
24,624
25
Adjustments (after tax)
0
0
Adjusted profit after tax
19,673
24,624
25
Income tax
(2,491)
(2,578)
3
Profit before income tax
22,165
27,202
23
Operating profit
22,193
27,138
22
Total income
27,771
32,753
18
Net fees and commissions
25,923
30,321
17
Other net non-interest income
1,846
2,389
29
Operating expenses
(5,578)
(5,615)
1
Total provisions
(28)
64
Main components of balance sheet
(closing balances)
2023
2024
%
Total assets
39,461
43,750
11
Total shareholders' equity
28,741
29,409
2
Asset under management
2023
HUF billion
2024
HUF billion
%
Assets under management, total (w/o duplicates)¹
3,086
4,071
32
Volume of investment funds (closing, w/o duplicates)
2,609
3,507
34
Volume of managed assets (closing)
477
563
18
Volume of investment funds (closing, with duplicates)²
3,532
4,648
32
bond
1,924
2,556
33
mixed
336
637
90
absolute return
370
507
37
equity
331
499
51
money market
484
340
(30)
commodity market
70
91
29
guaranteed
17
19
12
1 The cumulative net asset value of investment funds and managed assets of OTP Fund Management, eliminating the volume of own investment funds
(duplications) being managed in other investment funds and managed assets of OTP Fund Management.
2 The cumulative net asset value of investment funds with duplications managed by OTP Fund Management.
In 2024, OTP Fund Management generated HUF 24.6 billion profit, thus increasing its annual profit by 25%
y-o-y.
Annual net fee and commission income increased by 17%, driven by the growth of assets under
management. The average annual rate of the fund management fee (1.11% in 2024) was 15 basis points
lower than last year.
In 2024, other income jumped by 29%, owing to the gain on securities at fair value in the Company's own
books.
Operating expenses for the full year were 1% higher than in the previous year. The 13% increase in other
expenses largely stemmed from higher expert fees and rising IT costs, while the change in personnel
expenses was mitigated by a decrease in bonus payments.
In the Hungarian fund management market, the uptrend in investment funds assets continued. On top of
attractive returns and price fluctuations, positive capital inflows also contributed to asset growth. Despite
varying degrees of outflows in different categories, on balance, the inflow of capital exceeded outflow.
Regarding individual asset categories, bond funds retained their leading position, but the assets of real
estate funds, which ranked second in the previous year, barely rose in 2024, and it was overtaken by mixed
funds and absolute return funds.
In the case of OTP Fund Management, the asset of bond funds grew by 33% y-o-y, surpassing
HUF 2,500 billion, thus it made up more than half of managed funds’ volumes at the end of the year. Among
the other categories, mixed funds, which is currently the second largest category, skyrocketed
(+90% y-o-y), and absolute return funds also marched higher (+37% y-o-y), benefiting from the effect of
positive returns and capital inflows, while money market funds experienced capital outflows.
Overall, the volume of funds managed by OTP Fund Management exceeded HUF 4,600 billion
(+32% y-o-y) at the end of December; maintaining its position as the market leader with 31.5% market share
in the securities market.
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
121
MERKANTIL GROUP (HUNGARY)
Performance of Merkantil Group:
Main components of P&L account
2023
HUF million
2024
HUF million
Change
%
Profit after tax
6,647
10,842
63
Adjustments (after tax)
0
0
0
Adjusted profit after tax
6,647
10,842
63
Income tax
(3,860)
(3,728)
(3)
Profit before income tax
10,507
14,569
39
Operating profit
14,967
12,098
(19)
Total income
28,013
27,541
(2)
Net interest income
26,257
24,052
(8)
Net fees and commissions
759
669
(12)
Other net non-interest income
997
2,819
183
Operating expenses
(13,046)
(15,443)
18
Total provisions
(4,461)
2,471
Provision for impairment on loan losses
(4,438)
2,494
Other provision
(22)
(23)
1
Main components of balance sheet
(closing balances)
2023
2024
%
Total assets
930,761
1,009,625
8
Gross customer loans
590,510
674,058
14
Gross customer loans (FX-adjusted)
594,598
674,058
13
Stage 1+2 customer loans (FX-adjusted)
580,219
660,816
14
Corporate loans
58,066
57,654
(1)
Leasing
522,153
603,162
16
Allowances for possible loan losses
(13,637)
(9,896)
(27)
Allowances for possible loan losses (FX-adjusted)
(13,149)
(9,896)
(25)
Deposits from customers
5,028
5,884
17
Deposits from customers (FX-adjusted)
5,028
5,884
17
Retail deposits
2,767
2,447
(12)
Corporate deposits
2,261
3,437
52
Liabilities to credit institutions
839,730
900,713
7
Subordinated debt
5,003
6,031
21
Total shareholders' equity
61,237
66,604
9
Loan Quality
2023
2024
%/pps
Stage 1 loan volume under IFRS 9 (in HUF million)
533,569
612,507
15
Stage 1 loans under IFRS 9/gross customer loans
90.4%
90.9%
0.5
Own coverage of Stage 1 loans under IFRS 9
0.8%
0.4%
(0.4)
Stage 2 loan volume under IFRS 9 (in HUF million)
42,648
48,309
13
Stage 2 loans under IFRS 9/gross customer loans
7.2%
7.2%
(0.1)
Own coverage of Stage 2 loans under IFRS 9
7.0%
4.5%
(2.4)
Stage 3 loan volume under IFRS 9 (in HUF million)
14,293
13,241
(7)
Stage 3 loans under IFRS 9/gross customer loans
2.4%
2.0%
(0.5)
Own coverage of Stage 3 loans under IFRS 9
44.1%
40.2%
(3.9)
Provision for impairment on loan losses/average gross loans
0.80%
(0.40%)
(1.19)
Performance Indicators
2023
2024
pps
ROA
0.7%
1.1%
0.4
ROE
11.2%
17.9%
6.7
Total income margin
3.00%
2.87%
(0.13)
Net interest margin
2.81%
2.51%
(0.30)
Operating costs / Average assets
1.4%
1.6%
0.2
Cost/income ratio
46.6%
56.1%
9.5
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
122
In 2024, Merkantil Group posted HUF 11 billion adjusted profit after tax (+63% y-o-y), which brought its
full-year ROE to 17.9%.
Operating profit shrank by 19%, as a result of stagnating total income caused by narrowing net interest
margins as well as operating expenses expanding by 18%. Net interest income declined by 8%
y-o-y as income from vehicle rental was retroactively reclassified from interest income to other income in
3Q, for the full year. This reclassification reduced annual net interest income by a total of HUF 1.2 billion.
Without the effect of this reclassification, net interest income dropped by 4% y-o-y as net interest margin
narrowed. This shifting caused most of the increase in other income.
The 18% y-o-y increase in operating expenses stemmed from the growing personnel expenses, deductible
taxes (under other expenses), as well as from higher IT and real estate related costs.
The total risk costs line printed HUF 2.5 billion positive amount in full year 2024. The ratio of Stage 3 loans
sank by 0.5 pp y-o-y, to 2%. The coverage of Stage 3 loans dropped by 3.9 pps y-o-y, and that of Stage 2
loans declined by 2.4 pps.
FX-adjusted performing (Stage 1+2) loans grew by 14% y-o-y, including a 16% expansion in leasing
exposures, while corporate loans fell by 1%.
Credit demand benefited from the state subsidized loan facilities: under the KAVOSZ Széchenyi Card
programme, customers concluded subsidized loan agreements totalling HUF 168 billion (including HUF 84
billion in 2022, HUF 43 billion in 2023, and HUF 41 billion in 2024) with Merkantil Bank, since the beginning
of the scheme. Contracted amount under the Baross Gábor loan programme reached HUF 20 billion in 2024.
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
123
IFRS REPORTS OF THE MAIN FOREIGN SUBSIDIARIES OF OTP BANK
DSK GROUP (BULGARIA)
Performance of DSK Group:
Main components of P&L account
2023
HUF million
2024
HUF million
Change
%
Profit after tax
198,182
200,765
1
Adjustments (after tax)
0
0
Adjusted profit after tax
198,182
200,765
1
Income tax
(21,303)
(33,392)
57
Profit before income tax
219,485
234,156
7
Operating profit
216,102
255,204
18
Total income
316,105
375,365
19
Net interest income
226,693
267,411
18
Net fees and commissions
72,366
83,724
16
Other net non-interest income
17,046
24,230
42
Operating expenses
(100,003)
(120,160)
20
Total provisions
3,383
(21,048)
Provision for impairment on loan losses
2,779
(18,015)
Other provision
604
(3,033)
Main components of balance sheet
(closing balances)
2023
2024
%
Total assets
6,456,668
7,674,660
19
Gross customer loans
4,066,527
4,809,808
18
Gross customer loans (FX-adjusted)
4,357,292
4,809,808
10
Stage 1+2 customer loans (FX-adjusted)
4,254,297
4,707,396
11
Retail loans
2,408,789
2,959,593
23
Retail mortgage loans
1,237,703
1,582,839
28
Retail consumer loans
1,076,790
1,276,758
19
MSE loans
94,295
99,996
6
Corporate loans
1,517,313
1,378,332
(9)
Leasing
328,195
369,470
13
Allowances for possible loan losses
(125,806)
(142,807)
14
Allowances for possible loan losses (FX-adjusted)
(134,812)
(142,807)
6
Deposits from customers
5,165,700
6,132,661
19
Deposits from customers (FX-adjusted)
5,550,547
6,132,661
10
Retail deposits
4,664,369
5,250,443
13
Retail deposits
4,161,467
4,706,002
13
MSE deposits
502,902
544,442
8
Corporate deposits
886,178
882,219
0
Liabilities to credit institutions
249,178
318,710
28
Subordinated debt
88,087
94,318
7
Total shareholders' equity
890,188
1,051,427
18
Loan Quality
2023
2024
%/pps
Stage 1 loan volume under IFRS 9 (in HUF million)
3,483,290
4,087,398
17
Stage 1 loans under IFRS 9/gross customer loans
85.7%
85.0%
(0.7)
Own coverage of Stage 1 loans under IFRS 9
0.7%
0.5%
(0.2)
Stage 2 loan volume under IFRS 9 (in HUF million)
487,099
619,996
27
Stage 2 loans under IFRS 9/gross customer loans
12.0%
12.9%
0.9
Own coverage of Stage 2 loans under IFRS 9
9.3%
10.0%
0.6
Stage 3 loan volume under IFRS 9 (in HUF million)
96,137
102,413
7
Stage 3 loans under IFRS 9/gross customer loans
2.4%
2.1%
(0.2)
Own coverage of Stage 3 loans under IFRS 9
57.1%
58.0%
0.9
Provision for impairment on loan losses/average gross loans
(0.07%)
0.40%
0.47
Performance Indicators
2023
2024
pps
ROA
3.3%
2.9%
(0.4)
ROE
24.9%
21.5%
(3.4)
Total income margin
5.24%
5.33%
0.09
Net interest margin
3.76%
3.80%
0.04
Operating costs / Average assets
1.7%
1.7%
0.0
Cost/income ratio
31.6%
32.0%
0.4
Net loans to deposits (FX-adjusted)
76%
76%
0
FX rates
2023
HUF
2024
HUF
Change
%
HUF/BGN (closing)
195.7
209.7
7
HUF/BGN (average)
195.4
201.6
3
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
124
In 2024, DSK Group generated HUF 200.8 billion profit after tax, 1% more than in the previous year, the
ROE was 21.5%.
Annual operating profit improved by 18%, mainly as a result of strong volume growth, which was offset by a
higher risk costs and by the introduction of the global minimum tax regime on 1 January 2024. As a result,
the effective corporate tax rate increased from 10% in 2023 to 14% in 2024, and the amount of tax grew by
57% y-o-y.
The full-year profit before tax improved by 7%, mainly driven by a 18% surge in net interest income, in line
with the growth in total assets. Net interest margin was y-o-y stable, but its quarterly level has gradually
declined by altogether 27 basis points since the peak hit in 3Q 2023, reflecting ECB base rate cuts. In 2024,
the Bank steadily increased the share of long-term fixed-interest-rate bonds within the liquid asset portfolio.
As the interest rate on these bonds is lower than that on short-term placements, this entailed a margin
sacrifice in the short run. Net interest income was negatively affected by the increase in the mandatory
reserve requirement rate from 10% to 12% in July 2023, as the central bank does not pay interest on that
stock.
Net fees and commissions grew by 16% y-o-y, mainly as a result of the increase in retail volumes and
transactional turnover. Other income expanded by 42%, partly as a result of a y-o-y increase in currency
conversion gains, as well as the refunds from card companies in the fourth quarter.
Throughout the year, cost level was under significant pressure from wage inflation and IT developments. As
a result, annual operating expenses grew by 20% (by 16% in BGN), the cost/income ratio was 32.0%, which
remained one of the lowest ones among Group members.
In 2024, total risk cost amounted to -HUF 21.0 billion, of which credit risk costs made up -HUF 18.0 billion,
bringing the credit risk cost ratio to 40 bps. On the other risk cost line, HUF 7.5 billion impairment was set
aside for the Russian government bonds held in the Bank’s balance sheet; this effect was partially offset by
releases on other securities and on litigations. The coverage of Russian bonds was 78% at the end of the
year.
Underlying loan quality trends remained stable: the Stage 3 ratio declined by 0.2 pp, to 2.1% y-o-y, while
Stage 3 loans’ own provision coverage improved by 0.9 pp, to 58%.
Performing (Stage 1+2) loans surged by 11% y-o-y (FX-adjusted), propelled by the 24% y-o-y expansion in
household loan volumes. New mortgage loan placements jumped by 39%, and cash loan disbursements
grew by 21% y-o-y. In response to the strong (even at sector level) household loan flow, the central bank
tightened macroprudential brakes for retail loans, effective from 1 October 2024: in the case of the newly
contracted loans, the loan-to value (LTV) ratio was capped at 85%, the down payment shall be at least 10%,
and the debt service-to-income ratio (DSTI) shall not exceed 50%. Corporate (including MSE) loans fell by
8% y-o-y, partly because of the repayment of a larger loan affecting several Group members, as well as the
transfer of another larger loan to OTP Bank Serbia in 3Q; without them, corporate + MSE loans would have
expanded by 1% y-o-y. The leasing exposure of the Bulgarian operation grew by 14% y-o-y (FX-adjusted).
Deposits increased by 10% y-o-y (FX-adjusted), driven by retail deposits’ growth. The stock of corporate
deposits was y-o-y stable. The net loan/deposit ratio was 76% at the end of December.
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
125
OTP BANK SLOVENIA
Performance of OTP Bank Slovenia:
Main components of P&L account
2023
HUF million
2024
HUF million
Change
%
Profit after tax
100,958
113,282
12
Adjustments (after tax)
(11,385)
0
Adjusted profit after tax
112,342
113,282
1
Income tax
(7,226)
(24,288)
236
Profit before income tax
119,568
137,570
15
Operating profit
131,630
145,858
11
Total income
218,870
251,993
15
Net interest income
167,121
190,303
14
Net fees and commissions
46,028
53,756
17
Other net non-interest income
5,721
7,934
39
Operating expenses
(87,240)
(106,135)
22
Total provisions
(12,061)
(8,288)
(31)
Provision for impairment on loan losses
(2,485)
(8,640)
248
Other provision
(9,576)
352
Main components of balance sheet
(closing balances)
2023
2024
%
Total assets
5,892,803
6,106,968
4
Gross customer loans
2,796,313
2,908,790
4
Gross customer loans (FX-adjusted)
2,995,714
2,908,790
(3)
Stage 1+2 customer loans (FX-adjusted)
2,948,302
2,850,235
(3)
Retail loans
1,438,068
1,477,751
3
Retail mortgage loans
951,101
951,490
0
Retail consumer loans
431,197
473,435
10
MSE loans
55,770
52,826
(5)
Corporate loans
1,308,023
1,154,562
(12)
Leasing
202,211
217,922
8
Allowances for possible loan losses
(33,587)
(53,030)
58
Allowances for possible loan losses (FX-adjusted)
(35,983)
(53,030)
47
Deposits from customers
4,583,072
4,774,165
4
Deposits from customers (FX-adjusted)
4,913,369
4,774,165
(3)
Retail deposits
3,837,698
3,827,532
0
Retail deposits
3,332,073
3,330,558
0
MSE deposits
505,625
496,974
(2)
Corporate deposits
1,075,671
946,633
(12)
Liabilities to credit institutions
131,375
58,588
(55)
Issued securities
335,400
368,829
10
Subordinated debt
63,167
32,818
(48)
Total shareholders' equity
669,622
777,525
16
Loan Quality
2023
2024
%/pps
Stage 1 loan volume under IFRS 9 (in HUF million)
2,514,261
2,426,800
(3)
Stage 1 loans under IFRS 9/gross customer loans
89.9%
83.4%
(6.5)
Own coverage of Stage 1 loans under IFRS 9
0.3%
0.2%
0.0
Stage 2 loan volume under IFRS 9 (in HUF million)
237,794
423,434
78
Stage 2 loans under IFRS 9/gross customer loans
8.5%
14.6%
6.1
Own coverage of Stage 2 loans under IFRS 9
3.4%
4.7%
1.3
Stage 3 loan volume under IFRS 9 (in HUF million)
44,258
58,555
32
Stage 3 loans under IFRS 9/gross customer loans
1.6%
2.0%
0.4
Own coverage of Stage 3 loans under IFRS 9
41.4%
46.4%
5.0
Provision for impairment on loan losses/average gross loans
0.09%
0.30%
0.20
Performance Indicators
2023
2024
pps
ROA
2.2%
1.9%
(0.2)
ROE
19.7%
16.1%
(3.6)
Total income margin
4.23%
4.28%
0.06
Net interest margin
3.23%
3.23%
0.01
Operating costs / Average assets
1.7%
1.8%
0.1
Cost/income ratio
39.9%
42.1%
2.3
Net loans to deposits (FX-adjusted)
60%
60%
0
FX rates
2023
HUF
2024
HUF
Change
%
HUF/EUR (closing)
382.8
410.1
7
HUF/EUR (average)
382.3
394.2
3
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
126
By the legal and organizational integration of SKB and Nova KBM, the merger of the two Slovenian banks
was successfully completed on 22 August 2024. The planned cost synergies are steadily utilized, most of
them are likely to appear in 2025.
The Slovenian operation generated HUF 113 billion profit after tax, which is consistent with 12% y-o-y
growth and 16.1% annual ROE. One reason for the y-o-y higher profit is that NKBM was consolidated
starting from February 2023, therefore it gave only eleven months’ profit contribution in the base period. The
size of the profit after tax was adversely affected by the fact that the corporate income tax rate in Slovenia
has increased from 19% to 22% y-o-y.
The annual operating profit has improved by 11% y-o-y; within that, net interest income grew by 14%, while
fee and commission incomes were 17% higher than in the base period. The improvement in net interest
income materially benefited from the fact that the level of benchmark interest rates declined slower and by
a smaller degree than originally expected. Annual net interest margin (3.23%) overall stagnated y-o-y;
however, the quarterly changes reflected a steady decline simultaneously with the ECB’s interest rate cuts
started from June. The annual net interest income benefited from an increase in the share of consumer
loans within the product structure on the loan side, and from the investment of the extra liquidity into assets
with higher yields.
As part of the integration, the merged bank’s branch network declined in 4Q from 104 to 82 units by the end
of December 2024. Meanwhile the number of ATMs dropped by 15 and the workforce declined by 70 people.
The Bank’s annual cost/income ratio increased to 42.1%, from 39.8% in 2023.
The quality of the loan portfolio was overall stable. The ratio of Stage 2 loans has increased to 14.6% In
case of the retail book the carry-over effect of applying the standardized methodology following the
integration pushed up the Stage 2 ratio; their coverage increased, too. The annual credit risk cost ratio was
30 bps (2023: 9 bps), which is lower than the group-level indicator.
The FX-adjusted performing loan portfolio shrank by 3% in the full year. Within the retail loan portfolio, the
stock of consumer loans expanded dynamically, by 10%, while that of mortgage loans practically remained
unchanged. The SME loan portfolio fell by 5% y-o-y. Corporate loans fell by 12% year-on-year, partly due
to a large-amount early repayment and to generally subdued borrowing appetite.
The reorganizations relating to the integration affected the sales of mortgage loans particularly adversely,
but in 2024 the bank lost its previous market positions in practically all major loan product segments. The
losses of corporate debt volumes and market share can also be explained by technical reasons: the leasing
company, which was sold due to legal obligations, repaid its previously existing loan in September
(EUR 100 million).
FX-adjusted deposit volumes shrank by 3% y-o-y, with retail volumes remaining almost unchanged, while
corporate deposits eroded by 12%. The 60% level of the Slovenian operation’s net loan/deposit ratio is still
one of the lowest within OTP Group.
At the end of 2024, the Slovenian operation’s MREL eligible liabilities exceeded EUR 900 million;
four-fifths of which are Senior Preferred bonds.
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
127
OTP BANK CROATIA
Performance of OTP Bank Croatia:
Main components of P&L account
2023
HUF million
2024
HUF million
Change
%
Profit after tax
53,333
61,743
16
Adjustments (after tax)
0
0
Adjusted profit after tax
53,333
61,743
16
Income tax
(11,786)
(13,675)
16
Profit before income tax
65,119
75,417
16
Operating profit
66,116
73,593
11
Total income
123,133
138,874
13
Net interest income
91,117
105,300
16
Net fees and commissions
25,661
28,923
13
Other net non-interest income
6,355
4,652
(27)
Operating expenses
(57,017)
(65,282)
14
Total provisions
(997)
1,825
Provision for impairment on loan losses
721
10,435
Other provision
(1,718)
(8,610)
401
Main components of balance sheet
(closing balances)
2023
2024
%
Total assets
3,278,199
3,784,532
15
Gross customer loans
2,311,788
2,762,945
20
Gross customer loans (FX-adjusted)
2,476,818
2,762,945
12
Stage 1+2 customer loans (FX-adjusted)
2,380,108
2,683,926
13
Retail loans
1,247,616
1,467,012
18
Retail mortgage loans
687,081
781,115
14
Retail consumer loans
488,648
590,381
21
MSE loans
71,888
95,516
33
Corporate loans
943,290
992,666
5
Leasing
189,202
224,248
19
Allowances for possible loan losses
(97,835)
(88,780)
(9)
Allowances for possible loan losses (FX-adjusted)
(104,813)
(88,780)
(15)
Deposits from customers
2,385,223
2,683,855
13
Deposits from customers (FX-adjusted)
2,562,188
2,683,855
5
Retail deposits
1,871,758
1,970,271
5
Retail deposits
1,645,510
1,718,765
4
MSE deposits
226,248
251,506
11
Corporate deposits
690,430
713,584
3
Liabilities to credit institutions
373,142
465,507
25
Subordinated debt
23,438
45,555
94
Total shareholders' equity
403,487
483,716
20
Loan Quality
2023
2024
%/pps
Stage 1 loan volume under IFRS 9 (in HUF million)
1,932,763
2,384,302
23
Stage 1 loans under IFRS 9/gross customer loans
83.6%
86.3%
2.7
Own coverage of Stage 1 loans under IFRS 9
0.6%
0.5%
(0.1)
Stage 2 loan volume under IFRS 9 (in HUF million)
288,751
299,625
4
Stage 2 loans under IFRS 9/gross customer loans
12.5%
10.8%
(1.6)
Own coverage of Stage 2 loans under IFRS 9
7.6%
6.7%
(0.9)
Stage 3 loan volume under IFRS 9 (in HUF million)
90,274
79,019
(12)
Stage 3 loans under IFRS 9/gross customer loans
3.9%
2.9%
(1.0)
Own coverage of Stage 3 loans under IFRS 9
72.0%
72.1%
0.1
Provision for impairment on loan losses/average gross loans
(0.03%)
(0.41%)
(0.38)
Performance Indicators
2023
2024
pps
ROA
1.8%
1.7%
0.0
ROE
14.1%
14.2%
0.1
Total income margin
4.05%
3.93%
(0.12)
Net interest margin
2.99%
2.98%
(0.02)
Operating costs / Average assets
1.9%
1.8%
0.0
Cost/income ratio
46.3%
47.0%
0.7
Net loans to deposits (FX-adjusted)
93%
100%
7
FX rates
2023
HUF
2024
HUF
Change
%
HUF/EUR (closing)
382.8
410.1
7
HUF/EUR (average)
382.3
394.2
3
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
128
The Croatian bank generated almost HUF 62 billion profit after tax (+16% y-o-y) in full year 2024. Based
on average shareholders’ equity and full-year profit, ROE was 14.2% last year.
Regarding profit dynamics, on the income side, net interest income, the weight of which exceeded 75% last
year, expanded by 16% y-o-y, while performing loan volumes increased by double digits and net interest
margin narrowed by 2 bps y-o-y. In 2024, the European Central Bank reduced the euro area’s key interest
rate four times, by a total of 100 basis points. In the declining interest rate environment, quarterly margins
followed a slightly decreasing trend.
As a result of a broad-based growth, net fees and commissions increased by 13% last year.
Full-year operating expenses grew by 14% (or 10% in EUR).As to annual dynamics, the increase in other
expenses stemmed from higher IT and real-estate-related costs, while supervisory fees were lower y-o-y.
Overall, the cost/income ratio declined by 0.7 percentage points, to 47.0% last year.
Some HUF 2 billion positive risk cost supported profit in 2024. Within that, positive credit risk cost was more
than HUF 10 billion, owing to recoveries on Stage 3 claims. In 2024, other provision amounted to
HUF -8.6 billion, mainly in relation to litigations.
Loan quality showed an improvement: the ratio of Stage 3 loans dropped by 1.0 pp y-o-y, to 2.9%, owing to
the overall improvement of the loan portfolio, and the partial repayment and/or partial write-off of large
corporate loans classified as Stage 3. The own provision coverage of Stage 3 loans kept on improving: it
landed at 72.1% at the end of December.
Performing (Stage 1+2) loan volumes grew by 13% y-o-y (FX-adjusted). The strenghening lending activity
helped the retail portfolio surge by 18% y-o-y. The corporate portfolio increased slower
(+5% y-o-y).
FX-adjusted deposit volumes grew by 5% y-o-y, including a 4% increase in retail and 5% surge in corporate
(including MSE) deposits, due to the higher quality of services offered and the expansion of their scope,
amid intensifying market competition. The Bank’s net loan to deposit ratio stood at 100% at the end of
December.
The total market share of OTP Group’s Croatian operation rose y-o-y in both loan and deposit volumes, thus
it stabilized its fourth place in the ranking of Croatia’s loan market.
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
129
OTP BANK SERBIA
Performance of OTP Bank Serbia:
Main components of P&L account
2023
HUF million
2024
HUF million
Change
%
Profit after tax
58,211
66,496
14
Adjustments (after tax)
0
0
Adjusted profit after tax
58,211
66,496
14
Income tax
(9,143)
(10,973)
20
Profit before income tax
67,354
77,469
15
Operating profit
81,177
95,474
18
Total income
132,147
153,562
16
Net interest income
103,730
116,621
12
Net fees and commissions
18,419
21,726
18
Other net non-interest income
9,998
15,216
52
Operating expenses
(50,970)
(58,089)
14
Total provisions
(13,823)
(18,005)
30
Provision for impairment on loan losses
(11,030)
(15,860)
44
Other provision
(2,793)
(2,145)
(23)
Main components of balance sheet
(closing balances)
2023
2024
%
Total assets
2,874,794
3,483,775
21
Gross customer loans
1,978,855
2,341,379
18
Gross customer loans (FX-adjusted)
2,121,369
2,341,379
10
Stage 1+2 customer loans (FX-adjusted)
2,059,458
2,279,476
11
Retail loans
939,051
1,071,596
14
Retail mortgage loans
443,211
487,858
10
Retail consumer loans
442,685
523,305
18
MSE loans
53,156
60,433
14
Corporate loans
1,020,076
1,092,707
7
Leasing
100,330
115,173
15
Allowances for possible loan losses
(66,259)
(81,828)
23
Allowances for possible loan losses (FX-adjusted)
(71,056)
(81,828)
15
Deposits from customers
1,868,078
2,343,130
25
Deposits from customers (FX-adjusted)
2,005,508
2,343,130
17
Retail deposits
1,005,893
1,266,518
26
Retail deposits
854,791
1,095,447
28
MSE deposits
151,103
171,072
13
Corporate deposits
999,614
1,076,611
8
Liabilities to credit institutions
506,900
565,834
12
Subordinated debt
66,381
71,443
8
Total shareholders' equity
368,344
436,608
19
Loan Quality
2023
2024
%/pps
Stage 1 loan volume under IFRS 9 (in HUF million)
1,661,365
2,012,765
21
Stage 1 loans under IFRS 9/gross customer loans
84.0%
86.0%
2.0
Own coverage of Stage 1 loans under IFRS 9
0.7%
0.6%
(0.1)
Stage 2 loan volume under IFRS 9 (in HUF million)
259,780
266,711
3
Stage 2 loans under IFRS 9/gross customer loans
13.1%
11.4%
(1.7)
Own coverage of Stage 2 loans under IFRS 9
6.7%
10.9%
4.1
Stage 3 loan volume under IFRS 9 (in HUF million)
57,710
61,903
7
Stage 3 loans under IFRS 9/gross customer loans
2.9%
2.6%
(0.3)
Own coverage of Stage 3 loans under IFRS 9
63.8%
64.8%
1.0
Provision for impairment on loan losses/average gross loans
0.57%
0.75%
0.17
Performance Indicators
2023
2024
pps
ROA
2.2%
2.1%
0.0
ROE
16.6%
16.5%
(0.1)
Total income margin
4.93%
4.94%
0.01
Net interest margin
3.87%
3.75%
(0.12)
Operating costs / Average assets
1.9%
1.9%
0.0
Cost/income ratio
38.6%
37.8%
(0.7)
Net loans to deposits (FX-adjusted)
102%
96%
(6)
FX rates
2023
HUF
2024
HUF
Change
%
HUF/RSD (closing)
3.3
3.5
7
HUF/RSD (average)
3.3
3.4
3
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
130
In 2024, the Serbian banking group realized more than HUF 66 billion profit after tax. The 14% y-o-y increase
in annual profit was driven by stronger operating result, mitigated by the 30% higher risk costs. Based on
average shareholders’ equity and full-year profit, ROE was 16.5%.
During the year, revenues increased by 16% (by 12% in RSD terms). Within this, net interest income rose by
12%, supported by the expansion of both performing loans and of financial assets. Net interest margin topped
out in 3Q 2023, and has been slowly eroding since then in the falling interest rate environment. Margin stood
at 3.75% in 2024 (-12 bps y-o-y).
Net fees and commissions grew by 18%, supported by stronger income from fees on deposits, transactions,
and card commissions.
During the year, operating expenses surged by 14% y-o-y (by 10% in RSD terms), as a result of the wage
increase implemented in the high-wage-inflation environment, higher supervisory charges, as well as elevated
IT, marketing, and training expenses. Cost efficiency indicators further improved; the annual cost/income ratio
(37.8%, -0.7 pps y-o-y) was one of the lowest among group members.
Credit risk costs were 44% higher than in the previous year, thus the credit risk cost ratio jumped to 75 bps.
Impairments for loan losses were mostly recognized in the last quarter: first, due to the elevated risks related
to a large corporate exposure, it became warranted to increase the coverage level, and second, due to the
HUF 2.1 billion impairment loss incurred because of the extension of the interest rate cap. On 21 November,
the National Bank of Serbia approved the extension of the mortgage interest rate cap introduced in October
2023, a measure that would have expired at the end of 2024. The interest rate cap on variable-rate loans
increased from 4.1% in 2024 to 5% between 1 January and 31 December 2025.
Overall, loan portfolio quality improved: the ratio of Stage 3 loans was 2.6% at the end of December (-0.3 pps
y-o-y), while their own provision coverage rose by 1.0 pp y-o-y, to 64.8%.
The performing (Stage 1+2) loan book grew by 11% y-o-y (FX-adjusted). Within that, mortgage loans increased
by 10% y-o-y . As the upper limit of the available loan amount was raised, consumer loans expanded by 18%
y-o-y (FX-adjusted), mainly driven by the growth in cash loans and car loans. The stock of corporate (including
MSE) loans expanded by 8% y-o-y.
The Serbian operation’s deposit book grew by an FX-adjusted 17% y-o-y, to over HUF 2,300 billion at the
end of December. Within this, the volume of retail deposits surged by 28% y-o-y, alongside with higher
offered interest rates. This brought the net loan/deposit ratio to 96%, down from 144% at the end of
September 2022.
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
131
IPOTEKA BANK (UZBEKISTAN)
Performance of Ipoteka Bank (Uzbekistan):
Main components of P&L account
2023
HUF million
2024
HUF million
Change
%
Profit after tax
(52,760)
52,893
Adjustments (after tax)
(37,338)
0
Adjusted profit after tax
(15,422)
52,893
Income tax
(3,381)
(10,949)
224
Profit before income tax
(12,041)
63,842
Operating profit
40,143
78,037
94
Total income
66,089
125,768
90
Net interest income
53,006
108,715
105
Net fees and commissions
5,261
9,502
81
Other net non-interest income
7,822
7,551
(3)
Operating expenses
(25,946)
(47,731)
84
Total provisions
(52,184)
(14,195)
(73)
Provision for impairment on loan losses
(51,354)
(11,472)
(78)
Other provision
(830)
(2,723)
228
Main components of balance sheet
(closing balances)
2023
2024
%
Total assets
1,187,368
1,509,536
27
Gross customer loans
961,533
1,063,551
11
Gross customer loans (FX-adjusted)
1,051,933
1,063,551
1
Stage 1+2 customer loans (FX-adjusted)
926,285
915,790
(1)
Retail loans
778,554
722,673
(7)
Retail mortgage loans
379,317
435,597
15
Retail consumer loans
230,915
249,612
8
MSE loans
168,322
37,464
(78)
Corporate loans
147,731
193,117
31
Allowances for possible loan losses
(96,738)
(120,766)
25
Allowances for possible loan losses (FX-adjusted)
(106,164)
(120,766)
14
Deposits from customers
327,161
528,602
62
Deposits from customers (FX-adjusted)
358,363
528,602
48
Retail deposits
260,159
270,912
4
Retail deposits
125,410
179,133
43
MSE deposits
134,749
91,779
(32)
Corporate deposits
98,205
257,690
162
Liabilities to credit institutions
561,466
566,620
1
Issued securities
121,082
158,546
31
Subordinated debt
12,162
13,358
10
Total shareholders' equity
145,941
214,152
47
Loan Quality
2023
2024
%/pps
Stage 1 loan volume under IFRS 9 (in HUF million)
687,698
716,723
4
Stage 1 loans under IFRS 9/gross customer loans
71.5%
67.4%
(4.1)
Own coverage of Stage 1 loans under IFRS 9
2.8%
2.6%
(0.1)
Stage 2 loan volume under IFRS 9 (in HUF million)
159,737
199,067
25
Stage 2 loans under IFRS 9/gross customer loans
16.6%
18.7%
2.1
Own coverage of Stage 2 loans under IFRS 9
21.6%
19.6%
(2.0)
Stage 3 loan volume under IFRS 9 (in HUF million)
114,098
147,761
30
Stage 3 loans under IFRS 9/gross customer loans
11.9%
13.9%
2.0
Own coverage of Stage 3 loans under IFRS 9
38.0%
42.6%
4.6
Provision for impairment on loan losses/average gross loans
10.03%
1.16%
(8.88)
Performance Indicators
2023
2024
pps
ROA
(2.4%)
4.0%
6.4
ROE
(16.3%)
30.2%
46.5
Total income margin
10.08%
9.61%
(0.47)
Net interest margin
8.08%
8.31%
0.23
Operating costs / Average assets
4.0%
3.6%
(0.3)
Cost/income ratio
39.3%
38.0%
(1.3)
Net loans to deposits (FX-adjusted)
264%
178%
(86)
FX rates
2023
HUF
2024
HUF
Change
%
HUF/1,000 UZS (closing)
28.1
30.5
9
HUF/1,000 UZS (average)
30.1
28.8
(4)
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
132
The balance sheet of Ipoteka Bank was consolidated in the second quarter of 2023, and its P&L was included
in OTP Group's adjusted P&L account starting from the third quarter of 2023.
Based on end-2024 data, Ipoteka Bank is the fifth largest bank in Uzbekistan, with almost 7% market share
by total assets. The number of retail customers (1.8 million) surged by almost 18% since the Bank joined
the Group at the end of June 2023.
In 2024, the Bank generated HUF 53 billion profit after tax, which brought its ROE to 30%. Net interest
margin improved by 23 basis points, while the cost/income ratio by 1.3 pps, and the cost-to-asset ratio by
0.3 pp compared to the previous year. The bank’s cost/income ratio was 38% in 2024.
In 2024, total risk cost amounted to -HUF 14 billion; of that, the -HUF 11.5 billion impairment on loan losses
brought the credit risk cost ratio to 1.16%. This was due to the continuous review and development of the
risk management process, and to the stabilizing credit quality indicators in 2024. In 2024, other risk costs
arose mainly in 4Q, partly explained by provisions allocated to other assets and the fact that the impairment
loss related to penalty interest was reclassified from other risk costs to the provision for impairment on loan
losses line (in 4Q this increased other risk cost by HUF 0.8 billion, as the releases accounted for in 2024
were reclassified in one sum).
In 2024, the ratio of Stage 3 loans increased by 2 pps to 13.9% y-o-y, mainly due to the shifting of corporate
exposures in the first half-year. The own coverage of Stage 3 loans stood at 42.6%.
In 2024, not only credit quality trends stabilized, but the Bank's balance sheet structure also improved
significantly: the net loan/deposit ratio improved by 86 pps y-o-y, to 178%, down from 307% at the time
when Ipoteka Bank was consolidated into the Group. The net/loan deposit ratio, without the subsidized and
state-refinanced mortgage loans, stood at 110% at the end of 2024.
At the end of 2024, deposits amounted to HUF 529 billion (+48% y-o-y). Retail deposits rose by 43% y-o-y,
and corporate deposits grew by 50%.
The performing loan book stagnated y-o-y (FX-adjusted). Retail loans expanded by 12% y-o-y, well below
market dynamics.The volume of mortgage loans grew by 15% y-o-y, largely owing to a newly launched state
programme.
Corporate (including MSE) performing loans fell by 27% y-o-y, as a result of reclassifications into the Stage
3 segment and moderate disbursements.
On 25 April, the Bank successfully refinanced bonds, which was necessary because the senior unsecured
bonds issued in 2021 with nominal value of UZS 785 billion matured in April 2024. The new series was
issued in a nominal value of UZS 1.370 billion (USD 108 million equivalent), with three-year maturity, and
20.5% annual coupon.
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
133
OTP BANK UKRAINE
Performance of OTP Bank Ukraine:
Main components of P&L account
2023
HUF million
2024
HUF million
Change
%
Profit after tax
44,908
41,179
(8)
Adjustments (after tax)
0
0
Adjusted profit after tax
44,908
41,179
(8)
Income tax
(37,174)
(31,663)
(15)
Profit before income tax
82,082
72,842
(11)
Operating profit
78,018
68,414
(12)
Total income
108,853
101,605
(7)
Net interest income
93,450
89,894
(4)
Net fees and commissions
10,837
7,769
(28)
Other net non-interest income
4,567
3,942
(14)
Operating expenses
(30,835)
(33,191)
8
Total provisions
4,064
4,428
9
Provision for impairment on loan losses
10,654
9,123
(14)
Other provision
(6,590)
(4,695)
(29)
Main components of balance sheet
(closing balances)
2023
2024
%
Total assets
1,036,912
1,186,801
14
Gross customer loans
393,741
440,897
12
Gross customer loans (FX-adjusted)
417,978
440,897
5
Stage 1+2 customer loans (FX-adjusted)
326,545
391,837
20
Retail loans
29,004
41,136
42
Retail mortgage loans
2,004
1,230
(39)
Retail consumer loans
26,925
39,848
48
MSE loans
75
58
(22)
Corporate loans
208,991
251,128
20
Leasing
88,550
99,573
12
Allowances for possible loan losses
(84,671)
(52,283)
(38)
Allowances for possible loan losses (FX-adjusted)
(90,788)
(52,283)
(42)
Deposits from customers
736,621
842,437
14
Deposits from customers (FX-adjusted)
782,957
842,437
8
Retail deposits
295,816
301,782
2
Retail deposits
248,572
261,776
5
MSE deposits
47,244
40,006
(15)
Corporate deposits
487,141
540,655
11
Liabilities to credit institutions
91,154
97,486
7
Subordinated debt
7,530
8,879
18
Total shareholders' equity
157,088
205,705
31
Loan Quality
2023
2024
%/pps
Stage 1 loan volume under IFRS 9 (in HUF million)
208,563
323,190
55
Stage 1 loans under IFRS 9/gross customer loans
53.0%
73.3%
20.3
Own coverage of Stage 1 loans under IFRS 9
1.9%
2.2%
0.3
Stage 2 loan volume under IFRS 9 (in HUF million)
99,891
68,647
(31)
Stage 2 loans under IFRS 9/gross customer loans
25.4%
15.6%
(9.8)
Own coverage of Stage 2 loans under IFRS 9
14.4%
13.3%
(1.0)
Stage 3 loan volume under IFRS 9 (in HUF million)
85,287
49,059
(42)
Stage 3 loans under IFRS 9/gross customer loans
21.7%
11.1%
(10.5)
Own coverage of Stage 3 loans under IFRS 9
77.9%
73.7%
(4.2)
Provision for impairment on loan losses/average gross loans
(2.38%)
(2.21%)
0.17
Performance Indicators
2023
2024
pps
ROA
4.4%
3.8%
(0.6)
ROE
30.3%
22.4%
(8.0)
Total income margin
10.65%
9.39%
(1.26)
Net interest margin
9.14%
8.30%
(0.84)
Operating costs / Average assets
3.0%
3.1%
0.0
Cost/income ratio
28.3%
32.7%
4.3
Net loans to deposits (FX-adjusted)
42%
46%
4
FX rates
2023
HUF
2024
HUF
Change
%
HUF/UAH (closing)
9.1
9.4
3
HUF/UAH (average)
9.6
9.1
(5)
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
134
In 2024 OTP Bank Ukraine's profit after tax amounted to HUF 41 billion (-8% y-o-y), as loan growth resumed,
while stable liquidity and capital positions remained in place. Operating profit declined by 12% compared to
the base period, but risk costs remained in the positive territory. All this resulted in an ROE of 22.4%.
On 10 October 2024, the Ukrainian parliament passed a law pursuant to which the corporate income tax rate
on banks was increased from 25% to 50% retroactively for the whole year. In addition, effective from 2025 the
corporate income tax rate for other financial corporations was raised from 18% to 25%.
Net interest income for the full year fell by 4% y-o-y in HUF terms (and grew by 1% in UAH terms), while the
net interest margin narrowed by 84 basis points, mainly due to the lower interest rate earned on deposits
placed with the National Bank of Ukraine. The overnight deposit rate at the central bank stood at 23% back in
the first half of 2023, before a steady decline brought it down to 13% between July 2023 and June 2024. Since
then, there have been two interest rate hikes: the National Bank of Ukraine raised rates by 50 basis points on
12 December 2024, and by 100 basis points on 23 January 2025.
Operating expenses for the full year increased by 8% (+14% in UAH terms), predominantly driven by higher
personnel expenses, largely owing to the general wage increase that exceeded the rate of inflation. Within
other expenses, IT and IT services-related costs went up. The annual cost to income ratio rose by 4.3 pps
y-o-y, to 32.7%, thus remaining significantly better than the Group’s similar ratio.
Underlying loan quality trends kept on developing favourably: during the year, positive risk costs amounted
to HUF 4.4 billion. Of that, HUF 9.1 billion positive credit risk cost was recorded, mostly in relation to the
corporate and leasing portfolios, while on the other risk cost line, HUF 4.7 billion provision was created due
to the Ukrainian government bond portfolio’s dynamic expansion.
The ratio of Stage 3 loans in the portfolio improved by 10.5 pps y-o-y to 11.1%, and their own coverage ratio
hit 73.7%. In 2024, HUF 31 billion worth of non-performing loans were sold/written off. The downtrend in the
ratio of Stage 2 loans continued in the fourth quarter; first, through the repayment of Stage 2 loans, second,
thanks to the improvement in the corporate segment. Thus the Stage 2 ratio declined by 9.8 pps y-o-y.
Amid prudent lending standards, the FX-adjusted volume of performing (Stage 1+2) loans grew by 20%
y-o-y, from a low base. Within that, retail consumer loans surged by almost 50% (FX-adjusted). The
Government of Ukraine announced the Lending Development Strategy; as part of this, banks, including
OTP’s Ukrainian subsidiary, signed a memorandum in the summer of 2024 on lending to companies on
favourable terms, particularly in the energy sector. Accordingly, corporate volumes expanded
by 20% y-o-y.
The FX-adjusted deposit base expanded by 8% y-o-y; the engine of growth was the 11% y-o-y increase in
the corporate book, while the retail book rose by 5%.
The bank’s capital adequacy ratio significantly exceeded the regulatory minimum requirements, exceeding
39.4% at the end of December (regulatory minimum: 10.0%). Gross intergroup financing to the Ukrainian
operation amounted to the equivalent of HUF 55 billion at the end of December 2025.
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
135
CKB GROUP (MONTENEGRO)
Performance of CKB Group (Montenegro):
Main components of P&L account
2023
HUF million
2024
HUF million
Change
%
Profit after tax
21,358
24,194
13
Adjustments (after tax)
0
0
Adjusted profit after tax
21,358
24,194
13
Income tax
(3,861)
(4,385)
14
Profit before income tax
25,218
28,579
13
Operating profit
23,018
27,169
18
Total income
38,425
45,660
19
Net interest income
29,771
35,460
19
Net fees and commissions
7,797
9,729
25
Other net non-interest income
857
472
(45)
Operating expenses
(15,407)
(18,492)
20
Total provisions
2,200
1,410
(36)
Provision for impairment on loan losses
2,929
1,947
(34)
Other provision
(728)
(538)
(26)
Main components of balance sheet
(closing balances)
2023
2024
%
Total assets
663,676
776,370
17
Gross customer loans
452,493
545,499
21
Gross customer loans (FX-adjusted)
484,777
545,499
13
Stage 1+2 customer loans (FX-adjusted)
464,400
529,602
14
Retail loans
227,938
276,313
21
Retail mortgage loans
111,517
131,639
18
Retail consumer loans
110,534
137,035
24
MSE loans
5,887
7,639
30
Corporate loans
236,462
250,740
6
Leasing
0
2,548
(100)
Allowances for possible loan losses
(17,625)
(16,862)
(4)
Allowances for possible loan losses (FX-adjusted)
(18,882)
(16,862)
(11)
Deposits from customers
520,168
606,957
17
Deposits from customers (FX-adjusted)
557,998
606,957
9
Retail deposits
349,643
381,474
9
Retail deposits
268,046
296,784
11
MSE deposits
81,597
84,690
4
Corporate deposits
208,356
225,483
8
Liabilities to credit institutions
2,309
19,157
730
Total shareholders' equity
113,004
121,390
7
Loan Quality
2023
2024
%/pps
Stage 1 loan volume under IFRS 9 (in HUF million)
399,886
492,319
23
Stage 1 loans under IFRS 9/gross customer loans
88.4%
90.3%
1.9
Own coverage of Stage 1 loans under IFRS 9
0.8%
0.6%
(0.1)
Stage 2 loan volume under IFRS 9 (in HUF million)
33,587
37,282
11
Stage 2 loans under IFRS 9/gross customer loans
7.4%
6.8%
(0.6)
Own coverage of Stage 2 loans under IFRS 9
5.1%
4.8%
(0.4)
Stage 3 loan volume under IFRS 9 (in HUF million)
19,020
15,898
(16)
Stage 3 loans under IFRS 9/gross customer loans
4.2%
2.9%
(1.3)
Own coverage of Stage 3 loans under IFRS 9
67.2%
74.9%
7.7
Provision for impairment on loan losses/average gross loans
(0.67%)
(0.39
0.28
Performance Indicators
2023
2024
pps
ROA
3.4%
3.5%
0.1
ROE
20.6%
21.5%
0.9
Total income margin
6.11%
6.58%
0.47
Net interest margin
4.74%
5.11%
0.38
Operating costs / Average assets
2.5%
2.7%
0.2
Cost/income ratio
40.1%
40.5%
0.4
Net loans to deposits (FX-adjusted)
83%
87%
4
FX rates
2023
HUF
2024
HUF
Change
%
HUF/EUR (closing)
382.8
410.1
7
HUF/EUR (average)
382.3
394.2
3
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
136
In 2024, the Montenegrin CKB Group realized HUF 24 billion profit after tax (+13% y-o-y). Its ROE exceeded
21%.
In 2024, total income expanded by 19% y-o-y, driven by a 19% surge in net interest income, as well as 25%
jump in commissions, while other income halved. Both growing average volumes, and the rising interest
margin (+38 bps) helped net interest income. The rise in net fees mostly stemmed from improving card fee
income. Annual operating expenses grew by 16% in EUR terms, with personnel expenses, depreciation,
and other expenses equally contributing to the increase. The Bank’s cost/income ratio stood at 40.5% in
2024, 40 basis points higher than in 2023.
In 2024, credit risk costs amounted to +HUF 1.4 billion, mainly as a result of the revision of IFRS 9 model
parameters in 3Q, and the release of HUF 1.2 billion provisions due to the improving credit quality in 4Q.
Loan quality indicators developed favourably during the year: the ratio of Stage 3 loans dropped to 2.9%
(-1.3 pps y-o-y). The own provision coverage of Stage 3 loans stood at 74.9% at the end of 2024 (+7.7 pps
y-o-y). The ratio of Stage 2 loans sank by 0.6 pp, to 6.8% y-o-y.
Performing (Stage 1+2) loans rose by 14% y-o-y (FX-adjusted). The expansion of both outstanding stocks
and disbursements was supported by the Bank’s participation in the central bank’s mortgage and cash loan
rate reduction initiative, under which banks could voluntarily reduce lending rates on new disbursements
between 18 April 2024 and 31 December 2024. In the case of CKB, for cash loans with maturity of less than
six years, there was 2 pps decline irrespective of the loan amount; as a result, disbursements jumped by
34% y-o-y and the outstanding volumes expanded by 24%. In the field of mortgage loans, the Bank launched
a new mortgage loan facility, to help first-time home buyers younger than 30. As a result, disbursement grew
by 49% y-o-y and volumes expanded by 18%. Corporate loan disbursements also grew strongly in 2024,
with placements increasing by 50% y-o-y. In 2024, the Bank entered the leasing market, thus leasing
volumes amounted to HUF 2.8 billion by the end of the year.
The FX-adjusted deposit book expanded by 9% y-o-y. The y-o-y growth benefited from the 11% increase in
retail deposits, as well as from the 7% rise in corporate + MSE deposits. The net loan/deposit ratio stood at
87% at the end of the year.
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
137
OTP BANK ALBANIA
Performance of OTP Bank Albania:
Main components of P&L account
2023
HUF million
2024
HUF million
Change
%
Profit after tax
11,603
19,686
70
Adjustments (after tax)
0
0
Adjusted profit after tax
11,603
19,686
70
Income tax
(2,471)
(3,763)
52
Profit before income tax
14,073
23,449
67
Operating profit
13,750
23,145
68
Total income
33,123
40,047
21
Net interest income
27,912
33,531
20
Net fees and commissions
3,465
4,243
22
Other net non-interest income
1,746
2,274
30
Operating expenses
(19,373)
(16,902)
(13)
Total provisions
324
304
(6)
Provision for impairment on loan losses
108
0
(100)
Other provision
216
304
41
Main components of balance sheet
(closing balances)
2023
2024
%
Total assets
669,765
791,495
18
Gross customer loans
367,947
476,303
29
Gross customer loans (FX-adjusted)
405,990
476,303
17
Stage 1+2 customer loans (FX-adjusted)
380,790
452,213
19
Retail loans
180,114
201,778
12
Retail mortgage loans
124,927
143,981
15
Retail consumer loans
26,264
30,515
16
MSE loans
28,922
27,282
(6)
Corporate loans
194,531
241,788
24
Leasing
6,145
8,647
41
Allowances for possible loan losses
(17,690)
(20,422)
15
Allowances for possible loan losses (FX-adjusted)
(19,549)
(20,422)
4
Deposits from customers
547,854
615,186
12
Deposits from customers (FX-adjusted)
603,787
615,186
2
Retail deposits
518,726
554,511
7
Retail deposits
477,476
497,590
4
MSE deposits
41,250
56,921
38
Corporate deposits
85,061
60,675
(29)
Liabilities to credit institutions
8,138
14,919
83
Subordinated debt
2,861
0
(100)
Total shareholders' equity
81,102
114,649
41
Loan Quality
2023
2024
%/pps
Stage 1 loan volume under IFRS 9 (in HUF million)
312,494
416,249
33
Stage 1 loans under IFRS 9/gross customer loans
84.9%
87.4%
2.5
Own coverage of Stage 1 loans under IFRS 9
0.9%
1.0%
0.1
Stage 2 loan volume under IFRS 9 (in HUF million)
32,677
35,965
10
Stage 2 loans under IFRS 9/gross customer loans
8.9%
7.6%
(1.3)
Own coverage of Stage 2 loans under IFRS 9
8.2%
8.0%
(0.2)
Stage 3 loan volume under IFRS 9 (in HUF million)
22,776
24,090
6
Stage 3 loans under IFRS 9/gross customer loans
6.2%
5.1%
(1.1)
Own coverage of Stage 3 loans under IFRS 9
53.3%
56.1%
2.8
Provision for impairment on loan losses/average gross loans
(0.03%)
0.00%
0.03
Performance Indicators
2023
2024
pps
ROA
1.8%
2.7%
0.9
ROE
16.3%
20.2%
3.9
Total income margin
5.15%
5.49%
0.34
Net interest margin
4.34%
4.60%
0.26
Operating costs / Average assets
3.0%
2.3%
(0.7)
Cost/income ratio
58.5%
42.2%
(16.3)
Net loans to deposits (FX-adjusted)
64%
74%
10
FX rates
2023
HUF
2024
HUF
Change
%
HUF/ALL (closing)
3.7
4.2
13
HUF/ALL (average)
3.5
3.9
12
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
138
In 2024, OTP Bank Albania generated HUF 20 billion profit after tax (+70% y-o-y in HUF terms,
+50% in local currency terms). In 2024, the Bank’s ROE exceeded 20%.
At the end of 2024, the Bank's market share by net loan volumes was 13%, rendering it the third largest
lender in Albania. At the end of the year, the number of bank branches was 50, and the number of employees
was 700. In 2024, operating expenses fell by 22% y-o-y in local currency terms, thus the Bank's cost
efficiency indicator improved by 16.3 pps compared to the previous year. This was largely due to acquisition
completed in July 2022, as the realization of synergies began after the integration process was accomplished
by December 2023. As a result, the cost-to-income ratio improved to 42.2% in 2024.
The operating profit increased by 68% in HUF (+50% in local currency terms), as a result of a 13% decrease
in operating expenses and a 21% increase in total income. During the year, net interest income grew by
20%, net fees and commissions jumped by 22% and other income surged 30%. The increase in net interest
income can be primarily attributed to the expansion of performing loan and the deposit volumes. In 2024,
the amount of risk costs was +HUF 0.3 billion, mainly owing to the revision of the IFRS 9 risk parameters.
The ratio of Stage 3 loans improved by 1.1 pps y-o-y, to 5.1%.
Overall, the FX-adjusted performing (Stage 1+2) loan book expanded by 19% in 2024, driven by a 12%
increase in retail loans and a 24% growth in corporate.
Customer deposits rose by 2% y-o-y (FX-adjusted), as retail deposits increased by 7% and corporate
deposits contracted by 29%. The net loan-to-deposit ratio rose by 10 pps y-o-y, reaching the Group’s level,
74%.
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
139
OTP BANK MOLDOVA
Performance of OTP Bank Moldova:
Main components of P&L account
in HUF million
2023
HUF million
2024
HUF million
Change
%
Profit after tax
14,624
11,492
(21)
Adjustments (after tax)
0
0
Adjusted profit after tax
14,624
11,492
(21)
Income tax
(2,047)
(1,546)
(24)
Profit before income tax
16,671
13,038
(22)
Operating profit
13,352
12,413
(7)
Total income
25,275
26,179
4
Net interest income
16,349
15,353
(6)
Net fees and commissions
2,389
2,483
4
Other net non-interest income
6,537
8,343
28
Operating expenses
(11,923)
(13,765)
15
Total provisions
3,319
625
(81)
Provision for impairment on loan losses
3,106
574
(82)
Other provision
213
51
(76)
Main components of balance sheet
(closing balances)
2023
2024
%
Total assets
428,192
455,246
6
Gross customer loans
150,228
180,472
20
Gross customer loans (FX-adjusted)
161,243
180,472
12
Stage 1+2 customer loans (FX-adjusted)
154,943
174,886
13
Retail loans
72,352
81,055
12
Retail mortgage loans
39,767
40,976
3
Retail consumer loans
22,366
29,038
30
MSE loans
10,218
11,042
8
Corporate loans
77,765
88,337
14
Leasing
4,827
5,494
14
Allowances for possible loan losses
(7,122)
(7,209)
1
Allowances for possible loan losses (FX-adjusted)
(7,653)
(7,209)
(6)
Deposits from customers
332,062
359,474
8
Deposits from customers (FX-adjusted)
358,468
359,474
0
Retail deposits
220,562
206,350
(6)
Retail deposits
181,338
162,193
(11)
MSE deposits
39,225
44,156
13
Corporate deposits
137,906
153,124
11
Liabilities to credit institutions
27,489
20,459
(26)
Total shareholders' equity
63,353
69,054
9
Loan Quality
2023
2024
%/pps
Stage 1 loan volume under IFRS 9 (in HUF million)
127,607
153,557
20
Stage 1 loans under IFRS 9/gross customer loans
84.9%
85.1%
0.1
Own coverage of Stage 1 loans under IFRS 9
1.3%
1.2%
(0.1)
Stage 2 loan volume under IFRS 9 (in HUF million)
16,760
21,329
27
Stage 2 loans under IFRS 9/gross customer loans
11.2%
11.8%
0.7
Own coverage of Stage 2 loans under IFRS 9
11.7%
9.0%
(2.7)
Stage 3 loan volume under IFRS 9 (in HUF million)
5,861
5,586
(5)
Stage 3 loans under IFRS 9/gross customer loans
3.9%
3.1%
(0.8)
Own coverage of Stage 3 loans under IFRS 9
60.1%
62.9%
2.8
Provision for impairment on loan losses/average gross loans
(2.01%)
(0.36%)
1.65
Performance Indicators
2023
2024
pps
ROA
3.9%
2.7%
(1.2)
ROE
25.3%
17.4%
(7.9)
Total income margin
6.73%
6.06%
(0.67)
Net interest margin
4.35%
3.56%
(0.80)
Operating costs / Average assets
3.2%
3.2%
0.0
Cost/income ratio
47.2%
52.6%
5.4
Net loans to deposits (FX-adjusted)
43%
48%
5
FX rates
2023
2024
Change
%
HUF/MDL (closing)
19.9
21.3
7
HUF/MDL (average)
19.5
20.5
6
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
140
In 2024, OTP Bank Moldova generated HUF 11.5 billion profit after tax, 21% less than in the base period.
ROE reached 17.4% in 2024.
In 2024, the Bank’s total income grew by 4% y-o-y. Within that, the 6% drop in net interest income was
largely influenced by the sharp decline in the interest rate environment from the highs at the beginning of
2023 (base rate in 1Q 2023: 17% vs. 3.6% in 4Q 2024). This was also the main reason for the 80 bps y-o-y
erosion in net interest margin. The 28% surge in other income largely stemmed from large-amount currency
conversions by corporations.
Operating expenses grew by 15% in HUF and by 9% in local currency terms, predominantly because of
higher wages and, under other expenses, owing to the rise in IT costs and supervisory charges.
In 2024, HUF 0.6 billion worth of positive risk cost was recorded, partly as a result of the improving economic
environment, and the revision of the IFRS 9 model parameters.
The ratio of Stage 3 loans sank to 3.1% (-0.8 pp y-o-y), and their own provision coverage was 63%, in a
nearly 3 pps y-o-y uptick.
The FX-adjusted stock of performing (Stage 1+2) loans grew by 13% y-o-y, as retail loans increased by
12%, while leasing and corporate loan volumes expanded by 14% each. Retail loan growth largely stemmed
from a 30% jump in consumer loan volumes; mortgage loans rose at modest pace of 3%.
FX-adjusted deposit volumes stagnated last year; within that, retail deposits shrank by 6%, but corporate
deposits grew by 11%.
The net loan/deposit ratio stood at 48% at the end of the year. Deposits from banks continued their
downward trend of recent quarters, reflecting the Bank's strong liquidity position.
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
141
OTP BANK RUSSIA
Performance of OTP Bank Russia:
Main components of P&L account
2023
HUF million
2024
HUF million
Change
%
Profit after tax
95,674
136,946
43
Adjustments (after tax)
0
0
Adjusted profit after tax
95,674
136,946
43
Income tax1
(34,506)
(58,589)
70
Profit before income tax
130,180
195,536
50
Operating profit
149,307
252,216
69
Total income
223,654
343,619
54
Net interest income
122,084
187,070
53
Net fees and commissions
40,831
55,095
35
Other net non-interest income
60,739
101,454
67
Operating expenses
(74,347)
(91,403)
23
Total provisions
(19,126)
(56,681)
196
Provision for impairment on loan losses
(16,278)
(54,889)
237
Other provision
(2,848)
(1,792)
(37)
Main components of balance sheet
(closing balances)
2023
2024
%
Total assets
1,470,796
2,370,967
61
Gross customer loans
721,212
1,111,220
54
Gross customer loans (FX-adjusted)
684,725
1,111,220
62
Stage 1+2 customer loans (FX-adjusted)
591,915
1,057,903
79
Retail loans
575,515
1,053,490
83
Retail mortgage loans
1,178
932
(21)
Retail consumer loans
574,328
1,052,549
83
MSE loans
9
8
(10)
Corporate loans
16,400
4,413
(73)
Allowances for possible loan losses
(133,255)
(113,633)
(15)
Allowances for possible loan losses (FX-adjusted)
(127,038)
(113,633)
(11)
Deposits from customers
1,101,084
1,882,093
71
Deposits from customers (FX-adjusted)
1,069,472
1,882,093
76
Retail deposits
392,515
588,458
50
Retail deposits
274,009
440,870
61
MSE deposits
118,505
147,588
25
Corporate deposits
676,957
1,293,636
91
Liabilities to credit institutions
19,063
78,331
311
Subordinated debt
8,071
8,562
6
Total shareholders' equity
274,516
298,786
9
Loan Quality
2023
2024
%/pps
Stage 1 loan volume under IFRS 9 (in LCY million)
510,129
895,393
76
Stage 1 loans under IFRS 9/gross customer loans
70.7
80.6
9.8
Own coverage of Stage 1 loans under IFRS 9
3.0
3.0
0.0
Stage 2 loan volume under IFRS 9 (in LCY million)
114,001
162,509
43
Stage 2 loans under IFRS 9/gross customer loans
15.8
14.6
(1.2)
Own coverage of Stage 2 loans under IFRS 9
22.7
22.9
0.2
Stage 3 loan volume under IFRS 9 (in LCY million)
97,082
53,317
(45)
Stage 3 loans under IFRS 9/gross customer loans
13.5
4.8
(8.7)
Own coverage of Stage 3 loans under IFRS 9
95.0
93.5
(1.6)
Provision for impairment on loan losses/average gross loans
2.4
6.0
3.7
Performance Indicators
2023
2024
pps
ROA
8.0
7.2
(0.8)
ROE
33.9
45.3
11.4
Total income margin
18.69
18.11
(0.58)
Net interest margin
10.20
9.86
(0.34)
Operating costs / Average assets
6.2
4.8
(1.4)
Cost/income ratio
33.2
26.6
(6.6)
Net loans to deposits (FX-adjusted)
52
53
1
FX rates
2023
HUF
2024
HUF
Change
%
HUF/RUB (closing)
3.9
3.7
(5)
HUF/RUB (average)
4.2
3.9
(7)
1The Corporate income tax line includes the corporate income tax in the Russian segment, as well as the dividend taxes incurred at other members of OTP
Group because of the Russian Group members’ dividend payment.
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
142
OTP Bank Russia generated HUF 136.9 billion profit in 2024.
Corporate income tax surged by 70% y-o-y, owing to the higher pre-tax profit as well as the taxes associated
with dividend payments32. Pursuant to the regulation passed in July 2024 the corporate income tax rate in
Russia was increased to 25% from 1 January 2025, from the former 20%.
The annual net interest margin narrowed by 34 basis points y-o-y, while net interest income grew by 53%.
In 2024, net fees and commissions expanded by 35% y-o-y, mainly as a result of the rising account- and
transaction fees owing to the growing deposit volumes.
The 30% increase in cumulated operating expenses in RUB terms was mostly shaped by inflation processes,
while in Russia the number of branches has shrank by 42% and the number of employees by 23% since the
beginning of the war. The bank’s cost/income ratio was 27% in 2024.
The volume of Stage 3 loans declined significantly as a result of a sale of problem loans in the fourth quarter,
bringing down the Stage 3 ratio to 4.8%. The annual credit risk costs tripled y-o-y, the credit risk cost ratio
was 6%.
FX-adjusted performing (Stage 1+2) retail consumer loans grew by 79% in 2024. Although the increase was
mainly determined by car loan and cash loan volumes throughout the year, the volume of POS loans also
increased at the end of the year, owing to seasonal factors. Meanwhile, the performing corporate loan book
shrank by 96% compared to the pre-war level at the end of 2021.
FX-adjusted deposit volumes grew by 76% y-o-y. The net loan/deposit ratio was 53% at the end of the year.
At the end of 2022, the Russian operation paid back the full amount of its expiring intergroup liabilities. In
addition to this, RUB 41.8 billion dividend payment has been approved by the Central Bank of Russia since
September 2023.
32 The Corporate income tax line includes the corporate income tax in the Russian segment, as well as the dividend taxes incurre d at other members of
OTP Group because of the Russian Group members’ dividend payment.
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
143
OTP BANK ROMANIA
Performance of OTP Bank Romania:
Main components of P&L account
2023
HUF million
2024
HUF million
Change
%
Profit after tax
20,120
2,050
(90)
Adjustments (after tax)
0
0
Adjusted profit after tax
20,120
2,050
(90)
Income tax
(3,559)
(2,630)
(26)
Profit before income tax
23,679
4,680
(80)
Operating profit
20,994
9,589
(54)
Total income
68,635
33,866
(51)
Net interest income
53,865
27,046
(50)
Net fees and commissions
5,019
3,071
(39)
Other net non-interest income
9,751
3,749
(62)
Operating expenses
(47,641)
(24,277)
(49)
Total provisions
2,685
(4,909)
Provision for impairment on loan losses
2,771
(4,714)
Other provision
(86)
(196)
128
Main components of balance sheet
(closing balances)
2023
2024
%
Total assets
1,600,237
Gross customer loans
1,136,507
Gross customer loans (FX-adjusted)
1,217,672
Stage 1+2 customer loans (FX-adjusted)
1,152,869
Retail loans
519,467
Retail mortgage loans
407,306
Retail consumer loans
89,101
MSE loans
23,060
Corporate loans
562,635
Leasing
70,766
Allowances for possible loan losses
(55,856)
Allowances for possible loan losses (FX-adjusted)
(59,785)
Deposits from customers
1,100,016
Deposits from customers (FX-adjusted)
1,179,399
Retail deposits
711,542
Retail deposits
610,250
MSE deposits
101,292
Corporate deposits
467,857
Liabilities to credit institutions
261,740
Total shareholders' equity
192,650
Loan Quality
2023
2024
%/pps
Stage 1 loan volume under IFRS 9 (in HUF million)
919,683
Stage 1 loans under IFRS 9/gross customer loans
80.9%
Own coverage of Stage 1 loans under IFRS 9
1.2%
Stage 2 loan volume under IFRS 9 (in HUF million)
156,276
Stage 2 loans under IFRS 9/gross customer loans
13.8%
Own coverage of Stage 2 loans under IFRS 9
8.5%
Stage 3 loan volume under IFRS 9 (in HUF million)
60,549
Stage 3 loans under IFRS 9/gross customer loans
5.3%
Own coverage of Stage 3 loans under IFRS 9
51.9%
Provision for impairment on loan losses/average gross loans
(0.24%)
0.84%
1.08
Performance Indicators
2023
2024
pps
ROA
1.3%
0.3%
(1.0)
ROE
11.0%
2.1%
(8.9)
Total income margin
4.29%
4.18%
(0.11)
Net interest margin
3.36%
3.34%
(0.03)
Operating costs / Average assets
3.0%
3.0%
0.0
Cost/income ratio
69.4%
71.7%
2.3
Net loans to deposits (FX-adjusted)
98%
FX rates
2023
HUF
2024
HUF
Change
%
HUF/RON (closing)
77.0
82.4
7
HUF/RON (average)
77.3
79.2
2
On 30 July 2024, the sale of OTP Bank Romania S.A. to Banca Transilvania S.A. was completed.
Simultaneously, the Romanian bank was deconsolidated, thus neither its balance sheet nor its profit was
presented in the Group’s balance sheet or result, starting from July.
The Romanian operation generated HUF 2 billion profit after tax between January and June 2024
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
144
STAFF LEVEL AND OTHER INFORMATION
31/12/2023
31/12/2024
Branches
ATM
POS
Headcount
(closing)
Branches
ATM
POS
Headcount
(closing)
OTP Core
342
1,877 156,757
11,257
317
1,931 170,708
11,404
DSK Group (Bulgaria)
302
979
17,494
5,104
278
970
19,532
5,149
OTP Bank Slovenia
114
436
15,459
2,355
82
427
14,626
2,310
OBH (Croatia)
107
438
10,889
2,400
105
445
11,686
2,454
OTP Bank Serbia
156
275
20,108
2,676
155
287
24,263
2,686
Ipoteka Bank (Uzbekistan)
39
682
232
4,444
39
809
44,394
4,432
OTP Bank Ukraine
(w/o employed agents)
71
165
190
2,074
70
172
350
2,129
CKB Group (Montenegro)
28
114
8,323
503
26
109
9,289
561
OTP Bank Albania
50
129
988
719
50
106
2,046
700
OTP Bank Moldova
53
154
0
867
51
161
0
875
OTP Bank Russia
(w/o employed agents)
82
165
278
4,587
78
128
104
5,054
OTP Bank Romania
95
157
13,848
1,780
-
-
-
-
Foreign subsidiaries, total
1,097
3,694
87,809
27,509
934
3,614 126,290
26,351
Other Hungarian and foreign
subsidiaries
640
768
OTP Group (w/o employed agents)
39,407
38,523
OTP Bank Russia - employed agents
2,018
1,694
OTP Bank Ukraine - employed
agents
123
101
OTP Group (aggregated)
1,439
5,571 244,566
41,547
1,251
5,545 296,998
40,317
Definition of headcount number: closing, active FTE (full-time employee). The employee is considered as full-time employee in case his/her employment
conditions regarding working hours are in line with a full-time employment defined in the Labour Code in the reporting entity's country. Part-time employees
are taken into account proportional to the full-time working hours being effective in the reporting entity’s country. The other Hungarian and foreign subsidiaries,
and the OTP Group lines do not contain the headcount of agricultural businesses.
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
145
STATEMENT ON CORPORATE GOVERNANCE PRACTICE
Corporate governance practice
OTP Bank Plc., being registered in Hungary, has a corporate governance policy that complies with the
provisions on companies of the act applicable (Civil Code). As the company conducts banking operations, it
also adheres to the statutory regulations pertaining to credit institutions.
Beyond fulfilling the statutory requirements, as a listed company on the Budapest Stock Exchange (BSE), the
company also makes an annual declaration on its compliance with the BSE’s Corporate Governance
Recommendations. After being approved by the General Meeting, this declaration is published on the websites
of both the Stock Exchange (www.bet.hu) and the Bank (www.otpbank.hu).
System of internal controls
OTP Bank Plc., as a provider of financial and investment services, operates a closely regulated and state-
supervised system of internal controls.
OTP Bank Plc. has detailed risk management regulations applicable to all types of risks (credit, country,
counterparty, market, liquidity, operational, compliance), which are in compliance with the regulations on
prudent banking operations. The Bank Group pays special attention to the management of ESG risks and the
implementation of climate protection aspects in business practice. Its risk management system extends to
cover the identification of risks, the assessment and analysis of their impact, elaboration of the required action
plans and the monitoring of their effectiveness and results. The business continuity framework is intended to
provide for the continuity of services. Developed on the basis of international methodologies, the lifecycle
model includes process evaluation, action plan development for critical processes, the regular review and
testing of these, as well as related DRP activities.
OTP Bank Plc.'s internal audit system is realised on several levels of control built on each other. The system
of internal checks and balances includes process-integrated control, management control, independent
internal audit and executive information system. The independent internal audit organisation as a key element
of internal lines of defence promotes the statutory and efficient management of assets and liabilities, the
defence of property, the safe course of business, the efficient operation of internal control systems, the
minimisation of risks, moreover it reveals and reports deviations from statutory regulations and internal rules,
makes proposal to abolish deficiencies and follows up the execution of actions. The independent internal audit
organisation annually and quarterly prepares group-level reports on control actions and audit results for the
executive boards. Once a year, the internal audit organisation with the prior opinion of the Audit Committee
draws up, for the Supervisory Board, the Board of Directors and the Risk Assumption and Risk Management
Committee, objective and independent reports in respect of the operation of risk management, internal control
mechanisms and corporate governance functions. Furthermore, in line with the provisions of the Credit
Institutions Act, reports, once a year, to the Supervisory Board and the Board of Directors on the regularity of
internal audit tasks, professional requirements and the conduct of audits, and on the review of compliance with
IT and other technical conditions needed for the audits.
In line with the regulations of the European Union, the applicable Hungarian laws and supervisory
recommendations, OTP Bank Plc. operates an independent organisational unit with the task of identifying and
managing compliance risks. The Compliance Directorate prepares a report quarterly to the Board of Directors,
and annually to the Supervisory Board, about the Bank’s and the Bank Group’s compliance activities and
position.
IT Controls
Applications are developed by either in-house group resources or by third parties. OTP Bank applies
administrative, logical and physical control measures commensurate with the risk in order to protect the IT
systems storing and processing data, as follows:
•
access to data/systems is only possible on the basis of a predefined authorisation management process
that applies the principle of least privilege, ensures segregation of responsibilities, that has regular access
right reviews and ensures that dismissed employees’ access is revoked in a timely manner;
•
user authentication, authorisation and password management processes are controlled by policies and
audited;
•
the systems have test and development environments with appropriate separation from the production
environments that have a secure change management procedure, which ensures that program
developments or modifications can only be deployed to the operational environment after proper,
controlled testing and approval;
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
146
•
systems are protected by appropriate network perimeter protection, various security devices and network
segmentation, furthermore all network communications are protected with state-of-the-art encryption;
•
the IT systems that store and process data are regularly backed up and backup media is stored in
controlled premises with adequate protection for long-term retention, and the organisation carries out
regular backup restore tests;
•
adequate redundancy is applied for IT systems that store and process data to ensure business continuity
and disaster resiliency;
•
has developed DRPs and BCPs for critical systems and critical business processes, which are regularly
tested and reviewed;
•
the Bank collects and retains the complete log of all major IT operations and IT security relevant data
processing activities and the confidentiality, availability, integrity, authenticity and non-repudiation of these
audit logs are ensured;
•
there is a continuous, up-to-date protection against malicious codes;
•
it ensures the regular implementation of vendor patches and updates for the environments used;
•
it uses a data leakage protection (DLP) solution to reduce the risk of inadvertent data loss;
•
it ensures the continuous monitoring of the operation events of the physical and virtual environment
system elements with automated event detection and management tools;
•
the above measures are documented at an appropriate level, which ensures the traceability of the
implementation of data security requirements in a transparent manner;
•
it ensures permanent secure deletion of the data stored on the media, the destruction of the media and
the documentation of the destruction of the media during secure operational media disposal processes;
•
it enforces data protection requirements already at the design stage of the implementation of the
IT systems storing and processing personal data and of the systems operational processes related to
them;
•
acquire and maintain ability to adequately handle application related security events (including cyber
threats), entailing prevention, detection, identification, isolation, analysis, recovery and reporting;
•
remote work is regulated in a controlled and documented way, remote device and user access is protected
with multi-factor authentication;
•
ensures IT security compliance by its managed regulative framework;
•
revision and update of IT security regulations bi-yearly or in a frequency complying legislative
requirements or upon major changes;
•
ensures vulnerability assessments and penetration tests are carried out as planned;
•
defines pools for categorization of installed software into preferred, allowed and prohibited and ensures
compliance to that policy.
•
it ensures that its employees have adequate knowledge of data protection requirements and provides
regular data protection and information security awareness training for them.
General Meeting
The General Meeting is the supreme governing body of OTP Bank Plc. The regulations pertaining to its
operation are set forth in the Company’s Articles of Association, and comply fully with both general and special
statutory requirements. Information on the General Meeting is available in the Corporate Governance Report.
Regulations and information to be presented in the Business Report concerning securities
conferring voting rights issued by the Company and senior officials, according to the effective
Articles of Association, and ownership structure
The Company’s registered capital is HUF 28,000,001,000, that is twenty-eight thousand million one
thousand Hungarian forint, divided into 280,000,010 that is Two hundred and eighty million and ten
dematerialised ordinary shares with a nominal value of HUF 100 each, and a total nominal value of
HUF 28,000,001,000, that is twenty-eight billion one thousand Hungarian forint.
The ordinary shares of the Company specified all have the same nominal value and bestow the same rights
in respect of the Company.
There are no restrictions in place concerning the transfer of issued securities constituting the registered
capital of the Company.
No securities with special control rights have been issued by the Company.
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
147
Special Employee Partial Ownership Plan Organization No. I. of OTP Employees and Special Employee
Partial Ownership Plan Organization No. II. of OTP Employees (hereinafter referred to as: OTP SEPOPs)
were established based on the decision of the Company’s certain employees and executives considered as
employees pursuant to the Act XLIV of 1992 on Employee Partial Ownership Plan. Management rights of
OTP SEPOPs are exercised by a trust named Alapítvány az OTP Munkavállalók Különleges Résztulajdonosi
Programjáért, founded by the same employees setting up OTP SEPOPs. The Company did not participate
either in foundation or in management of OTP SEPOPs.
The Company in line with the ESOP Act initiated an employee share ownership plan having a remuneration
purpose and founded OTP Bank ESOP Organization for its execution (hereinafter referred to as ESOP
Organization). Pursuant to the laws, the management rights over the ESOP Organization are exercised by
a law firm, the so called trustee. In the case of the ESOP Organization Szűcs Law Firm is entitled to exercise
the authorities of the trustee. The Company participated in the foundation of the ESOP Organization,
however, after its foundation it cannot participate in its management, and according to the laws, it is not
entitled to either give orders or to recall the trustee.
Rules on the restrictions of the voting rights:
The Company’s ordinary shares confer one vote per share.
An individual shareholder or group of shareholders may not exercise voting rights in respect of in an extent
exceeding 25%, or – if the voting rights of another shareholder or group of shareholders exceed
10% – exceeding 33% of the total voting rights represented by the shares conferring voting rights at the
Company’s General Meeting.
The shareholder is obliged to notify the Company’s Board of Directors without delay if the shareholder
directly or indirectly, or together with other shareholders in the same group of shareholders, holds more than
2% of the voting rights represented by the shares conferring voting rights at the Company’s General Meeting.
Concurrently with this, the shareholder is obliged to designate the shareholders through which the indirect
voting right exists, or the members of the group of shareholders. In the event of a failure to provide such
notification, or if there are substantive grounds for assuming that the shareholder has made a misleading
declaration regarding the composition of the shareholder group, then the shareholder’s voting right shall be
suspended and may not be exercised until the shareholder has met the above obligations. The notification
obligation stipulated in this paragraph and the related legal consequences are also incumbent upon
individuals who are classified or may be classified as the Company’s shareholders under Article 61 of the
Capital Markets Act. The Company must also be provided with proof of the conditions for exemption from
the notification obligation in accordance with Section 61 (7)-(8) and (11) and Section 61 (10), (11a) and (12),
of the Capital Markets Act.
Shareholder group: the shareholder and another shareholder, in which the former has either a direct or
indirect shareholding or has an influence without a shareholding (collectively: a direct and/or indirect
influence); furthermore: the shareholder and another shareholder who is exercising or is willing to exercise
its voting rights together with the former shareholder, regardless of what type of agreement between the
participants underlies such concerted exercising of rights.
For determining the existence and extent of the indirect holding, the rules of the Credit Institutions Act
relating to the calculation of indirect ownership shall be applied.
If the voting rights that may be exercised by a shareholder group exceed the threshold stipulated above, the
voting rights shall be reduced in such a way that the voting rights relating to the shares most recently
acquired by the group of shareholders shall not be exercisable.
If there are substantive grounds to presume that the exercising of voting rights by any shareholder or
shareholders might result in a breach of the rules of the Capital Markets Act relating to the acquisition of a
controlling interest, the Board of Directors’ authorised representative responsible for the registration of
shareholders at the venue of the General Meeting, or the Chairman of the General Meeting, may exclude
the affected shareholders from attending the General Meeting or exercising voting rights.
The General Meeting has exclusive authority with respect to the following matters:
•
changes to the rights associated with specific series of shares, or the transformation of certain
categories or classes of shares; (qualified majority)
•
the decision regarding the delisting of the shares (qualified majority). When making the decisions,
shares embodying multiple voting rights shall represent one share.
The Company is not aware of any kind of agreements among the owners that could give rise to the restriction
of the transfer of issued securities and/or the voting rights.
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Rules on the appointment and removal of executive officers, and rules on amendment of the Articles of
Association:
The Board of Directors has at least 5, and up to 11 members.
When making the decisions, shares embodying multiple voting rights shall represent one share. The
members of the Board of Directors are elected by the General Meeting based on its decision uniformly either
for an indefinite period or for five years; in the latter case the mandate ends with the General Meeting
concluding the fifth financial year following the election. The mandate of a member elected during this period
expires together with the mandate of the Board of Directors.
The Board of Directors elects a Chairman and may elect one or more Deputy Chairmen, from among its own
members, whose period of office shall be equal to the mandate of the Board of Directors. The Chairman of
the Board of Directors is also the Chief Executive Officer (Chairman & CEO) of the Company, unless the
Board of Directors decides within its competence that the position of Chairman of the Board of Directors and
the Chief Executive Officer of the Company are held by separate persons.
The membership of the Board of Directors ceases to exist by
g. expiry of the mandate,
h. resignation,
i.
recall,
j.
death,
k. the occurrence of grounds for disqualification as regulated by law.
l.
termination of the employment of internal (executive) Board members.
The General Meeting has exclusive authority with respect to the following matters:
• the recall of members of the Board of Directors, the Supervisory Board and Audit Committee, and of
the auditor; (qualified majority)
More than one third of the members of the Board of Directors and the non-executive members of the
Supervisory Board may be recalled within a 12-month period only if any shareholder holds more than
33% of the shares issued by the Company, which have been obtained by the shareholder by way of
a public purchase offer.
• except in the cases referred by these Articles of Association to the authority of the Board of Directors,
the establishment and amendment of the Articles of Association; (qualified majority); the General
Meeting decides on proposals concerning the amendment of the Articles of Association – based on a
resolution passed by shareholders with a simple majority – either individually or en masse.
The Board of Directors is obliged to
• prepare the Company’s financial statements in accordance with the Accounting Act, and make a
proposal for the use of the profit after taxation;
• prepare a report once a year for the General Meeting, and once every three months for the
Supervisory Board, concerning management, the status of the Company’s assets and business policy;
• provide for the proper keeping of the Company's business books;
• perform the tasks referred to its authority under the Credit Institutions Act, in particular:
-
ensuring the integrity of the accounting and financial reporting system;
-
elaborating the appropriate strategy and determining risk tolerance levels for each business unit
concerned;
-
setting risk assumption limits;
-
providing the necessary resources for the management or risk, the valuation of assets, the use of
external credit ratings and the application of internal models.
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The following, in particular, come under the exclusive authority of the Board of Directors:
• election of the Chairman & Chief Executive Officer of the Company, and exercising employer’s right
in respect thereof;
• election of one or more Deputy Chairmen of the Board of Directors;
• determination of the annual plan;
• the analysis and assessment of the implementation of business-policy guidelines, on the basis of the
Company’s quarterly balance sheet;
• decisions on transactions referred to the authority of the Board of Directors by the Company's
organisational and operational regulations;
• decision on launching, suspending, or terminating the performance of certain banking activities within
the scope of the licensed activities of the Company;
• designation of the employees entitled to sign on behalf of the Company;
• decision on the increasing of registered capital at the terms set out in the relevant resolution of the
General Meeting;
• decision to acquire treasury shares at the terms set out in the relevant resolution of the General
Meeting;
• decision on approving internal loans in accordance with the Credit Institutions Act;
• decision on the approval of regulations that fundamentally determine banking operations, or are
referred to its authority by the Credit Institutions Act. The following shall qualify as such regulations:
-
the collateral evaluation regulations,
-
the risk-assumption regulations,
-
the customer rating regulations,
-
the counterparty rating regulations,
-
the investment regulations,
-
the regulations on asset classification, impairment and provisioning,
-
the organisational and operational regulations, which contain the regulations on the procedure for
assessing requests related to large loans,
-
the regulations on the transfer of signatory rights;
• the decision on approving the Rules of Procedure of the Board of Directors;
• decision on steps to hinder a public takeover procedure;
• decision on the acceptance of a public purchase offer received in respect of treasury shares;
• decision on the commencement of trading in the shares in a regulated market (flotation);
• decision on the cessation of trading in the shares in a given regulated market, provided that the shares
are traded in another regulated market (hereinafter: transfer).
The Board of Directors is exclusively authorised to:
• decide, in the cases specified in the Civil Code, on acceptance of the Company’s interim balance
sheet, subject to the prior approval of the Supervisory Board;
• decide, instead of the General Meeting, to pay an advance on dividends, subject to the preliminary
approval of the Supervisory Board;
• make decisions regarding any change in the Company’s name, registered office, permanent
establishments and branches, and in the Company’s activities – with the exception of its core activity
– and, in relation to this, to modify the Articles of Association should it become necessary to do so on
the basis of the Civil Code or the Articles of Association;
• make decision on mergers (if, according to the provisions of the law on the transformation, merger
and demerger of legal entities, the approval of the General Meeting is not required in order for the
merger to take place).
The Board of Directors directly exercises employer's rights in respect of the Chairman & CEO. The person
affected by a decision may not participate in the decision making. Employer rights in respect of the executive
directors of the Company are exercised by the Board of Directors through the Chairman & CEO, with the
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proviso that the Board of Directors must be notified in advance of the appointment and dismissal of the
Deputy CEOs. With regard to issues related to the exercising of employer's rights in respect of employees,
the Company is represented by the Chief Executive Officer and by the senior company employees defined
in the Organisational and Operational Regulations of the Company, in accordance with the delegation of
authority approved by the Board of Directors. If the Chairman of the Board of Directors and the CEO are
different persons, the employer rights in respect of the other executive directors of the Company (CEO,
deputy CEOs) are exercised by the Board of Directors through the Chairman of Board of Directors, with the
proviso that the Board of Directors shall be notified in advance of the appointment and dismissal of the CEO
and Deputy CEOs. With regard to issues related to the exercising of employer's rights in respect of
employees, the Company is represented by the persons defined in the Organisational and Operational
Regulations of the Company, in accordance with the delegation of authority approved by the Board of
Directors.
The Board of Directors may delegate, to individual members of the Board of Directors, to executive directors
employed by the Company, and to the heads of the individual service departments, any task that does not
come under the exclusive authority of the Board of Directors in accordance with these Articles of Association
or a General Meeting resolution.
The Company may acquire treasury shares in accordance with the rules of the Civil Code. The prior
authorisation of the General Meeting is not required for the acquisition of treasury shares if the acquisition
of the shares is necessary in order to prevent a direct threat of severe damage to the Company (this
provision is not applicable in the event of a public purchase offer aimed at buying up the Company’s shares),
as well as if the Company acquires the treasury shares in the context of a judicial procedure aimed at the
settlement of a claim to which the Company is entitled, or in the course of a transformation.
The Company has not made agreements in the meaning of points (j) and (k) in paragraph 95/A of
Act No. C of 2000 on Accounting.
OWNERSHIP STRUCTURE OF OTP BANK PLC.
Description of owner
Total equity
1 January 2024
31 December 2024
Ownership
share
Voting
rights1
Quantity
Ownership
share
Voting
rights 1
Quantity
Domestic institution/company
31.40%
31.46%
87,914,205
31.57%
32.39%
88,395,584
Foreign institution/company
54.43%
54.54%
152,405,042
54.53%
55.94%
152,679,265
Domestic individual
12.93%
12.96%
36,217,730
10.31%
10.58%
28,878,581
Foreign individual
0.48%
0.48%
1,349,320
0.36%
0.37%
998,943
Employees, senior officers
0.48%
0.48%
1,338,715
0.51%
0.53%
1,435,703
Treasury shares2
0.20%
0.00%
572,746
2.52%
0.00%
7,049,823
Government held owner
0.05%
0.05%
139,036
0.05%
0.05%
139,036
International Development Institutions
0.01%
0.01%
28,603
0.00%
0.00%
3,251
Other3
0.01%
0.01%
34,613
0.15%
0.15%
419,824
TOTAL
100.00%
100.00%
280,000,010
100.00%
100.00%
280,000,010
1 Voting rights in the General Meeting of the Issuer for participation in decision-making.
2 Treasury shares do not include the OTP shares held by ESOP (OTP Bank Employee Stock Ownership Plan Organization). Pursuant to Act V of 2013 on
the Civil Code, OTP shares held by the ESOP are not classified as treasury shares, but the ESOP must be consolidated in accordance with IFRS 10
Consolidated Financial Statements standard. On 31 December 2024 ESOP owned 11,965,796 OTP shares.
3 Non-identified shareholders according to the shareholders’ registry.
NUMBER OF TREASURY SHARES HELD IN THE YEAR UNDER REVIEW (2024)
1 January
31 March
30 June
30 September
31 December
OTP Bank
572,746
1,452,570
3,443,352
4,762,756
7,049,823
Subsidiaries
0
0
0
0
0
TOTAL
572,746
1,452,570
3,443,352
4,762,756
7,049,823
SHAREHOLDERS WITH OVER/AROUND 5% STAKE AS AT 31 DECEMBER 2024
Name
Nationality1
Activity2
Number of
shares
Ownership3
Voting
rights3,4
Notes5
MOL (Hungarian Oil and Gas Company Plc.)
D
C
24,000,000
8.57%
8.79%
Groupama Group
F/D
C
14,260,181
5.09%
5.22%
Groupama Gan Vie SA
F
C
14,140,000
5.05%
5.18%
Groupama Biztosító Ltd,
D
C
120,181
0.04%
0.04%
1 Domestic (D), Foreign (F).
2 Custodian (CU), Public Institution (PU), International Development Institutions (ID), Institutional (I), Company (C), Private (PR), Employee or senior officer
(E).
3 Rounded to two decimals.
4 Voting rights in the General Meeting of the Issuer for participation in decision-making.
5 Eg, professional investor, financial investor, etc.
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SENIOR OFFICERS, STRATEGIC EMPLOYEES AND THEIR SHAREHOLDING OF OTP SHARES AS AT 31
DECEMBER 2024
Type1
Name
Position
Commencement
date of the term
Expiration/termination
of the term
Number of
shares
IG
dr. Sándor Csányi 2
Chairman and CEO
15/05/1992
2026
76,887
IG
Tamás Erdei
Deputy Chairman
27/04/2012
2026
59,685
IG
Gabriella Balogh
member
16/04/2021
2026
27,393
IG
Mihály Baumstark
member
29/04/1999
2026
58,800
IG
Péter Csányi
member, Deputy CEO
16/04/2021
2026
49,429
IG
dr. István Gresa
member
27/04/2012
2026
195,058
IG
Antal Kovács3
member
15/04/2016
2026
114,940
IG
György Nagy4
member
16/04/2021
2026
13,000
IG
dr. Márton Gellért Vági
member
16/04/2021
2026
22,600
IG
dr. József Vörös
member
15/05/1992
2026
204,914
IG
László Wolf
member, Deputy CEO
15/04/2016
2026
554,412
FB
Tibor Tolnay
Chairman
15/05/1992
2026
54
FB
dr. Gábor Horváth
Deputy Chairman
19/05/1995
2026
0
FB
Klára Bella
member
12/04/2019
2026
491
FB
dr. Tamás Gudra
member
16/04/2021
2026
0
FB
András Michnai
member
25/04/2008
2026
1,410
FB
Olivier Péqueux
member
13/04/2018
2026
0
SP
András Becsei
Deputy CEO
11,649
SP
László Bencsik
Deputy CEO
16,003
SP
György Kiss-Haypál
Deputy CEO
15,995
SP
Imre Bertalan
MC member
0
SP
dr. Bálint Csere
MC member
12,983
TOTAL No. of shares held by management
1,435,703
1 Board Member (IG), Supervisory Board Member (FB), Employee in strategic position (SP)
2 Number of OTP shares owned by Dr. Sándor Csányi, Chairman and CEO, directly or indirectly: 5,276,887
3 Number of OTP shares owned by Antal Kovács, Member of Board of Directors, directly or indirectly: 119,240
4 Number of OTP shares owned by György Nagy, Member of Board of Directors, directly or indirectly: 980,000
Committees33
Members of the Board of Directors
Dr. Sándor Csányi – Chairman
Mr. Tamás Erdei – Deputy Chairman
Ms. Gabriella Balogh
Mr. Mihály Baumstark
Mr. Péter Csányi
Dr. István Gresa
Mr. Antal Kovács
Mr. György Nagy
Dr. Márton Gellért Vági
Dr. József Vörös
Mr. László Wolf
Members of the Supervisory Board
Mr. Tibor Tolnay – Chairman
Dr. József Gábor Horváth – Deputy Chairman
Ms. Klára Bella
Dr. Tamás Gudra
Mr. András Michnai
Mr. Olivier Péqueux
Members of the Audit Committee
Dr. József Gábor Horváth – Chairman
Mr. Tibor Tolnay – Deputy Chairman
Dr. Tamás Gudra
Mr. Olivier Péqueux
The résumés of the committee and board members are available in the Corporate Governance Report/Annual
Report.
33 Personal changes can be found in the „Personal and organizational changes” chapter.
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Auditor
On 26 April 2024, concerning the audit of OTP Bank Plc.’s separate and consolidated annual financial
statements in accordance with International Financial Reporting Standards for the year 2024, the Annual
General Meeting elected Ernst & Young Ltd. (001165, H-1132 Budapest, Váci út 20.) as the Company’s auditor
from 1 May 2024 until 30 April 2025.
Operation of the executive boards
OTP Bank Plc. has a dual governance structure, in which the Board of Directors is the Company’s executive
management body in its managerial function, while the Supervisory Board is the management body in its
supervisory function of the Company. It controls the supervision of the lawfulness of the Company’s operation,
its business practices and management, performs oversight tasks and accepts the provisions of the Bank
Group's Remuneration Policy. The effective operation of Supervisory Board is supported by the Audit
Committee, as a committee, which also monitors the internal audit, the risk management, the reporting systems
and the activities of the auditor.
In order to assist the performance of the governance functions the Board of Directors founded and operates,
as permanent or other committees, such as the Management Committee, the Executive Steering Committee,
the Remuneration Committee, the Nomination Committee and the Risk Assumption and Risk Management
Committee.
To ensure effective operation OTP Bank Plc. also has a number of further permanent committees.
OTP Bank Plc. gives an account of the activities of the executive boards and the committees every year in its
Corporate Governance Report.
The Board of Directors held 6, the Supervisory Board held 7 meetings, while the Audit Committee held 2
meetings in 2024. In addition, resolutions were passed by the Board of Directors on 149, by the Supervisory
Board on 73 and by the Audit Committee on 24 occasions by written vote.
Policy of diversity
OTP Bank Plc. determines and regulates the criteria for the selection of senior executives in line with European
Union as well as domestic legal requirements and directives fundamentally determining the operation of credit
institutions.
When designating members of the management bodies (Board of Directors, Supervisory Board) as well as
appointing members of the Board of Directors and administrative members (Management), OTP Bank Plc.
considers the existence of professional preparation, the high-level human and leadership competence, the
versatile educational background, the widespread business experience and business reputation of the utmost
importance, at the same time, it is also highly committed to taking efficient measures in order to ensure diversity
with regard to corporate operation, including the gradual improvement in women’s participation rate.
OTP Bank Plc.’s Nomination Committee continuously keeps tracking the European Union and domestic
legislation relating to women’s quota on its agenda, in that when unambiguously worded expectations are
announced, it promptly takes the necessary measures. In accordance with OTP Bank Plc.’s currently approved
strategy, the goal is to have at least one female member in both the Bord of Directors and the Supervisory
Board.
It is important to note, however, that, as a public limited company, the selection of the members of the
management bodies falls within the exclusive competence of the General Meeting upon which – beyond its
capacity to designate enforcing the above aspects to maximum effect – OTP Bank Plc. has no substantive
influence.
According to OTP Bank Plc.’s Articles of Association, a Board of Directors comprising 5-11 members and a
Supervisory Board comprising 5-9 members are set up at OTP Bank Plc. Currently the Board of Directors
operates with 11 members and has one female member, the Supervisory Board comprises 6 members and
has one female member. The management of OTP Bank Plc. currently comprises 6 members and has no
female member.
Fight against corruption and against the practice of bribery
The Code of Ethics (https://www.otpbank.hu/static/portal/sw/file/OTP_EtikaiKodex_EN.pdf) , the Partner Code
of Ethics (https://www.otpbank.hu/static/portal/sw/file/OTP_Partneri_EtikaiKodex_EN.pdf) published in 2023
and the Anti-Corruption Policy of OTP Bank Group, approved in 2019, contains provisions on the fight against
corruption and against the practice of bribery, as well as the enforcement of legal, fair and ethical conduct
(https://www.otpgroup.info/ethical-declaration). As it can be read in the foreword of the Code and the Anti-
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Corruption Policy as well, the OTP Bank Plc. and its management have adopted the principle of zero tolerance
towards corruption and bribery, taking a definite stance against all forms of corruption and giving full support
to the fight against corruption. In addition, the Code states that "As an ethical and compliant institution, the
Bank and its management are fully committed to ensuring observance of all relevant legislation, including anti-
corruption statutes."
The OTP Bank Plc. has set up an ethics reporting system (whistleblowing), which is for the reporting and the
handling of the reports on suspected or actual violation of the values set forth in the Code of Ethics, where
anonymous reporting of ethics issues is also possible. The OTP Bank Plc. conducts inquiries for the purpose
of detecting, preventing anomalies in connection with reports made or anomalies it became aware of otherwise.
In 2024, a total of 200 reports were received through the ethics Whistleblowing System of OTP Bank Plc., of
which 44 reports were deemed necessary to conduct ethics proceedings. Ethical breaches were identified in
12 cases.
The OTP Bank Plc. has created and maintains its Code of Ethics to keep reputational risk and financial losses,
which may incur in relation to corruption, bribery and discrimination, on a minimum level. Both employees and
newcomers receive education on the Code of Ethics, and in addition, the acceptance to be bound by it is a
prerequisite for their employment.
In addition, all business partners and clients are communicated about the Anti-Corruption Policy and
procedures through the Code of Ethics and Anti-Corruption Policy published publicly on the OTP Bank Plc.'s
website and from 2023 the Partner Code of Ethics has been published on the Bank’s website as well. The
Anti-Corruption Policy stipulates that, in view of the fact that existing and established relationships with
contractual partners also contain the possibility of corruption, the OTP Bank Plc. will act prudently in its dealings
with contractors, in particular in the tendering and preparation process, to minimise the risk of corruption. The
OTP Bank Plc. establishes relationships with its contractual partners based on an assessment of
professionalism, competence and competitiveness, and does not apply other non-professional selection
criteria that contain the possibility of corruption.
Based on the Compliance’s proposal, the prohibition of corruption will be reflected in the contractual and
regulatory documents used by the OTP Bank Plc. in a clearer and well-defined manner from 2023 onwards,
through the inclusion of anti-corruption clauses in the business rules and standard contracts. The clause will
state from the very beginning of the business relationship that the contracting partner accepts OTP Bank Plc.'s
anti-corruption principles, including the prohibition of corruption and the consequences of breaching this
prohibition, which can even be termination of contract.
Any requests from third parties affecting human rights are treated by the OTP Bank Plc. as a priority.
We manage the risks regarding the fight against corruption and bribery within the framework of our operational
risk management process. Our quarterly compliance reports cover the changes in risks as well as the steps
necessary steps to manage them. The reports are presented to the Executive Steering Committee and the
Board of Directors; the annual report is also submitted to the Supervisory Board.
Non-financial performance indicators
•
Internal audit: 208 closed audits, 1,193 recommendations, 1,193 accepted recommendations.
•
Compliance with Budapest Stock Exchange (BSE) Recommendations (yes/no ratio): 72 yes, 0
no.
•
Compliance: 11 closed data- and consumer protection related investigations by the Compliance.
•
Bank security investigations, reports: in 2024, we made 1,049 reports, 20 additions to reports and
356 notifications. Of these reports, 889 were on suspicion of fraud, 38 on suspicion of money
laundering and 122 on suspicion of other crimes.
In terms of financial abuse, there is an increasing trend in housing loans, which amounted to
approximately HUF 41 million in 2024. A detailed comparison of the development of losses from credit
fraud with the data of 2023 shows that in 2023 the loss from personal loan fraud was HUF 22 million,
while in 2024 it increased to HUF 39 million. In 2023, the loss due to fraud was HUF 852 thousand, while
in 2024 it increased to HUF 1.2 million.
In 2024, there were no losses related to overdrafts, baby loans, home loans and CSOK applications.
Considering corporate credit fraud in the MSE and MLE sectors, the bank's losses amounted to
HUF 4.7 billion in 2023, which decreased to HUF 1.2 billion in 2024.
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In the area of online fraud against customers, as a result of the Bank's protective measures, the damage
caused by the misuse of cash flows to the detriment of customers decreased by 32% to HUF 7.2 billion
in 2024 compared to the data for 2023, when the damage to customers exceeded HUF 10 billion.
In addition, the operational fraud prevention measures and monitoring activities prevented customer
losses of HUF 21.7 billion, which is more than three times the previous year's figure of HUF 6.5 billion.
Compared to the data of 2023, in contrast to other domestic banks, a decrease can be observed in the
area of bank card fraud, both in terms of the number of fraud attempts and the value of successful fraud.
In 2024, the value of successful bank card misuse was HUF 3.5 billion, of which the value of successful
transactions with OTP-issued cards was HUF 3.2 billion.
As a result of the newly introduced rules and improvements, the ratio of bank card fraud to sales has
decreased compared to 2023, and is once again well below the European average published by
Mastercard: OTP Bank 0.0253%, European average 0.0407%.
•
Ethics issues: 200 ethics reports, establishing ethics offense in 12 cases.
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OTP GROUP’S SUSTAINABILITY REPORT 2024
1. General information
1.1. Basis for preparation of the report
General basis for the preparation of the sustainability statement
ESRS 2 BP-1
OTP Bank Plc. prepared its sustainability statement34 for the year 2024 (01.01.2024-31.12.2024) on a
consolidated basis, in accordance with the European Sustainability Reporting Standards (hereinafter referred
to as: ESRS), including disclosures under Article 8 of EU Regulation 2020/852 (hereinafter referred to as
Taxonomy Regulation). The scope of consolidation is the same as that of the financial statements. The E1-6
disclosure requirement data point 50.b. differs from this, as it pertains to assets under operational control but
not consolidated in the financial statements, in compliance with ESRS expectations. The consolidation of a
subsidiary begins when OTP Group gains control and ends when the Group loses control.
Corporate names used in the report:
•
OTP Bank Plc.: OTP Bank or Bank
•
Consolidated group of companies: OTP Group, Banking Group, Group
•
Subsidiaries are referred to without their legal form
Under Article 19a(9) or Article 29a(8) of Directive 2013/34/EU, the following subsidiaries are exempt from
individual or consolidated sustainability reporting:
•
DSK Bank AD35
•
OTP banka d.d.36
•
OTP banka Hrvatska dioničko društvo37
OTP Group has not omitted any specific information corresponding to intellectual property, know-how, or
innovation results, and has not utilized the exemption from disclosing information on imminent developments
or matters under negotiation.
Section 134/J (1) of the Hungarian Accounting Law requires that the Company must prepare its consolidated
business report including the consolidated sustainability statement in the electronic reporting format (XHTML)
set out in Commission Delegated Regulation (EU) 2019/815(ESEF Regulation), and the sustainability
disclosures defined by the ESEF taxonomy, including those required according to article 8 of Regulation (EU)
2020/852, must be tagged in the consolidated sustainability statement using the XBRL markup language.
Given that the ESEF taxonomy for sustainability reporting has not been adopted yet, the Company, was unable
to carry out the XBRL tagging.
Value Chain Management
The materiality assessment of impacts, risks, and opportunities for the upstream and downstream value chain
extended comprehensively to the covered corporate group to the extent of identifying material impacts, risks,
and opportunities. The extent to which policies, actions, targets, and metrics cover the value chain is presented
at the relevant disclosure requirements. Regarding metrics, disclosure requirement E1-6 includes information
on the value chain: gross and total GHG38 emissions for Scopes 1, 2, and 3.
In case of E3 Water and Marine Resources and E4 Biodiversity and Ecosystem, the development and reporting
of metrics covering the value chain is necessary and planned in the future. Information on the value chain in
this report is limited, with plans to gradually acquire such information from 2025. OTP Group expects that the
range of publicly available information will expand in this regard in line with legal requirements, and the
information available to the corporate group will also increase due to expectations.
34 Sustainability Report according to Act C of 2000 on Accounting
35 DSK Group and subsidiaries
36 OTP Bank Slovenia and subsidiaries
37 OTP Bank Croatia and subsidiaries
38 Greenhouse Gas
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Disclosures on Specific Circumstances
ESRS 2 BP-2
Time periods defined by OTP Group
•
Short term: one year
•
Medium term: 2 years from the end of the short-term period (financial planning period)
•
Long term: beyond 3 years, starting from the end of the medium-term period.
Financial planning is conducted for the three years following the current year, which aligns with the defined
time periods and explains the deviation from the long-term definition in section 6.4 of ESRS 1.
Information on estimates using indirect sources related to the value chain, the basis of preparation, the level
of accuracy, and where applicable measures planned to improve accuracy of these estimations, are presented
alongside the relevant metric (@1.5. Disclosure Requirements in ESRS covered by the undertaking’s
sustainability statement and general reporting policy) in the report.
Identified significant measurement uncertainties, information on the sources of measurement uncertainties,
and assumptions, approximations, and judgments used in the measurement, are also presented alongside the
relevant quantitative metrics. Forward-looking information always carries a certain degree of uncertainty, which
is not separately disclosed. To ensure the reliability of the report, the aim is to avoid presenting information
affected by significant uncertainty – if this is not possible or advisable due to ESRS requirements, the fact of
significant uncertainty is disclosed.
We will publish revised comparative data due to future methodological changes to the figure if it can be
produced at reasonable cost and, under reasonable assumptions, is capable of influencing the user's decisions
based on the Sustainability Statement. We will not publish a modification retroactively as a result of a change
in estimate.
A previous period error is considered material based on individual judgment it is reasonable to assume that it
is capable of influencing the decisions of the users of the sustainability statements. Restatement has been
made in chapter 2.1.1. Disclosure under EU Taxonomy, details are to be seen in the chapter.
GRI Standards 2021, the GRI G4 Financial Services Sector indicators and own indicators are used in the
sustainability statement as entity specific disclosures. Their application is indicated by the notation used in
these standards and our own notation, their list can be found in the @6. ESRS Index. It is indicated in the
@ESRS SBM-3 disclosure for which material topics their use was deemed necessary.
1.2. Governance
Role of Governing Bodies
ESRS 2 GOV-1
Composition and Diversity
The administrative, executive, and supervisory bodies of OTP Group are the Board of Directors, the
Supervisory Board, and the Audit Committee of OTP Bank Plc. Additionally, there are permanent and special
committees (17 committees) established by the Board of Directors of OTP Bank, which are listed in the
Corporate Governance Report.
Composition and diversity of the members of the administrative,
executive, and supervisory bodies
OTP Bank
Board of
Directors
Supervisory
Board
Audit
Committee
Additional
Committee
Number of executive members (person)39
11
0
0
46
Number of non-executive members (person)
0
6
4
77
Total number of members (persons)
11
6
4
123
Number of employee representative members (persons)40
0
2
0
1
Proportion of men
91%
83%
100%
89%
Proportion of women
9%
17%
0%
11%
Proportion of independent members in the Supervisory Board
-
67%
-
-
39 For the Board of Directors performs the executive function in corporate law, so both internal and external members perform ex ecutive functions.
40 The Work Council delegates members based on the Civil Code, and the members of the Works Council are elected by the employees of OTP Bank
Plc. from among themselves.
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The professional experience of the members of the Supervisory Board and the Board of Directors (governing
bodies) is presented in the @Appendix. For governing bodies, the members must be collectively capable
(collective suitability) of making informed decisions on matters within the committee's decision-making
authority. However, it is not required that all members possess high-level knowledge in all matters within the
governing body's authority, as far as the composition of the body ensures appropriate professional diversity
and thus the collective suitability of the body. The suitability of the members of the governing bodies is reviewed
at least once a year. The primary consideration in forming the composition of the standing committees is to
elect members who have in-depth knowledge of the matters and professional issues within the committee's
decision-making authority, or whose specialized expertise is essential for making certain decisions within the
committee's authority.
Roles Related to Sustainability
OTP Bank's ESG organization was established by the decision of the Board of Directors in 2021. The ESG
Committee and the ESG Sub-Committee were included as standing committees in the Organizational and
Operational Regulation, and the tasks, responsibilities, and reporting obligations of the relevant organizational
units and departments were defined.
The organization has multiple levels:
•
The main decision-maker is the Board of Directors.
•
The ESG Committee is a standing committee, established by the Board of Directors. Its task is to
formulate the ESG strategy, plans, and policies of OTP Bank and the Banking Group, and to support
the governing bodies in performing ESG tasks. The ESG Committee reviews all ESG-related
proposals before they are submitted to the governing body. The ESG Committee, together with the
relevant departments, is responsible for identifying ESG risks, formulating strategies, plans, and
policies, setting and evaluating goals and performance, and assessing the consequences of climate-
related and environmental risks, as well as social and governance risks, thereby assisting the Board
of Directors in performing its ESG tasks. The Chairman of the ESG Committee is appointed by the
Chairman-CEO from among the members of the Board of Directors, and its members are the Deputy
CEOs and elected directors of OTP Bank.
•
The ESG Sub-Committee is the standing decision-preparation forum of the ESG Committee, that
performs coordination, consultation, and implementation duties in the context of its technical support
work. The head of the Sub-Committee, who is also the head of ESG business transformation, is the
Managing Director of the Green Program Directorate.
•
The Board of Directors receives a comprehensive quarterly report on the topics discussed at the
quarterly meetings of the ESG Committee and the progress of the action plan in response to the MNB
Green Recommendation, as well as a written report on the annual progress of the ESG strategy. The
Supervisory Board receives a written report on the annual report of the Board of Directors.
The Board of Directors of OTP Bank approved the Group's ESG strategy in 2021 (see @Strategy for more
details).
ESG coordination is also ensured at the subsidiary banks.
Security issues, including information security, fall within the scope of the Security Directorate. The Security
Directorate is responsible for developing and enforcing OTP Bank's Security Policy, professionally directing
security activities, developing and implementing procedures, and overseeing the security activities of the
Group members. The Security Directorate supports the Anti-Money Laundering Committee in controlling anti-
money laundering activities. The head of the Security Directorate supervises the execution of the bank security
tasks.
The Security Directorate prepares an Annual Report on the security situation of OTP Group, the enforcement
of the Security Policy, changes in risks, and the steps necessary to manage these risks for the Board of
Directors, and the Supervisory Board.
To ensure the sustainability expertise of the members of the governing bodies, regular training for the members
is provided. In 2024 such training was conducted, where an external expert in ESG governance and the head
of the Green Program Directorate (Vice-Chair of the ESG Committee) gave a presentation on OTP Bank's
ESG-related activities. The materials from the presentations are continuously accessible to the members of
the governing bodies through the e-learning system.
In 2023, targeted ESG training was provided to the executive and strategic-level leaders of the Banking Group,
whereby nearly 360 leaders of OTP Group received the e-learning tailored for the target group. The material
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covered the general basics of ESG, legal and regulatory requirements, business aspects, risk management,
human resources topics, and the necessity of avoiding greenwashing.
The collective suitability assessment of the members of the governing bodies includes questions regarding
whether the leader has the skills to identify and exploit opportunities related to the company's sustainability.
The Nomination Committee reports annually to the Board of Directors and the Supervisory Board on the
individual and collective suitability of the members of the governing bodies, including the presence of
sustainability-related skills.
When electing members of the ESG Committee, as a standing committee, it is ensured that they have in-depth
knowledge of the topics within the committee's authority, as described above. The Committee's rules of
procedure state that external experts may be involved in forming its opinion.
Role of Governing Bodies in Business Conduct
ESRS G1 GOV-1
The Supervisory Board, the Board of Directors, and among their committees, the Ethics Committee, play a
prominent role in ensuring ethical business conduct and compliance. For the Banking Group, a key element
of responsible business conduct is the fight against money laundering, in which the Anti-Money Laundering
Committee plays an important role. In terms of compliance, the governance and organizational responsibility
lie with the Board of Directors and the Supervisory Board.
The Board of Directors approved the Code of Ethics, which summarizes the principles and guidelines of
ethical business conduct, and the Compliance Policy.
The Supervisory Board – as a body elected by the General Meeting – performs the oversight of the
Company’s management, business activity and legal operation, and fulfils the responsibilities assigned to it by
the Credit Institutions Act.41
The Bank develops and enforces conflict of interest and ethical rules, and it requires firm action from all leaders
and supervisory bodies against the violations of those rules.
The tasks of OTP Bank's Ethics Committee are partly limited to OTP Bank and are partly group wide. At
group level, the Commission acts as a secondary body in cases that can be interpreted at group level, and in
cases communicated via the ethics/infringement reporting line and primarily managed by OTP Bank's Ethics
Department. The Committee investigates reports in a separate procedure and makes second-level decisions.
The Committee's objective is to provide clear guidance on following ethical behaviour through its interpretations
and opinions provided for general and specific matters. The Committee can provide guidance at the group
level.
The Committee on the Prevention of Money Laundering (PMB) is a standing committee established by the
Board of Directors that makes decisions about the sustainability of a business relationship or the approval of
the establishment of a business relationship that involve customers concerned with the arising of specific
money laundering risks. As part of the system for preventing, detecting, investigating, and responding to
corruption and bribery allegations and cases, the Committee discusses reports on the implementation of bank-
and group-level anti-money laundering and counter-terrorism financing (AML/CFT) policies, procedures, and
controls, particularly those proposed by the AML officer. It also discusses the risk management measures
necessary for quickly and effectively addressing any identified deficiencies. The Committee discusses and
recommends the Bank's and the Group’s internal risk assessment on anti-money laundering to the Board of
Directors for deliberation. The Committee reports annually to the Board of Directors on its activities, internal
and external investigations ordered, their resource requirements, and budget. The PMB sends summaries and
minutes of its quarterly meetings to the Supervisory Board for information.
The expertise of the members of the Board of Directors and the Supervisory Board in business conduct is
ensured by mandatory annual ethics training and supplementary ethical leadership training (please refer to
@4.1. Corporate Governance), just as the expertise of the Banking Group's employees is ensured by
mandatory training prescribed by regulators. When forming the composition of standing committees, the
primary consideration is to elect members who have in-depth knowledge of the matters and professional issues
within the committee's decision-making authority or whose specialized expertise is essential for making certain
decisions within the committee's authority.
41 Act CCXXXVII of 2013 on Credit Institutions and Financial Enterprises
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Information provided to Governing Bodies on Sustainability
ESRS 2 GOV-2
The practice of informing about the impacts, risks, and opportunities identified during the materiality
assessment varies by topic. The information is not communicated through a separate channel but is integrated
into the sector-specific information practices.
Area
Reporting practices
Significant impact, risk, opportunity,42 addressed
by governing body in 2024
Regular reporting to the governing body
ESG Committee
(detailed
tasks
in
@Governance)
The ESG Committee reviews in advance all ESG-
related proposals submitted to the governing body. The
Committee meets quarterly. The Board of Directors
receives a comprehensive report on the topics
discussed at the ESG Committee's quarterly meetings
and on the progress of the action plan in response to
the MNB Green Recommendation43. Additionally, the
Board of Directors receives a written report on the
annual progress of the ESG strategy. The Supervisory
Board receives a written report on the annual report of
the Board of Directors.
The ESG Committee as the highest-level body
addressed the following: climate change mitigation,
climate change adaptation, risks and impacts of
energy, and diversity of employees.
In addition to it informed the Board of Directors and
the Supervisory Board on: climate change mitigation,
climate change adaptation, and lending-related
opportunities concerning energy.
Compliance
Directorate
The compliance officer reports on compliance to the
Bank's Board of Directors quarterly and to the
Supervisory Board annually.
Measures against workplace violence and harassment
Data protection
Access to financial products and services
Corporate culture, compliance, anti-money laundering
Corruption and bribery
Security Directorate
The Security Directorate prepares an annual report on
the security situation for the Board of Directors and the
Supervisory Board.
Information security1
Human- and
Organizational
Development
Directorate
Human resource issues are reported to the ESC
(Executive Steering Committee), and a report on the
results of group-level engagement survey is prepared
for the Supervisory Board.
Work-life balance
Gender equality and equal pay for equal work Training
and skills development
Occasional reporting to the governing body2
Retail
Customer
Tribe
Submissions were made to the Board of Directors for
the following:
the policy for equal service opportunities for persons
with disabilities
the new product policy in compliance with consumer
protection recommendations
Regarding the complaint handling policy
Access to financial products and services
Human- and
Organizational
Development
Directorate
Board of Directors submissions were made regarding
the occupational health system and health insurance
Health protection and safety
1 Information security and privacy protection constitute an important topic, which is managed by two separate areas of expertise.
2 Only those areas or topics that are not covered in regular reporting are included.
It is not explicitly declared for the governing bodies and their committees how they consider sustainability
impacts, risks, and opportunities when overseeing the Banking Group's strategy, major transactions, and risk
management procedures. The bodies take positions based on the long-term interests of the Banking Group,
and consideration is given according to generally applied principles. The Board of Directors' objectives and
activities emphasize increasing shareholder value, efficiency and effectiveness, managing risks, and ensuring
full compliance with external regulations, i.e., ensuring the most effective implementation of business, ethical,
and internal control policies. The Board of Directors is responsible for ensuring the effectiveness of internal
lines of defence and providing a sustainable business model that considers all risks, including ESG risks.
The Supervisory Board's responsibility extends to supervision of the lawfulness of the Company's operations,
business conduct, and management, including directing the Company's internal audit organization and
monitoring the operational effectiveness of internal defence lines.
42 The material impacts, risks and opportunities have been identified as presented in the @ESRS SBM-3 disclosure requirement.
43 A The Hungarian National Bank's Recommendation No. 10/2022 (VIII.2.) on climate change and environmental risks, as well as th e integration of
environmental sustainability considerations into the activities of credit institutions.
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According to the provisions of the SRD II44 directive, the remuneration policy must contribute to the company's
business strategy, long-term interests, and sustainability. To facilitate all these, the Bank's Remuneration
Policy and practice include that the remuneration of executives is based on value creation. Long-term
sustainable value creation, and ethical behaviour is promoted in the multi-year deferral of performance-based
remuneration and its subsequent risk adjustment.
Sustainability and Climate Change in Incentive Mechanism
ESRS 2 GOV-3, E1 GOV-3
Members of the Supervisory Board and the Board of Directors of OTP Bank receive only fixed remuneration
in their capacity as members. Executive Board members and employee delegates of the Supervisory Board,
in addition to their employment, fall under the scope of the Banking Group's Remuneration Policy. Most of the
other committee members also fall under this Policy. Employees not covered by the Policy typically receive
incentive bonuses.
Sustainability-related incentives are in place for members covered by the Remuneration Policy: the principle
of the performance measurement and evaluation system is that the amount of performance-based
remuneration – alongside the preliminary and subsequent evaluation of risks – is linked to the level of
achievement of group/bank/subsidiary institutional and individual objectives within a two-tier performance
measurement system. The range of institutional indicators is uniform at the institutional level. For individual
indicators, the weight of one indicator among the objectives – except for the network – is generally a minimum
of 5% and a maximum of 30%. The evaluation of institutional and individual objectives is done separately on
a scale of 0-100% (based on the level and weight of performance indicators and target objectives).
Performance evaluation is based on individual agreements and individual performance evaluations within the
affected group.
The conditions of incentive mechanisms for those covered by the Banking Group's Remuneration Policy are
approved by the Supervisory Board.
In performance evaluation, the measurement of specific sustainability-related objectives is done through the
ESG and CSR indicator – as an individual indicator – which is considered a reference value. The
"Environmental and Social Responsibility (ESG-CSR)" indicator is applied uniformly with a weight of 5% within
performance-based remuneration for the first- and second-level managers of the Bank and the primary
managers of the subsidiaries, and with a weight of 4% for regional managers. The following aspects are
evaluated within the indicator: achieving the goals set out in the ESG strategy, applying significant ESG
aspects during operations, implementing them into own business processes and internal regulatory
documents, strengthening ESG awareness within the organization, providing quality data for the
sustainability/integrated report by the set deadline, and properly operating CSR-related processes (especially:
adequately supporting CSR initiatives related to the professional’s field).
Climate-related considerations are taken into account as part of the ESG-CSR indicator for those covered by
the Remuneration Policy. GHG emission reduction targets are not included in the performance evaluation.
Additional individual indicators related to sustainability are the following: The Banking Group measures
compliance with the limits set in the Bank's risk appetite statement (RAS) within the individual indicators for
the Deputy CEOs responsible for business and risk management and the CEOs of the subsidiary banks. The
weight of the individual indicator is at least 5% and at most 10%.
The Banking Group measures prudent operation and the functioning of controls for all executives covered by
the Banking Group's Remuneration Policy, with a weight of at least 5% and at most 10%. For first- and second-
level managers, indicators measuring the strengthening of control function must also be included with a weight
of 20%.
Based on Section 22 (2) of Act LXVII of 2019, the Bank does not prepare a remuneration report, so the
consistency of the presented information with the remuneration report cannot be examined.
Due Diligence
ESRS 2 GOV-4
In the operation of OTP Group, certain elements of the sustainability due diligence process are implemented
as part of the general group operations, not as a separate and continuous process.
44 Directive (EU) 2017/828 of the European Parliament and of the Council of 17 May 2017 amending Directive 2007/36/EC as regards the encouragement
of long-term shareholder engagement
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In its business practices, the Bank considers the interests of the corporation, shareholders, customers, and
partners. The Bank always applies a governance system and operates bodies and committees that support
and assist the organization in monitoring the interests of customers and partners, changes in business needs,
and shaping its business policy and relationships with customers and partners accordingly (Compliance
Policy).
The standing committees established by the Board of Directors of OTP Bank are the highest-level bodies in
the group governance system, serving as decision-making, decision-preparing, and advisory bodies of the
Bank. Their scope of responsibilities expanded to making thorough analyses and supporting materials-based
considerations, including feedback provided by stakeholders. Several committees are dedicated to various
aspects of risk management (Credit and Limits Committee, Group Operational Risk Management Committee,
Committee on the Prevention of Money Laundering, Risk Assumption and Risk Management Committee).
The individual elements of the due diligence process applied by OTP Group are presented in the Sustainability
Statement as follows. In identifying the elements, we built on the relationship between the due diligence
elements presented in Chapter 4 of ESRS 1 and the ESRS disclosure requirements:
•
Embedding due diligence in governance, strategy, and business model: @GOV-2, @GOV-3, @ESRS
SBM-3
•
Engaging with affected stakeholders in all key steps of due diligence: @GOV-2, @SBM-2, @IRO-1,
@S1-2, @G1-1 policies
•
Identifying and assessing impacts: this was implemented separately in connection with the preparation
of this report, and is not integrated into the operation of the organization
•
Taking actions to address those adverse impacts: action at material topics (@E1-3- E3-2- E4-3, @S1-
4, @S4-4(1), @S4-4(2), @S4-4(3), @G1-3)
•
Tracking the effectiveness of these efforts and communicating metrics and targets at material topics.
(@E1-4, @S1-5, @S4-5(1), @S4-5(2), @S4-5(3), @G1-1).
Risk Management in Relation to Sustainability Reporting
ESRS 2 GOV-5
The sustainability reporting process is coordinated by the Marketing and Communications Directorate of OTP
Bank, which establishes and operates internal controls. An important tool of risk management and internal
control procedures is that reporting is carried out in close cooperation with the Bank's departments. According
to OTP Group's governance model, OTP Bank, as the parent company, provides strategic control, guidance
and cooperation with group members.
We identified changes in regulatory expectations, timely availability and accuracy of data as the main risk
factors in the reporting process. When prioritizing risk factors, we considered the extent of the risk and the
likelihood of occurrence. The risks associated with the timely availability of data are increased by changing
regulatory expectations, given that it is necessary to modify the data collection methodology and the
Sustainability Data Collection Platform, which is used by the Group to collect both quantitative and numerous
narrative information, as well as providing new information compared to previous ones may
encounter difficulties with data providers.
Risk Mitigation and Control Measures:
reporting entity level
•
To ensure compliance with CSRD reporting obligations, a Project Steering Committee has been
established, which continuously monitors the reporting and audit process.
•
For quantitative information in sustainability reporting, we build on data and definitions already used
by the Banking Group for other purposes, to mitigate the potential for errors due to definitional
differences, as well as for those data risk management and control processes already implemented.
•
Various tools such as explanations on the data collection platform and instructional videos assist the
departments in the reporting and data collection process. In 2024, we requested feedback from the
subsidiary banks on the usefulness of the support tools and improved them.
•
The Marketing and Communications Directorate provide active support throughout the data collection
process for any arising questions.
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•
During the preparation of the 2024 Sustainability Statement, interim data collection was also
conducted in addition to the annual one, to check the data in a timely manner and reduce risks arising
from the introduction of ESRS.
•
The Sustainability Statement is approved by the Board of Directors and the Supervisory Board as part
of the Annual Report before being published on the website.
•
The 2024 Sustainability Statement as a whole is assured by an auditor based on a limited assurance
engagement, in accordance with the regulations.
•
For the first- and second-level managers of the bank and the primary managers of the subsidiaries,
the ESG-CSR indicator is a mandatory part of performance-based remuneration, where the provision
of quality data for the Sustainability Statement by the set deadline is an evaluation criterion.
data-level:
•
Information collection through the Sustainability Data Platform makes data provision and reporting
transparent and traceable.
•
The four-eyes principle is applied to the collected information, with an approval function in addition to
data entry in the data collection process.
•
The data collection platform performs automatic checks based on multiple criteria, in addition to which
the department coordinating the reporting also conducts checks. The discussions and error corrections
related to the checks are traceable within the platform.
•
We perform cross-checks between the data collection platform and data collected in other systems.
•
After the reporting cycle, data providers receive feedback on the typical errors of the information
provided through the data collection platform.
•
We conduct consultations with the departments providing information regarding the correct
interpretation and completion of narrative information.
•
In case of narrative content, we aim to incorporate information from approved and documented
sources.
•
Approval is also required for narrative information.
•
The information in the report is approved by the relevant departments.
1.3. Strategy
Strategy, Business Model and Value Chain
ESRS 2 SBM-1
Business Model, Products and Services
OTP Group's business model as a universal banking group aims to meet the financial needs of retail,
private banking, micro- and small enterprises, medium and large enterprises, and municipal clients at
a high level through branch networks, continuously developing digital and innovative remote service
channels, as well as through agents and other contracted partners. The Banking Group served the financial
needs of approximately 17 million clients at the end of 2024. The total revenue of the corporate group in 202445
was 4,276 HUF billion.
OTP Group is present in 10 countries in the Central and Eastern European region and entered the Central
Asian region in 2023 with the acquisition of the Uzbek Ipoteka Bank. The parent bank of OTP Group, OTP
Bank Plc., is a leading credit institution in Hungary. At the end of 2024, the Hungarian operation accounted for
48.52% of the Group's assets. In addition to its operations in Hungary, the Bank has foreign subsidiaries in a
total of 10 countries through capital investments, typically holding 100% or nearly 100% ownership. Among
the group members, OTP's Montenegrin subsidiary is also a market leader based on total assets, while the
Bulgarian, Slovenian, and Serbian operations are the second largest in their respective local market. The
Croatian and Moldovan subsidiaries rank fourth, and the Albanian subsidiary ranks third in terms of net loans
in the local rankings of banks. Among the larger foreign subsidiaries, the Bulgarian accounted for 17.68%, the
Slovenian 14.07%, the Croatian 8.72% (thus the Eurozone and ERM 2 countries accounted for 40.46% in
total), and the Serbian 8.02% of the Group's assets.
45 The consolidated corporate group covered by the report, OTP Group, is a corporate group consisting of more than 100 companies , and its own
operations cover the activities of this corporate group.
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Our acquisition strategy is based on creating shareholder value by achieving optimal operating size and
leveraging OTP's expertise in regional markets. As a result of 24 bank acquisitions and one portfolio takeover
carried out over more than two decades, significant experience has been accumulated within the Group in
both the acquisition process and the integration and business-operational transformation projects within the
Group.
The key banks and other financial companies within the corporate group offer a wide range of modern banking
and financial services to both retail and corporate clients in Hungary and abroad: they collect demand and
term deposits from their clients and offer a wide range of other savings forms, including – varying by country
– pension services, government securities, investment funds, stocks, corporate bonds, and other securities
and structured investments. In line with the strategy, the Group aims to ensure the conditions for stable
operation and growth across economic cycles by maintaining a stable liquidity position. Some group members
have an active presence in the capital markets: OTP Bank has issued bonds in multiple currencies and
maturities in recent years, partly to comply with MREL requirements, targeting investors across a wide
geographical range. Additionally, OTP Mortgage Bank, the Slovenian subsidiary, the Albanian subsidiary, and
the Uzbek Ipoteka Bank have outstanding issued mortgage bonds and bonds.
On the asset side, group members provide retail mortgage loans and consumer loans (including personal
loans, credit card loans, commercial credit, car loans, overdrafts, baby loans), corporate investment and
working capital loans, municipal loans, and leasing services. Within the Group's net loans, mortgage loans
accounted for 27.86%, consumer loans 25.58%, corporate loans 35.52%, micro and small enterprise loans
3.92%, and leasing 7.11% at the end of 2024. Depending on the balance sheet structure of the entity, group
members invest their liquidity reserves in the money and capital markets (including interbank loans and
corporate bonds) or receive intergroup financing. Additionally, the wide range of modern financial services
offered by the banking and non-banking domestic and foreign subsidiaries includes asset and fund
management, investment and treasury services, payment services, pension services, and other services (e.g.,
guarantees, factoring, letters of credit, bill discounting).
The non-financial companies within the Group, which collectively represent a smaller 2.21% proportion46 based
on profit, cover activities such as real estate development and operation, agriculture, and private equity fund
management. The range of products and services offered did not change significantly in 2024.
Differences can be observed between countries in terms of business focus, the range of services and
products offered, and sales channels. Regarding business focus, while the proportion of retail and corporate
loans and leasing portfolios is relatively balanced in most countries of the Group compared to the overall Group
ratios, in Ukraine the corporate and leasing portfolios account for over 90% of the outstanding loans, while in
Russia the proportion of retail consumer loans reaches 99%, while the mortgage loan portfolio is negligible in
both countries.
The process of selling the Romanian operation was completed in 2024. As a result of the exit, the Group does
not conduct business activities in Romania.
The goal of the Banking Group is to continuously develop its services in the ever-evolving digital and
technological environment to make them easily accessible, understandable, and secure for a wide range of
clients. In addition to digitalization, OTP Group places great emphasis on sustainability, aiming to avoid
negative environmental and social impacts, achieve positive impacts, and exploit potential business
advantages. The Banking Group is committed to offering products that align with the real needs of clients and
their capabilities, contributing to their financial well-being.
Our employees represent key value, and their high-level performance is the guarantee of OTP Group's results.
As a responsible employer, our goal is to improve employee well-being. The Bank actively participates in
developing financial awareness among the population and enriching cultural values.
OTP Group employed more than 43,118 people at the end of 2024.
46 Profit after tax based on continuing operations.
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Distribution of the number of employees of OTP Group by country
as of 31 December 2024, total employees, persons*
*The figure includes countries with more than 50 people, excluding those with fewer than 5 individuals.
Value Chain
Upstream Value Chain
Financial Services: The upstream value chain preceding OTP Group's activities includes suppliers providing
products and services necessary for the Group operations and the provision of its products and services. The
main activity of OTP Group is to provide financial services. For this activity material and energy-intensive
procurements are not connected to raw materials, but rather for own operation. Service procurement is
dominant, particularly in marketing communication, IT, and telecommunications services. The properties used
by the Group for operational activities include both owned and leased assets. Corporate vehicles are typically
owned by the Group.
Other activities: Among the Group's other activities, service sector companies have an upstream value chain
similar to financial sector companies. The typical procurements of subsidiaries active in the real estate sector
and those of the agricultural and food industry differ. Companies involved in the development, operation,
ownership, and fund management of real estate (e.g. shopping centers, office buildings) have relatively greater
environmental impacts, particularly in terms of building materials and energy needs. The raw material needs
of agricultural and food industry companies, which also have relatively greater environmental impacts, are
partly sourced from outside the Group, with significant intra-group procurement as well.
Downstream Value Chain
Financial Services: The downstream value chain following OTP Group's activities includes those involved in
the sale of products and services and the customers who use these products and services.
An agent network also participates in the mediation of financial services; in 2024, the number of agents at the
group level was 13,700 (additional information may be collected here).
The most significant environmental and social impacts of the Banking Group arise through those using financial
services, primarily related to lending, which is the most impactful part of the value chain. In asset management,
the downstream value chain is the managed assets, which is significantly smaller in business terms and
impacts, and is present in five countries within OTP Group (Hungary, Bulgaria, Croatia, Serbia, Ukraine).
Other activities: Some service companies among the other activities directly sell their services to customers.
Tenants are present in the value chain of the real estate sector of the Group. The products of agricultural and
food industry companies reach consumers through a longer value chain.
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ESG Strategy
Stability and sustainability are two of the cornerstones of OTP Group's corporate strategy. The Management
Committee unanimously approved the Group's ESG strategy for 2021-2025 in 2021. It is reviewed annually to
align with changes in the market and regulatory environment. The strategy, along with the related vision and
mission, did not change in 2024.
OTP Group aims to play a regional leading role in financing the fair and gradual transition to a low-
carbon economy and to build a sustainable future through responsible solutions. OTP Group has set
a goal of achieving a green loan portfolio47 of HUF 1,500 billion by 2025.
The Group defines its long-term sustainability, transparency, and ethical operation through stable
management, responsible and transparent governance, being a responsible employer in the labour
market, and an active participant in society. Our goal is to provide responsible and fair financial
services tailored to customer needs, fostering open cooperation with our stakeholders based on trust
while reducing our negative environmental impacts.
The strategy has three pillars: responsible service provider, responsible employer, and responsible
social actor.
Vision
Responsible financial decisions and socially and environmentally adequate, ethical financial solutions are
available for all economic participants and citizens in all of the countries covered by OTP Group’s operations.
Mission
For us, sustainability means taking responsibility for our economic, social, and environmental impacts. We
firmly believe that with our leading role in the Central and Eastern European region and our presence in Central
Asia, our pioneering developments, conscious and ethical business operations, and exemplary partnerships,
we create value and contribute to a sustainable future.
Our goal is to integrate into the operations of the departments involved in the ESG strategy for the relevant
topics by 2025. In addition to the business opportunities the strategy includes identifying and managing
significant risks and addressing social and governance targets.
Strategic goals
KPIs
2024 year-end result
Responsible service provider
•
Products and services promoting the
green transition of the economy
•
Products and investment services
aimed at promoting investments in a
sustainable economy
•
Active ESG risk management
Group-wide, a total of HUF 1,500 billion
in green loans by 2025
With 1,027 billion HUF in green loans, we
have achieved/exceeded the target set for
2024
Responsible employer
•
Enhancing employee well-being and
development, diversity and employee
engagement
Increase the level of employee
engagement, achieving the 75th
percentile of the financial sector
benchmark and the 75th percentile
globally1 ongoing at Group level. The
financial sector target was 75% and the
global target was 78%2 in 2024.
At Group level, the employee engagement
level was 77%, up 5% on the previous year,
meeting the target for the financial sector
but not the global target.
Responsible social actor
•
Significant reduction of emissions from
own operations
•
Contribution to social goals and the
UN Sustainable Goals (SDGs) through
responsible products and services, as
well as donations
We have been achieving the set goal since
2022.
Carbon neutrality partially offset by
carbon credits by the end of 2022
(achieved), and the goal of net zero
emissions for OTP Bank by 2030.48
The goal is for OTP Bank to become a
member of the S&P Dow Jones
Sustainability Index by 2025
The Bank's score in the S&P Global
Corporate Sustainability Assessment
improved by 9%, or 4 points, in 2023
compared to the previous year49
1 Based on the benchmark of more than 750 companies.
2 The engagement score is an output value, which means it cannot be directly improved. For a more detailed methodological description, see: @ESRS S1-
5.
47 The definition of green loan portfolio can be found @Environmental Information.
48 In the case of carbon neutrality partially offset by carbon credits, the carbon credit comes from a verified source, without restrictions on the type. Net
zero emissions involve reducing greenhouse gas emissions as much as possible and neutralizing unavoidable emissions through carbon removal. The
goal covers Scope 1-2 emissions.
49 The latest available result as of 31 December 2024
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The majority of subsidiary banks developed their ESG strategies by 2022, and with the approval of the ESG
strategies of the Russian, Ukrainian, and Moldovan subsidiary banks in 2024, all subsidiary banks now have
ESG strategies. In these strategies, the subsidiary banks have defined their own goals, which align with the
objectives of OTP Bank. The subsidiary strategies address ESG risk management, development of green
lending, organizational frameworks, social issues, and mitigating the environmental impacts of operations. The
subsidiary banks have also defined the KPIs to measure the effectiveness of achieving the goals sets. The
Board of Directors of OTP Bank is informed of the achievement of ESG goals and the annual review of plans.
Green Financing
The details of green financing are presented in the @Green lending target disclosure requirements.
OTP Group integrates green/climate-conscious lending into its business activities and aims to ensure that over
time, any client in any sector can receive a loan under green conditions given the client has a green/sustainable
goal they wish to achieve with the loan. The maturity of this process varies by country, industry, and customer
segment.
The key sectors for green lending in the Group’s portfolio are the following:
•
Energy: renewable energy production, distribution, storage, and related loan purposes,
•
Real estate: construction, purchase of green properties, as well as financing renovation of buildings
that result in significant energy improvements,
•
Transportation: electro-mobility.
Challenges
One of the significant challenges for OTP Group in sustainable finance is understanding, collecting, evaluating,
integrating into internal processes, and reporting on the sustainability performance, plans, and strategies of its
clients. From the clients' perspective, measuring and disclosing sustainability performance is an obligation
affecting an increasingly broad customer base, impacting both corporate and non-corporate clients, but to a
varying degree. According to our experience, the readiness of the client base managed by OTP Group to
prepare the necessary data and report is heterogeneous, but it is moving in a favorable direction at an
increasing rate. The primary difficulty for companies in providing sustainability data is that, since there were
no such expectations previously, they did not measure this data, and they lack the necessary knowledge and
systems to measure, store, and provide the data credibly.
In the coming years, numerous obligations and business needs related to sustainability data will emerge,
affecting retail and corporate lending, risk management processes, various internal controlling and reporting
processes, and external data provision and reporting processes, both at the parent bank and the subsidiaries.
Prioritizing and appropriately managing this complex challenge on the IT system side is crucial to ensure that
the Banking Group can meet its regulatory obligations and manage the risks and business opportunities arising
from climate change.
Stakeholders
ESRS 2 SBM-2
The goal stated in OTP Group's corporate strategy in OTP Group’s Management Report is to meet the needs
and expectations of its clients, investors, and employees at the highest possible level.
Additionally, the Banking Group's ESG strategy expresses a commitment to behaving as a responsible partner
with all its stakeholders, which is reflected in the strategy's three pillars: responsible service provider,
responsible employer, and responsible social actor.
OTP Group's Code of Ethics stipulates that the goal concerning stakeholders50 is to enforce the principles of
ethical business conduct, and adherence to these principles is mandatory for all employees and agents alike.
Each member company of the Banking Group maintains relationships with the relevant groups according to
its organizational characteristics and the characteristics of the stakeholder groups. The Banking Group
cooperates with its most important stakeholders, and one of the goals of maintaining contact with stakeholders
is to become informed of their opinions, as meeting expectations ensures the Group's social legitimacy and
business success. We continuously seek feedback and consider it in the development of our strategies,
50 those who fulfill contractual obligations for OTP Group and, in the course of their activities, meet a wide range of OTP Group clients or potential clients,
provide services on behalf of OTP Group, and clearly appear in public as representatives of OTP Group while fulfilling their contractual obligations
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activities, and programs. From the perspective of the business model and strategy, the opinions of clients,
investors, employees, and regulatory bodies are the most relevant.
In the context of the materiality assessment and due diligence, the view and interests of stakeholders regarding
the strategy and business model were not explored51.
Key stakeholders
Purpose of engagement and cooperation
Method of engagement and cooperation
Customers, clients
(retail, corporate)
Improving service quality, providing quality
information related to services, understanding
customer needs, protecting customer data
Customer satisfaction surveys, examining aspects
important to customers, market research Informative and
educational materials, videos Service-related information
(e.g., account statements) Customer service (bank branch,
telephone, video, internet) Complaint handling
Shareholders bondholders
(and analysts)
Informing about the activities and operating
environment of the Group, the Group's financial
results, the development of external and
internal factors affecting them, expected
outlooks, and ESG performance.
Understanding expectations.
Annual report, stock exchange reports and presentations
General meeting
Personal and virtual meetings Answering investor and
analyst questions
Employees
Responsible employer practices, enhancing
employee well-being and development,
diversity, and employee engagement.
Providing a healthy and safe work environment
with equal opportunities, fair employment
practices.
Employee engagement measurement, providing feedback
opportunities
Performance evaluation
Meetings and consultations with employee representatives
(e.g. trade unions)
Intranet, internal communication
Regulatory bodies,
authorities
Anti-money laundering, fair market competition,
ensuring access to financial services, equal
opportunities, economic intermediary, helping
to achieve social goals, regulatory compliance,
expanding green finance
Reports in compliance with legal requirements
Ensure availability of publicly subsidized products
Cooperation to prevent crime
Consultations through representative bodies (banking
associations)
OTP Group considers the expectations and opinions of interested parties and incorporates them into its
strategy and business model.
The Board of Directors, the Supervisory Board, and the various committees receive regular reports on matters
related to stakeholders. Members of the governing bodies have the opportunity to request information about
the materials of any committee, as well as from any department of the Group.
The governing bodies were informed about the feedback from stakeholders – such as employees, customers,
shareholders, and regulatory bodies:
•
The Supervisory Board received a report on the group-level engagement survey process and its
results.
•
Semi-annual reports are submitted to the Board of Directors and the Supervisory Board on the
experiences of handling customer complaints, the consumer protection investigations of the Hungarian
National Bank (MNB, Supervisory Authority), and customer complaints received by foreign
subsidiary banks.
•
The governing bodies receive quarterly group-level information on the closed investigations of
regulatory bodies, as well as on the MNB supervisory procedures and the status of the implementation
of the recommendations made to the Bank. The investigation reports containing the results of the
examinations prescribed by the MNB, to be carried out by internal audit, are reviewed and approved
by the Supervisory Board or both the Supervisory Board and the Board of Directors, before being sent
to the Supervisory Authority.
•
The Board of Directors receives a comprehensive quarterly report on the implementation and progress
of the ESG strategy.
1.4. Materiality Assessment
ESRS 2, E1, E2, E3, E4, E5, G1 IRO-1
The purpose of the materiality assessment is to enable OTP Group to identify the impacts, risks, and
opportunities to be presented in the Sustainability Statement. The materiality assessment focused on
determining whether a topic is material. The depth of examination of individual impacts, risks, and opportunities
were carried out with this perspective.
51 During the materiality assessment, the opinions of the stakeholders are detailed by IRO-1.
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The methodology for the procedure of identifying and evaluating impacts, risks, and opportunities was
developed for the reporting process – in accordance with ESRS requirements – building on the existing
processes of the Group where available. Management of impacts, risks, and opportunities is accomplished
through several different processes within OTP Group (operation of the @ESG organization, implementation
of the @ESG Strategy and @ESG Risk managemen). The risk management processes are presented under
@ESG Risk managemen disclosure requirements.
In recent years, several materiality analyses have been conducted as part of the sustainability reporting
process, aligning with GRI requirements. The most recent analysis preceding the current was completed in
early 2022, and it examined the two dimensions of impact materiality and financial materiality. However, due
to requirements of ESRS, the current materiality analysis presented below was prepared with a significantly
revised and expanded methodology compared to the one before in 2022. The materiality analysis is planned
to be reviewed annually, next time in the course of 2025.
The process of materiality assessment, including the methods, and the decision-making process are illustrated
in the following diagram.
Identification and Evaluation of Impacts
During the materiality assessment, OTP Group focused on factors associated with an increased risk of adverse
impacts. The activities within the Group provide a suitable starting point for identifying the increased risk of
adverse impacts, therefore we grouped the companies included in OTP Group by activity sector and identified
the impacts arising from their own activities and along the value chain.
We identified three relevant activity sectors: the most significant being (1) financial services; (2) the real estate
sector - as several group members are involved in real estate development, operation, and ownership that is
not related to the operation of OTP Group (e.g. office buildings, bank branches) but service external parties;
(3) the agriculture sector - several companies are involved in agriculture and the food industry.
The long list of impacts was determined based on the ESRS topic list and additional inputs (GRI Standards
2021 topics, GRESB Real Estate Assessment criteria, UNEP FI Consumer Banking identification module,
regulatory expectations, topics from the previous materiality assessment, benchmarks). The topics defined by
ESRS were supplemented with OTP Group-specific content, and OTP Group-specific topics were also
identified. Taxation, Financial awareness, Community engagement, Attitude shaping, Privacy (and information
security, cybersecurity), Corporate culture (and compliance, anti-money laundering).
The criteria for evaluating and ranking impacts are shown in the table below.
Impact type
Assessment factors
Actual negative
severity (scale, scope, irreversibility)
Potential negative
severity (scale, scope, irreversibility)
likelihood
Actual positive
scale, scope
Potential positive
scale, scope
likelihood
From the long list of impacts – based on the criteria and inputs presented above – we narrowed down the list
of impacts to be evaluated for those where it is reasonable that a material impact may arise (short list).
The short list of sustainability impacts was evaluated using a scoring methodology in a multi-round iterative
process involving internal experts, managers of the Banking Group, external experts, and stakeholders.
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The extent of the impacts was determined based on objective data to the extent possible. Previous
sustainability reporting data sources and additional internal information were used. To determine material
impacts and topics with reasonable effort, we consistently aimed to rely on extensive information for the
evaluation and, in addition to internal inputs, relied on generally accepted views within the profession (e.g.
which sector has which material sustainability impacts).
The information characterizing the impacts is not comparable in most cases, so a scale was needed to be
used for the evaluation on which these different types of information could be placed and compared. For this
purpose, we used a scale of 0-5 for scoring the scale, scope, and reversibility of the impact in the case of
negative impacts. Thus, the maximum score for an impact was 15.
If any characteristic of the impact received a score of 5, the impact became material regardless of the other
criteria. For positive impacts, reversibility is not evaluated, so a greater impact was required to reach the
materiality threshold.
The impacts were evaluated over the time period where their severity is expected to be the greatest.
Sustainability topics were evaluated at the ESRS subtopic or sub-subtopic level. A sustainability topic
became material if at least one assigned impact reached a score of 9 based on the above evaluation.
We considered sub-subtopic level evaluation in all cases where ESRS identified a sub-subtopic, but we only
evaluated at the sub-subtopic level if the identified impact could be separated into a sub-subtopic for OTP
Group.
For the evaluation of the loan portfolio, we started from the activities of the financed companies based on
NACE code classifications when estimating impacts and potential impacts. At the time of the analysis, there
was no clear classification system that would match the categories appearing in ESRS with activity sectors.
Therefore, we identified these sectors using and synthesizing various sources. To achieve the best
approximation, we considered industries that also appeared in different sources as relevant and used the
available experience regarding the sustainability impacts of different industries.
Regarding the impacts of the agriculture and real estate sectors, we considered sector-level materiality (where
a sustainability topic is not material at the entire group level).
For climate-related issues, GHG emissions were specifically used. To identify the impacts of our own
operations, we identified actual and potential future emission sources based on activities and along the value
chain. For Scope 1-2 emissions, we used the already available data. For Scope 3 emissions, partial data were
available for the loan portfolio and investment fund management for the year 2023 at the time of the analysis.
For this information, please refer to Chapter @Climate Change disclosures and @Annual Report of OTP Group
2023. In addition to the direct impact, we also considered the importance of setting an example when
evaluating the impacts.
The evaluation of the effects related to pollution and resource use and the circular economy was also carried
out in the above manner, in relation to our own activities and the entire value chain, no further investigation
was carried out.
The evaluation of impacts related to biodiversity was also carried out in the above manner, covering our own
activities and the entire value chain, without further examination. Among the corporate group's agricultural
companies, some operate in or near Natura 2000 protected areas. The activities of Agromag Plusz Kft. and
Nemesszalóki Mezőgazdasági Zrt. affect protected areas, and to mitigate the impacts, the companies manage
these areas by complying with nature conservation and environmental regulations and fulfilling the expected
reporting obligations to the authorities.
Consultation with Stakeholders
We used various sources to understand the opinions and expectations of stakeholders, which were considered
during the identification and evaluation of material impacts.
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Among others, we used:
•
ESG assessments and questionnaires: Sustainalytics, MSCI, Moody’s.
•
Residential TRI*M Index research (Cross-country brand and satisfaction international, nationally
representative52 residential research), which measured brand, satisfaction, and loyalty.
•
Employee engagement surveys, particularly OTP Group's53 2023 engagement measurement,
which included 28,990 responses.
•
Specifically for OTP Group's materiality assessment, we sought opinions through an online
stakeholder questionnaire from civil organizations and universities; authorities, supervisory
authorities and public administration; financial analysts and stock exchanges; the media; and
employee representatives. Based on the feedback received, one topic was included in the list of
material topics (employees: work-life balance), as more than a third of the respondents rated it as
material. Regarding impact materiality, all stakeholders received the same questionnaire. We also
sought the opinions of financial analysts and stock exchange stakeholders from a financial
materiality perspective. The questionnaire primarily contained multiple-choice questions, but there
was also the opportunity to raise additional potentially material topics and, in the case of one
question, to provide an open-ended response. Participants were informed about the background
information needed to complete the questionnaire and the purpose of the questionnaire.
Stakeholders specifically affected by pollution and resource use and the circular economy were not consulted.
Identification and Evaluation of Financial Risks and Opportunities
The identification of financial risks and opportunities related to sustainability topics was the result of an iterative
process.
As a starting point for identifying financial risks and opportunities (long list):
•
We used the topics included in ESRS,
•
Supplemented with inputs also used for impact materiality,
•
SASB standards for the financial sector, and
•
ESG rating topics.
Based on the latter two inputs, no new topics needed to be added.
The sustainability topics where relevant risks or opportunities might arise for OTP Group (short list) were
identified in workshops and subsequent consultations with the involvement of OTP Bank's experts. Participants
considered whether the risks and opportunities were relevant in the short, medium, or long term.
The deeper exploration and evaluation of risks and opportunities began for the relevant topics. The Banking
Group does not use a threshold applicable to all areas for financial materiality. OTP Group experts did not
consider it justified or practical to apply such a threshold, partly because different risks and opportunities can
have different financial impacts. Therefore, during the evaluation we applied the threshold values (or derived
conclusions) from the documents used for the evaluation, and if these were not available, we determined the
threshold value during the materiality assessment.
OTP Group has detailed risk management policies and systems covering all types of risks (loan, country,
counterparty, market, liquidity, operational, compliance), including ESG risk management, the practice of which
is continuously evolving. OTP Group takes a holistic approach to ESG risks and ESG factors, integrating them
into the risk management frameworks of the main risk types, i.e. treating ESG risk as a risk type rather than a
stand-alone risk type. Sustainability risks are considered together with other risks.
Financial risks and opportunities arising from sustainability topics can originate from three main sources, which
were examined as follows:
•
For opportunities, the ESG strategy and annual plans are decisive, as the strategy focuses on
exploiting material opportunities.
52 Except for Moldova, Ukraine and Uzbekistan, where the survey was conducted based on an urban sample.
53 The process of understanding the opinions of the employees of the Uzbek subsidiary will be introduced gradually, according to a unique schedule. In
the Russian subsidiary, the engagement survey was carried out on a different platform and based on a list of questions.
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•
The implementation of the Climate & Environmental (C&E) Risk Materiality Assessment for the
group-level assessment of sustainability risks related to lending activities started in 2024, in line
with the European Banking Authority (EBA) requirements. The results of this assessment were not
available at the time of the materiality assessment and the start of this reporting. Therefore, as an
alternative solution for evaluating these risks, we analysed the results of the climate change stress
test and the income from interest and net fees and commissions based on activities broken up by
NACE codes. The matching of risks with activities was done in the same way as applied for impact
materiality. Another source of information was the Environmental Risk Materiality Assessment
available at some subsidiaries.
•
Other topics representing relevant risks fall into the category of operational risks. OTP Group
conducts an annual group-level Risk and Control Self-Assessment (RCSA) to identify operational
risks. During the process, departments identify operational risks in their processes, their likelihood
of occurrence in different cases, and link risk mitigation mechanisms, i.e., control functions and
activities, to the identified operational risks. Among the risks identified in this process, those
attributable to sustainability reasons were assigned to sustainability topics.
We evaluated relevant risks and opportunities on a 3-level scale (large, medium, small) based on (1) their
potential magnitude and (2) their likelihood. We considered medium/large and large/large risks and
opportunities as material.
Additional information to the assessment of climate change related topics:
In line with the general procedure applied during the identification and evaluation of impacts, the identification
of risks and opportunities was also based on activities.
Regarding the assessment of transition and physical risks related to lending activities:
•
OTP Group's 2023 group-level climate change stress test evaluated the risks as presented in the
@Stress-test (For long-term impacts, the use of NGFS54 climate scenarios in the banking sector is the
generally accepted and mostly alternative-free approach.)
•
The group-level stress test provided suitable basis for the evaluation, while some subsidiaries had
their own environmental risk materiality assessments (C&E Risk Materiality Assessment), which cover
other credit risks, among which we considered the assessments of the Bulgarian and Croatian
subsidiaries as examples.
With regards to the assessment of financial risks related to own operations, the following was analysed:
•
The annual group-level Risk and Control Self-Assessment (RCSA) 2023 provided the basis for the
analysis of operational risks. During the annual self-assessment process, departments identify
operational risks in their processes, their likelihood of occurrence in different cases, and link risk
mitigation mechanisms to the identified operational risks. The annual RCSA results and their detailed
evaluation were submitted to the Group Operational Risk Management Committee, and these results
are also part of the calculation of operational risk management capital requirements. The RCSA
measures the risks for the next year (short term), with the risk trend indicating medium and long-term
risks. Climate-related hazards identified during the evaluation fell into the category of physical risks,
and the risk of events occurring in the supply chain was also identified. Participants could identify any
climate-related hazard or risk, and no prior exclusion of climate-related risks was made. Based on the
applied methodology, similar to other non-climate-related risks, departments did not evaluate risks
using a predefined hazard list and asset list. Climate change-related risks did not reach the materiality
threshold in the RCSA evaluation.
•
The Climate & Environmental Risk Materiality Assessment of the Bulgarian and Croatian subsidiary
bank also examined operational risks, among other things, and the results were taken into account.
The Croatian document classified the operational risks mainly due to extreme weather events (physical
risk) as low-medium risk in the short to medium term and medium risk in the long term (which is not a
material risk level according to the document's own classification). The Bulgarian analysis indicated
moderate exposure.
54 The Network of Central Banks and Supervisors for Greening the Financial System.
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The above documents did not address the identification of assets and business activities that are incompatible
with the transition to a climate-neutral economy or those requiring significant effort for this transition. The risks
identified in relation to climate change were considered manageable for OTP Group.
For financial opportunities, we considered the ESG strategy (@Strategy) and annual plans as decisive, as
the strategy focuses on exploiting material opportunities. Expanding the green loan portfolio is included as a
financial opportunity in the ESG strategy. The strategy covered the time period up to 2025 at the time of the
analysis.
The material impacts, risks, and opportunities related to climate change are presented in the @ESRS SBM-3
disclosure.
Validation of the evaluation and approval
The evaluation of impacts, risks, and opportunities was followed by a multi-round internal review. As part of
this, the evaluation of impacts rated below but close to the materiality threshold was reviewed based on
stakeholder feedback. Representatives of Hungarian subsidiaries and foreign subsidiary banks could also
provide feedback on the materiality assessment.
The ESG Sub-Committee discussed the list of material impacts, risks, and opportunities and, after one
modification, approved it by majority decision in accordance with the Sub-Committee's operating rules.
The ESG Committee discussed and approved the results of the materiality assessment. A unanimous decision
was required for approval in accordance with the Committee's operating rules. The Chairman of the ESG
Committee is a member of the Board of Directors.
The results of the materiality analysis were included in the Board of Directors' briefing on the agenda items of
the ESG Committee's quarterly meetings.
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ESRS SBM-3
OTP Group’s Material Sustainability Impacts, risks and opportunities
Impact/Risk/Opportunity
Management (The report will elaborate further in line with
disclosure requirements.)
Type of
Impact/Risk/opportunity
Concentration of Impact,
Risk, Opportunity
Time period
Up-
stream
OTP
Group
Down-
stream55
Short
term
Medium
term
Long
term
E1 Climate Change
Climate Change Mitigation
OTP Group's impact stems from direct and indirect greenhouse gas
emissions, exacerbating climate change. This effect is significant for the entire
group.
OTP Group's indirect emissions related to its loan portfolio (Scope 3) exceed
Scope 1-2 emissions by several orders of magnitude, and significant Scope 3
emissions are also associated with asset managers.
Direct emissions from operations and indirect emissions from energy
consumption (Scope 1-2) are relatively small for most companies, given that
they provide financial or other services. However, due to the Group's size,
these emissions are significant overall. This impact is material for the entire
group. Several group members, which are significantly smaller56 compared to
financial institutions, operate in the agricultural and food sectors, as well as
the real estate sector, where these emissions are also relatively higher.
The Banking Group aims to facilitate climate change mitigation by
reducing emissions associated with its lending and operations. By the
end of 2024, it prepared a decarbonization (transition) plan for its loan
portfolio. The ESG strategy has set a KPI for green lending for the
period up to 2025. The balance sheet green exposure of the OTP
Group is continuously increasing.
In addition to efficiency measures, the use of green electricity plays a
significant role in reducing Scope 1-2 emissions.
Actual negative impact
x
x
x
x
x
OTP Group, through its financial products, encourages the mitigation of
climate change within its portfolio.
Through its applied practices, the Banking Group also has a significant
exemplary and awareness-raising impact, considering its wide customer base
Actual positive impact
x
x
x
x
x
A significant business opportunity for the Banking Group is the expansion of
green lending that facilitates climate change mitigation in the countries where
it engages in corporate lending and retail mortgage lending (there is no active
green lending according to OTP standards in Ukraine).
Opportunity
x
x
x
x
@E1-SBM-3 This is material for OTP Group's lending activities because, in
connection with climate change mitigation, transition risks arise for a portion of
the customer base, which indirectly also poses a risk to the Banking Group.
The extent of this risk is estimated through stress testing of the corporate
portfolio.
Risk management is conducted within the framework of ESG risk
management.
Risk
x
x
x
Climate Change Adaptation
OTP Group's lending practices impact adaptation, either facilitating (by
expecting or supporting with favourable conditions), hindering, or remaining
neutral towards clients' adaptation efforts. The need for adaptation is strongly
necessary in several sectors within the portfolio (e.g. mortgage loans,
agriculture, real estate, construction sectors.
The Banking Group aims to facilitate adaptation to climate change
through green lending. Risk management is conducted within the
framework of ESG risk management.
Actual positive impact
x
x
x
x
The Banking Group strives to leverage the business opportunity arising from
lending that facilitates adaptation to climate change.
Opportunity
x
x
x
E1-SBM-3 18 This also includes the physical risks associated with lending
activities, as well as some transition risks (investments necessary for
adaptation).
Risk
x
x
x
55 For client-related topics, we have indicated only where the impact depends on the client's practice, the influence of the Group is indir ect.
56 Sales revenue, balance sheet total, number of employees
MANAGEMENT REPORT (CONSOLIDATED)
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Impact/Risk/Opportunity
Management (The report will elaborate further in line with
disclosure requirements.)
Type of
Impact/Risk/opportunity
Concentration of Impact,
Risk, Opportunity
Time period
Up-
stream
OTP
Group
Down-
stream55
Short
term
Medium
term
Long
term
Energy
By financing energy-intensive industries, the Bank Group has a negative
impact.
Within green loans, these goals represent a particularly large
proportion, and financing is also significant in the affected sectors.
The Banking Group addresses this topic through the methods and
tools presented in the previous two topics.
Actual negative impact
x
x
x
x
The Group has a positive impact by providing incentive loans for renewable,
carbon-free energy sources considered green during the transition, and by
encouraging energy efficiency.
Actual positive impact
x
x
x
x
Similar to climate change mitigation and adaptation, the business opportunity
arises within green lending, where the expansion of the use of renewable and
green-certified energy sources plays a significant role.
Opportunity
x
x
x
Financing energy-intensive and fossil fuel-using companies poses credit and
reputational risks for OTP Bank and its subsidiaries.
Risk
x
x
x
E3 Water and Marine Resources
Water Withdrawal
In OTP Group's corporate loan portfolio, the presence of sectors with high
water withdrawal is significant. To better understand the impacts, it is
necessary to investigate the practices employed by these companies.
There is an opportunity to finance these goals within green lending.
The Banking Group's minimum expectation for its clients, which is
monitored, is compliance with relevant environmental and social laws
and regulations, as well as possessing the necessary permits and
authorizations for their operations. Understanding clients' practices
beyond these requirements is ongoing, in parallel with the evolving
and strengthening regulatory expectations. Based on this,
expectations that encourage responsible behaviour can be
formulated.
Actual negative impact
x
x
x
x
Green lending finances activities that have a positive impact.
Actual positive impact
x
x
x
x
Financial risk primarily arises in relation to those loan clients who are unable
to adequately manage changing or existing environmental expectations (e.g.,
stricter regulations, changing consumer preferences, fines) or face difficulties
in ensuring the water needs of their activities. A deeper understanding of the
risk requires further analysis.
Risk
x
x
x
x
E4 Biodiversity and Ecosystems 57
Direct impact drivers of biodiversity loss
In the corporate loan portfolio of OTP Group, sectors potentially negatively
impacting biodiversity and ecosystems are significant. To better understand
these impacts, it is necessary to uncover the practices employed by the
companies.
The minimum expectations set and monitored by the Banking Group
for its clients include compliance with relevant environmental and
social laws and regulations, as well as possessing the necessary
permits and licenses for their operations (currently, there are
significantly fewer requirements related to biodiversity compared to
water).
Actual negative impact
x
x
x
x
The Banking Group indirectly influences the extent of these impacts through
financing conditions and can encourage positive effects.
Understanding clients' practices beyond these requirements is
ongoing alongside the evolving and strengthening regulatory
expectations, which will form the basis for articulating expectations
that encourage responsible behaviour.
Potential positive impact
x
x
x
x
57 E4 SBM-3 No significant negative impacts were identified in terms of lnd degradation, desertification/soil sealing.
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Impact/Risk/Opportunity
Management (The report will elaborate further in line with
disclosure requirements.)
Type of
Impact/Risk/opportunity
Concentration of Impact,
Risk, Opportunity
Time period
Up-
stream
OTP
Group
Down-
stream55
Short
term
Medium
term
Long
term
S1 Own Workforce
OTP Group employs 43,118 people, so many impacts on its own workforce
are significant.
Working conditions: Work-life balance
The Banking Group influences work-life balance through the provision of
overtime, flexible employment opportunities, and access to childcare facilities.
The family-related commitments of female employees are typically stronger,
and the fact that approximately two-thirds of the Group's employees are
women amplifies these impacts.
At OTP Group, various employee benefits and support systems are
continuously available to help maintain employee well-being. The
measures focus on the areas of working hours and flexibility, holidays
and absences, well-being and recreation.
Actual positive impact
x
x
x
x
The effects may be negative if OTP Group practices do not adequately take
employee considerations into account.
Potential negative impact
x
x
x
x
Working conditions: Health and safety
Stress emerges as a relevant risk for a significant portion of employees,
considering that most staff at the member companies work in non-hazardous
positions. Occupational safety risks are more significant in agricultural
companies.
OTP Group operates occupational health and safety programs to
maintain a safe and healthy working environment. It is a common,
ongoing practice within the group to conduct regular, preventive health
examinations for employees and stress management is also
supported by action packages.
Actual negative impact
x
x
x
x
Equal treatment and equal opportunities: Gender equality and equal pay for work of equal value
This is a topic that strongly influences employee well-being, made even more
important by the high proportion of female employees. The corporate group
monitors the pay ratio between men and women in the same positions, and at
the parent bank and most subsidiaries, this difference is minimal.
OTP Bank has a strategy for creating gender equality, and several
subsidiary banks have specific diversity policies in place.
The majority of group members continuously implement measures to
promote equal opportunities and diversity.
Leadership training and internal awareness campaigns are
implemented to strengthen an inclusive mindset.
Actual positive impact
x
x
x
x
The proportion of female managers is consistently lower at higher levels. At
some subsidiary banks, the difference is greater for employees in the same
position.
Actual negative impact
x
x
x
x
Equal treatment and equal opportunities: Training and skills development
OTP Group's training and skills development practices influence the sector
and other employers due to its significant role as an employer. Access to
training is always ensured. Performance evaluations at the Group's member
companies follow different methodologies, with a smaller proportion of
employees participating in this process at several member companies.
OTP Group provides a wide training portfolio for its employees.
Professional and personal development training, as well as other (e.g.
mandatory) training. These plans are developed with employee
involvement and take into account the results of performance
evaluations.
Actual positive impact
x
x
x
x
The impacts may be negative if OTP Group practices do not ensure equal
access to training.
Potential negative impact
x
x
x
Equal treatment and equal opportunities: Employment and inclusion of persons with disabilities
Due to its size and scope of activities (as a wide range of society interacts
with its employees), the Banking Group could have a significant impact on the
employment of persons with disabilities and the change in this employment
culture.
The Banking Group prohibits all forms of discrimination, but measures
to support the employment of persons with disabilities are not widely
implemented.
Actual positive impact
x
x
x
x
Currently, the employment of these individuals is low at the group level.
Actual negative impact
x
x
x
Equal treatment and equal opportunities: Measures against violence and harassment in the workplace
The large number of employees and the high proportion of female employees
make this topic important, further emphasized by the lower proportion of
female employees in higher positions (increasing the risk of abuse). No
reported and confirmed cases of abuse have occurred, so the impact is
potential.
The Banking Group implements measures related to the application of
the Code of Ethics.
Potential negative impact
x
x
x
x
Equal treatment and equal opportunities: Diversity
Due to the significant number of employees, the member companies of the
Banking Group have both the opportunity and the role to implement diversity.
OTP Group prohibits all forms of discrimination. (This topic partially overlaps
with gender equality and the employment of persons with disabilities.)
See: Gender Equality and Equal Pay for Work of Equal Value
Actual positive impact
x
x
x
x
The Banking Group's practices provide room for improvement in implementing
diversity.
Actual negative impact
x
x
x
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Impact/Risk/Opportunity
Management (The report will elaborate further in line with
disclosure requirements.)
Type of
Impact/Risk/opportunity
Concentration of Impact,
Risk, Opportunity
Time period
Up-
stream
OTP
Group
Down-
stream55
Short
term
Medium
term
Long
term
S4 Consumers and end-users
These topics are material for member companies providing financial products
and services.
Information security and data protection 58
The banks within the Banking Group hold a large amount of sensitive data
about their customers. By protecting personal data and implementing
information security and cyber protection, the Banking Group has a positive
impact on its customers.
Security systems and workflows are constantly evolving, and staff
training is also regular. The Group aims to use the most modern
solutions for data management, data security and data leakage
prevention, supported by organizational development, technical,
customer education and cooperation measures. The parent bank
continuously supports and monitors the anti-fraud efforts of its
subsidiaries.
The Banking Group's data management processes operate within a
permanent framework, according to regular activities
Actual positive impact
x
x
x
x
Despite OTP Group's practices that prioritize safety and secure operations, it
sometimes happens that customers suffer losses.
Actual negative impact
x
x
x
x
A breach of personal data protection, fraud, or violation of legal requirements,
as well as successful attacks and incidents in the field of information security
and cybersecurity, can cause significant losses to both the banks of OTP
Group and their customers. Data protection deficiencies, violations, and
potential incidents not only carry the risk of significant financial penalties but
can also lead to customer complaints and loss of customers. Consequently,
the reputation of the banks would decrease.
Risk
x
x
x
Access to quality information59
Quality information provision ensures objective information and understanding
of financial products for all customers. Its implementation affects customers'
well-being and financial situation, as a financial product can have a significant
impact on a customer's life. This topic is primarily important for retail and SME
customers, and its significance is even more pronounced for vulnerable social
groups. The practices of OTP Group have a positive impact.
Information and communication about banking products and services
are highly regulated areas in most countries where OTP Group
operates. Member companies support good financial decisions and
knowledge expansion through educational videos and calculators,
among other tools. The Group's member companies are continuously
improving the understandability of financial services.
Actual positive impact
x
x
x
x
Despite the efforts made, opportunities for development can always be
identified, given the complexity of financial products, information obligations
and their continuous changes.
Actual negative impacts
x
x
x
x
Access to financial products and services 60
Access to financial products and services can support customers' well-being
and prosperity. In addition, access for residents of disadvantaged areas and
those in disadvantaged social situations is material. Ensuring access to
financial products for disadvantaged customers requires careful consideration
and strict regulation to protect the interests of depositors and prevent
excessive indebtedness. The Banking Group can also support adequate
housing, as mortgage loans are an important market segment in most areas
of operation.
At the group level, the goal is to expand the range of products that are
partially or fully available digitally, ensuring that these processes are
as convenient and accessible to as many customers as possible.
These solutions can also facilitate access for residents of
disadvantaged areas. The Banking Group pays attention to imparting
knowledge related to the use of online channels. Accessibility is
continuously improving.
In addition to market-based products, the Banking Group ensures the
availability of significant state-supported mortgage loan schemes in
several countries.
Actual positive impact
x
x
x
x
The accessibility cannot be considered comprehensive.
Actual negative impact
x
x
x
x
58 ESRS: Information-related effects on consumers and/or end-users: Protection of privacy (ESRS 1 AR 16) In addition to the protection of personal data, this topic at the OTP Group also includes information security and cyber
security.
protection, as these are interrelated topics in the OTP Group, but not specifically mentioned in the ESRS.
59 ESRS: Impacts related to information on consumers and/or end-users: Access to (quality) information (ESRS 1 AR 16)
60 ESRS: Social inclusion of consumers and/or end-users: Access to products and services (ESRS 1 AR 16)
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Impact/Risk/Opportunity
Management (The report will elaborate further in line with
disclosure requirements.)
Type of
Impact/Risk/opportunity
Concentration of Impact,
Risk, Opportunity
Time period
Up-
stream
OTP
Group
Down-
stream55
Short
term
Medium
term
Long
term
G1 Business Conduct
Corporate culture, compliance, anti-money laundering
The business conduct of OTP Group not only affects its direct partners and
stakeholders but also influences the attitude of employees and customers
towards ethical business conduct. Corporate governance characteristics and
transparent decision-making are also important to investors.
The fight against money laundering is essential for the banks within the
Banking Group, aiming to prevent customers' attempts at money laundering.
From a societal perspective, careful and prudent practice is particularly
important.
Implementing ethical business conduct and ensuring legal operations are of
utmost importance to OTP Group.
The foundations and guidelines for ethical business conduct are
summarized in the Code of Ethics
OTP Group operates an ethics reporting system and conducts annual
ethics training for all employees.
The Banking Group conducts regular mandatory training to increase
the awareness of its relevant employees on AML/CFT. OTP Bank
operates a separate whistleblowing system in relation to AML/CFT.
Actual positive impact
x
x
x
x
Despite OTP Group's emphasis on striving for ethical business operations,
non-compliances cannot be completely eliminated.
Actual negative impact
x
x
x
Non-compliance with laws and regulations can result in fines and reputational
loss. Banks are also expected to play an active role in preventing money
laundering. Violating anti-money laundering rules can lead to liquidity
problems and the termination of correspondent banking relationships.
Breaching business ethics rules can cause dissatisfaction and complaints
from employees and business partners.
Risk
x
x
x
x
Corruption and bribery
The effectiveness of corruption prevention impacts the efficiency of resource
utilization. Due to its size, OTP Group's anti-corruption practices can influence
economic morale (especially within the sector). The practices implemented by
OTP Group have a positive impact.
The fight against corruption is supported by an anti-corruption training
system, the application of an anti-corruption clause among contractual
partners, the expansion of which at group level is in progress, and
regular risk assessments.
Actual positive impact
x
x
x
x
Even with careful and constantly evolving practices, abuse can occur.
Potential negative impact
x
x
x
x
Regarding the management of potential financial impacts of ESG risks, no provisions are made for ESG risks, and the management has not established a capital
buffer for such risks. Based on the ECB's Novel Risk Recommendation, OTP Group has identified risks in Slovenia (OTP Bank Slovenia) and Bulgaria (DSK Bank) for
which it has recognized impairment, which is also reflected in the consolidated IFRS9 ECL (expected credit loss). The additional capital requirement related to climate
risks is not material. ESG aspects are expected to be included in the rating models of the Group in 2025. In the context of operational risk loss data collection, an ESG
flag is used if an ESG risk factor can be identified behind the given loss event. No significant losses were realized in 2024 concerning material topics. The analysis of
expected financial impacts and the estimation of expected financial impacts will be carried out in 2025.
OTP Group's risk management processes, prudent behaviour, and business planning practices ensure its resilience in managing sustainability impacts and risks, as
well as leveraging opportunities. The Group conducted a @Stress-test to assess the potential impacts of climate change justified by both regulatory and business
considerations. No resilience assessment was conducted in connection to the biodiversity and ecosystem topic, as it was not financially material. In order to properly
address complex environmental challenges, the involvement of the banking sector is necessary, making it likely that further resilience analyses will be warranted in
the future. The Banking Group continuously monitors market opportunities to exploit them and keeps track of regulatory expectations to respond appropriately.
MANAGEMENT REPORT (CONSOLIDATED)
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178
Sanctions Supplement: OTP Group’s operations are affected by various anti-corruption laws, sanctions
enacted and applied by the UN, the UK and the EU, as well as the United States. In addition, OTP Group’s
operations in Russia are subject to various Russian countersanctions. In the course of its business activities,
OTP Group may come into contact with organizations whose employees are considered public officials.
Applicable sanctions may restrict OTP Group’s dealings with certain sanctioned countries, individuals and
organizations. OTP Group is particularly exposed to risks related to economic sanctions imposed by the United
States, the EU and the United Kingdom against Russia and the Russian-occupied territories of Ukraine, as
well as certain targeted Russian and Ukrainian organizations and individuals, as well as entities owned or
controlled by such targeted organizations and individuals.
The imposition of any current or future sanctions may result in OTP Group’s existing or future customers being
subject to sanctions, directly or indirectly. If OTP Group is unable to cease providing services to sanctioned
parties within the permitted wind-down period (if any) and such customers continue to be subject to sanctions
and/or are included in sanction lists, this may also expose OTP Group to the risk of being subject to sanctions.
OTP Group cannot provide assurances that current or future sanctions targeting Russia, Russian companies
and associated companies will not have a material impact on OTP Group’s operations.
Litigation or investigations related to alleged or suspected violations of anti-corruption laws and sanctions may
result in OTP Group being fined, restricted in its activities, revoked in its licenses, damaged in its reputation,
and other adverse consequences on its activities and financial consequences. Additionally, violations of anti-
corruption laws and sanctions regulations may result in financial disadvantage.
OTP Group also applies entity-specific disclosures to inform about the impacts of the following material
topics:
•
Water withdrawal is a material topic concerning the value chain, for which entity-specific disclosure
will be developed later
•
Direct impact drivers of biodiversity loss is a material topic concerning the value chain, for which entity-
specific disclosure will be developed later
•
Information security and data protection
•
Access to (quality) information
•
Access to financial products and services
•
Corporate culture, compliance, anti-money laundering
1.5. Disclosure Requirements in ESRS covered by the undertaking’s sustainability
statement and general reporting policy
ESRS 2 IRO-2
Among the disclosure requirements and data points in the thematic standards of ESRS, we report those that
are related to the material sub-topics for OTP Group. To link material topics and disclosure requirements, we
used the EFRAG ID 177 – Links between AR16 and Disclosure requirements guideline, and the identification
of data points was based on the interpretation of data point expectations.
Data points
We report voluntarily reportable data points if the required information can be produced without significant
effort or if we have previously reported them. In several cases, we utilize the phased introduction option
specified in the ESRS, and these data points are not included in the report.
Regarding environmental topics, only Climate Change Mitigation is material – in terms of impact materiality –
for our own operations. We do not consider data points related to other E1 (climate change) topics, E3 (water
and marine resources), and E4 (biodiversity and ecosystems) topics relevant for our own operations.
The material impacts and risks related to the S4 (Consumers and End-users) topic are specifically material for
the clients and specific portion of clients of the (banks within the Group) (see @ESRS SBM-3). We report the
related data points for these clients.
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Policies, Actions and Targets
We disclose available policies, actions and targets in cases when they apply:
•
to the entire OTP Group or nearly the entire group
•
to the parent bank and subsidiaries, or for a smaller group that includes these member companies:
•
OTP Bank
•
Merkantil Bank
•
DSK Bank (Bulgaria)
•
OTP Bank Slovenia
•
OTP Bank Croatia
•
OTP Bank Serbia
•
Ipoteka Bank (Uzbekistan)
•
OTP Bank Ukraine
•
CKB (Montenegro)
•
OTP Bank Albania
•
OTP Bank Russia
Considering the mid-year sale of OTP Bank Romania, we do not present policies, actions, or objectives for
this operation.
OTP Lakástakarék has a narrow scope of activity, focusing specifically on housing savings and loans, OTP
Mortgage Bank focuses specifically on mortgage lending, the companies have a relatively small central
organisation, and they use the branch network of the parent bank, the sales agents of OTP Financial Point
Ltd. and other sales partners to carry out their specific business activities. The activities of the two subsidiary
banks are therefore not presented separately.
•
to asset managers in the context of Climate Change Mitigation, if relevant information has been
disclosed in connection with SFDR61 expectations, to ensure the information can be linked
•
OTP Fund Management,
•
OTP Real Estate Investment Fund Management,
•
PortfoLion Venture Capital Fund Management,
•
DSK Asset Management (Bulgaria),
•
OTP Invest (Croatia).
•
and in case of Own Workforce (S1) topic, to companies with an active workforce of over 250
employees as of 31.12.2024:
•
the above banks,
•
CIL-Babér,
•
OTP Factoring,
•
Nádudvari Élelmiszer,
•
NAGISZ.
We report if the Group has not adopted a policy, action, or target for the given sustainability issue if these are
not available for any of the companies listed above.
Conditional data points for minimum disclosure requirements for policies, measures and objectives are
reported if they are relevant to the policy, measure or objective presented.
Metrics
For metrics, our goal is to fully report the relevant data points. We have set a threshold value in exceptional
cases, specifically for the @ESRS S1-16 Compensation Metrics (pay gap and total compensation) disclosure
requirement. The threshold value was determined to reduce reporting burdens. We refrain from obtaining data
for metric components if it is negligible under reasonable assumptions and would require significant effort to
determine.
The metrics have not been validated by an external body other than the service provider providing the
assurance.
61 Regulation (EU) No 2019/2088 of the European Parliament and of the Council of 27 November 2019 on disclosures in the financia l services sector
related to sustainability. The Ukrainian LLC AMC OTP Capital and the Serbian OTP INVEST DRUŠTVO ZA UPRAVLJANJE UCITS I ALTERNATIVNIM
FONDOVIMA AD BEOGRAD are not covered, the Romanian OTP Asset Management was sold during the year and therefore no information is disclosed.
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Entity-Specific Disclosures
We deemed it necessary to define entity-specific disclosures for those material topics named in the @ESRS
SBM-3 disclosure requirement that were supplemented with OTP Group-specific content compared to the list
in ESRS 1 AR16, and for S4 topics, as ESRS currently does not define metrics for these topics. Regarding E3
and E4 topics, the Banking Group did not collect information during the reporting period that would adequately
characterize these impacts. Regulatory expectations and data to be requested from clients are under
development in these matters. After finalizing these and implementing data collection, we will define entity-
specific disclosures (if sectoral ESRSs covering these topics are not published in the meantime) and report
them.
Operational control: The situation where the enterprise is able to direct the operational activities and
relationships of an entity, location, operation or asset.
Business relationships: Business relationships include relationships in the upstream and downstream value
chain of the enterprise and are not limited to direct contractual relationships.
Where associates or joint ventures are accounted for using the equity method in IFRS financial statements
and are part of the Group’s value chain, the Bank includes information about them together with the approach
applied to other business relationships in the value chain. When the Bank determines impact indicators, the
data of the associate or joint venture is not limited to the equity share owned but takes into account the impacts
that arise through business relationships related to the Group’s products and services.
The management, executive and supervisory bodies of OTP Group are the Board of Directors, Supervisory
Board and Audit Committee of OTP Bank Plc.
Gender distribution of members of the management, executive and supervisory bodies, the percentage of
female and male board members compared to all members, based on the number of employees expressed in
persons at the end of the year.
The proportion of independent members of the boards is the number of independent members divided by the
total number of board members based on the year-end data. Regarding the independence criteria for board
members, the Bank considers the relevant provisions of Act V of 2013 on the Civil Code (Ptk.) to be guiding
principles, the details of which are disclosed by the Bank in the document OTP Bank Plc. @Statement on the
Independence of Board Members.
The breakdown by country applies to those countries where the Group has 50 or more employees and these
employees represent at least 10% of the total number of employees. The number of employees is given in
chapter S1 according to employees, the year-end headcount is reported, including active employees.
Total income is the sum of Interest income and income similar to interest income + Income from fees and
commissions + Other operating income in the consolidated IFRS report for the year 2024.
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2.
Environmental Information
OTP Group aims to take a regional leadership role in financing a fair and gradual transition to a low
carbon economy, and building a sustainable future. To achieve this objective, the Group significantly
increased its green loan and corporate bond portfolio in 2024 and considers the preparation of its
climate target-setting document62 a milestone. Various aspects of the Group’s risk management
systems have been improved. OTP Group's objective is to reduce its environmental footprint resulting
from its operations.
Material subtopic
Source of impact
Type of impact, risk,
opportunity
Description of impact, risk,
opportunity
E1 Climate change
Mitigation of climate change
Energy
entire OTP Group's own
operations,
loan portfolio, fund managers'
investments
negative impact
Direct and indirect GHG
emission
Mitigation of climate change
Adaption to climate change
Energy
loan portfolio, fund managers'
investments
positive impact
Green financial products
Mitigation of climate change
entire OTP Group own
operations
positive impact
Shaping mindsets through
applied practices
Mitigation of climate change
Adaptation to climate change
Energy
loan portfolio
financial opportunity
Green financial products
financial risk
Conversion and physical risks in
the portfolio
E2 Water and marine resources
Water withdrawal
loan portfolio
negative impact
Financing sectors with high
water abstraction
positive impact
Green lending
financial risk
Water dependency and
environmental compliance risk in
the portfolio
E4 Biodiversity and ecosystems
Factors directly causing
biodiversity loss
loan portfolio
negative impact
Funding for sectors with
negative impacts on biodiversity
and ecosystems
potential positive impact
The possibility of setting
expectations to encourage
responsible behaviour by
customers
For a more detailed description of the impacts, risks and opportunities and how to manage them, see @ESRS
SBM-3 and the following sections of this chapter.
2.1. Disclosures under the EU Taxonomy Regulation
2.1.1. EU Taxonomy Regulation Disclosures
Information to be disclosed by companies covered by Articles 19a or 29a of Directive 2013/34/EU of the
European Parliament and of the Council (EU) 2020/852 on environmentally sustainable economic activities,
based on the methodology set out in Commission Delegated Regulation (EU) 2021/2178. For the credit
institutions of OTP Group, the reporting is based on exposures and balance sheets corresponding to the scope
of prudential consolidation according to Section 2 of Chapter 2 of Title II of Regulation (EU) No 575/2013, as
set out in Annex V, point 1 of the current Commission Delegated Regulation (EU) No 2021/2178.
OTP Bank is committed to sustainable financing and social responsibility.
Mandatory Disclosures
The Taxonomy Regulation applies to financial market participants that make available financial products and
undertakings which are subject to the obligation to publish a non-financial statement or a consolidated non-
financial statement pursuant to Article 19a or Article 29a of Directive No. 2013/34/EU of the European
Parliament and of the Council, respectively (Article 1 (b) and (c) of Chapter I of (EU) 2020/852). Pursuant to
Article 8 of the Taxonomy Regulation, any undertaking which is subject to an obligation to disclose non-
financial information pursuant to Article 19a or Article 29a of Directive No. 2013/34/EU shall include in its non-
financial statement or consolidated non-financial statement information on how and to what extent the
62 This document defines a GHG target for 2030 in both absolute and relative terms, relating to category 15 of OTP Group's Scope 3 emissions, and
identifies the main instruments to ensure the achievement of the target; however, it is not considered a transition plan according to the ESRS E1-1
disclosure requirement.
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undertaking’s activities are associated with economic activities that qualify as environmentally sustainable
under Articles 3 and 9 of (EU) 2020/852 Regulation. OTP Group report is based on the exposures and balance
sheet according to the scope of prudential consolidation in accordance with Regulation (EU) No. 575/2013,
Title II, Chapter 2, Section 2 for the types of assets and accounting portfolios specified in point 1.1.2 of Annex
V of Commission Delegated Regulation (EU) No. 2021/2178, including information on stock and flows, on
transitional and enabling activities, and on specialized and general purpose lending.
The tables below present the consolidated information on OTP Group’s mandatory KPIs under Regulation
(EU) No. 2020/852 (Taxonomy Regulation), which have been prepared using the template published in Annex
VI of Regulation No. 2021/2178. The gross carrying amount is based on the reference date of 31. December
2024.
OTP Group discloses the relevant KPIs on a consolidated basis, considering the scope of prudential
consolidation, in accordance with Annex V, point 1.1.1 of EU 2021/2178. Accordingly, the exposures of the
various subsidiaries, including those of fund managers and credit institutions, are part of the consolidated credit
institution KPIs.
In regard to the publication of the table in Appendix 2 of the third Commission Notice of November 2024
(C/2024/6691 Commission Notice), OTP Group has chosen not to publish it in this reporting year, due to the
late publication of the Notice. The publication of the table will be taken into account by OTP Group in the next
reporting year. In the case of OTP Fund Management Ltd, the requirements for asset managers have been
taken into account and the KPIs for asset managers is presented in a separate chapter.
The calculation of the main KPI indicators has been based on the best understanding of the requirements set
out in the Delegated Regulation and the KPIs have been set accordingly.
In accordance with the legislation, the main KPI indicators are calculated as a proportion of total green assets,
which is not equal to the Bank's total balance sheet. OTP Group's corporate loan portfolio is dominated by
companies that are not subject to the obligation to disclose non-financial information under Articles 19a or 29a
of Directive 2013/34/EU. As the eligible and aligned exposures to these entities are not included in the
mandatory disclosure, they are disclosed in the (@green lending) section of this report. Exposures to non-EU
subsidiary banks as defined above are also not covered by the mandatory reporting and are excluded from
the calculation of the KPIs.
The qualitative disclosures required by Annex XI of the Delegated Regulation provide detailed information on
the data and methodology used by the Bank.
The main stock and flow KPI indicators of OTP Group show the following changes compared to the previous
year:
Mandatory GAR KPIs of OTP Group
2024
2023
Turnover
Capex
Turnover
Capex
Main KPI
Green asset ratio (GAR) Stock
0.10%
0.29%
0.05%
0.09%
Additional KPIs
Green asset ratio (GAR) Flow
0.13%
0.45 %
0.00%
0.01%
Significant efforts in green financing lead to improvements in key KPIs. For taxonomy aligned stocks,
compared to the same data last year, the KPI shows a significant increase on both a capex and turnover basis.
On turnover basis, our taxonomy aligned exposures increased from 0.05% to 0.10% and on a capex basis
from 0.09% to 0.29% of GAR assets. The proportion of assets included in the calculation of the main KPIs
within the total balance sheet remained broadly unchanged at around 65%. Both GAR assets and total bank
balance sheet data increased by more than 13%.
Taxonomy- eligible and aligned exposures to financial institutions improved severalfold, one of the main
reasons being the wider availability of taxonomy reports for financial corporations. Taxonomy-eligible
exposures reach 2.5%, while taxonomy-aligned exposures reach 0.10%.
Taxonomy-eligible exposures to non-financial corporates exceed 8.5% on a turnover basis and the taxonomy-
aligned ratio on turnover basis is above 3%.
With respect to exposures to households, in case only the substantial contribution (SC) criterion is met, the
Bank does not report these exposures as taxonomy-aligned exposures, given that it cannot currently
demonstrate compliance with the DNSH conditions.
In line with the interpretation of the third Commission Notice (C/2024/6691 Commission Notice) published in
November 2024, the Bank interprets this category as its entire gros exposure to gross households (not limited
to the exposure of the subsidiary banks operating in the EU).
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
183
For gross household exposures, the taxonomy-eligible ratio is close to 28%, while for exposures secured by
real estate the ratio is 57%. For retail motor vehicle finance, the taxonomy-eligible ratio is close to 37%. Tables
1 to 5 published in Annex VI to Regulation 2021/2178, which are to be published by credit institutions in
accordance with Article 8 of the Taxonomy Regulation, are presented below.
In calculating the eligibility and alignment KPIs according to the EU taxonomy for the managed assets, the
OTP Group is making a restatement regarding the data for the 2023 financial year:
1. Assets considered for GAR calculation – Asset management data provided in lines 55-57 of
Revenue-based (T-1)
On a Turnover basis Template 1 – Assets for the calculation of GAR Turnover, Row 55 – Assets under
management Total [gross] carrying amount is restated by + 1,526,575 million HUF.
On a Turnover basis Template 1 – Assets for the calculation of GAR Turnover, Row 55 – Assets under
management [CCM+CCA] of which towards taxonomy relevant sectors (Taxonomy-eligible) is restated by +
124,025 million HUF
On a Turnover basis Template 1 – Assets for the calculation of GAR Turnover, Row 55 – Assets under
management [CCM+CCA] of which environmentally sustainable (Taxonomy-aligned) is restated by + 9,337
million HUF
2. Assets considered for GAR calculation – Asset management data provided in lines 55-57 of Capex-
based (T-1)
On a Capex basis Template 1 – Assets for the calculation of GAR Turnover, Row 55 – Assets under
management Total [gross] carrying amount is restated by + 1,526,575 million HUF.
On a Capex basis Template 1 – Assets for the calculation of GAR Turnover, Row 55 – Assets under
management [CCM+CCA] of which towards taxonomy relevant sectors (Taxonomy-eligible) is restated by +
314,352 million HUF
On a Capex basis Template 1 – Assets for the calculation of GAR Turnover, Row 55 – Assets under
management [CCM+CCA] of which environmentally sustainable (Taxonomy-aligned) is restated by + 14,882
million HUF
Therefore, the consolidated sustainability data for 2023 published in this report are not comparable to the data
published in last year's report.
According to Article 8 of EU 2021/2178 financial undertakings and non-financial undertakings shall provide in
the non-financial statement the key performance indicators covering the previous annual reporting period.
OTP Group presents its consolidated, comparative GAR KPI-s for the previous reporting period, as required
by Article 8, where Annex VI templates explicitly require the disclosure of the t-1 period. This included
'Template 1 – Assets for the calculation of GAR' and 'Template 3 – GAR KPI stock'.
OTP Group believes that these disclosure practices do not hinder the comparability of GAR KPI's as required
by Article 8 of the legislation.
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
184
0. Summary of KPIs to be disclosed by credit institutions under Article 8 Taxonomy Regulation
Total environmentally
sustainable assets,
(million HUF)
[turnover based]
Total
environmentally
sustainable assets,
(million HUF)
[capex based]
KPI¹
KPI²
% coverage
(over total
assets)
% of assets excluded from the
numerator of the GAR (Article
7(2) and (3) and Section 1.1.2. of
Annex V)
% of assets excluded from the
denominator of the GAR (Article
7(1) and Section 1.2.4 of Annex V)
Main KPI
Green asset ratio (GAR)
stock
30,365
82,911
0.10%
0.29%
64.76%
27.43%
35.24%
Total environmentally
sustainable activities,
(million HUF)
[turnover based]
Total
environmentally
sustainable activities
(million HUF)
[capex based]
KPI
KPI
% coverage
(over total
assets)
% of assets excluded from the
numerator of the GAR (Article
7(2) and (3) and Section 1.1.2. of
Annex V)
% of assets excluded from the
denominator of the GAR (Article
7(1) and Section 1.2.4 of Annex V)
Additional
KPI-s
GAR (flow)
10,625
35,351
0.13%
0.45%
58.52%
19.93%
41.48%
Financials guarantees
-
-
Asset under management
15,963
29,556
0.37%
0.68%
¹ based on the Turnover KPI of the counterparty
² based on the CapEx KPI of the counterparty, except for lending activities where for general lending Turnover KPI is used
³ % of assets covered by the KPI over banks´ total assets
Notes:
•
Across the reporting templates: cells shaded in grey should not be reported.
•
Fees and Commissions (sheet 6) and Trading Book (sheet 7) KPIs shall only apply starting 2026.
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
185
1. Assets for the calculation of GAR – Turnover based data
HUF million
Disclosure reference date 31 December 2024
Total [gross]
carrying amount
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
Water and marine resources (WTR)
of which towards taxonomy relevant sectors (Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which environmentally sustainable (Taxonomy-
aligned)
of which environmentally sustainable
(Taxonomy-aligned)
of which environmentally sustainable
(Taxonomy-aligned)
of which use of
proceeds
of which
transitional
of which
enabling
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
enabling
GAR - Covered assets in both numerator and
denominator
1
Loans and advances, debt securities and
equity instruments not HfT eligible for GAR
calculation
16,727,599 3,950,274 30,345
776
7,922
12,245
719
18
0
0
887
0
0
0
2
Financial undertakings
2,157,696
53,932 2,208
776
401
430
84
18
0
0
0
0
0
0
3
Credit institutions
1,724,030
50,227 2,123
724
379
423
60
13
0
0
0
0
0
0
4
Loans and advances
1,145,822
50,227 2,123
724
379
423
60
13
0
0
0
0
0
0
5
Debt securities, including UoP
578,186
0
0
0
0
0
0
0
0
0
0
0
0
0
6
Equity instruments
22
0
0
0
0
0
0
0
0
0
0
7
Other financial corporations
433,666
3,706
85
52
22
6
23
5
0
0
0
0
0
0
8
of which investment firms
1,934
0
0
0
0
0
0
0
0
0
0
0
0
0
9
Loans and advances
1,934
0
0
0
0
0
0
0
0
0
0
0
0
0
10
Debt securities, including UoP
0
0
0
0
0
0
0
0
0
0
0
0
0
0
11
Equity instruments
0
0
0
0
0
0
0
0
0
0
0
12
of which management companies
6,625
0
0
0
0
0
0
0
0
0
0
0
0
0
13
Loans and advances
0
0
0
0
0
0
0
0
0
0
0
0
0
0
14
Debt securities, including UoP
0
0
0
0
0
0
0
0
0
0
0
0
0
0
15
Equity instruments
6,625
0
0
0
0
0
0
0
0
0
0
16
of which insurance undertakings
1,966
0
0
0
0
0
0
0
0
0
0
0
0
0
17
Loans and advances
1,669
0
0
0
0
0
0
0
0
0
0
0
0
0
18
Debt securities, including UoP
0
0
0
0
0
0
0
0
0
0
0
0
0
0
19
Equity instruments
297
0
0
0
0
0
0
0
0
0
0
20
Non-financial undertakings
877,837
74,200 28,137
0
7,521
11,816
635
0
0
0
887
0
0
0
21
Loans and advances
859,587
71,778 27,662
0
7,432
11,816
259
0
0
0
887
0
0
0
22
Debt securities, including UoP
18,159
2,332
386
0
0
0
376
0
0
0
0
0
0
0
23
Equity instruments
91
90
90
90
0
0
0
0
0
0
0
24
Households
13,692,065 3,822,141
0
0
0
0
0
0
0
0
25
of which loans collateralised by
residential immovable property
6,014,461 3,422,059
0
0
0
0
0
0
0
0
26
of which building renovation loans
127,700
127,014
0
0
0
0
27
of which motor vehicle loans
743,909
273,068
0
0
0
0
28
Local governments financing
0
0
0
0
0
0
0
0
0
0
0
0
0
0
29
Housing financing
0
0
0
0
0
0
0
0
0
0
0
0
0
0
30
Other local government financing
0
0
0
0
0
0
0
0
0
0
0
0
0
0
31
Collateral obtained by taking
possession: residential and
commercial immovable properties
16,115
0
0
0
0
0
0
0
0
0
0
0
0
0
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
186
HUF million
Disclosure reference date 31 December 2024
Total [gross]
carrying amount
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
Water and marine resources (WTR)
of which towards taxonomy relevant sectors (Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which environmentally sustainable (Taxonomy-
aligned)
of which environmentally sustainable
(Taxonomy-aligned)
of which environmentally sustainable
(Taxonomy-aligned)
of which use of
proceeds
of which
transitional
of which
enabling
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
enabling
32 Assets excluded from the numerator for GAR calculation
(covered in the denominator)
12,303,916
33
Financial and non-financial
undertakings
9,719,235
34
SMEs and NFCs (other than SMEs)
not subject to NFRD disclosure
obligations
6,935,346
35
Loans and advances
6,561,296
36
of which loans collateralised by
commercial immovable property
0
37
of which building renovation loans
0
38
Debt securities
306,914
39
Equity instruments
67,136
40
Non-EU country counterparties not
subject to NFRD disclosure obligations
2,783,889
41
Loans and advances
2,767,099
42
Debt securities
14,052
43
Equity instruments
2,737
44
Derivatives
50,334
45
On demand interbank loans
379,446
46
Cash and cash-related assets
667,872
47
Other categories of assets
(e,g, Goodwill, commodities etc,)
1,487,029
48 Total GAR assets
29,047,630 3,950,274 30,345
776
7,922
12,245
719
18
0
0
887
0
0
0
49 Assets not covered for GAR calculation
15,804,501
50
Central governments and
Supranational issuers
8,149,592
51
Central banks’ exposure
7,012,747
52
Trading book
642,162
53 Total assets
44,852,131 3,950,274 30,345
776
7,922
12,245
719
18
0
0
887
0
0
0
Off-balance sheet exposures - Undertakings subject to
NFRD disclosure obligations
54 Financial guarantees
7,206
0
0
0
0
0
0
0
0
0
0
0
0
0
55 Assets under management
4,346,946
80,313 14,452
0
1,552
12,899 2,146 1,266
0
1,262
112
37
0
26
56
Of which debt securities
551,901
41,261
0
0
0
0
239
0
0
0 46,449
0
0
0
57
Of which equity instruments
526,720
39,053 9,822
0
898
8,924 1,907
14
0
184 56,560 133
0
22
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
187
HUF million
Disclosure reference date 31 December 2024
Total [gross]
carrying
amount
Circular economy (CE)
Pollution (PPC)
Biodiversity and Ecosystems (BIO)
TOTAL
(CCM + CCA + WTR + CE + PPC + BIO)
of which towards taxonomy relevant
sectors
(Taxonomy-eligible)
of which towards taxonomy relevant
sectors
(Taxonomy-eligible)
of which towards taxonomy relevant
sectors
(Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which environmentally
sustainable
(Taxonomy-aligned)
of which environmentally
sustainable
(Taxonomy-aligned)
of which environmentally
sustainable
(Taxonomy-aligned)
of which environmentally sustainable
(Taxonomy-aligned)
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
transitional
of which
enabling
GAR - Covered assets in both numerator and
denominator
1
Loans and advances, debt securities and
equity instruments not HfT eligible for GAR
calculation
16,727,599
569
2
0
0 5,767 0
0
0 17,065 0
0
0 3,975,280
30,365
776
7,922
12,245
2
Financial undertakings
2,157,696
108
0
0
0
0 0
0
0
0 0
0
0
54,124
2,226
776
401
430
3
Credit institutions
1,724,030
0
0
0
0
0 0
0
0
0 0
0
0
50,287
2,136
724
379
423
4
Loans and advances
1,145,822
0
0
0
0
0 0
0
0
0 0
0
0
50,287
2,136
724
379
423
5
Debt securities, including UoP
578,186
0
0
0
0
0 0
0
0
0 0
0
0
0
0
0
0
0
6
Equity instruments
22
0
0
0
0 0
0
0 0
0
0
0
0
0
7
Other financial corporations
433,666
108
0
0
0
0 0
0
0
0 0
0
0
3,837
90
52
22
6
8
of which investment firms
1,934
0
0
0
0
0 0
0
0
0 0
0
0
0
0
0
0
0
9
Loans and advances
1,934
0
0
0
0
0 0
0
0
0 0
0
0
0
0
0
0
0
10
Debt securities, including UoP
0
0
0
0
0
0 0
0
0
0 0
0
0
0
0
0
0
0
11
Equity instruments
0
0
0
0
0 0
0
0 0
0
0
0
0
0
12
of which management companies
6,625
0
0
0
0
0 0
0
0
0 0
0
0
0
0
0
0
0
13
Loans and advances
0
0
0
0
0
0 0
0
0
0 0
0
0
0
0
0
0
0
14
Debt securities, including UoP
0
0
0
0
0
0 0
0
0
0 0
0
0
0
0
0
0
0
15
Equity instruments
6,625
0
0
0
0 0
0
0 0
0
0
0
0
0
16
of which insurance undertakings
1,966
0
0
0
0
0 0
0
0
0 0
0
0
0
0
0
0
0
17
Loans and advances
1,669
0
0
0
0
0 0
0
0
0 0
0
0
0
0
0
0
0
18
Debt securities, including UoP
0
0
0
0
0
0 0
0
0
0 0
0
0
0
0
0
0
0
19
Equity instruments
297
0
0
0
0 0
0
0 0
0
0
0
0
0
20
Non-financial undertakings
877,837
461
2
0
0 5,767 0
0
0 17,065 0
0
0
99,015
28,139
0
7,521
11,816
21
Loans and advances
859,587
461
2
0
0 5,767 0
0
0 17,065 0
0
0
96,217
27,663
0
7,432
11,816
22
Debt securities, including UoP
18,159
0
0
0
0
0 0
0
0
0 0
0
0
2,708
386
0
0
0
23
Equity instruments
91
0
0
0
0 0
0
0 0
0
90
90
90
0
24
Households
13,692,065
0
0
0
0
3,822,141
0
0
0
0
25
of which loans collateralised by
residential immovable property
6,014,461
0
0
0
0
3,422,059
0
0
0
0
26
of which building renovation loans
127,700
127,014
0
0
0
0
27
of which motor vehicle loans
743,909
273,068
0
0
0
0
28
Local governments financing
0
0
0
0
0
0 0
0
0
0 0
0
0
0
0
0
0
0
29
Housing financing
0
0
0
0
0
0 0
0
0
0 0
0
0
0
0
0
0
0
30
Other local government financing
0
0
0
0
0
0 0
0
0
0 0
0
0
0
0
0
0
0
31
Collateral obtained by taking
possession: residential and
commercial immovable properties
16,115
0
0
0
0
0 0
0
0
0 0
0
0
0
0
0
0
0
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
188
HUF million
Disclosure reference date 31 December 2024
Total [gross]
carrying
amount
Circular economy (CE)
Pollution (PPC)
Biodiversity and Ecosystems (BIO)
TOTAL
(CCM + CCA + WTR + CE + PPC + BIO)
of which towards taxonomy relevant
sectors
(Taxonomy-eligible)
of which towards taxonomy relevant
sectors
(Taxonomy-eligible)
of which towards taxonomy relevant
sectors
(Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which environmentally
sustainable
(Taxonomy-aligned)
of which environmentally
sustainable
(Taxonomy-aligned)
of which environmentally
sustainable
(Taxonomy-aligned)
of which environmentally sustainable
(Taxonomy-aligned)
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
transitional
of which
enabling
32 Assets excluded from the numerator for GAR
calculation (covered in the denominator)
12,303,916
33
Financial and non-financial
undertakings
9,719,235
34
SMEs and NFCs (other than SMEs)
not subject to NFRD disclosure
obligations
6,935,346
35
Loans and advances
6,561,296
36
of which loans collateralised by
commercial immovable property
0
37
of which building renovation loans
0
38
Debt securities
306,914
39
Equity instruments
67,136
40
Non-EU country counterparties not
subject to NFRD disclosure obligations
2,783,889
41
Loans and advances
2,767,099
42
Debt securities
14,052
43
Equity instruments
2,737
44
Derivatives
50,334
45
On demand interbank loans
379,446
46
Cash and cash-related assets
667,872
47
Other categories of assets
(e,g, Goodwill, commodities etc,)
1,487,029
48 Total GAR assets
29,047,630
569
2
0
0 5,767 0
0
0 17,065 0
0
0 3,975,280
30,365
776
7,922
12,245
49 Assets not covered for GAR calculation
15,804,501
50
Central governments and
Supranational issuers
8,149,592
51
Central banks’ exposure
7,012,747
52
Trading book
642,162
53 Total assets
44,852,131
569
2
0
0 5,767 0
0
0 17,065 0
0
0 3,975,280
30,365
776
7,922
12,245
Off-balance sheet exposures - Undertakings subject to
NFRD disclosure obligations
54 Financial guarantees
7,206
0
0
0
0
0 0
0
0
0 0
0
0
0
0
0
0
0
55 Assets under management
4,346,946 7,019 185
0
73 4,351 22
0
1 1,914 0
0
0
95,855
15,963
0
1,552
14,262
56
Of which debt securities
551,901
300
0
0
0
19 0
0
0
0 0
0
0
88,268
0
0
0
0
57
Of which equity instruments
526,720 5,051 184
0
73
186 22
0
1 1,914 0
0
0
104,670
10,174
0
1,178
9,204
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
189
1. Assets for the calculation of GAR – Turnover based data
(T-1)
HUF million
Disclosure reference date 31 December 2023
Total [gross]
carrying amount
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
Water and marine resources (WTR)
of which towards taxonomy relevant sectors (Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which environmentally sustainable (Taxonomy-
aligned)
of which environmentally sustainable
(Taxonomy-aligned)
of which environmentally sustainable
(Taxonomy-aligned)
of which use of
proceeds
of which
transitional
of which
enabling
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
enabling
GAR - Covered assets in both numerator and
denominator
1
Loans and advances, debt securities and
equity instruments not HfT eligible for GAR
calculation
13,420,637 3,018,478 12,435
0
974
1,007
15
0
0
0
0
0
0
0
2
Financial undertakings
2,012,646
4,288
0
0
0
0
0
0
0
0
0
0
0
0
3
Credit institutions
1,301,023
0
0
0
0
0
0
0
0
0
0
0
0
0
4
Loans and advances
854,447
0
0
0
0
0
0
0
0
0
0
0
0
0
5
Debt securities, including UoP
446,575
0
0
0
0
0
0
0
0
0
0
0
0
0
6
Equity instruments
0
0
0
0
0
0
0
0
0
0
0
7
Other financial corporations
711,623
4,288
0
0
0
0
0
0
0
0
0
0
0
0
8
of which investment firms
59,625
0
0
0
0
0
0
0
0
0
0
0
0
0
9
Loans and advances
59,624
0
0
0
0
0
0
0
0
0
0
0
0
0
10
Debt securities, including UoP
0
0
0
0
0
0
0
0
0
0
0
0
0
0
11
Equity instruments
1
0
0
0
0
0
0
0
0
0
0
12
of which management companies
26,032
0
0
0
0
0
0
0
0
0
0
0
0
0
13
Loans and advances
0
0
0
0
0
0
0
0
0
0
0
0
0
0
14
Debt securities, including UoP
0
0
0
0
0
0
0
0
0
0
0
0
0
0
15
Equity instruments
26,032
0
0
0
0
0
0
0
0
0
0
16
of which insurance undertakings
1,797
0
0
0
0
0
0
0
0
0
0
0
0
0
17
Loans and advances
1,795
0
0
0
0
0
0
0
0
0
0
0
0
0
18
Debt securities, including UoP
0
0
0
0
0
0
0
0
0
0
0
0
0
0
19
Equity instruments
1
0
0
0
0
0
0
0
0
0
0
20
Non-financial undertakings
176,625
21,188 12,435
0
974
1,007
15
0
0
0
0
0
0
0
21
Loans and advances
60,818
10,110 6,132
0
0
0
0
0
0
0
0
0
0
0
22
Debt securities, including UoP
115,807
11,078 6,304
0
974
1,007
15
0
0
0
0
0
0
0
23
Equity instruments
0
0
0
0
0
0
0
0
0
0
0
24
Households
11,231,366 2,993,002
0
0
0
0
0
0
0
0
25
of which loans collateralised by
residential immovable property
4,524,697 2,694,148
0
0
0
0
0
0
0
0
26
of which building renovation loans
127,689
127,416
0
0
0
0
0
0
0
0
27
of which motor vehicle loans
446,413
171,438
0
0
0
0
28
Local governments financing
0
0
0
0
0
0
0
0
0
0
0
0
0
0
29
Housing financing
0
0
0
0
0
0
0
0
0
0
0
0
0
0
30
Other local government financing
0
0
0
0
0
0
0
0
0
0
0
0
0
0
31
Collateral obtained by taking
possession: residential and
commercial immovable properties
9,789
0
0
0
0
0
0
0
0
0
0
0
0
0
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
190
HUF million
Disclosure reference date 31 December 2023
Total [gross]
carrying amount
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
Water and marine resources (WTR)
of which towards taxonomy relevant sectors (Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which environmentally sustainable (Taxonomy-
aligned)
of which environmentally sustainable
(Taxonomy-aligned)
of which environmentally sustainable
(Taxonomy-aligned)
of which use of
proceeds
of which
transitional
of which
enabling
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
enabling
32 Assets excluded from the numerator for GAR calculation
(covered in the denominator)
11,562,435
33
Financial and non-financial
undertakings
9,385,343
34
SMEs and NFCs (other than SMEs)
not subject to NFRD disclosure
obligations
6,860,587
35
Loans and advances
6,712,884
36
of which loans collateralised by
commercial immovable property
37
of which building renovation loans
38
Debt securities
146,932
39
Equity instruments
771
40
Non-EU country counterparties not
subject to NFRD disclosure obligations
2,524,756
41
Loans and advances
2,492,214
42
Debt securities
30,472
43
Equity instruments
2,070
44
Derivatives
41,967
45
On demand interbank loans
574,648
46
Cash and cash-related assets
605,799
47
Other categories of assets
(e,g, Goodwill, commodities etc,)
954,677
48 Total GAR assets
25,679,052 3,018,478 12,435
0
974
1,007
15
0
0
0
0
0
0
0
49 Assets not covered for GAR calculation
13,930,092
50
Central governments and
Supranational issuers
6,307,758
51
Central banks’ exposure
7,401,137
52
Trading book
221,197
53 Total assets
39,609,144 3,018,478 12,435
0
974
0
0
0
0
0
0
0
0
0
Off-balance sheet exposures - Undertakings subject to
NFRD disclosure obligations
54 Financial guarantees
173,787
0
0
0
0
0
0
0
0
0
0
0
0
0
55 Assets under management*
3,177,939
144,741 10,195
1,038
9,157 1,566 1,175
1,175
56
Of which debt securities
266,078
1,752 1,752
331
1,421
717
717
717
0
57
Of which equity instruments
359,496
8,443 8,443
707
7,736
14
0
0
*restated
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
191
HUF million
Disclosure reference date 31 December 2024
Total [gross]
carrying
amount
Circular economy (CE)
Pollution (PPC)
Biodiversity and Ecosystems (BIO)
TOTAL
(CCM + CCA + WTR + CE + PPC + BIO)
of which towards taxonomy relevant
sectors
(Taxonomy-eligible)
of which towards taxonomy relevant
sectors
(Taxonomy-eligible)
of which towards taxonomy relevant
sectors
(Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which environmentally
sustainable
(Taxonomy-aligned)
of which environmentally
sustainable
(Taxonomy-aligned)
of which environmentally
sustainable
(Taxonomy-aligned)
of which environmentally sustainable
(Taxonomy-aligned)
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
transitional
of which
enabling
GAR - Covered assets in both numerator and
denominator
1
Loans and advances, debt securities and
equity instruments not HfT eligible for GAR
calculation
13,420,637
0
0
0
0
0 0
0
0
0 0
0
0 3,018,493 12,435
0
974
1,007
2
Financial undertakings
2,012,646
0
0
0
0
0 0
0
0
0 0
0
0
4,288
0
0
0
0
3
Credit institutions
1,301,023
0
0
0
0
0 0
0
0
0 0
0
0
0
0
0
0
0
4
Loans and advances
854,447
0
0
0
0
0 0
0
0
0 0
0
0
0
0
0
0
0
5
Debt securities, including UoP
446,575
0
0
0
0
0 0
0
0
0 0
0
0
0
0
0
0
0
6
Equity instruments
0
0
0
0
0 0
0
0 0
0
0
0
0
0
7
Other financial corporations
711,623
0
0
0
0
0 0
0
0
0 0
0
0
4,288
0
0
0
0
8
of which investment firms
59,625
0
0
0
0
0 0
0
0
0 0
0
0
0
0
0
0
0
9
Loans and advances
59,624
0
0
0
0
0 0
0
0
0 0
0
0
0
0
0
0
0
10
Debt securities, including UoP
0
0
0
0
0
0 0
0
0
0 0
0
0
0
0
0
0
0
11
Equity instruments
1
0
0
0
0 0
0
0 0
0
0
0
0
0
12
of which management companies
26,032
0
0
0
0
0 0
0
0
0 0
0
0
0
0
0
0
0
13
Loans and advances
0
0
0
0
0
0 0
0
0
0 0
0
0
0
0
0
0
0
14
Debt securities, including UoP
0
0
0
0
0 0
0
0
0 0
0
0
0
0
0
0
0
15
Equity instruments
26,032
0
0
0
0 0
0
0 0
0
0
0
0
0
16
of which insurance undertakings
1,797
0
0
0
0
0 0
0
0
0 0
0
0
0
0
0
0
0
17
Loans and advances
1,795
0
0
0
0
0 0
0
0
0 0
0
0
0
0
0
0
0
18
Debt securities, including UoP
0
0
0
0
0
0 0
0
0
0 0
0
0
0
0
0
0
0
19
Equity instruments
1
0
0
0
0 0
0
0 0
0
0
0
0
0
20
Non-financial undertakings
176,625
0
0
0
0
0 0
0
0
0 0
0
0
21,203 12,435
0
974
1,007
21
Loans and advances
60,818
0
0
0
0
0 0
0
0
0 0
0
0
10,110
6,132
0
0
0
22
Debt securities, including UoP
115,807
0
0
0
0
0 0
0
0
0 0
0
0
11,093
6,304
0
974
1,007
23
Equity instruments
0
0
0
0
0 0
0
0 0
0
0
0
0
0
24
Households
11,231,366
0
0
0
0
2,993,002
0
0
0
0
25
of which loans collateralised by
residential immovable property
4,524,697
0
0
0
0
2,694,148
0
0
0
0
26
of which building renovation loans
127,689
127,416
0
0
0
0
27
of which motor vehicle loans
446,413
171,438
0
0
0
0
28
Local governments financing
0
0
0
0
0
0 0
0
0
0 0
0
0
0
0
0
0
0
29
Housing financing
0
0
0
0
0
0 0
0
0
0 0
0
0
0
0
0
0
0
30
Other local government financing
0
0
0
0
0
0 0
0
0
0 0
0
0
0
0
0
0
0
31
Collateral obtained by taking
possession: residential and
commercial immovable properties
9,789
0
0
0
0
0 0
0
0
0 0
0
0
0
0
0
0
0
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
192
HUF million
Disclosure reference date 31 December 2024
Total [gross]
carrying
amount
Circular economy (CE)
Pollution (PPC)
Biodiversity and Ecosystems (BIO)
TOTAL
(CCM + CCA + WTR + CE + PPC + BIO)
of which towards taxonomy relevant
sectors
(Taxonomy-eligible)
of which towards taxonomy relevant
sectors
(Taxonomy-eligible)
of which towards taxonomy relevant
sectors
(Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which environmentally
sustainable
(Taxonomy-aligned)
of which environmentally
sustainable
(Taxonomy-aligned)
of which environmentally
sustainable
(Taxonomy-aligned)
of which environmentally sustainable
(Taxonomy-aligned)
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
transitional
of which
enabling
32 Assets excluded from the numerator for GAR
calculation (covered in the denominator)
11,562,435
33
Financial and non-financial
undertakings
9,385,343
34
SMEs and NFCs (other than SMEs)
not subject to NFRD disclosure
obligations
6,860,587
35
Loans and advances
6,712,884
36
of which loans collateralised by
commercial immovable property
37
of which building renovation loans
38
Debt securities
146,932
39
Equity instruments
771
40
Non-EU country counterparties not
subject to NFRD disclosure obligations
2,524,756
41
Loans and advances
2,492,214
42
Debt securities
30,472
43
Equity instruments
2,070
44
Derivatives
41,967
45
On demand interbank loans
574,648
46
Cash and cash-related assets
605,799
47
Other categories of assets
(e,g, Goodwill, commodities etc,)
954,677
48 Total GAR assets
25,679,052
0
0
0
0
0 0
0
0
0 0
0
0 3,018,493 12,435
0
974
1,007
49 Assets not covered for GAR calculation
13,930,092
50
Central governments and
Supranational issuers
6,307,758
51
Central banks’ exposure
7,401,137
52
Trading book
221,197
53 Total assets
39,609,144
0
0
0
0
0 0
0
0
0 0
0
0
0
0
0
0
0
Off-balance sheet exposures - Undertakings subject to
NFRD disclosure obligations
54 Financial guarantees
173,787
0
0
0
0
0 0
0
0
0 0
0
0
0
0
0
0
0
55 Assets under management
3,177,939
146,307 11,371
1,038
10,332
56
Of which debt securities
266,078
2,469
2,469
1,048
2,138
57
Of which equity instruments
359,496
8,457
8,443
707
7,736
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
193
1. Assets for the calculation of GAR – Capex based
HUF million
Disclosure reference date 31 December 2024
Total [gross]
carrying amount
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
Water and marine resources (WTR)
of which towards taxonomy relevant sectors (Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which environmentally sustainable (Taxonomy-
aligned)
of which environmentally
sustainable (Taxonomy-aligned)
of which environmentally
sustainable (Taxonomy-aligned)
of which use of
proceeds
of which
transitional
of which
enabling
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
enabling
GAR - Covered assets in both numerator and denominator
1
Loans and advances, debt securities and
equity instruments not HfT eligible for GAR
calculation
16,727,599
4,002,781
80,382
767
45,373
10,740
304
38
0
0
33
0
0
0
2
Financial undertakings
2,157,696
53,508
3,106
756
719
695
109
22
0
0
0
0
0
0
3
Credit institutions
1,724,030
50,014
2,979
704
675
688
99
22
0
0
0
0
0
0
4
Loans and advances
1,145,822
50,014
2,979
704
675
688
99
22
0
0
0
0
0
0
5
Debt securities, including UoP
578,186
0
0
0
0
0
0
0
0
0
0
0
0
0
6
Equity instruments
22
0
0
0
0
0
0
0
0
0
0
7
Other financial corporations
433,666
3,494
127
52
44
8
10
0
0
0
0
0
0
0
8
of which investment firms
1,934
0
0
0
0
0
0
0
0
0
0
0
0
0
9
Loans and advances
1,934
0
0
0
0
0
0
0
0
0
0
0
0
0
10
Debt securities, including UoP
0
0
0
0
0
0
0
0
0
0
0
0
0
0
11
Equity instruments
0
0
0
0
0
0
0
0
0
0
0
0
12
of which management companies
6,625
0
0
0
0
0
0
0
0
0
0
0
0
0
13
Loans and advances
0
0
0
0
0
0
0
0
0
0
0
0
0
0
14
Debt securities, including UoP
0
0
0
0
0
0
0
0
0
0
0
0
0
0
15
Equity instruments
6,625
0
0
0
0
0
0
0
0
0
0
16
of which insurance undertakings
1,966
0
0
0
0
0
0
0
0
0
0
0
0
0
17
Loans and advances
1,669
0
0
0
0
0
0
0
0
0
0
0
0
0
18
Debt securities, including UoP
0
0
0
0
0
0
0
0
0
0
0
0
0
0
19
Equity instruments
297
0
0
0
0
0
0
0
0
0
0
20
Non-financial undertakings
877,837
127,133
77,275
11
44,654
10,045
195
16
0
0
33
0
0
0
21
Loans and advances
859,587
124,733
76,343
11
44,573
10,045
90
16
0
0
33
0
0
0
22
Debt securities, including UoP
18,159
2,318
851
0
0
0
105
0
0
0
0
0
0
0
23
Equity instruments
91
81
81
81
0
0
0
0
0
0
0
24
Households
13,692,065
3,822,141
0
0
0
0
0
0
0
0
25
of which loans collateralised by
residential immovable property
6,014,461
3,422,059
0
0
0
0
0
0
0
0
26
of which building renovation loans
127,700
127,014
0
0
0
0
0
0
0
0
27
of which motor vehicle loans
743,909
273,068
0
0
0
0
28
Local governments financing
0
0
0
0
0
0
0
0
0
0
0
0
0
0
29
Housing financing
0
0
0
0
0
0
0
0
0
0
0
0
0
0
30
Other local government financing
0
0
0
0
0
0
0
0
0
0
0
0
0
0
31
Collateral obtained by taking
possession: residential and
commercial immovable properties
16,115
0
0
0
0
0
0
0
0
0
0
0
0
0
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
194
HUF million
Disclosure reference date 31 December 2024
Total [gross]
carrying amount
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
Water and marine resources (WTR)
of which towards taxonomy relevant sectors (Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which environmentally sustainable (Taxonomy-
aligned)
of which environmentally
sustainable (Taxonomy-aligned)
of which environmentally
sustainable (Taxonomy-aligned)
of which use of
proceeds
of which
transitional
of which
enabling
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
enabling
32 Assets excluded from the numerator for GAR calculation
(covered in the denominator)
12,303,916
33
Financial and non-financial
undertakings
9,719,235
34
SMEs and NFCs (other than SMEs)
not subject to NFRD disclosure
obligations
6,935,346
35
Loans and advances
6,561,296
36
of which loans collateralised by
commercial immovable property
0
37
of which building renovation loans
0
38
Debt securities
306,914
39
Equity instruments
67,136
40
Non-EU country counterparties not
subject to NFRD disclosure obligations
2,783,889
41
Loans and advances
2,767,099
42
Debt securities
14,052
43
Equity instruments
2,737
44
Derivatives
50,334
45
On demand interbank loans
379,446
46
Cash and cash-related assets
667,872
47
Other categories of assets
(e,g, Goodwill, commodities etc,)
1,487,029
48 Total GAR assets
29,047,630
4,002,781
80,382
767
45,373
10,740
304
38
0
0
33
0
0
0
49 Assets not covered for GAR calculation
15,804,501
50
Central governments and
Supranational issuers
8,149,592
51
Central banks’ exposure
7,012,747
52
Trading book
642,162
53 Total assets
44,852,131
4,002,781
80,382
767
45,373
10,740
304
38
0
0
33
0
0
0
Off-balance sheet exposures - Undertakings subject to NFRD
disclosure obligations
54 Financial guarantees
7,206
0
0
0
0
0
0
0
0
0
0
0
0
0
55 Assets under management
4,346,946
104,814
27,998
0
5,363
22,635
5,351 1,334
0
1,331
205
169
0
142
56
Of which debt securities
513,985
46,449
0
0
0
0
300
0
0
0
19
0
0
0
57
Of which equity instruments
526,720
56,560
18,606
0
3,251
15,356
5,051 1,329
0
1,328
186
75
0
75
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
195
HUF million
Disclosure reference date 31 December 2024
Total [gross]
carrying
amount
Circular economy (CE)
Pollution (PPC)
Biodiversity and Ecosystems
(BIO)
TOTAL
(CCM + CCA + WTR + CE + PPC + BIO)
of which towards taxonomy relevant
sectors (Taxonomy-eligible)
of which towards taxonomy relevant
sectors (Taxonomy-eligible)
of which towards taxonomy relevant
sectors (Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which environmentally
sustainable (Taxonomy-aligned)
of which environmentally
sustainable (Taxonomy-
aligned)
of which environmentally
sustainable (Taxonomy-
aligned)
of which environmentally sustainable
(Taxonomy-aligned)
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
transitional
of which
enabling
GAR - Covered assets in both numerator and
denominator
1
Loans and advances, debt securities and
equity instruments not HfT eligible for GAR
calculation
16,727,599 5,127 2,492
0
0 3,825 0
0
0
3 0
0
0 4,012,073 82,911
767
45,373
10,740
2
Financial undertakings
2,157,696
108
0
0
0
0 0
0
0
0 0
0
0
53,725
3,128
756
719
695
3
Credit institutions
1,724,030
0
0
0
0
0 0
0
0
0 0
0
0
50,113
3,001
704
675
688
4
Loans and advances
1,145,822
0
0
0
0
0 0
0
0
0 0
0
0
50,113
3,001
704
675
688
5
Debt securities, including UoP
578,186
0
0
0
0
0 0
0
0
0 0
0
0
0
0
0
0
0
6
Equity instruments
22
0
0
0
0 0
0
0 0
0
0
0
0
0
7
Other financial corporations
433,666
108
0
0
0
0 0
0
0
0 0
0
0
3,612
127
52
44
8
8
of which investment firms
1,934
0
0
0
0
0 0
0
0
0 0
0
0
0
0
0
0
0
9
Loans and advances
1,934
0
0
0
0
0 0
0
0
0 0
0
0
0
0
0
0
0
10
Debt securities, including UoP
0
0
0
0
0
0 0
0
0
0 0
0
0
0
0
0
0
0
11
Equity instruments
0
0
0
0
0 0
0
0 0
0
0
0
0
0
12
of which management companies
6,625
0
0
0
0
0 0
0
0
0 0
0
0
0
0
0
0
0
13
Loans and advances
0
0
0
0
0
0 0
0
0
0 0
0
0
0
0
0
0
0
14
Debt securities, including UoP
0
0
0
0
0
0 0
0
0
0 0
0
0
0
0
0
0
0
15
Equity instruments
6,625
0
0
0
0 0
0
0 0
0
0
0
0
0
16
of which insurance undertakings
1,966
0
0
0
0
0 0
0
0
0 0
0
0
0
0
0
0
0
17
Loans and advances
1,669
0
0
0
0
0 0
0
0
0 0
0
0
0
0
0
0
0
18
Debt securities, including UoP
0
0
0
0
0
0 0
0
0
0 0
0
0
0
0
0
0
0
19
Equity instruments
297
0
0
0
0 0
0
0 0
0
0
0
0
0
20
Non-financial undertakings
877,837 5,019 2,492
0
0 3,825 0
0
0
3 0
0
0
136,207 79,783
44,654
10,045
21
Loans and advances
859,587 5,007 2,492
0
0 3,825 0
0
0
3 0
0
0
133,691 78,851
11
44,573
10,045
22
Debt securities, including UoP
18,159
12
0
0
0
0 0
0
0
0 0
0
0
2,435
851
0
0
0
23
Equity instruments
91
0
0
0
0 0
0
0 0
0
81
81
81
0
24
Households
13,692,065
0
0
0
0
3,822,141
0
0
0
0
25
of which loans collateralised by
residential immovable property
6,014,461
0
0
0
0
3,422,059
0
0
0
0
26
of which building renovation loans
127,700
0
0
0
0
127,014
0
0
0
0
27
of which motor vehicle loans
743,909
273,068
0
0
0
0
28
Local governments financing
0
0
0
0
0
0 0
0
0
0 0
0
0
0
0
0
0
0
29
Housing financing
0
0
0
0
0
0 0
0
0
0 0
0
0
0
0
0
0
0
30
Other local government financing
0
0
0
0
0
0 0
0
0
0 0
0
0
0
0
0
0
0
31
Collateral obtained by taking
possession: residential and
commercial immovable properties
16,115
0
0
0
0
0 0
0
0
0 0
0
0
0
0
0
0
0
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
196
HUF million
Disclosure reference date 31 December 2024
Total [gross]
carrying
amount
Circular economy (CE)
Pollution (PPC)
Biodiversity and Ecosystems
(BIO)
TOTAL
(CCM + CCA + WTR + CE + PPC + BIO)
of which towards taxonomy relevant
sectors (Taxonomy-eligible)
of which towards taxonomy relevant
sectors (Taxonomy-eligible)
of which towards taxonomy relevant
sectors (Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which environmentally
sustainable (Taxonomy-aligned)
of which environmentally
sustainable (Taxonomy-
aligned)
of which environmentally
sustainable (Taxonomy-
aligned)
of which environmentally sustainable
(Taxonomy-aligned)
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
transitional
of which
enabling
32 Assets excluded from the numerator for GAR
calculation (covered in the denominator)
12,303,916
33
Financial and non-financial
undertakings
9,719,235
34
SMEs and NFCs (other than SMEs)
not subject to NFRD disclosure
obligations
6,935,346
35
Loans and advances
6,561,296
36
of which loans collateralised by
commercial immovable property
0
37
of which building renovation loans
0
38
Debt securities
306,914
39
Equity instruments
67,136
40
Non-EU country counterparties not
subject to NFRD disclosure obligations
2,783,889
41
Loans and advances
2,767,099
42
Debt securities
14,052
43
Equity instruments
2,737
44
Derivatives
50,334
45
On demand interbank loans
379,446
46
Cash and cash-related assets
667,872
47
Other categories of assets
(e,g, Goodwill, commodities etc,)
1,487,029
48 Total GAR assets
29,047,630 5,127 2,492
0
0 3,825 0
0
0
3 0
0
0 4,012,073 82,911
767
45,373
10,740
49 Assets not covered for GAR calculation
15,804,501
50
Central governments and
Supranational issuers
8,149,592
51
Central banks’ exposure
7,012,747
52
Trading book
642,162
53 Total assets
44,852,131 5,127
0
0
0
0 0
0
0
0 0
0
0 4,008,248 80,419
767
45,373
10,740
Off-balance sheet exposures - Undertakings subject to
NFRD disclosure obligations
54 Financial guarantees
7,206
0
0
0
0
0 0
0
0
0 0
0
0
0
0
0
0
0
55 Assets under management
4,346,946 5,787
51
24 2,397 1
0
1
7 2
0
0
118,560 29,556
0
5,363
24,133
56
Of which debt securities
513,985
3
0
0
3 0
0
0
0 0
0
0
46,773
0
0
0
0
57
Of which equity instruments
526,720 5,784
51
24 2,394 6
0
1 2,394 2
0
2
72,369 20,069
0
4,681
16,786
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
197
1. Assets for the calculation of GAR – Capex based
(T-1)
HUF million
Disclosure reference date 31 December 2023
Total [gross]
carrying amount
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
Water and marine resources (WTR)
of which towards taxonomy relevant sectors (Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which environmentally sustainable (Taxonomy-
aligned)
of which environmentally sustainable
(Taxonomy-aligned)
of which environmentally
sustainable (Taxonomy-aligned)
of which use of
proceeds
of which
transitional
of which
enabling
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
enabling
GAR - Covered assets in both numerator and denominator
1
Loans and advances, debt securities and
equity instruments not HfT eligible for GAR
calculation
13,420,637
3,038,192
23,138
0
0
0
0
0
0
0
0
0
0
0
2
Financial undertakings
2,012,646
3,358
0
0
0
0
0
0
0
0
0
0
0
0
3
Credit institutions
1,301,023
0
0
0
0
0
0
0
0
0
0
0
0
0
4
Loans and advances
854,447
0
0
0
0
0
0
0
0
0
0
0
0
0
5
Debt securities, including UoP
446,575
0
0
0
0
0
0
0
0
0
0
0
0
0
6
Equity instruments
0
0
0
0
0
0
0
0
0
0
0
7
Other financial corporations
711,623
3,358
0
0
0
0
0
0
0
0
0
0
0
0
8
of which investment firms
59,625
0
0
0
0
0
0
0
0
0
0
0
0
0
9
Loans and advances
59,624
0
0
0
0
0
0
0
0
0
0
0
0
0
10
Debt securities, including UoP
0
0
0
0
0
0
0
0
0
0
0
0
0
0
11
Equity instruments
1
0
0
0
0
0
0
0
0
0
0
12
of which management companies
26,032
0
0
0
0
0
0
0
0
0
0
0
0
0
13
Loans and advances
0
0
0
0
0
0
0
0
0
0
0
0
0
0
14
Debt securities, including UoP
0
0
0
0
0
0
0
0
0
0
0
0
0
0
15
Equity instruments
26,032
0
0
0
0
0
0
0
0
0
0
16
of which insurance undertakings
1,797
0
0
0
0
0
0
0
0
0
0
0
0
0
17
Loans and advances
1,795
0
0
0
0
0
0
0
0
0
0
0
0
0
18
Debt securities, including UoP
0
0
0
0
0
0
0
0
0
0
0
0
0
0
19
Equity instruments
1
0
0
0
0
0
0
0
0
0
0
20
Non-financial undertakings
176,625
41,833
23,138
0
0
0
0
0
0
0
0
0
0
0
21
Loans and advances
60,818
21,221
13,844
0
0
0
0
0
0
0
0
0
0
22
Debt securities, including UoP
115,807
20,612
9,293
0
0
0
0
0
0
0
0
0
0
23
Equity instruments
0
0
0
0
0
0
0
0
0
0
0
24
Households
11,231,366
2,993,002
0
0
0
0
0
0
0
0
25
of which loans collateralised by
residential immovable property
4,524,697
2,694,148
0
0
0
0
0
0
0
0
26
of which building renovation loans
127,689
127,416
0
0
0
0
0
0
0
0
27
of which motor vehicle loans
446,413
171,438
0
0
0
0
28
Local governments financing
0
0
0
0
0
0
0
0
0
0
0
29
Housing financing
0
0
0
0
0
0
0
0
0
0
0
30
Other local government financing
0
0
0
0
0
0
0
0
0
0
0
31
Collateral obtained by taking
possession: residential and
commercial immovable properties
9,789
0
0
0
0
0
0
0
0
0
0
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
198
HUF million
Disclosure reference date 31 December 2023
Total [gross]
carrying amount
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
Water and marine resources (WTR)
of which towards taxonomy relevant sectors (Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which environmentally sustainable (Taxonomy-
aligned)
of which environmentally sustainable
(Taxonomy-aligned)
of which environmentally
sustainable (Taxonomy-aligned)
of which use of
proceeds
of which
transitional
of which
enabling
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
enabling
32 Assets excluded from the numerator for GAR calculation
(covered in the denominator)
11,562,435
33
Financial and non-financial
undertakings
9,385,343
34
SMEs and NFCs (other than SMEs)
not subject to NFRD disclosure
obligations
6,860,587
35
Loans and advances
6,712,884
36
of which loans collateralised by
commercial immovable property
37
of which building renovation loans
38
Debt securities
146,932
39
Equity instruments
771
40
Non-EU country counterparties not
subject to NFRD disclosure obligations
2,524,756
41
Loans and advances
2,492,214
42
Debt securities
30,472
43
Equity instruments
2,070
44
Derivatives
41,967
45
On demand interbank loans
574,648
46
Cash and cash-related assets
605,799
47
Other categories of assets
(e,g, Goodwill, commodities etc,)
954,677
48 Total GAR assets
25,679,052
2,993,002
49 Assets not covered for GAR calculation
13,930,092
50
Central governments and
Supranational issuers
6,307,758
51
Central banks’ exposure
7,401,137
52
Trading book
221,197
53 Total assets
39,609,144
2,993,002
Off-balance sheet exposures - Undertakings subject to NFRD
disclosure obligations
54 Financial guarantees
173,787
0
55 Assets under management
3,177,939
339,475
19,267
3,988
15,279
6,673 1,745
1,742
56
Of which debt securities
266,078
3,648
3,648
1,281
2,367
5
5
2
57
Of which equity instruments
359,496
15,619
15,619
2,707
12,913
1,740 1,740
1,740
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
199
HUF million
Disclosure reference date 31 December 2023
Total [gross]
carrying
amount
Circular economy (CE)
Pollution (PPC)
Biodiversity and Ecosystems
(BIO)
TOTAL
(CCM + CCA + WTR + CE + PPC + BIO)
of which towards taxonomy relevant
sectors
(Taxonomy-eligible)
of which towards taxonomy relevant
sectors
(Taxonomy-eligible)
of which towards taxonomy relevant
sectors
(Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which environmentally
sustainable
(Taxonomy-aligned)
of which environmentally
sustainable
(Taxonomy-aligned)
of which environmentally
sustainable
(Taxonomy-aligned)
of which environmentally sustainable (Taxonomy-
aligned)
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
transitional
of which
enabling
GAR - Covered assets in both numerator and
denominator
1
Loans and advances, debt securities and
equity instruments not HfT eligible for GAR
calculation
13,420,637
0 0
0
0
0
0
0
0
0 0
0
0 3,038,192
23,138
0
0
0
2
Financial undertakings
2,012,646
0 0
0
0
0
0
0
0
0 0
0
0
3,358
0
0
0
0
3
Credit institutions
1,301,023
0 0
0
0
0
0
0
0
0 0
0
0
0
0
0
0
0
4
Loans and advances
854,447
0 0
0
0
0
0
0
0
0 0
0
0
0
0
0
0
0
5
Debt securities, including UoP
446,575
0 0
0
0
0
0
0
0
0 0
0
0
0
0
0
0
0
6
Equity instruments
0
0 0
0
0
0
0
0 0
0
0
0
0
0
7
Other financial corporations
711,623
1 0
0
0
0
0
0
0
0 0
0
0
3,358
0
0
0
0
8
of which investment firms
59,625
0 0
0
0
0
0
0
0
0 0
0
0
0
0
0
0
0
9
Loans and advances
59,624
0 0
0
0
0
0
0
0
0 0
0
0
0
0
0
0
0
10
Debt securities, including UoP
0
0 0
0
0
0
0
0
0
0 0
0
0
0
0
0
0
0
11
Equity instruments
1
0 0
0
0
0
0
0 0
0
0
0
0
0
12
of which management companies
26,032
0 0
0
0
0
0
0
0
0 0
0
0
0
0
0
0
0
13
Loans and advances
0
0 0
0
0
0
0
0
0
0 0
0
0
0
0
0
0
0
14
Debt securities, including UoP
0
0 0
0
0
0
0
0
0
0 0
0
0
0
0
0
0
0
15
Equity instruments
26,032
0 0
0
0
0
0
0 0
0
0
0
0
0
16
of which insurance undertakings
1,797
0 0
0
0
0
0
0
0
0 0
0
0
0
0
0
0
0
17
Loans and advances
1,795
0 0
0
0
0
0
0
0
0 0
0
0
0
0
0
0
0
18
Debt securities, including UoP
0
0 0
0
0
0
0
0
0
0 0
0
0
0
0
0
0
0
19
Equity instruments
1
0 0
0
0
0
0
0 0
0
0
0
0
0
20
Non-financial undertakings
176,625
0 0
0
0
0
0
0
0
0 0
0
0
41,833
23,138
0
0
0
21
Loans and advances
60,818
0 0
0
0
0
0
0
0 0
0
0
21,221
13,844
0
0
0
22
Debt securities, including UoP
115,807
0 0
0
0
0
0
0
0 0
0
0
20,612
9,293
0
0
0
23
Equity instruments
0
0 0
0
0
0
0
0 0
0
0
0
0
0
24
Households
11,231,366
0 0
0
0
2,993,002
0
0
0
0
25
of which loans collateralised by
residential immovable property
4,524,697
2,694,148
0
0
0
0
26
of which building renovation loans
127,689
127,416
0
0
0
0
27
of which motor vehicle loans
446,413
171,438
0
0
0
0
28
Local governments financing
0
0
0
0
0
0
0
0
0
29
Housing financing
0
0
0
0
0
0
0
0
0
30
Other local government financing
0
0
0
0
0
0
0
0
0
31
Collateral obtained by taking
possession: residential and
commercial immovable properties
9,789
0
0
0
0
0
0
0
0
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
200
HUF million
Disclosure reference date 31 December 2023
Total [gross]
carrying
amount
Circular economy (CE)
Pollution (PPC)
Biodiversity and Ecosystems
(BIO)
TOTAL
(CCM + CCA + WTR + CE + PPC + BIO)
of which towards taxonomy relevant
sectors
(Taxonomy-eligible)
of which towards taxonomy relevant
sectors
(Taxonomy-eligible)
of which towards taxonomy relevant
sectors
(Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which environmentally
sustainable
(Taxonomy-aligned)
of which environmentally
sustainable
(Taxonomy-aligned)
of which environmentally
sustainable
(Taxonomy-aligned)
of which environmentally sustainable (Taxonomy-
aligned)
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
transitional
of which
enabling
32 Assets excluded from the numerator for GAR
calculation (covered in the denominator)
11,562,435
33
Financial and non-financial
undertakings
9,385,343
34
SMEs and NFCs (other than SMEs)
not subject to NFRD disclosure
obligations
6,860,587
35
Loans and advances
6,712,884
36
of which loans collateralised by
commercial immovable property
37
of which building renovation loans
38
Debt securities
146,932
39
Equity instruments
771
40
Non-EU country counterparties not
subject to NFRD disclosure obligations
2,524,756
41
Loans and advances
2,492,214
42
Debt securities
30,472
43
Equity instruments
2,070
44
Derivatives
41,967
45
On demand interbank loans
574,648
46
Cash and cash-related assets
605,799
47
Other categories of assets
(e,g, Goodwill, commodities etc,)
954,677
48 Total GAR assets
25,679,052
3,038,192
23,138
49 Assets not covered for GAR calculation
13,930,092
50
Central governments and
Supranational issuers
6,307,758
51
Central banks’ exposure
7,401,137
52
Trading book
221,197
53 Total assets
39,609,144
3,038,192
23,138
Off-balance sheet exposures - Undertakings subject to
NFRD disclosure obligations
54 Financial guarantees
173,787
55 Assets under management*
3,177,939
346,148
21,012
3,988
17,021
56
Of which debt securities
266,078
3,653
3,653
1,283
2,369
57
Of which equity instruments
359,496
17,359
17,359
4,446
14,652
* restated
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
201
2. GAR Sector information – Turnover based data
Breakdown by sector -
NACE 4 digits level
(code and label)
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
Water and marine resources (WTR)
Non-Financial corporates (Subject to
NFRD)
SMEs and other NFC not subject
to NFRD
Non-Financial corporates (Subject to
NFRD)
SMEs and other NFC not subject to
NFRD
Non-Financial corporates (Subject to
NFRD)
SMEs and other NFC not subject to
NFRD
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
HUF million
of which
environmentally
sustainable (CCM)
HUF million
of which
environmentally
sustainable (CCM)
HUF million
of which
environmentally
sustainable (CCA)
HUF million
of which
environmentally
sustainable (CCA)
HUF million
of which
environmentally
sustainable (WTR)
HUF million
of which
environmentally
sustainable (WTR)
1
7022
131
3
24
2
2932
1,756
35
3
2511
515
2
3
4
1920
42
2
1
5
4711
40
8
6
4730
379
379
7
4646
2,048
8
2120
376
376
9
1062
3,444
3,251
10
2016
20
1
4
11
3811
64
2
12
12
2059
2,524
62
467
13
4531
19
19
14
2720
0
15
1039
4,950
16
3511
9,066
1,994
17
4519
72
2
13
18
4931
4,562
2,199
251
19
3523
224
205
20
6420
5,502
5,044
21
4950
22
2910
0
23
5510
309
24
7010
15,274
10,266
25
8020
15
0
3
26
5310
811
396
27
6492
587
14
109
28
3514
0
0
29
2442
1,065
1,065
30
3513
1,010
1,008
31
6110
176
2
32
6120
36
33
6203
0
34
4520
660
35
1082
23
36
2351
2,293
210
37
2221
1,779
38
0520
0
0
39
3522
7
4
0
40
6820
21
19
41
6831
5,642
1,124
42
3020
17
8
43
3512
8,691
794
44
2443
8
8
45
4671
13
0
2
46
6920
1
1
47
8220
8
8
48
6209
18
0
49
2012
0
0
50
6201
256
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
202
Breakdown by
sector - NACE 4
digits level
(code and label)
Circular economy (CE)
Pollution (PPC)
Biodiversity and Ecosystems (BIO)
TOTAL (CCM + CCA + WTR + CE + PPC + BIO)
Non-Financial corporates
(Subject to NFRD)
SMEs and other NFC not
subject to NFRD
Non-Financial corporates
(Subject to NFRD)
SMEs and other NFC not
subject to NFRD
Non-Financial corporates
(Subject to NFRD)
SMEs and other NFC not
subject to NFRD
Non-Financial corporates
(Subject to NFRD)
SMEs and other NFC not
subject to NFRD
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
HUF
million
of which
environmentally
sustainable (CE)
HUF
million
of which
environmentally
sustainable (CE)
HUF
million
of which
environmentally
sustainable (PPC)
HUF
million
of which
environmentally
sustainable (PPC)
HUF
million
of which
environmentally
sustainable (BIO)
HUF
million
of which
environmentally
sustainable (BIO)
HUF million
of which
environmentally
sustainable (CCM
+ CCA + WTR +
CE + PPC + BIO)
HUF
million
of which
environmentally
sustainable (CCM
+ CCA + WTR +
CE + PPC + BIO)
1
7022
156
3
2
2932
1,756
35
3
2511
518
2
4
1920
43
2
5
4711
40
8
6
4730
379
379
7
4646
2,048
8
2120
0
0
753
9
1062
3,444
3,251
10
2016
24
1
11
3811
76
2
12
2059
2,992
62
13
4531
0
19
19
14
2720
0
15
1039
33
2,772
7,755
16
3511
9,066
1,994
17
4519
86
2
18
4931
4,813
2,199
19
3523
224
205
20
6420
5,502
5,044
21
4950
22
2910
0
23
5510
17,063
17,372
24
7010
287
2,995
18,556
10,266
25
8020
18
0
26
5310
811
396
27
6492
696
14
28
3514
0
0
29
2442
1,065
1,065
30
3513
1,010
1,008
31
6110
89
265
2
32
6120
11
47
33
6203
0
34
4520
660
35
1082
4
2
29
36
2351
11
2
2,304
211
37
2221
1,779
38
0520
0
0
39
3522
0
1
8
4
40
6820
21
19
41
6831
5,642
1,124
42
3020
17
8
43
3512
8,691
794
44
2443
8
8
45
4671
16
0
46
6920
1
1
47
8220
8
8
48
6209
25
43
0
49
2012
0
0
50
6201
256
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
203
2. GAR Sector information – Capex based
Breakdown by sector -
NACE 4 digits level
(code and label)
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
Water and marine resources (WTR)
Non-Financial corporates (Subject to
NFRD)
SMEs and other NFC not subject
to NFRD
Non-Financial corporates (Subject to
NFRD)
SMEs and other NFC not subject to
NFRD
Non-Financial corporates (Subject to
NFRD)
SMEs and other NFC not subject to
NFRD
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
HUF million
of which
environmentally
sustainable (CCM)
HUF million
of which
environmentally
sustainable (CCM)
HUF million
of which
environmentally
sustainable (CCA)
HUF million
of which
environmentally
sustainable (CCA)
HUF million
of which
environmentally
sustainable (WTR)
HUF million
of which
environmentally
sustainable (WTR)
1
7022
326
139
2
2932
1,826
56
3
2511
326
3
13
4
1920
179
89
5
4711
1,126
185
6
4730
5,976
5,976
7
4646
2,048
8
2120
359
254
105
9
1062
3,958
3,617
10
2016
50
21
11
3811
160
68
12
2059
6,264
2,680
13
4531
49
45
14
2720
0
15
1039
7,920
33
16
3511
9,066
5,077
17
4519
179
77
18
4931
6,242
3,976
19
3523
559
522
20
6420
13,755
12,838
21
4950
22
2910
0
0
23
5510
6,078
24
7010
36,501
35,490
25
8020
38
16
26
5310
268
34
27
6492
1,456
623
28
3514
1
1
29
2442
584
584
16
16
30
3513
1,029
974
31
6110
133
15
32
6120
71
33
6203
20
34
4520
660
35
1082
501
36
2351
1,990
189
37
2221
1,779
38
0520
0
0
39
3522
9
9
40
6820
52
49
41
6831
5,375
1,570
42
3020
15
5
43
3512
9,991
2,022
44
2443
11
11
45
4671
25
14
46
6920
3
3
47
8220
32
31
48
6209
4
4
49
2012
0
0
50
6201
137
8
61
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
204
Breakdown by
sector - NACE 4
digits level
(code and label)
Circular economy (CE)
Pollution (PPC)
Biodiversity and Ecosystems (BIO)
TOTAL (CCM + CCA + WTR + CE + PPC + BIO)
Non-Financial corporates
(Subject to NFRD)
SMEs and other NFC not
subject to NFRD
Non-Financial corporates
(Subject to NFRD)
SMEs and other NFC not
subject to NFRD
Non-Financial corporates
(Subject to NFRD)
SMEs and other NFC not
subject to NFRD
Non-Financial corporates
(Subject to NFRD)
SMEs and other NFC not
subject to NFRD
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
HUF
million
of which
environmentally
sustainable (CE)
HUF
million
of which
environmentally
sustainable (CE)
HUF
million
of which
environmentally
sustainable (PPC)
HUF
million
of which
environmentally
sustainable (PPC)
HUF
million
of which
environmentally
sustainable (BIO)
HUF
million
of which
environmentally
sustainable (BIO)
HUF million
of which
environmentally
sustainable (CCM
+ CCA + WTR +
CE + PPC + BIO)
HUF
million
of which
environmentally
sustainable (CCM
+ CCA + WTR +
CE + PPC + BIO)
1
7022
65
391
139
2
2932
1,826
56
3
2511
339
3
4
1920
3
182
89
5
4711
1,126
185
6
4730
5,976
5,976
7
4646
2,048
8
2120
0
464
254
9
1062
3,958
3,617
10
2016
10
60
21
11
3811
32
192
68
12
2059
1,247
7,511
2,680
13
4531
49
45
14
2720
0
15
1039
858
8,811
16
3511
9,066
5,077
17
4519
36
215
77
18
4931
669
6,911
3,976
19
3523
559
522
20
6420
13,755
12,838
21
4950
22
2910
0
0
23
5510
115
6,193
24
7010
2,967
39,468
35,490
25
8020
8
46
16
26
5310
268
34
27
6492
290
1,746
623
28
3514
1
1
29
2442
2,451
2,451
3,050
3,050
30
3513
1,029
974
31
6110
133
15
32
6120
20
91
33
6203
20
34
4520
660
35
1082
501
36
2351
41
41
2,031
230
37
2221
1,779
38
0520
0
0
39
3522
3
12
9
40
6820
52
49
41
6831
35
5,410
1,570
42
3020
15
5
43
3512
9,991
2,022
44
2443
11
11
45
4671
25
14
46
6920
3
3
47
8220
32
31
48
6209
4
4
49
2012
0
0
50
6201
198
8
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
205
3. GAR KPI Stock – Turnover based data
% (compared to total covered assets in the denominator)
Disclosure reference date 31 December 2024
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
Water and marine resources (WTR)
of which towards taxonomy relevant sectors (Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which environmentally sustainable (Taxonomy-
aligned)
of which environmentally sustainable
(Taxonomy-aligned)
of which environmentally sustainable
(Taxonomy-aligned)
of which use of
proceeds
of which
transitional
of which
enabling
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
enabling
GAR - Covered assets in both numerator and
denominator
1
Loans and advances, debt securities and equity
instruments not HfT eligible for GAR calculation
23.6%
0.2%
0.0%
0.1%
0.1%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
2
Financial undertakings
2.5%
0.1%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
3
Credit institutions
2.9%
0.1%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
4
Loans and advances
4.4%
0.2%
0.1%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
5
Debt securities, including UoP
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
6
Equity instruments
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
7
Other financial corporations
0.9%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
8
of which investment firms
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
9
Loans and advances
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
10
Debt securities, including UoP
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
11
Equity instruments
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
12
of which management companies
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
13
Loans and advances
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
14
Debt securities, including UoP
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
15
Equity instruments
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
16
of which insurance undertakings
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
17
Loans and advances
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
18
Debt securities, including UoP
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
19
Equity instruments
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
20
Non-financial undertakings
8.5%
3.2%
0.0%
0.9%
1.4%
0.1%
0.0%
0.0%
0.0%
0.1%
0.0%
0.0%
0.0%
21
Loans and advances
8.4%
3.2%
0.0%
0.9%
1.4%
0.0%
0.0%
0.0%
0.0%
0.1%
0.0%
0.0%
0.0%
22
Debt securities, including UoP
12.8%
2.1%
0.0%
0.0%
0.0%
2.1%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
23
Equity instruments
98.5%
98.5%
98.5%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
24
Households
27.9%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
25
of which loans collateralised by
residential immovable
property
56.9%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
26
of which building renovation loans
99.5%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
27
of which motor vehicle loans
36.7%
0.0%
0.0%
0.0%
0.0%
28
Local governments financing
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
29
Housing financing
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
30
Other local government financing
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
31
Collateral obtained by taking possession:
residential and commercial immovable
properties
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
32 Total GAR assets
13.6%
0.1%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
206
% (compared to total covered assets in the
denominator)
Disclosure reference date 31 December 2024
Circular economy (CE)
Pollution (PPC)
Biodiversity and Ecosystems
(BIO)
TOTAL
(CCM + CCA + WTR + CE + PPC + BIO)
of which towards taxonomy
relevant sectors (Taxonomy-
eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which towards taxonomy
relevant sectors (Taxonomy-
eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which environmentally
sustainable (Taxonomy-
aligned)
of which environmentally
sustainable (Taxonomy-
aligned)
of which environmentally
sustainable (Taxonomy-
aligned)
of which environmentally sustainable
(Taxonomy-aligned)
Proportion
of total
assets
covered
of which use
of proceeds
of which
enabling
of which use
of proceeds
of which
enabling
of which use
of proceeds
of which
enabling
of which use
of proceeds
of which
transitional
of which
enabling
GAR - Covered assets in both numerator and
denominator
1
Loans and advances, debt securities and
equity instruments not HfT
eligible for GAR calculation
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.1% 0.0%
0.0%
0.0%
23.8% 0.2%
0.0%
0.1%
0.1%
37.29%
2
Financial undertakings
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
2.5%
0.1%
0.0%
0.0%
0.0%
4.81%
3
Credit institutions
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
2.9%
0.1%
0.0%
0.0%
0.0%
3.84%
4
Loans and advances
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
4.4%
0.2%
0.1%
0.0%
0.0%
2.55%
5
Debt securities, including UoP
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
1.29%
6
Equity instruments
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
7
Other financial corporations
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.9%
0.0%
0.0%
0.0%
0.0%
0.97%
8
of which investment firms
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
9
Loans and advances
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
10
Debt securities, including UoP
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
11
Equity instruments
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
12
of which management companies
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.01%
13
Loans and advances
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
14
Debt securities, including UoP
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
15
Equity instruments
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.01%
16
of which insurance undertakings
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
17
Loans and advances
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
18
Debt securities, including UoP
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
19
Equity instruments
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
20
Non-financial undertakings
0.1% 0.0%
0.0%
0.0%
0.7%
0.0%
0.0%
0.0%
1.9% 0.0%
0.0%
0.0%
11.3% 3.2%
0.0%
0.9%
1.4%
1.96%
21
Loans and advances
0.1% 0.0%
0.0%
0.0%
0.7%
0.0%
0.0%
0.0%
2.0% 0.0%
0.0%
0.0%
11.2% 3.2%
0.0%
0.9%
1.4%
1.92%
22
Debt securities, including UoP
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
14.9% 2.1%
0.0%
0.0%
0.0%
0.04%
23
Equity instruments
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
98.5% 98.5%
98.5%
0.0%
0.00%
24
Households
0.0% 0.0%
0.0%
0.0%
27.9% 0.0%
0.0%
0.0%
0.0%
30.53%
25
of which loans collateralised by
residential immovable
property
0.0% 0.0%
0.0%
0.0%
56.9% 0.0%
0.0%
0.0%
0.0%
13.41%
26
of which building renovation loans
0.0% 0.0%
0.0%
0.0%
99.5% 0.0%
0.0%
0.0%
0.0%
0.28%
27
of which motor vehicle loans
36.7% 0.0%
0.0%
0.0%
0.0%
1.66%
28
Local governments financing
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
29
Housing financing
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
30
Other local government financing
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
31
Collateral obtained by taking
possession: residential and
commercial immovable properties
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.04%
32 Total GAR assets
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.1% 0.0%
0.0%
0.0%
13.7% 0.1%
0.0%
0.0%
0.0%
64.76%
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
207
3. GAR KPI Stock – Capex based
% (compared to total covered assets in the denominator)
Disclosure reference date 31 December 2024
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
Water and marine resources (WTR)
of which towards taxonomy relevant sectors (Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which environmentally sustainable (Taxonomy-
aligned)
of which environmentally sustainable
(Taxonomy-aligned)
of which environmentally sustainable
(Taxonomy-aligned)
of which use of
proceeds
of which
transitional
of which
enabling
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
enabling
GAR - Covered assets in both numerator and
denominator
1
Loans and advances, debt securities and equity
instruments not HfT eligible for GAR calculation
23.9%
0.5%
0.0%
0.3%
0.1%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
2
Financial undertakings
2.5%
0.1%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
3
Credit institutions
2.9%
0.2%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
4
Loans and advances
4.4%
0.3%
0.1%
0.1%
0.1%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
5
Debt securities, including UoP
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
6
Equity instruments
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
7
Other financial corporations
0.8%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
8
of which investment firms
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
9
Loans and advances
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
10
Debt securities, including UoP
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
11
Equity instruments
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
12
of which management companies
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
13
Loans and advances
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
14
Debt securities, including UoP
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
15
Equity instruments
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
16
of which insurance undertakings
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
17
Loans and advances
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
18
Debt securities, including UoP
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
19
Equity instruments
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
20
Non-financial undertakings
14.5%
8.8%
0.0%
5.1%
1.1%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
21
Loans and advances
14.5%
8.9%
0.0%
5.2%
1.2%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
22
Debt securities, including UoP
12.8%
4.7%
0.0%
0.0%
0.0%
0.6%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
23
Equity instruments
88.7%
88.7%
88.7%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
24
Households
27.9%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
25
of which loans collateralised by
residential immovable property
56.9%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
26
of which building renovation loans
99.5%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
27
of which motor vehicle loans
36.7%
0.0%
0.0%
0.0%
0.0%
28
Local governments financing
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
29
Housing financing
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
30
Other local government financing
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
31
Collateral obtained by taking possession:
residential and commercial immovable
properties
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
32
Total GAR assets
13.8%
0.3%
0.0%
0.2%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
208
% (compared to total covered assets in the
denominator)
Disclosure reference date 31 December 2024
Circular economy (CE)
Pollution (PPC)
Biodiversity and Ecosystems
(BIO)
TOTAL
(CCM + CCA + WTR + CE + PPC + BIO)
of which towards taxonomy
relevant sectors (Taxonomy-
eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which towards taxonomy
relevant sectors (Taxonomy-
eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which environmentally
sustainable (Taxonomy-
aligned)
of which environmentally
sustainable (Taxonomy-
aligned)
of which environmentally
sustainable (Taxonomy-
aligned)
of which environmentally sustainable
(Taxonomy-aligned)
Proportion
of total
assets
covered
of which use
of proceeds
of which
enabling
of which use
of proceeds
of which
enabling
of which use
of proceeds
of which
enabling
of which use
of proceeds
of which
transitional
of which
enabling
GAR - Covered assets in both numerator and
denominator
1
Loans and advances, debt securities and
equity instruments not HfT
eligible for GAR calculation
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
24.0% 0.5%
0.0%
0.3%
0.1%
37.29%
2
Financial undertakings
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
2.5%
0.1%
0.0%
0.0%
0.0%
4.81%
3
Credit institutions
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
2.9%
0.2%
0.0%
0.0%
0.0%
3.84%
4
Loans and advances
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
4.4%
0.3%
0.1%
0.1%
0.1%
2.55%
5
Debt securities, including UoP
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
1.29%
6
Equity instruments
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
7
Other financial corporations
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.8%
0.0%
0.0%
0.0%
0.0%
0.97%
8
of which investment firms
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
9
Loans and advances
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
10
Debt securities, including UoP
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
11
Equity instruments
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
12
of which management companies
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.01%
13
Loans and advances
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
14
Debt securities, including UoP
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
15
Equity instruments
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.01%
16
of which insurance undertakings
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
17
Loans and advances
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
18
Debt securities, including UoP
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
19
Equity instruments
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
20
Non-financial undertakings
0.6% 0.3%
0.0%
0.0%
0.4%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
15.5% 9.1%
0.0%
5.1%
1.1%
1.96%
21
Loans and advances
0.6% 0.3%
0.0%
0.0%
0.5%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
15.6% 9.2%
0.0%
5.2%
1.2%
1.92%
22
Debt securities, including UoP
0.1% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
13.4% 4.7%
0.0%
0.0%
0.0%
0.04%
23
Equity instruments
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
88.7% 88.7%
88.7%
0.0%
0.00%
24
Households
0.0% 0.0%
0.0%
0.0%
27.9% 0.0%
0.0%
0.0%
0.0%
30.53%
25
of which loans collateralised by
residential immovable
property
0.0% 0.0%
0.0%
0.0%
56.9% 0.0%
0.0%
0.0%
0.0%
13.41%
26
of which building renovation loans
99.5% 0.0%
0.0%
0.0%
0.0%
0.28%
27
of which motor vehicle loans
36.7% 0.0%
0.0%
0.0%
0.0%
1.66%
28
Local governments financing
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
29
Housing financing
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
30
Other local government financing
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
31
Collateral obtained by taking
possession: residential and
commercial immovable properties
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.04%
32 Total GAR assets
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
13.8% 0.3%
0.0%
0.2%
0.0%
64.76%
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
209
3. GAR KPI Stock – Turnover based
(T-1)
%
(compared to total covered assets in the denominator)
Disclosure reference date 31 December 2023
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
Water and marine resources (WTR)
of which towards taxonomy relevant sectors (Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which environmentally sustainable (Taxonomy-
aligned)
of which environmentally sustainable
(Taxonomy-aligned)
of which environmentally sustainable
(Taxonomy-aligned)
of which use of
proceeds
of which
transitional
of which
enabling
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
enabling
GAR - Covered assets in both numerator and
denominator
1
Loans and advances, debt securities and equity
instruments not HfT eligible for GAR calculation
22.5%
0.1%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
2
Financial undertakings
0.2%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
3
Credit institutions
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
4
Loans and advances
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
5
Debt securities, including UoP
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
6
Equity instruments
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
7
Other financial corporations
0.6%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
8
of which investment firms
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
9
Loans and advances
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
10
Debt securities, including UoP
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
11
Equity instruments
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
12
of which management companies
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
13
Loans and advances
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
14
Debt securities, including UoP
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
15
Equity instruments
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
16
of which insurance undertakings
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
17
Loans and advances
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
18
Debt securities, including UoP
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
19
Equity instruments
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
20
Non-financial undertakings
12.0%
7.0%
0.0%
0.6%
0.6%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
21
Loans and advances
16.6%
10.1%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
22
Debt securities, including UoP
9.6%
5.4%
0.0%
0.8%
0.9%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
23
Equity instruments
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
24
Households
26.7%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
25
of which loans collateralised by
residential immovable property
59.5%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
26
of which building renovation loans
99.8%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
27
of which motor vehicle loans
38.4%
0.0%
0.0%
0.0%
0.0%
28
Local governments financing
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
29
Housing financing
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
30
Other local government financing
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
31
Collateral obtained by taking possession:
residential and commercial immovable
properties
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
32 Total GAR assets
10.4%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
210
% (compared to total covered assets in the
denominator)
Disclosure reference date 31 December 2023
Circular economy (CE)
Pollution (PPC)
Biodiversity and Ecosystems
(BIO)
TOTAL
(CCM + CCA + WTR + CE + PPC + BIO)
of which towards taxonomy
relevant sectors (Taxonomy-
eligible)
of which towards taxonomy relevant
sectors (Taxonomy-eligible)
of which towards taxonomy
relevant sectors (Taxonomy-
eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which environmentally
sustainable (Taxonomy-
aligned)
of which environmentally
sustainable (Taxonomy-
aligned)
of which environmentally
sustainable (Taxonomy-
aligned)
of which environmentally sustainable
(Taxonomy-aligned)
Proportion
of total
assets
covered
of which
use of
proceeds
of which
enabling
of which
use of
proceeds
of which
enabling
of which
use of
proceeds
of which
enabling
of which
use of
proceeds
of which
transitional
of which
enabling
GAR - Covered assets in both numerator
and denominator
1
Loans and advances, debt securities and
equity instruments not HfT eligible for GAR
calculation
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
22.5%
0.1%
0.0%
0.0%
0.0%
29.92%
2
Financial undertakings
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.2%
0.0%
0.0%
0.0%
0.0%
4.49%
3
Credit institutions
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
2.90%
4
Loans and advances
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
1.91%
5
Debt securities, including UoP
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
1.00%
6
Equity instruments
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
7
Other financial corporations
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.6%
0.0%
0.0%
0.0%
0.0%
1.59%
8
of which investment firms
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.13%
9
Loans and advances
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.13%
10
Debt securities, including UoP
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
11
Equity instruments
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
12
of which management companies
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.06%
13
Loans and advances
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
14
Debt securities, including UoP
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
15
Equity instruments
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.06%
16
of which insurance undertakings
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
17
Loans and advances
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
18
Debt securities, including UoP
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
19
Equity instruments
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
20
Non-financial undertakings
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
12.0%
7.0%
0.0%
0.6%
0.6%
0.39%
21
Loans and advances
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
16.6% 10.1%
0.0%
0.0%
0.0%
0.14%
22
Debt securities, including UoP
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
9.6%
5.4%
0.0%
0.8%
0.9%
0.26%
23
Equity instruments
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
24
Households
0.0% 0.0%
0.0%
0.0%
26.7%
0.0%
0.0%
0.0%
0.0%
25.04%
25
of which loans collateralised by
residential immovable property
0.0% 0.0%
0.0%
0.0%
59.5%
0.0%
0.0%
0.0%
0.0%
10.09%
26
of which building renovation loans
0.0% 0.0%
0.0%
0.0%
99.8%
0.0%
0.0%
0.0%
0.0%
0.28%
27
of which motor vehicle loans
38.4%
0.0%
0.0%
0.0%
0.0%
1.00%
28
Local governments financing
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
29
Housing financing
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
30
Other local government financing
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
31
Collateral obtained by taking
possession: residential and
commercial immovable properties
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.02%
32 Total GAR assets
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
10.4%
0.0%
0.0%
0.0%
0.0%
64.83%
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
211
3. GAR KPI Stock – Capex based
(T-1)
% (compared to total covered assets in the denominator)
Disclosure reference date 31 December 2023
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
Water and marine resources (WTR)
of which towards taxonomy relevant sectors (Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which environmentally sustainable (Taxonomy-
aligned)
of which environmentally sustainable
(Taxonomy-aligned)
of which environmentally sustainable
(Taxonomy-aligned)
of which use of
proceeds
of which
transitional
of which
enabling
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
enabling
GAR - Covered assets in both numerator and
denominator
1
Loans and advances, debt securities and equity
instruments not HfT eligible for GAR calculation
22.6%
0.2%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
2
Financial undertakings
0.2%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
3
Credit institutions
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
4
Loans and advances
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
5
Debt securities, including UoP
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
6
Equity instruments
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
7
Other financial corporations
0.5%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
8
of which investment firms
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
9
Loans and advances
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
10
Debt securities, including UoP
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
11
Equity instruments
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
12
of which management companies
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
13
Loans and advances
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
14
Debt securities, including UoP
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
15
Equity instruments
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
16
of which insurance undertakings
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
17
Loans and advances
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
18
Debt securities, including UoP
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
19
Equity instruments
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
20
Non-financial undertakings
23.7%
13.1%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
21
Loans and advances
34.9%
22.8%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
22
Debt securities, including UoP
17.8%
8.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
23
Equity instruments
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
24
Households
26.7%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
25
of which loans collateralised by
residential immovable
property
59.5%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
26
of which building renovation loans
99.8%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
27
of which motor vehicle loans
38.4%
0.0%
0.0%
0.0%
0.0%
28
Local governments financing
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
29
Housing financing
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
30
Other local government financing
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
31
Collateral obtained by taking possession:
residential and commercial immovable
properties
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
32
Total GAR assets
10.3%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
212
% (compared to total covered assets in the
denominator)
Disclosure reference date 31 December 2023
Circular economy (CE)
Pollution (PPC)
Biodiversity and Ecosystems
(BIO)
TOTAL
(CCM + CCA + WTR + CE + PPC + BIO)
of which towards taxonomy
relevant sectors (Taxonomy-
eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which towards taxonomy
relevant sectors (Taxonomy-
eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which environmentally
sustainable (Taxonomy-
aligned)
of which environmentally
sustainable (Taxonomy-
aligned)
of which environmentally
sustainable (Taxonomy-
aligned)
of which environmentally sustainable
(Taxonomy-aligned)
Proportion
of total
assets
covered
of which use
of proceeds
of which
enabling
of which use
of proceeds
of which
enabling
of which use
of proceeds
of which
enabling
of which use
of proceeds
of which
transitional
of which
enabling
GAR - Covered assets in both numerator and
denominator
1
Loans and advances, debt securities and
equity instruments not HfT
eligible for GAR calculation
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
22.6% 0.2%
0.0%
0.0%
0.0%
29.92%
2
Financial undertakings
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.2%
0.0%
0.0%
0.0%
0.0%
4.49%
3
Credit institutions
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
2.90%
4
Loans and advances
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
1.91%
5
Debt securities, including UoP
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
1.00%
6
Equity instruments
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
7
Other financial corporations
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.5%
0.0%
0.0%
0.0%
0.0%
1.59%
8
of which investment firms
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.13%
9
Loans and advances
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.13%
10
Debt securities, including UoP
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
11
Equity instruments
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
12
of which management companies
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.06%
13
Loans and advances
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
14
Debt securities, including UoP
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
15
Equity instruments
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.06%
16
of which insurance undertakings
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
17
Loans and advances
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
18
Debt securities, including UoP
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
19
Equity instruments
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
20
Non-financial undertakings
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
23.7% 13.1%
0.0%
0.0%
0.0%
0.39%
21
Loans and advances
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
34.9% 22.8%
0.0%
0.0%
0.0%
0.14%
22
Debt securities, including UoP
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
17.8% 8.0%
0.0%
0.0%
0.0%
0.26%
23
Equity instruments
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
24
Households
0.0% 0.0%
0.0%
0.0%
26.7% 0.0%
0.0%
0.0%
0.0%
25.04%
25
of which loans collateralised by
residential immovable
property
0.0% 0.0%
0.0%
0.0%
59.5% 0.0%
0.0%
0.0%
0.0%
10.09%
26
of which building renovation loans
0.0% 0.0%
0.0%
0.0%
99.8% 0.0%
0.0%
0.0%
0.0%
0.28%
27
of which motor vehicle loans
38.4% 0.0%
0.0%
0.0%
0.0%
1.00%
28
Local governments financing
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
29
Housing financing
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
30
Other local government financing
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
31
Collateral obtained by taking
possession: residential and
commercial immovable properties
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.02%
32 Total GAR assets
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
10.3% 0.0%
0.0%
0.0%
0.0%
64.83%
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
213
4. GAR KPI Flow – Turnover based data
% (compared to total covered assets in the
denominator)
Disclosure reference date 31 December 2024
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
Water and marine resources (WTR)
of which towards taxonomy relevant sectors (Taxonomy-eligible)
of which towards taxonomy relevant sectors (Taxonomy-
eligible)
of which towards taxonomy relevant sectors (Taxonomy-
eligible)
of which environmentally sustainable (Taxonomy-aligned)
of which environmentally sustainable
(Taxonomy-aligned)
of which environmentally sustainable
(Taxonomy-aligned)
of which use of
proceeds
of which
transitional
of which
enabling
of which use of
proceeds
of which
enabling
of which use
of proceeds
of which enabling
GAR - Covered assets in both numerator
and denominator
1
Loans and advances, debt securities
and equity instruments not HfT eligible
for GAR calculation
19.7%
0.2%
0.0%
0.0%
0.1%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
2
Financial undertakings
0.1%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
3
Credit institutions
0.1%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
4
Loans and advances
0.1%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
5
Debt securities, including UoP
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
6
Equity instruments
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
7
Other financial corporations
0.4%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
8
of which investment firms
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
9
Loans and advances
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
10
Debt securities, including
UoP
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
11
Equity instruments
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
12
of which management
companies
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
13
Loans and advances
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
14
Debt securities, including
UoP
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
15
Equity instruments
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
16
of which insurance
undertakings
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
17
Loans and advances
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
18
Debt securities, including
UoP
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
19
Equity instruments
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
20
Non-financial undertakings
6.8%
3.5%
0.0%
0.4%
2.6%
0.0%
0.0%
0.0%
0.0%
0.1%
0.0%
0.0%
0.0%
21
Loans and advances
6.7%
3.5%
0.0%
0.4%
2.6%
0.1%
0.0%
0.0%
0.0%
0.1%
0.0%
0.0%
0.0%
22
Debt securities, including UoP
24.1%
0.0%
0.0%
0.0%
0.0%
24.1%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
23
Equity instruments
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
24
Households
23.1%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
25
of which loans collateralised
by residential immovable
property
65.1%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
26
of which building renovation
loans
99.5%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
27
of which motor vehicle loans
30.1%
0.0%
0.0%
0.0%
0.0%
28
Local governments financing
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
29
Housing financing
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
30
Other local government
financing
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
31
Collateral obtained by taking
possession:
residential and commercial
immovable properties
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
32
Total GAR assets
13.0%
0.1%
0.0%
0.0%
0.1%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
214
% (compared to total covered assets in the
denominator)
Disclosure reference date 31 December 2024
Circular economy (CE)
Pollution (PPC)
Biodiversity and Ecosystems (BIO)
TOTAL (CCM + CCA + WTR + CE + PPC + BIO)
of which towards taxonomy relevant
sectors (Taxonomy-eligible)
of which towards taxonomy relevant
sectors (Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which towards taxonomy relevant sectors (Taxonomy-
eligible)
Proportion
of total
assets
covered
of which environmentally
sustainable (Taxonomy-aligned)
of which environmentally
sustainable (Taxonomy-aligned)
of which environmentally sustainable
(Taxonomy-aligned)
of which environmentally sustainable (Taxonomy-
aligned)
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
transitional
of which
enabling
GAR - Covered assets in both numerator
and denominator
1
Loans and advances, debt securities
and equity instruments not HfT
eligible for GAR calculation
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.1%
0.0%
0.0%
0.0%
19.78% 0.20%
0.00%
0.02%
0.15%
38.59%
2
Financial undertakings
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.13%
0.01%
0.01%
0.00%
0.00%
4.16%
3
Credit institutions
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.07%
0.01%
0.01%
0.00%
0.00%
3.43%
4
Loans and advances
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.08%
0.01%
0.01%
0.00%
0.00%
2.83%
5
Debt securities, including
UoP
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
0.00%
0.00%
0.00%
0.00%
0.60%
6
Equity instruments
0.0% 0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
7
Other financial corporations
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.40%
0.03%
0.00%
0.02%
0.01%
0.73%
8
of which investment firms
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
0.00%
0.00%
0.00%
0.00%
0.01%
9
Loans and advances
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
0.00%
0.00%
0.00%
0.00%
0.01%
10
Debt securities, including
UoP
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
11
Equity instruments
0.0% 0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
12
of which management
companies
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
13
Loans and advances
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
14
Debt securities, including
UoP
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
15
Equity instruments
0.0% 0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
16
of which insurance
undertakings
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
0.00%
0.00%
0.00%
0.00%
0.01%
17
Loans and advances
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
0.00%
0.00%
0.00%
0.00%
0.01%
18
Debt securities, including
UoP
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
19
Equity instruments
0.0% 0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
20
Non-financial undertakings
0.1% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
1.0%
0.0%
0.0%
0.0%
8.05%
3.53%
0.00%
0.35%
2.60%
2.21%
21
Loans and advances
0.1% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
1.0%
0.0%
0.0%
0.0%
8.05%
3.55%
0.00%
0.36%
2.61%
2.19%
22
Debt securities, including
UoP
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
48.26% 0.00%
0.00%
0.00%
0.00%
0.01%
23
Equity instruments
0.0% 0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
24
Households
0.0% 0.0%
0.0%
0.0%
23.12% 0.00%
0.00%
0.00%
0.00%
32.22%
25
of which loans collateralised
by residential immovable
property
0.0% 0.0%
0.0%
0.0%
65.10% 0.00%
0.00%
0.00%
0.00%
9.72%
26
of which building renovation
loans
0.0% 0.0%
0.0%
0.0%
99.48% 0.00%
0.00%
0.00%
0.00%
0.17%
27
of which motor vehicle loans
30.12% 0.00%
0.00%
0.00%
0.00%
3.18%
28
Local governments financing
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
29
Housing financing
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
30
Other local government
financing
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
31
Collateral obtained by taking
possession:
residential and commercial
immovable properties
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.00%
32 Total GAR assets
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
13.04% 0.13%
0.00%
0.01%
0.10%
58.52%
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
215
4. GAR KPI Flow – Capex based
% (compared to total covered assets in the
denominator)
Disclosure reference date 31 December 2024
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
Water and marine resources (WTR)
of which towards taxonomy relevant sectors (Taxonomy-eligible)
of which towards taxonomy relevant sectors (Taxonomy-
eligible)
of which towards taxonomy relevant sectors (Taxonomy-
eligible)
of which environmentally sustainable (Taxonomy-aligned)
of which environmentally sustainable
(Taxonomy-aligned)
of which environmentally sustainable
(Taxonomy-aligned)
of which use of
proceeds
of which
transitional
of which
enabling
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
enabling
GAR - Covered assets in both numerator
and denominator
1
Loans and advances, debt securities
and equity instruments not HfT eligible
for GAR calculation
20.2%
0.7%
0.0%
0.5%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
2
Financial undertakings
0.1%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
3
Credit institutions
0.1%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
4
Loans and advances
0.1%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
5
Debt securities, including UoP
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
6
Equity instruments
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
7
Other financial corporations
0.4%
0.1%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
8
of which investment firms
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
9
Loans and advances
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
10
Debt securities, including UoP
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
11
Equity instruments
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
12
of which management
companies
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
13
Loans and advances
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
14
Debt securities, including UoP
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
15
Equity instruments
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
16
of which insurance
undertakings
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
17
Loans and advances
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
18
Debt securities, including UoP
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
19
Equity instruments
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
20
Non-financial undertakings
15.3%
11.8%
0.0%
8.8%
0.8%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
21
Loans and advances
15.2%
11.8%
0.0%
8.9%
0.8%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
22
Debt securities, including UoP
23.0%
16.3%
0.0%
0.0%
0.0%
6.7%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
23
Equity instruments
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
24
Households
23.1%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
25
of which loans collateralised
by residential immovable
property
65.1%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
26
of which building renovation loans
99.5%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
27
of which motor vehicle loans
30.1%
0.0%
0.0%
0.0%
0.0%
28
Local governments financing
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
29
Housing financing
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
30
Other local government
financing
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
31
Collateral obtained by taking
possession:
residential and commercial
immovable properties
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
32
Total GAR assets
13.3%
0.4%
0.0%
0.3%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
216
% (compared to total covered assets in the
denominator)
Disclosure reference date 31 December 2024
Circular economy (CE)
Pollution (PPC)
Biodiversity and Ecosystems (BIO)
TOTAL (CCM + CCA + WTR + CE + PPC + BIO)
of which towards taxonomy relevant
sectors (Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which towards taxonomy relevant sectors (Taxonomy-
eligible)
Proportion
of total
assets
covered
of which environmentally
sustainable (Taxonomy-aligned)
of which environmentally sustainable
(Taxonomy-aligned)
of which environmentally sustainable
(Taxonomy-aligned)
of which environmentally sustainable (Taxonomy-
aligned)
of which use of
proceeds
of which
enabling
of which
use of
proceeds
of which
enabling
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
transitional
of which
enabling
GAR - Covered assets in both numerator
and denominator
1
Loans and advances, debt securities
and equity instruments not HfT
eligible for GAR calculation
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
20.2% 0.7%
0.0%
0.5%
0.0%
38.59%
2
Financial undertakings
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.1% 0.0%
0.0%
0.0%
0.0%
4.16%
3
Credit institutions
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.1% 0.0%
0.0%
0.0%
0.0%
3.43%
4
Loans and advances
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.1% 0.0%
0.0%
0.0%
0.0%
2.83%
5
Debt securities, including
UoP
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.60%
6
Equity instruments
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.00%
7
Other financial corporations
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.4% 0.1%
0.0%
0.0%
0.0%
0.73%
8
of which investment firms
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.01%
9
Loans and advances
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.01%
10
Debt securities, including
UoP
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.00%
11
Equity instruments
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.00%
12
of which management
companies
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.00%
13
Loans and advances
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.00%
14
Debt securities, including UoP
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.00%
15
Equity instruments
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.00%
16
of which insurance
undertakings
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.01%
17
Loans and advances
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.01%
18
Debt securities, including UoP
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.00%
19
Equity instruments
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.00%
20
Non-financial undertakings
0.3%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
15.6% 11.8%
0.0%
8.8%
0.8%
2.21%
21
Loans and advances
0.3%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
15.6% 11.8%
0.0%
8.9%
0.8%
2.19%
22
Debt securities, including
UoP
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
29.8% 16.3%
0.0%
0.0%
0.0%
0.01%
23
Equity instruments
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.00%
24
Households
0.0%
0.0%
0.0%
0.0%
23.1% 0.0%
0.0%
0.0%
0.0%
32.22%
25
of which loans collateralised
by residential immovable
property
0.0%
0.0%
0.0%
0.0%
65.1% 0.0%
0.0%
0.0%
0.0%
9.72%
26
of which building renovation
loans
0.0%
0.0%
0.0%
0.0%
99.5% 0.0%
0.0%
0.0%
0.0%
0.17%
27
of which motor vehicle loans
30.1% 0.0%
0.0%
0.0%
0.0%
3.18%
28
Local governments financing
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.00%
29
Housing financing
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.00%
30
Other local government
financing
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.00%
31
Collateral obtained by taking
possession: residential and
commercial immovable
properties
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
0.0%
0.00%
32 Total GAR assets
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0% 0.0%
0.0%
0.0%
13.3% 0.4%
0.0%
0.3%
0.0%
58.52%
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
217
5. KPI off-balance sheet exposures (Stock) – Turnover based data
% (compared to total eligible off-balance
sheet assets)
Disclosure reference date 31 December 2024
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
Water and marine resources (WTR)
of which towards taxonomy relevant sectors (Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which environmentally sustainable (Taxonomy-aligned)
of which environmentally sustainable
(Taxonomy-aligned)
of which environmentally sustainable
(Taxonomy-aligned)
of which use of
proceeds
of which
transitional
of which
enabling
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
enabling
1 Financial guarantees (FinGuar KPI)
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
2 Assets under management (AuM
KPI)
1.8%
0.3%
0.0%
0.0%
0.3%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
% (compared to total eligible off-balance
sheet assets)
Disclosure reference date 31 December 2024
Circular economy (CE)
Pollution (PPC)
Biodiversity and Ecosystems (BIO)
TOTAL (CCM + CCA + WTR + CE + PPC + BIO)
of which towards taxonomy relevant
sectors (Taxonomy-eligible)
of which towards taxonomy relevant
sectors (Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which environmentally
sustainable (Taxonomy-aligned)
of which environmentally
sustainable (Taxonomy-aligned)
of which environmentally
sustainable (Taxonomy-aligned)
of which environmentally sustainable
(Taxonomy-aligned)
of which use
of proceeds
of which
enabling
of which use
of proceeds
of which
enabling
of which use
of proceeds
of which
enabling
of which use
of proceeds
of which
transitional
of which
enabling
1 Financial guarantees (FinGuar KPI)
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
2 Assets under management (AuM
KPI)
0.2%
0.0%
0.0%
0.0%
0.1%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
2.2%
0.4%
0.0%
0.0%
0.3%
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
218
5. KPI off-balance sheet exposures (Stock) – Capex based
% (compared to total eligible off-balance
sheet assets)
Disclosure reference date 31 December 2024
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
Water and marine resources (WTR)
of which towards taxonomy relevant sectors (Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which environmentally sustainable (Taxonomy-aligned)
of which environmentally sustainable
(Taxonomy-aligned)
of which environmentally sustainable
(Taxonomy-aligned)
of which use of
proceeds
of which
transitional
of which
enabling
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
enabling
1 Financial guarantees (FinGuar KPI)
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
2 Assets under management (AuM
KPI)
2.4%
0.6%
0.0%
0.1%
0.5%
0.1%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
% (compared to total eligible off-balance
sheet assets)
Disclosure reference date 31 December 2024
Circular economy (CE)
Pollution (PPC)
Biodiversity and Ecosystems (BIO)
TOTAL (CCM + CCA + WTR + CE + PPC + BIO)
of which towards taxonomy relevant
sectors (Taxonomy-eligible)
of which towards taxonomy relevant
sectors (Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which environmentally
sustainable (Taxonomy-aligned)
of which environmentally
sustainable (Taxonomy-aligned)
of which environmentally
sustainable (Taxonomy-aligned)
of which environmentally sustainable
(Taxonomy-aligned)
of which use
of proceeds
of which
enabling
of which use
of proceeds
of which
enabling
of which use
of proceeds
of which
enabling
of which use
of proceeds
of which
transitional
of which
enabling
1 Financial guarantees (FinGuar KPI)
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
2 Assets under management (AuM
KPI)
0.1%
0.0%
0.0%
0.0%
0.1%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
2.7%
0.7%
0.0%
0.1%
0.6%
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
219
5. KPI off-balance sheet exposures (Flow) – Turnover based data
% (compared to total eligible off-balance
sheet assets)
Disclosure reference date 31 December 2024
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
Water and marine resources (WTR)
of which towards taxonomy relevant sectors (Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which environmentally sustainable (Taxonomy-aligned)
of which environmentally sustainable
(Taxonomy-aligned)
of which environmentally sustainable
(Taxonomy-aligned)
of which use of
proceeds
of which
transitional
of which
enabling
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
enabling
1 Financial guarantees (FinGuar KPI)
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
2 Assets under management (AuM
KPI)
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
% (compared to total eligible off-balance
sheet assets)
Disclosure reference date 31 December 2024
Circular economy (CE)
Pollution (PPC)
Biodiversity and Ecosystems (BIO)
TOTAL (CCM + CCA + WTR + CE + PPC + BIO)
of which towards taxonomy relevant
sectors (Taxonomy-eligible)
of which towards taxonomy relevant
sectors (Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which environmentally
sustainable (Taxonomy-aligned)
of which environmentally
sustainable (Taxonomy-aligned)
of which environmentally
sustainable (Taxonomy-aligned)
of which environmentally sustainable
(Taxonomy-aligned)
of which use
of proceeds
of which
enabling
of which use
of proceeds
of which
enabling
of which use
of proceeds
of which
enabling
of which use
of proceeds
of which
transitional
of which
enabling
1 Financial guarantees (FinGuar KPI)
0.00% 0.00%
0.00%
0.00% 0.00% 0.00%
0.00%
0.00% 0.00% 0.00%
0.00%
0.00% 0.00% 0.00%
0.00%
0.00%
0.00%
2 Assets under management (AuM
KPI)
0.00% 0.00%
0.00%
0.00% 0.00% 0.00%
0.00%
0.00% 0.00% 0.00%
0.00%
0.00% 0.00% 0.00%
0.00%
0.00%
0.00%
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5. KPI off-balance sheet exposures (Flow) – Capex based
% (compared to total eligible off-balance
sheet assets)
Disclosure reference date 31 December 2024
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
Water and marine resources (WTR)
of which towards taxonomy relevant sectors (Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which environmentally sustainable (Taxonomy-aligned)
of which environmentally sustainable
(Taxonomy-aligned)
of which environmentally sustainable
(Taxonomy-aligned)
of which use of
proceeds
of which
transitional
of which
enabling
of which use of
proceeds
of which
enabling
of which use of
proceeds
of which
enabling
1 Financial guarantees (FinGuar KPI)
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
2 Assets under management (AuM
KPI)
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
% (compared to total eligible off-balance
sheet assets)
Disclosure reference date 31 December 2024
Circular economy (CE)
Pollution (PPC)
Biodiversity and Ecosystems (BIO)
TOTAL (CCM + CCA + WTR + CE + PPC + BIO)
of which towards taxonomy relevant
sectors (Taxonomy-eligible)
of which towards taxonomy relevant
sectors (Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which environmentally
sustainable (Taxonomy-aligned)
of which environmentally
sustainable (Taxonomy-aligned)
of which environmentally
sustainable (Taxonomy-aligned)
of which environmentally sustainable
(Taxonomy-aligned)
of which use
of proceeds
of which
enabling
of which use
of proceeds
of which
enabling
of which use
of proceeds
of which
enabling
of which use
of proceeds
of which
transitional
of which
enabling
1 Financial guarantees (FinGuar KPI)
0.00% 0.00%
0.00%
0.00% 0.00% 0.00%
0.00%
0.00% 0.00% 0.00%
0.00%
0.00% 0.00% 0.00%
0.00%
0.00%
0.00%
2 Assets under management (AuM
KPI)
0.00% 0.00%
0.00%
0.00% 0.00% 0.00%
0.00%
0.00% 0.00% 0.00%
0.00%
0.00% 0.00% 0.00%
0.00%
0.00%
0.00%
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Summary of credit institution KPIs for OTP Group's EU subsidiary banks
0. Summary of KPIs to be disclosed by credit institutions under Article 8 Taxonomy Regulation – DSK
Total environmentally
sustainable assets,
(million HUF)
[turnover based]
Total environmentally
sustainable assets,
(million HUF)
[capex based]
KPI¹
KPI²
% coverage
(over total assets)³
% of assets excluded from the
numerator of the GAR (Article 7(2) and
(3) and Section 1.1.2. of Annex V)
% of assets excluded from the
denominator of the GAR (Article 7(1)
and Section 1.2.4 of Annex V)
Main KPI
Green asset ratio
(GAR) stock
0.00
0.00
0.00%
0.00%
70.82%
27.90%
29.18%
Total environmentally
sustainable activities,
(million HUF)
[turnover based]
Total environmentally
sustainable activities
(million HUF)
[capex based]
KPI
KPI
% coverage
(over total assets)
% of assets excluded from the
numerator of the GAR (Article 7(2) and
(3) and Section 1.1.2. of Annex V)
% of assets excluded from the
denominator of the GAR (Article 7(1)
and Section 1.2.4 of Annex V)
Additional
KPI-s
GAR (flow)
0.00
0.00
0.00%
0.00%
47.48%
7.26%
52.52%
Financials guarantees
0.00
0.00
0.00%
0.00%
Asset under
management
14.61
35.97
0.02%
0.05%
¹ based on the Turnover KPI of the counterparty
² based on the CapEx KPI of the counterparty, except for lending activities where for general lending Turnover KPI is used
³ % of assets covered by the KPI over banks´ total assets
0. Summary of KPIs to be disclosed by credit institutions under Article 8 Taxonomy Regulation – OBH
Total environmentally
sustainable assets,
(million HUF)
[turnover based]
Total environmentally
sustainable assets,
(million HUF)
[capex based]
KPI¹
KPI²
% coverage
(over total
assets)³
% of assets excluded from the
numerator of the GAR (Article 7(2) and
(3) and Section 1.1.2. of Annex V)
% of assets excluded from the
denominator of the GAR (Article
7(1) and Section 1.2.4 of Annex
V)
Main KPI
Green asset ratio (GAR) stock
311.75
787.60
0.01%
0.03%
73.48%
20.94%
26.52%
Total environmentally
sustainable activities,
(million HUF)
[turnover based]
Total environmentally
sustainable activities
(million HUF)
[capex based]
KPI
KPI
% coverage
(over total
assets)
% of assets excluded from the
numerator of the GAR (Article 7(2) and
(3) and Section 1.1.2. of Annex V)
% of assets excluded from the
denominator of the GAR (Article
7(1) and Section 1.2.4 of Annex
V)
Additional
KPI-s
GAR (flow)
276.50
678.12
0.04%
0.09%
54.02%
14.57%
45.98%
Financials guarantees
0.00
0.00
0.00%
0.00%
Asset under management
27.91
78.57
0.04%
0.10%
¹ based on the Turnover KPI of the counterparty
² based on the CapEx KPI of the counterparty, except for lending activities where for general lending Turnover KPI is used
³ % of assets covered by the KPI over banks´ total assets
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0. Summary of KPIs to be disclosed by credit institutions under Article 8 Taxonomy Regulation – OBS
Total environmentally
sustainable assets,
(million HUF)
[turnover based]
Total environmentally
sustainable assets,
(million HUF)
[capex based]
KPI¹
KPI²
% coverage
(over total
assets)³
% of assets excluded from the
numerator of the GAR (Article 7(2) and
(3) and Section 1.1.2. of Annex V)
% of assets excluded from the
denominator of the GAR (Article
7(1) and Section 1.2.4 of Annex V)
Main KPI
Green asset ratio (GAR) stock
7,210.51
14,451.81
0.19%
0.38%
62.55%
22.65%
37.45%
Total environmentally
sustainable activities,
(million HUF)
[turnover based]
Total environmentally
sustainable activities
(million HUF)
[capex based]
KPI
KPI
% coverage
(over total
assets)
% of assets excluded from the
numerator of the GAR (Article 7(2) and
(3) and Section 1.1.2. of Annex V)
% of assets excluded from the
denominator of the GAR (Article
7(1) and Section 1.2.4 of Annex V)
Additional
KPI-s
GAR (flow)
1,570.04
1,447.26
0.17%
0.15%
46.67%
16.42%
53.33%
Financials guarantees
0.00
0.00
0.00%
0.00%
Asset under management
0.00
0.00
0.00%
0.00%
¹ based on the Turnover KPI of the counterparty
² based on the CapEx KPI of the counterparty, except for lending activities where for general lending Turnover KPI is used
³ % of assets covered by the KPI over banks´ total assets
Notes:
•
Across the reporting templates: cells shaded in grey should not be reported.
•
Fees and Commissions (sheet 6) and Trading Book (sheet 7) KPIs shall only apply starting 2026.
The separate report published by the OTP Fund Manager and the tables indicated in Annex XII of Regulation 2021/2178 are presented
under a separate sub-heading.
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General qualitative information on the content and methodology of KPIs published in Annex XI of
Regulation No. 2021/2178:
The scope of assets and activities covered by the KPIs:
Asset portfolio covered
The calculation of the green asset ratio (GAR) for on-balance sheet exposures shall cover the following
accounting categories of financial assets, including loans and advances, debt securities, equity holdings and
repossessed collaterals:
•
financial assets at amortised cost;
•
financial assets at fair value through other comprehensive income;
•
investments in subsidiaries;
•
joint ventures and associates;
•
financial assets designated at fair value through profit or loss and non-trading financial assets
mandatorily at fair value through profit or loss;
•
real estate collaterals obtained by credit institutions by taking possession in exchange for the
cancellation of debts.
The ESG strategy's key element of OTP Group is to increase the green loan portfolio. The alignment of green
lending with the EU Taxonomy is ensured through the Group's green frameworks. The presentation of the
frameworks can be found in the @Voluntary GAR reporting.
In accordance with Article 7(1) of Regulation No. 2021/2178, exposures to central governments, central banks
and supranational issuers shall be excluded from the calculation of the numerator and denominator of key
performance indicators of financial undertakings.
Pursuant to Article 7 of Regulation No. 2021/2178, the following assets are excluded from the numerator of
the GAR:
•
financial assets held for trading;
•
on-demand interbank loans;
•
(c) exposures to undertakings that are not obliged to publish non-financial information pursuant to
Article 19a or 29a of Directive No. 2013/34/EU;
•
derivatives;
•
cash and cash-related assets;
•
other categories of assets (e.g. goodwill, goods, etc.).
Based on the guidance in Annex III of EU Regulation No. 2021/2178, gross exposures have been aggregated
in the relevant row of Template 1 of the GAR for credit institutions based on the separate report of OTP Fund
Management. Exposures on assets under management are shown on a consolidated basis in the asset GAR
indicator in summary template 0, based on data on the total assets of the Fund Manager.
Financial data are identified based on the Bank’s analytical credit and risk database and FINREP balance
sheet data. In respect of alignment with the taxonomy, data were generated through individual data requests
or from publicly available data.
Findings concerning Annex VI of Regulation No. 2021/2178, worksheet ‘0’
The use of CAPEX and turnover-based reporting has necessitated the duplication of KPI cells.
The definition of the KPIs shall be based on the following components:
a) the numerator, which shall cover the loans and advances, debt securities, equities and repossessed
collaterals, financing Taxonomy-aligned economic activities based on turnover KPI and Capex KPI of
underlying assets.
b) the denominator, which shall cover the total loans and advances, total debt securities, total equities
and total repossessed collaterals and all other covered on-balance sheet assets.
Pursuant to point 1.2.3. (Fees and commissions) of Annex V, KPIs for trading book items and fees and
commissions are applicable from 1 January 2026.
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Findings concerning Annex VI of Regulation No. 2021/2178, Template 1
The template has been duplicated on the basis of counterparty turnover and CapEx data. The numerators of
the two GAR KPIs differ for (general) loans for unknown purpose, bond exposure and equity holdings to non-
financial undertakings.
Exposures were analysed along the following customer segmentation:
•
financial undertakings
•
non-financial undertakings
•
retail customers (with the following sub-categories: residential property, home renovation and car
loans)
•
local governments (only with the following sub-category: housing financing) – rental housing financing
or known green loan purpose
•
collateral obtained by taking possession, residential and commercial real estate
Tables T-1 are filled in using the latest version of the data as at 31.12.2023, where available.
Information on financial undertakings
The collection of data on the taxonomy reports of financial enterprises was carried out taking into account the
latest available data. Pursuant to the financial materiality threshold, exposures that did not reach 0.01% of the
portfolio's size in terms of taxonomy evaluation were not taken into account. When collecting and processing
the taxonomy reports, the Bank made all reasonable efforts in order to ensure portfolio coverage is as
comprehensively as possible.
Information on non-financial undertakings
The range of customers covered by the NFRD has been identified for each subsidiary bank, taking into account
local regulations.
Filtering criteria (Hungary):
Based on Accounting Act C./2000: in the two consecutive business years preceding the business year,
on the balance sheet date, any two of the following three indicators exceeded the following limit:
Number of employees
> 250 persons
Total assets
> HUF 10 billion
Annual net sales revenue > HUF 20 billion
For the application of the above filtering criteria, data compiled by an external data provider and existing in the
banking systems were used.
Loans and debt securities exposures to non-financial undertakings were taken into account on the basis of
known and unknown loan purposes. In the case of known loan purposes, transactions that have been
designated on the basis of the Bank’s eligibility and alignment checks have been taken into account. In the
case of unknown loan purposes and for equity exposures, the counterparty’s disclosed turnover and CAPEX
eligibility and alignment information has been taken into account.
If no published information was available for the counterparty concerned, the Bank did not take into account
the counterparty’s exposures for the purposes of eligibility and alignment in the course of reporting.
We have made every reasonable effort to identify the NFRD-obliged companies that appear in the parent
company consolidation. At the same time, in the absence of up-to-date, comprehensive data provided by a
public authority or a market operator, it is conceivable that not all of our NFRD-obligated customers have been
identified. The Bank's short-term plans include the full, up-to-date identification of the non-financial partners
involved in the GAR report and the integration of the required data into the bank's IT systems.
Loans and advances belonging to the specialized financing segment that can be identified in the controlling
system are examined for the special lending category. In the case of bond exposures, the debt securities
invested in project financing exposures were examined.
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Information on households
GAR for retail exposures to residential real estate or house renovation loans was calculated as a proportion of
loans to households collateralised by residential immovable property or granted for house renovation purposes
that is Taxonomy-aligned in accordance with the relevant technical screening criteria for buildings, in particular
renovation and acquisition and ownership in accordance with Annex I and Sections 7.1, 7.2, 7.3, 7.4, 7.5, 7.6,
and 7.7 respectively of Annex II to Delegated Regulation (EU) No. 2021/2139 or Sections 3.1 and 3.2 of Annex
II to Delegated Regulation (EU) No. 2023/2486, compared to total loans to households collateralised by
residential immovable property or granted for house renovation purposes.
According to the Bank's interpretation, based on EU Regulation 2021/2178, gross exposure to households
means the Bank's exposure to all households, not just loans secured by residential real estate. The taxonomic
examination can be interpreted in the case of exposures secured by residential real estate, loans secured by
non-residential real estate are excluded during the taxonomic examination.
In line with the spirit of the legal interpretation, in order to avoid duplication of exposures, the Bank has decided
to show exposures related to building modernization as defined in Section 7.2 of Annex I of the Delegated Act
only in row 28 of Template and to exclude these exposures from loans collateralized by residential immovable
property.
GAR for consumer credit exposures for car loans shall be calculated as the proportion of loans financing cars
complying with the technical screening criteria as laid down in Section 6.5 of Annex I to Climate Delegated
Act. This GAR includes disclosures related to transition activities, as well as the disclosure of loan portfolios
for loans granted only after the start date of the application of Regulation EU 2021/2178, as well as the
publication of flow of loans. Given that the Bank is currently unable to verify DNSH compliance in the case of
residential exposures, the Bank does not display data related to taxonomy-aligned residential real estate
financing for 2024.
The value for special lending in this residential exposure category is the same as the taxonomy-aligned value.
The Bank was unable to identify any exposure to rental housing financing beyond any doubt, so the fields in
this category do not contain any data. Based on the interpretation of the legislation, exposures related to other
non-rental housing or known green loan purposes must be excluded from the numerator of the GAR.
For the given exposure class, the methodology used shall contain the gross carrying amount of commercial
and residential repossessed real estate collaterals compliant with the technical screening criteria for buildings
in Section 7.7 of Annex I to Delegated Act. The denominator contains the total gross book value of the
commercial and residential real estate collateral seized by the credit institution.
Findings concerning Annex VI of Regulation No. 2021/2178, worksheet ‘2’
The Bank’s interpretation is that column (a) of the template should contain – in a breakdown by 4-digit NACE
code – the core activities of all the Bank’s counterparties that fall within the scope of the NFRD.
The table contains exposures that are eligible and aligned to EU Taxonomy, per the given NACE code.
Findings concerning Annex VI of Regulation No. 2021/2178, worksheet ‘3’
In this template, the Bank has disclosed the GAR KPI for the loan portfolio, which have been calculated for the
covered assets on the basis of the data reported in template 1, using the formulae provided in the template
published by the Commission.
The Bank has duplicated this template for turnover-based and CapEx-based disclosures.
Findings concerning Annex VI of Regulation No. 2021/2178, worksheet ‘4’
The Bank has duplicated this template for turnover-based and CapEx-based disclosures. In disclosing
information on changes in portfolio, the Bank has reported exposures incurred in the current year.
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Findings concerning Annex VI of Regulation No. 2021/2178, worksheet ‘5’
In the calculation of the KPIs for off-balance sheet exposures (financial guarantees and assets under
management), the Bank has used the data on covered assets provided in Table 1 and the formulas suggested
in this table. Exposures for which information was not available in the Bank's systems are not considered and
disclosed in this report.
Findings and publication regarding Annex XII to 2021/2178
Pursuant to Article 8, points 6-7 of Decree 2021/2178, the Bank makes the following disclosures, which we
prepared on the basis of data published by the parties concerned.
In case a value of a cell is zero, the cell will not be filled, it will remain empty.
Compared to last year, with the exception of table 3, the values show no significant, small changes. The
amount and share of economic activity in the taxonomy of electricity generation from nuclear energy has fallen
to a third of the previous year's level in this reporting cycle, both on a turnover and capex basis.
Template 1: Nuclear and fossil gas related activities
Row
Nuclear energy related activities
YES/NO
1
The undertaking carries out, funds or has exposures to research, development,
demonstration and deployment of innovative electricity generation facilities that produce
energy from nuclear processes with minimal waste from the fuel cycle.
YES
2
The undertaking carries out, funds or has exposures to construction and safe operation of
new nuclear installations to produce electricity or process heat, including for the purposes
of district heating or industrial processes such as hydrogen production, as well as their
safety upgrades, using best available technologies.
YES
3
The undertaking carries out, funds or has exposures to safe operation of existing nuclear
installations that produce electricity or process heat, including for the purposes of district
heating or industrial processes such as hydrogen production from nuclear energy, as well
as their safety upgrades.
YES
Fossil gas related activities
4
The undertaking carries out, funds or has exposures to construction or operation of
electricity generation facilities that produce electricity using fossil gaseous fuels.
YES
5
The undertaking carries out, funds or has exposures to construction, refurbishment, and
operation of combined heat/cool and power generation facilities using fossil gaseous fuels.
YES
6
The undertaking carries out, funds or has exposures to construction, refurbishment and
operation of heat generation facilities that produce heat/cool using fossil gaseous fuels.
YES
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Template 2: Taxonomy-aligned economic activities (denominator)
Row
Economic activities
Amount and proportion (the information is to be presented in
monetary amounts and as percentages) -Turnover
Amount and proportion (the information is to be presented in
monetary amounts and as percentages) -Capex
CCM + CCA
Climate change
mitigation
(CCM)
Climate
change
adaptation
CCM + CCA
Climate change
mitigation
(CCM)
Climate change
adaptation
Amount
%
Amount
%
Amount
%
Amount
%
Amount
%
Amount
%
1
Amount and proportion of taxonomy-aligned
economic activity referred to in Section 4.26 of
Annexes I and II to Delegated Regulation
2021/2139 in the denominator of the applicable
KPI
0.23
0.00%
0.23
0.01
0.00%
0.01
2
Amount and proportion of taxonomy-aligned
economic activity referred to in Section 4.27 of
Annexes I and II to Delegated Regulation
2021/2139 in the denominator of the applicable
KPI
0.23
0.00%
0.23
0.43
0.00%
0.43
3
Amount and proportion of taxonomy-aligned
economic activity referred to in Section 4.28 of
Annexes I and II to Delegated Regulation
2021/2139 in the denominator of the applicable
KPI
2,752.38
0.01%
2,752.38
5,914.98
0.02%
5,914.98
4
Amount and proportion of taxonomy-aligned
economic activity referred to in Section 4.29 of
Annexes I and II to Delegated Regulation
2021/2139 in the denominator of the applicable
KPI
243.24
0.00%
243.24
5
Amount and proportion of taxonomy-aligned
economic activity referred to in Section 4.30 of
Annexes I and II to Delegated Regulation
2021/2139 in the denominator of the applicable
KPI
3.88
0.00%
1.60
2.28
2.26
0.00%
2.26
6
Amount and proportion of taxonomy-aligned
economic activity referred to in Section 4.31 of
Annexes I and II to Delegated Regulation
2021/2139 in the denominator of the applicable
KPI
7
Amount and proportion of other taxonomy-
aligned economic activities not referred to in
rows 1 to 6 above in the denominator of the
applicable KPI
29,044,873.54
99.99%
29,041,469.33
99.98%
8
Total applicable KPI
29,047,630.26
100%
29,047,630.26
100%
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Template 3 – Taxonomy-aligned economic activities (numerator)
Row
Economic activities
Amount and proportion (the information is to be
presented in monetary amounts and as percentages) -
Turnover
Amount and proportion (the information is to be
presented in monetary amounts and as percentages) -
Capex
CCM + CCA
Climate change
mitigation
Climate change
adaptation
CCM + CCA
Climate change
mitigation
Climate change
adaptation
Amount
%
Amount
%
Amount
%
Amount
%
Amount
%
Amount
%
1
Amount and proportion of taxonomy-aligned economic activity referred
to in Section 4.26 of Annexes I and II to Delegated Regulation
2021/2139 in the numerator of the applicable KPI
0.00
0.00%
0.00
0.10
0.00%
0.10
2
Amount and proportion of taxonomy-aligned economic activity referred
to in Section 4.27 of Annexes I and II to Delegated Regulation
2021/2139 in the numerator of the applicable KPI
0.00
0.00%
0.00
3
Amount and proportion of taxonomy-aligned economic activity referred
to in Section 4.28 of Annexes I and II to Delegated Regulation
2021/2139 in the numerator of the applicable KPI
2,451.47
8.07% 2,451.47
5,791.00
7.28% 5,791.00
4
Amount and proportion of taxonomy-aligned economic activity referred
to in Section 4.29 of Annexes I and II to Delegated Regulation
2021/2139 in the numerator of the applicable KPI
0.06
0.00%
0.06
5
Amount and proportion of taxonomy-aligned economic activity referred
to in Section 4.30 of Annexes I and II to Delegated Regulation
2021/2139 in the numerator of the applicable KPI
0.43
0.00%
0.43
0.00
0.07
0.00%
0.07
6
Amount and proportion of taxonomy-aligned economic activity referred
to in Section 4.31 of Annexes I and II to Delegated Regulation
2021/2139 in the numerator of the applicable KPI
1.16
0.00%
1.16
7
Amount and proportion of other taxonomy-aligned economic
activities not referred to in rows 1 to 6 above in the numerator of
the applicable KPI
27,911.41
91.92%
74,626.96
92.80%
8
Total amount and proportion of taxonomy-aligned economic
activities in the numerator of the applicable KPI
30,363.31 100,00%
80,419.34 100,00%
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Template 4 - Taxonomy-eligible but not taxonomy-aligned economic activities
Row
Economic activities
Amount and proportion (the information is to be presented
in monetary amounts and as percentages) -Turnover
Amount and proportion (the information is to be presented
in monetary amounts and as percentages) - Capex
CCM + CCA
Climate change
mitigation
Climate change
adaptation
CCM + CCA
Climate change
mitigation
Climate change
adaptation
Amount
%
Amount
%
Amount
%
Amount
%
Amount
%
Amount
%
1
Amount and proportion of taxonomy-eligible but not
taxonomy-aligned economic activity referred to in Section
4.26 of Annexes I and II to Delegated Regulation
2021/2139 in the denominator of the applicable KPI
0.05
0.00%
0.05
0.02
0.00%
0.02
2
Amount and proportion of taxonomy-eligible but not
taxonomy-aligned economic activity referred to in Section
4.27 of Annexes I and II to Delegated Regulation
2021/2139 in the denominator of the applicable KPI
7.38
0.00%
7.38
3
Amount and proportion of taxonomy-eligible but not
taxonomy-aligned economic activity referred to in Section
4.28 of Annexes I and II to Delegated Regulation
2021/2139 in the denominator of the applicable KPI
131.99
0.00%
131.99
15.31
0.00%
15.31
4
Amount and proportion of taxonomy-eligible but not
taxonomy-aligned economic activity referred to in Section
4.29 of Annexes I and II to Delegated Regulation
2021/2139 in the denominator of the applicable KPI
14.14
0.00%
14.14
299.37
0.01%
299.37
5
Amount and proportion of taxonomy-eligible but not
taxonomy-aligned economic activity referred to in Section
4.30 of Annexes I and II to Delegated Regulation
2021/2139 in the denominator of the applicable KPI
304.35
0.01%
304.35
0.00
231.15
0.01%
231.15
6
Amount and proportion of taxonomy-eligible but not
taxonomy-aligned economic activity referred to in Section
4.31 of Annexes I and II to Delegated Regulation
2021/2139 in the denominator of the applicable KPI
1.58
0.00%
1.58
7
Amount and proportion of other taxonomy-aligned
economic activities not referred to in rows 1 to 6 above
in the numerator of the applicable KPI
3,920,169.56
99.99%
3,922,120.35
99.99%
8
Total amount and proportion of taxonomy-eligible but
not taxonomy-aligned economic activities in the
numerator of the applicable KPI
3,920,629.05 100.00%
3,922,666.19 100.00%
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
230
Template 5 - Taxonomy non-eligible economic activities
Row
Economic activities
Turnover
Capex
Amount
%
Amount
%
1
Amount and proportion of economic activity referred to in row 1 of Template 1 that is taxonomy-non-
eligible in accordance with Section 4.26 of Annexes I and II to Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
1,289.39
0.01%
2
Amount and proportion of economic activity referred to in row 2 of Template 1 that is taxonomy-non-
eligible in accordance with Section 4.27 of Annexes I and II to Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
8.94
0.00%
22.95
0.00%
3
Amount and proportion of economic activity referred to in row 3 of Template 1 that is taxonomy-non-
eligible in accordance with Section 4.28 of Annexes I and II to Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
4.75
0.00%
4
Amount and proportion of economic activity referred to in row 4 of Template 1 that is taxonomy-non-
eligible in accordance with Section 4.29 of Annexes I and II to Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
2,925.52
0.01%
706.89
0.00%
5
Amount and proportion of economic activity referred to in row 5 of Template 1 that is taxonomy-non-
eligible in accordance with Section 4.30 of Annexes I and II to Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
1.14
0.00%
1.15
0.00%
6
Amount and proportion of economic activity referred to in row 6 of Template 1 that is taxonomy-non-
eligible in accordance with Section 4.31 of Annexes I and II to Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
7
Amount and proportion of other taxonomy-non-eligible economic activities not referred to in rows
1 to 6 above in the denominator of the applicable KPI
25,092,408.15
99.98%
25,043,813.73
100.00%
8
Total amount and proportion of taxonomy-non-eligible economic activities in the denominator of
the applicable KPI
25,096,637.90
100.00%
25,044,544.72
100.00%
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
231
The data on nuclear energy and fossil gas activities published in the 2023 Financial Report are published below:
Template 1: Nuclear and fossil gas related activities (T-1)
Row
Nuclear energy related activities
YES/NO
1
The undertaking carries out, funds or has exposures to research, development, demonstration and deployment of innovative electricity generation
facilities that produce energy from nuclear processes with minimal waste from the fuel cycle.
NO
2
The undertaking carries out, funds or has exposures to construction and safe operation of new nuclear installations to produce electricity or process
heat, including for the purposes of district heating or industrial processes such as hydrogen production, as well as their safety upgrades, using best
available technologies.
YES
3
The undertaking carries out, funds or has exposures to safe operation of existing nuclear installations that produce electricity or process heat,
including for the purposes of district heating or industrial processes such as hydrogen production from nuclear energy, as well as their safety
upgrades.
YES
Fossil gas related activities
4
The undertaking carries out, funds or has exposures to construction or operation of electricity generation facilities that produce electricity using fossil
gaseous fuels.
YES
5
The undertaking carries out, funds or has exposures to construction, refurbishment, and operation of combined heat/cool and power generation
facilities using fossil gaseous fuels.
YES
6
The undertaking carries out, funds or has exposures to construction, refurbishment and operation of heat generation facilities that produce heat/cool
using fossil gaseous fuels.
YES
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
232
Template 2: Taxonomy-aligned economic activities (denominator) (T-1)
Row
Economic activities
Amount and proportion (the information is to be presented in
monetary amounts and as percentages) -Turnover
Amount and proportion (the information is to be presented in
monetary amounts and as percentages) -Capex
CCM + CCA
Climate
change
mitigation
(CCM)
Climate change
adaptation
CCM + CCA
Climate
change
mitigation
(CCM)
Climate change
adaptation
Amount
%
Amount
%
Amount
%
Amount
%
Amount
%
Amount
%
1
Amount and proportion of taxonomy-aligned economic
activity referred to in Section 4.26 of Annexes I and II to
Delegated Regulation 2021/2139 in the denominator of the
applicable KPI
2
Amount and proportion of taxonomy-aligned economic
activity referred to in Section 4.27 of Annexes I and II to
Delegated Regulation 2021/2139 in the denominator of the
applicable KPI
3
Amount and proportion of taxonomy-aligned economic
activity referred to in Section 4.28 of Annexes I and II to
Delegated Regulation 2021/2139 in the denominator of the
applicable KPI
4,241.3
0.02%
4,241.3
5,831.8
0.02%
5,831.8
4
Amount and proportion of taxonomy-aligned economic
activity referred to in Section 4.29 of Annexes I and II to
Delegated Regulation 2021/2139 in the denominator of the
applicable KPI
5
Amount and proportion of taxonomy-aligned economic
activity referred to in Section 4.30 of Annexes I and II to
Delegated Regulation 2021/2139 in the denominator of the
applicable KPI
6
Amount and proportion of taxonomy-aligned economic
activity referred to in Section 4.31 of Annexes I and II to
Delegated Regulation 2021/2139 in the denominator of the
applicable KPI
7
Amount and proportion of other taxonomy-aligned
economic activities not referred to in rows 1 to 6 above
in the denominator of the applicable KPI
25,851,399
99.98%
25,849,808
99.98%
8
Total applicable KPI
25,855,640
100%
25,855,640
100%
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
233
Template 3: Taxonomy-aligned economic activities (numerator) (T-1)
Row
Economic activities
Amount and proportion (the information is to be
presented in monetary amounts and as percentages) -
Turnover
Amount and proportion (the information is to be
presented in monetary amounts and as percentages) -
Capex
CCM + CCA
Climate change
mitigation
Climate change
adaptation
CCM + CCA
Climate change
mitigation
Climate change
adaptation
Amount
%
Amount
%
Amount
%
Amount
%
Amount
%
Amount
%
1
Amount and proportion of taxonomy-aligned economic activity referred
to in Section 4.26 of Annexes I and II to Delegated Regulation
2021/2139 in the numerator of the applicable KPI
2
Amount and proportion of taxonomy-aligned economic activity referred
to in Section 4.27 of Annexes I and II to Delegated Regulation
2021/2139 in the numerator of the applicable KPI
3
Amount and proportion of taxonomy-aligned economic activity referred
to in Section 4.28 of Annexes I and II to Delegated Regulation
2021/2139 in the numerator of the applicable KPI
3,997.4
32%
3,997.4
5,916.6
25%
5,916.6
4
Amount and proportion of taxonomy-aligned economic activity referred
to in Section 4.29 of Annexes I and II to Delegated Regulation
2021/2139 in the numerator of the applicable KPI
5
Amount and proportion of taxonomy-aligned economic activity referred
to in Section 4.30 of Annexes I and II to Delegated Regulation
2021/2139 in the numerator of the applicable KPI
6
Amount and proportion of taxonomy-aligned economic activity referred
to in Section 4.31 of Annexes I and II to Delegated Regulation
2021/2139 in the numerator of the applicable KPI
7
Amount and proportion of other taxonomy-aligned economic
activities not referred to in rows 1 to 6 above in the numerator of
the applicable KPI
8,454
68%
17,564
75%
8
Total amount and proportion of taxonomy-aligned economic
activities in the numerator of the applicable KPI
12,451
100%
23,481
100%
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
234
Template 4: Taxonomy-eligible but not taxonomy-aligned economic activities T-1
Row
Economic activities
Amount and proportion (the information is to be presented
in monetary amounts and as percentages) -Turnover
Amount and proportion (the information is to be presented
in monetary amounts and as percentages) - Capex
CCM + CCA
Climate change
mitigation
Climate change
adaptation
CCM + CCA
Climate change
mitigation
Climate change
adaptation
Amount
%
Amount
%
Amount
%
Amount
%
Amount
%
Amount
%
1
Amount and proportion of taxonomy-eligible but not
taxonomy-aligned economic activity referred to in Section
4.26 of Annexes I and II to Delegated Regulation 2021/2139
in the denominator of the applicable KPI
2
Amount and proportion of taxonomy-eligible but not
taxonomy-aligned economic activity referred to in Section
4.27 of Annexes I and II to Delegated Regulation 2021/2139
in the denominator of the applicable KPI
10.6
0%
10.6
3
Amount and proportion of taxonomy-eligible but not
taxonomy-aligned economic activity referred to in Section
4.28 of Annexes I and II to Delegated Regulation 2021/2139
in the denominator of the applicable KPI
4
Amount and proportion of taxonomy-eligible but not
taxonomy-aligned economic activity referred to in Section
4.29 of Annexes I and II to Delegated Regulation 2021/2139
in the denominator of the applicable KPI
171.4
0.01%
171.4
5
Amount and proportion of taxonomy-eligible but not
taxonomy-aligned economic activity referred to in Section
4.30 of Annexes I and II to Delegated Regulation 2021/2139
in the denominator of the applicable KPI
507.2
0.02%
507.2
402.3
0,01%
402.3
6
Amount and proportion of taxonomy-eligible but not
taxonomy-aligned economic activity referred to in Section
4.31 of Annexes I and II to Delegated Regulation 2021/2139
in the denominator of the applicable KPI
16.4
0%
16.4
7
Amount and proportion of other taxonomy-aligned
economic activities not referred to in rows 1 to 6 above
in the numerator of the applicable KPI
3,374,915
99.98%
3,389,945
99.98%
8
Total amount and proportion of taxonomy-eligible but
not taxonomy-aligned economic activities in the
numerator of the applicable KPI
3,375,433
100%
3,390,535
100%
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
235
Template 5: Taxonomy non-eligible economic activities (T-1)
Row
Economic activities
Turnover
Capex
Amount
%
Amount
%
1
Amount and proportion of economic activity referred to in row 1 of Template 1 that is taxonomy-non-
eligible in accordance with Section 4.26 of Annexes I and II to Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
2
Amount and proportion of economic activity referred to in row 2 of Template 1 that is taxonomy-non-
eligible in accordance with Section 4.27 of Annexes I and II to Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
3
Amount and proportion of economic activity referred to in row 3 of Template 1 that is taxonomy-non-
eligible in accordance with Section 4.28 of Annexes I and II to Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
4
Amount and proportion of economic activity referred to in row 4 of Template 1 that is taxonomy-non-
eligible in accordance with Section 4.29 of Annexes I and II to Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
1,708.3
0.01%
1,371.6
0.01%
5
Amount and proportion of economic activity referred to in row 5 of Template 1 that is taxonomy-non-
eligible in accordance with Section 4.30 of Annexes I and II to Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
6
Amount and proportion of economic activity referred to in row 6 of Template 1 that is taxonomy-non-
eligible in accordance with Section 4.31 of Annexes I and II to Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
7
Amount and proportion of other taxonomy-non-eligible economic activities not referred to in rows
1 to 6 above in the denominator of the applicable KPI
22,478,499
99.99%
22,463,733
99.99%
8
Total amount and proportion of taxonomy-non-eligible economic activities in the denominator of
the applicable KPI
22,480,207
100%
22,465,105
100%
According to the third Commission Notice (C/2024/6691 Commission Notice) Annex XII templates should be published on a flow basis. However due to the publishing
date of the notice – November 2024 – OTP Group does not prepare Annex XII templates on a flow basis in the current reporting period.
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
236
Independent report published by the OTP Fund Manager
The following is the mandatory report for the OTP Fund Manager. The report for 2024 includes the data of the
Fund Manager's subsidiaries63 as well, while the report for 2023 includes the exposures of OTP Fund Manager
as a separate legal entity, which limits the comparability of the results for the two years.
Reference date: 31 December 2024
in HUF million
The weighted average value of all the investments that are
directed at funding, or are associated with taxonomy-aligned
economic activities relative to the value of total assets
covered by the KPI, with following weights for investments in
undertakings per below:
The weighted average value of all the investments that are directed at
funding, or are associated with taxonomy-aligned economic activities,
with following weights for investments in undertakings per below:
Turnover-based:
Turnover-based:
0.80%
22,290
CapEx-based:
CapEx-based:
1.66%
45,959
The percentage of assets covered by the KPI relative to total
investments (total AuM). Excluding investments in sovereign
entities,
The monetary value of assets covered by the KPI. Excluding
investments in sovereign entities.
Coverage ratio:
Coverage:
63.87%
2,776,316
Additional, complementary disclosures: breakdown of denominator of the KPI
The percentage of derivatives relative to total assets covered
by the KPI.
The value in monetary amounts of derivatives:
-
-
The proportion of exposures to EU financial and non-financial
undertakings not subject to Articles 19a and 29a of Directive
2013/34/EU over total assets covered by the KPI:
Value of exposures to financial and non-financial undertakings from
non-EU countries not subject to Articles 19a and 29a of Directive
2013/34/EU:
For non-financial undertakings:
For non-financial undertakings:
1.39%
38,685
For financial undertakings:
For financial undertakings:
4.95%
137,523
The proportion of exposures to financial and non-financial
undertakings from non-EU countries not subject to Articles 19a
and 29a of Directive 2013/34/EU over total assets covered by
the KPI:
Value of exposures to financial and non-financial undertakings from
non-EU countries not subject to Articles 19a and 29a of Directive
2013/34/EU:
For non-financial undertakings:
For non-financial undertakings:
39.90%
1,107,738
For financial undertakings:
For financial undertakings:
24.89%
691,142
The proportion of exposures to financial and non-financial
undertakings subject to Articles 19a and 29a of Directive
2013/34/EU over total assets covered by the KPI:
The proportion of exposures to financial and non-financial undertakings
subject to Articles 19a and 29a of Directive 2013/34/EU over total
assets covered by the KPI:
For non-financial undertakings:
For non-financial undertakings:
7.24%
201,019
For financial undertakings:
For financial undertakings:
11.19%
310,588
The proportion of exposures to other counterparties and
assets over total assets covered by the KPI:
Value of exposures to other counterparties and assets
10.43%
289,622
The value of all the investments that are funding economic
activities that are not taxonomy-eligible relative to the value of
total assets covered by the KPI:
The value of all the investments that are funding economic activities
that are not taxonomy-eligible relative to the value of total assets
covered by the KPI:
87.53%
2,430,102
The value of all the investments that are funding taxonomy-
eligible economic activities, but not taxonomy-aligned relative
to the value of total assets covered by the KPI:
Value of all the investments that are funding Taxonomy-eligible
economic activities, but not taxonomy-aligned:
7.62%
211,491
63 DSK Asset Management EAD, LLC AMC OTP Capital, OTP Alapkezelő Zrt., OTP INVEST DRUŠTVO ZA UPRAVLJANJE UCITS I ALTERNATIVNIM
FONDOVIMA AD BEOGRAD, OTP Invest d.o.o.
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
237
in HUF million
Additional, complementary disclosures: breakdown of numerator of the KPI
The proportion of Taxonomy-aligned exposures to financial
and non-financial undertakings subject to Articles 19a and 29a
of Directive 2013/34/EU over total assets covered by the KPI:
Value of Taxonomy-aligned exposures to financial and non-financial
undertakings subject to Articles 19a and 29a of Directive 2013/34/EU:
For non-financial undertakings:
For non-financial undertakings:
Turnover-based
Turnover-based
0.68%
18,755
Capital expenditures-based:
Capital expenditures-based:
1.47%
40,872
For financial undertakings
For financial undertakings
Turnover-based
Turnover-based:
0.00%
1
Capital expenditures-based:
Capital expenditures-based:
0.00%
9
The proportion of Taxonomy-aligned exposures to other
counterparties and assets over total assets covered by the
KPI:
Value of Taxonomy-aligned exposures to other counterparties and
assets:
Turnover-based:
Turnover-based:
0.13%
3,526
Capital expenditures-based:
Capital expenditures-based:
0.18%
5,079
Breakdown of the numerator of the KPI per environmental objective
Taxonomy-aligned activities:
1. Climate change mitigation
Enabling activities:
Turnover:
Turnover:
0.06%
1,552
CAPEX:
CAPEX:
0.19%
5,363
Enabling activities:
Turnover:
Turnover:
0.46%
12,899
CAPEX:
CAPEX:
0.82%
22,635
2. Climate change adaptation
Transitional activities:
Turnover:
Turnover:
0.00%
5
CAPEX:
CAPEX:
0.00%
3
Enabling activities:
Turnover:
Turnover:
0.05%
1,262
CAPEX:
CAPEX:
0.05%
1,331
3. The sustainable use and protection of water and marine resources
Transitional activities:
Turnover:
Turnover:
0.00%
11
CAPEX:
CAPEX:
0.00%
26
Enabling activities
Turnover:
Turnover:
0.00%
26
CAPEX:
CAPEX:
0.01%
142
4. The transition to a circular economy
Transitional activities:
Turnover:
Turnover:
0.00%
112
CAPEX:
CAPEX:
0.00%
27
Enabling activities:
Turnover:
Turnover:
0.00%
73
CAPEX:
CAPEX:
0.00%
24
5. Pollution prevention and control
Transitional activities:
Turnover:
Turnover:
0.00%
24
CAPEX:
CAPEX:
0.00%
1
Enabling activities:
Turnover:
Turnover:
0.00%
1
CAPEX:
CAPEX:
0.00%
1
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
238
Breakdown of the numerator of the KPI per environmental objective
Taxonomy-aligned activities:
6. The protection and restoration of biodiversity and ecosystems
Transitional activities:
Turnover:
Turnover:
0.00%
0
CAPEX:
CAPEX:
0.00%
2
Enabling activities:
Turnover:
Turnover:
0.00%
0
CAPEX:
CAPEX:
0.00%
0
OTP Fund Management publishes the following report for the financial year 2023:
in HUF million
The weighted average value of all the investments that are
directed at funding, or are associated with taxonomy-aligned
economic activities relative to the value of total assets covered
by the KPI, with following weights for investments in
undertakings per below:
The weighted average value of all the investments that are directed at
funding, or are associated with taxonomy-aligned economic activities,
with following weights for investments in undertakings per below:
Turnover-based:
Turnover-based:
0.54%
14,222
CapEx-based:
CapEx-based:
1.05 %
27,842
The percentage of assets covered by the KPI relative to total
investments (total AuM). Excluding investments in sovereign
entities.
The monetary value of assets covered by the KPI. Excluding
investments in sovereign entities.
Coverage ratio
Coverage:
83,22 %
2,644,791
Additional, complementary disclosures: breakdown of denominator of the KPI
The percentage of derivatives relative to total assets covered
by the KPI.
The value in monetary amounts of derivatives:
-
-
The proportion of exposures to EU financial and non-financial
undertakings not subject to Articles 19a and 29a of Directive
2013/34/EU over total assets covered by the KPI:
Value of exposures to financial and non-financial undertakings from
non-EU countries not subject to Articles 19a and 29a of Directive
2013/34/EU:
For non-financial undertakings:
For non-financial undertakings:
0.72%
19,087
For financial undertakings:
For financial undertakings:
3.06%
81,042
The proportion of exposures to financial and non-financial
undertakings from non-EU countries not subject to Articles 19a
and 29a of Directive 2013/34/EU over total assets covered by
the KPI:
Value of exposures to financial and non-financial undertakings from
non-EU countries not subject to Articles 19a and 29a of Directive
2013/34/EU:
For non-financial undertakings:
For non-financial undertakings:
35.43%
937,141
For financial undertakings:
For financial undertakings:
44.25%
1,170,413
The proportion of exposures to financial and non-financial
undertakings subject to Articles 19a and 29a of Directive
2013/34/EU over total assets covered by the KPI:
The proportion of exposures to financial and non-financial undertakings
subject to Articles 19a and 29a of Directive 2013/34/EU over total
assets covered by the KPI:
For non-financial undertakings:
For non-financial undertakings:
6.29%
166,292
For financial undertakings:
For financial undertakings:
7.40%
195,762
The proportion of exposures to other counterparties and
assets over total assets covered by the KPI:
Value of exposures to other counterparties and assets
2.84%
75,053
The value of all the investments that are funding economic
activities that are not taxonomy-eligible relative to the value of
total assets covered by the KPI:
The value of all the investments that are funding economic activities
that are not taxonomy-eligible relative to the value of total assets
covered by the KPI:
79.69%
2,107,555
The value of all the investments that are funding taxonomy-
eligible economic activities, but not taxonomy-aligned relative
to the value of total assets covered by the KPI:
Value of all the investments that are funding Taxonomy-eligible
economic activities, but not taxonomy-aligned:
14.73%
389,520
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
239
Additional, complementary disclosures: breakdown of numerator of the KPI
The proportion of Taxonomy-aligned exposures to financial
and non-financial undertakings subject to Articles 19a and 29a
of Directive 2013/34/EU over total assets covered by the KPI:
Value of Taxonomy-aligned exposures to financial and non-financial
undertakings subject to Articles 19a and 29a of Directive 2013/34/EU:
For non-financial undertakings:
For non-financial undertakings:
Turnover-based
Turnover-based
0.50%
13,283
Capital expenditures-based:
Capital expenditures-based:
1.01%
26,679
For financial undertakings
For financial undertakings
Turnover-based
Turnover-based:
0.00%
0
Capital expenditures-based:
Capital expenditures-based:
0.00%
0
The proportion of Taxonomy-aligned exposures to other
counterparties and assets over total assets covered by the
KPI:
Value of Taxonomy-aligned exposures to other counterparties and
assets:
Turnover-based:
Turnover-based:
0.04%
938
Capital expenditures-based:
Capital expenditures-based:
0.04%
1,163
Breakdown of the numerator of the KPI per environmental objective
Taxonomy-aligned activities:
1. Climate change mitigation
Enabling activities:
Turnover:
Turnover:
0.04%
1,038
CAPEX:
CAPEX:
0.15%
3,988
Enabling activities:
Turnover:
Turnover:
0.35%
9,157
CAPEX:
CAPEX:
0.58%
15,279
2. Climate change adaptation
Transitional activities:
Turnover:
Turnover:
0.00%
4
CAPEX:
CAPEX:
0.00%
3
Enabling activities:
Turnover:
Turnover:
0.04%
1,175
CAPEX:
CAPEX:
0.07%
1,742
3. The sustainable use and protection of water and marine resources
Transitional activities:
Turnover:
Turnover:
0.00%
0
CAPEX:
CAPEX:
0.00%
0
Enabling activities
Turnover:
Turnover:
0.00%
0
CAPEX:
CAPEX:
0.00%
0
4. The transition to a circular economy
Transitional activities:
Turnover:
Turnover:
0.00%
0
CAPEX:
CAPEX:
0.00%
0
Enabling activities:
Turnover:
Turnover:
0.00%
0
CAPEX:
CAPEX:
0.00%
0
5. Pollution prevention and control
Transitional activities:
Turnover:
Turnover:
0.00%
0
CAPEX:
CAPEX:
0.00%
0
Enabling activities:
Turnover:
Turnover:
0.00%
0
CAPEX:
CAPEX:
0.00%
0
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6. The protection and restoration of biodiversity and ecosystems
Transitional activities:
Turnover:
Turnover:
0.00%
0
CAPEX:
CAPEX:
0.00%
2
Enabling activities:
Turnover:
Turnover:
0.00%
0
CAPEX:
CAPEX:
0.00%
0
Contextual information in support of the quantitative indicators including the scope of assets and
activities covered by the KPIs, information on data sources and limitation.
The KPI covers equity and bond assets within the funds and portfolios managed by Fund Manager and its
subsidiaries. Collective investment forms representing a significant portion of each portfolio were considered
only if the ESG service provider used by Fund Manager (MSCI ESG Research) can break down underlying
investments, excluding state securities.
The coverage is further limited as the data reporting obligations under Articles 19a and 29a of Directive
2013/34/EU only extend to a limited group of target companies receiving Fund Manager's investments, so for
a significant portion of investments, the Fund Manager and the ESG service provider do not have usable data.
63.87% of the 11 billion EUR assets managed by the Fund Manager and its subsidiaries were considered. In
terms of the evolution of the GAR ratio over time, the calculated GAR ratio increased from 0.54% to 0.8% on
a turnover basis and from 1.05% to 1.66% on a CAPEX basis. For each activity, only activities related to
mitigating climate change and adapting to climate change were fully considered in this reporting period.
Activities related to sustainable use and protection of water and marine resources, transition to circular
economy, and pollution prevention and reduction were only provided by non-financial companies.
Fund Manager relied solely on data provided by the ESG service provider (MSCI ESG Research) when
calculating the KPIs and did not use any other external ESG providers or conduct its own data collection.
Due to the data provision of MSCI ESG Research, the breakdown taxonomy aligned activities of OTP Fund
Manager is only possible according to transitional and enabling activities, in the Annex VI templates of OTP
Group. OTP Fund Manager’s monetary amount of taxonomy aligned activities dislosed according to Annex IV
also consist of those taxonomy aligned activities which have not received a transitional or enabling flag, hence
the two values are different.
An explanation of the nature and purpose of the economic activities aligned with the Taxonomy and an
explanation of the evolution of the economic activities aligned with The taxonomy over time from the second
year of implementation, distinguishing between business-related and methodological and data-related
elements.
Explanation of the nature and objectives of the economic activities aligned with the taxonomy, and the
explanation of the evolution of these activities over time starting from the second year of implementation,
distinguishing between business-related, methodological, and data-related elements.
OTP Fund Management does not have a general, overarching goal for economic activities aligned with the
taxonomy but considers the environmental objectives of sustainability when evaluating a given investment,
focusing primarily on greenhouse gas emissions, waste and pollutant emissions, and water stress.
In calculating the eligibility and alignment KPIs according to the EU taxonomy for the managed assets, the
OTP Group is making a restatement regarding the data for the 2023 financial year. Therefore, the consolidated
sustainability data for 2023 published in this report are not comparable to the data published in last year's
report.
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The OTP Climate Change Fund
The OTP Climate Change Fund integrates sustainability considerations into investment decision-making as follows:
The Fund's reference index is aligned with its investment strategy (70% MSCI ACWI IMI SDG 7 Affordable
and Clean Energy Select Index + 25% MSCI EMU Climate Change ESG Select NETR EUR + 5% RMAX). The
two MSCI indices in the reference index are ESG-focused. Using an ESG-type benchmark supports achieving
the ESG goals outlined in the investment policy by overweighting companies with high ESG scores compared
to those with low ESG scores, following a methodology equivalent to the Fund's investment policy.
The MSCI ACWI IMI SDG 7 Affordable and Clean Energy Select Index aims to support SDG 7 goals
(affordable, sustainable, and clean energy for all), one of the 17 sustainability goals adopted in the UN's 2030
Agenda.
The MSCI EMU Climate Change ESG Select Index aims to consider sustainability aspects in its composition
and adjusts company capitalization based on low emissions and positive contributions to climate change.
During the investment strategy, we filter securities in the reference indices to create a shortlist of interesting
investment targets for the Fund. Companies in the reference indices are already ESG-screened, and
companies with more than 5% of their revenue from arms manufacturing or tobacco sales cannot be included.
The shortlist may include securities not in the reference index but are seen as contributing to sustainable
development or having good ESG ratings within their industry. Companies without ESG ratings but contributing
to sustainability goals or leading their industry in sustainability may also be included with limited weight.
Companies with more than 5% of their revenue from arms manufacturing or tobacco sales cannot be included
in the shortlist. The Fund also does not invest in companies with more than 50% of their revenue from coal,
natural gas, or oil extraction.
The final portfolio must consist of at least 70% of shares that, in addition to contributing to the preservation of
the planet, have good, sustainable ratings in the ESG approach. Good, sustainable ratings are defined as
MSCI ratings between AAA-BBB for developed market shares and AAA-BB for emerging market shares.
The Fund's primary goal is to mitigate climate change and promote adaptation to climate change. The Fund
aims to achieve this goal in line with Article 16 of the Taxonomy Regulation by investing in companies whose
activities, primarily through their products, directly contribute to other companies' significant contributions to
combating climate change. The Fund does not have a sustainability objective but commits to investing at least
51% in sustainable investments, including 10% in environmentally sustainable investments aligned with the
taxonomy.
OTP Omega Fund of Funds
The Fund invests in other actively and passively managed funds in accordance with the fund of funds structure.
The research advisor (MSCI) publishes an ESG rating for some funds, but not for others. This depends partly
on the business considerations of the ESG consultant, but also partly on the business considerations of the
individual fund managers themselves. The Fund does not have a sustainability objective but commits to
investing at least 51% of its investments in sustainable programs, within which it will not invest in taxonomy-
aligned environmentally sustainable investments.
OTP Ecotrend Fund
The Fund seeks to make a commitment to promoting environmental features, primarily through its bond
portfolio. The Fund plans to invest partly in green government bonds to finance or refinance expenditures that
promote the transition to a low-carbon, climate resilient and environmentally sustainable economy. Thus, it
falls into one of the six green sectors: renewable energy, energy efficiency, waste and water management,
land use and use of living natural resources, clean transport, and adaptation. The Fund does not have a
sustainability objective, nor does it have a commitment to a minimum ratio of sustainable investments.
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The KPI data calculated by the Fund Manager for the year 2024 and its breakdown compared to the year 2023
have changed due to the portfolio compositions, coverage, and the expansion of available data. The Fund
Manager did not examine the individual effects of the change factors, and a trend regarding the change cannot
be determined from data of two years alone.
Description of the compliance with Regulation (EU) No. 2020/852 in the financial undertaking’s business
strategy, product design processes and engagement with clients and counterparties.
OTP Fund Management is committed to taking sustainability risks into account in its investment decisions and
to continuously increasing the number of SFDR-rated products that invest in a significant share of sustainable
investments.
For funds and portfolios that have a commitment to sustainable investment under the Taxonomy Regulation,
the EU taxonomy DNSH indicators are considered in addition to the sustainability indicator calculated by the
ESG data provider selected by the Fund Manager to determine Taxonomy compliance, in accordance with the
commitment of the fund/portfolio concerned.
The Fund Management currently has one Fund (OTP Climate Change Fund) or which the Fund Manager has
committed that at least 10% of the investments will be aligned with the EU Taxonomy. (This ratio was
approximately 30% in the fund at the end of 2024).
2.1.1. Voluntary Reporting
OTP Group wishes to present its sustainability efforts in the most transparent way possible. For this
reason, it takes the opportunity to present its green portfolio, its composition, the calculation
methodology used and the underlying definitions in the voluntary green portfolio report.
In addition to reporting the mandatory green asset ratio set by the Taxonomy Regulation, the Bank discloses
the total composition of its green portfolio, as defined by the Bank, and the relevant ratios based on other
market and regulatory standards beyond the Taxonomy regulation.
One of the key objectives of OTP Group’s ESG strategy is the continuous expansion of its green portfolio. The
Group actively finances the region’s green transition and has introduced a green asset KPI at the subsidiary
level in line with local ESG strategies to monitor and promote this goal. By the end of 2024, the green portfolio
reached HUF 1,027 billion, marking a 56% increase compared to the previous year's green portfolio.64.
Further detailing of objectives continued, and OTP Bank Management Committee approved specific targets
for 2025, segmented into retail and corporate categories. The Group has committed to achieving HUF 1,500
billion in green loan portfolio volume by 2025 through dynamic expansion across all key customer segments.
The corporate green portfolio grew by 64% compared to the previous year, with sustainable corporate assets
representing over 80% of the total sustainable portfolio. The proportion of sustainable exposures relative to
gross book value reached 2,3%, reflecting an improvement of more than 50% from the previous year.
The corporate green bond portfolio grew by 35% year-over-year, maintaining a consolidated gross book value
ratio of 40%, while its share within the sustainable portfolio exceeded 5%.
The majority of the retail green portfolio is linked to Hungarian entities. The portfolio’s green share increased
by more than 13% compared to the previous year, a trend expected to continue as data quality improves. The
retail segment's share within the total sustainable portfolio approached 19%.
OTP Group as green loan portfolios in nine countries: Hungary, Bulgaria, Slovenia, Croatia, Serbia,
Uzbekistan, Montenegro, Albania, and Moldova. Green financing is ongoing.
OTP Group integrates green/climate-conscious65 lending into its business activities and aims to ensure that
over time, any customer in any sector can receive a loan under green conditions if the customer has a
green/sustainable goal they wish to achieve with the loan. The maturity of this process varies by country,
industry, and customer segment.
64 Increasing the green portfolio is one of the main action packages related to the three climate change subtopics according to the ESRS
65 The Group does not specifically address the sub-topics set out in the ESRS.
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The expected impact of green lending on reducing GHG emissions is presented in the @E1-4 disclosure
requirement, but this has not been measured so far.
OTP Group’s Green Portfolio
OTP Group's sustainable frameworks are defined by the Green Lending Framework, the Sustainable
Finance Framework, the MNB's green housing, as well as green corporate and municipal capital
requirement discount programs, and the EU Taxonomy. OTP Group considers exposures that meet
the criteria defined in these frameworks as green exposures, records them as green loans in its internal
databases, and sets quantitative targets for these exposures. Hereinafter, we refer to this as the OTP
Group's green portfolio.
To demonstrate the correlations with the mandatory GAR report figures, the table below presents the OTP
Group's green portfolio in proportion to the total balance sheet total and the GAR asset total data defined in
the mandatory report under the Taxonomy Regulation.
The table takes into account the exposures determined by the OTP Group that meet the sustainable criteria
detailed below and are recorded as green. The figures include green loan and bond exposures of enterprises
outside the EU, as well as exposures of clients who are not subject to the NFRD/CSRD during the reporting
period, i.e., those that cannot be included in the mandatory GAR report.
Green Portfolio as defined by OTP Group
Gross book
value*
Green portfolio Green portfolio
as a proportion
of gross
exposure by
customer
segment
Green
portfolio as a
proportion of
Total assets
Green portfolio as a
proportion of Total
GAR assets
HUF million
HUF million
%
%
%
Total assets
44,852,131
Total GAR assets
29,047,630
Non-financial corporations
10,597,072
833,809
7.87%
1.86%
2.87%
Loans and advances
10,187,983
782,721
7.68%
1.75%
2.69%
Debt securities
339,126
51,088
15.06%
0.11%
0.18%
Other
69,964
0.00%
Households
13,692,065
193,634
1.41%
0.43%
0.67%
Green portfolio of OTP Group**
1,027,443,09
2.29%
3.54%
*According to Gross Book Value of EU Taxonomy
** As defined in 2.3
This allocation demonstrates the portfolio’s diversification and balance across various green investment areas.
Renewable energy and corporate real estate projects represent a significant portion of the green portfolio, with
electromobility and residential mortgage loans also significant. Although agriculture and corporate green bonds
account for smaller portions, they contribute to the portfolio’s year-over-year growth.
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OTP Group’s Green Loan and Sustainable Finance Frameworks
The Group has developed its green loan and sustainable finance frameworks by taking into account internation
best practices.
The @Green Loan Framework, endorsed by external experts (SPOs), was updated and approved in July 2023
by the Hungarian National Bank. This ensures that loans meeting the conditions of the framework are eligible
for the MNB's Green Corporate and Municipal Capital Relief Program Category B, which defines the scope of
"eligible transactions under the framework".
Throughout 2024, various IT and controlling developments were implemented. However, further significant
improvements are required in the data infrastructure for sustainable exposures to ensure efficient group-wide
tracking and the utilization of non-financial data for classification.
OTP Group identifies corporate exposures as part of its green portfolio based on loan purpose and individual
transaction assessments, shaped to be in line with EU Taxonomy and MNB’s green capital relief program,
where applicable. Taxonomy-aligned exposures are classified according to the EU Taxonomy’s technical
screening criteria (TSC).
Similarly, retail exposures in OTP Group’s sustainable green portfolio are assessed based on their loan
purpose and compliance with one or more green criteria defined in frameworks aligned with the EU Taxonomy.
The Group did not assess compliance with DNSH (Do No Significant Harm) and MSS (Minimum Social
Safeguards) criteria.
Green Loan Framework
The Green Loan Framework defines the general principles of green lending and has been extended beyond
Hungary to the following countries: Bulgaria, Slovenia, Croatia, Serbia, Albania, and Montenegro.
As part of the 2023 expansion to subsidiaries, the framework was broadened to include green loan purposes
most relevant to OTP Group’s portfolio and the climate mitigation and adaptation priorities of the specific
countries. The framework covers the following sectors named in the EU Taxonomy and the CBI (Climate Bond
Initiative) Taxonomy:
•
EU Taxonomy: energy, manufacturing, transportation, construction & real estate, forestry, waste
management
•
CBI Taxonomy: energy, industry, transportation, buildings, land use and marine sources, waste and
pollution control
The framework also allows for water management-related financing.66
Scope of the framework applies to non-retail customers, including multinational corporations, SMEs,
municipalities, and residential housing associations. The Green Alignment Assessment Tool (GAAT) is used
to evaluate loan eligibility, with country-specific conditions and supporting documents.
Compliance with EU Taxonomy includes the verification of minimum safeguards (MS), where applicable.
Sustainable Finance Framework
OTP Group’s funding activities continued to be supported in 2024 by the @Sustainable Finance Framework,
covering both environmental and social sustainability areas. This framework was updated in 2024 with external
expert67 validation and is available on OTP Group’s @website.
66 Drought poses a significant physical climate change risk related to the crop production activities of agricultural clients. Investments aimed at mitigating
this risk involve, either partially or entirely, water supplementation activities that affect the quantitative and qualitative state of surface and/or groundwater.
67 SPO: Second Party Opinion
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Under this framework, OTP Bank and its subsidiaries can issue green and social financial instruments,
including bonds (sustainable financial instruments), in compliance with: ICMA68 Green Bond Principles, 2022;
ICMA Social Bond Principles, 2023; LMA69 Green Loan Principles, 2023 and the LMA Social Bond Principles.
The framework includes the following restrictions: Sustainable financial instruments cannot be used to finance
fossil fuel production, nuclear energy production, weapons and defense-related activities, mining, gambling or
tobacco-related activities.
Eligible green categories for financing70:
•
green buildings
•
renewable energy
•
clean transportation
Eligible social categories for financing:
•
Job creation and unemployment mitigation programs, particularly those addressing economic crises
or social disruptions, including SME financing with positive social impact
OTP Group is committed to annual investor reporting within one year of issuing a sustainable financial
instrument, continuing until all proceeds are allocated. The 2023 @Allocation report and @Impact report are
available on OTP Group’s website. The 2024 reports will be published in summer 2025.
OTP Mortgage Bank publishes on its @website nn annual report on the allocation of proceeds from green
mortgage bond issuances, ensuring transparency and alignment with Green Bond Principles and the
underlying Hungarian Central Bank Green Mortgage Loan program, where applicable.
Corporate Green Lending
In 2024, OTP Group significantly expanded its green loan and bond portfolio, in line with its ESG
strategy. The combined corporate green loan and bond portfolio grew from HUF 508 billion to HUF 834
billion, strengthening OTP’s role in financing a fair and gradual transition to a low-carbon economy.
Within the green portfolio, the corporate loan portfolio – primarily comprising large corporate and project
finance loans – continued to expand in 2024. This growth was driven by financing projects in renewable
energy sources and sustainable real estate development. Additionally, financing for energy production from
sustainable fuel sources (e.g. biomass and biogas power plants) increased.
The number of green SME loans more than doubled, exceeding HUF 90 billion in total volume.
In Hungary, Széchenyi Investment Loan Max+ was introduced, a state-supported green investment loan for
micro, small, and medium-sized enterprises (SMEs). Within this program a special green variant, option D –
based on the KAVOSZ71 criteria – was launched, to offer preferential interest rates for green investments that
align with OTP Group’s definitions of green financing.
To further integrate sustainability principles into lending, OTP Group implemented internal developments,
which are expected to drive additional growth in green loan volumes.
Subsidiaries continued the momentum from 2023, with a strong focus on renewable energy financing
and electric vehicle financing. The composition of renewable energy financing varies by country, depending
on geographical and regulatory conditions, influencing the balance of solar, wind, and hydropower
investments.
68 International Capital Market Association
69 Loan Market Association
70 The exact criteria are included in the framework.
71 KAVOSZ coordinates the state-subsidized loan.
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In real estate financing, meeting the conditions defined in the EU Taxonomy based on primary energy demand
calculations poses a significant challenge. At the member state level, the regulatory environment related to
energy-efficient buildings and the availability of official documents (energy certificates) vary, which greatly
complicates the provision of EU Taxonomy-based green loans in the real estate sector.
Retail Green Lending
The green loan portfolio for retail customers reached HUF 193 billion by the end of 2024.72
In 2024, nearly HUF 25.68 billion was disbursed under the two green products introduced in 2023: OTP Green
Mortgage Loan and the Green “Évnyerő” Mortgage Loan. Both products are designed for the purchase and
construction of new homes and energy-efficient home renovations. The difference between the two products
is the repayment structure.
The Hungarian Green Home Program (ZOP) loans, available in 2021-2022, still represent a major share of the
retail green portfolio. This portfolio exceeds HUF 150 billion and is primarily used for energy-efficient new home
purchases and construction.
In Croatia, the subsidiary bank’s green home loan portfolio saw strong growth in the second half of 2024,
reaching HUF 15 billion by year-end. The Sunny Loan product supports new home (apartment or house)
construction and purchases and used home purchases and renovations if they meet energy efficiency criteria.
2.2. Climate Change
Policies
ESRS E1-2, E3-1, E4-2
Group Credit Risk Policy
Key content: As OTP Group continues to expand its international exposure, the complexity of lending
processes and the range of credit products it offers have increased. This policy establishes the minimum credit
risk management requirements at the Group level to ensure an efficient and structured risk management
process. The primary objective of credit risk management is to enable safe business growth by maintaining
the quality of the loan portfolio while staying within the Group’s risk appetite. The Banking Group takes a
holistic approach to environmental and climate risks as part of ESG risks, and ESG risks are integrated into
the risk management framework for the main risk types. An ESG credit risk management framework has been
incorporated into the Group Credit Risk Policy, which sets out the assessment methodology for assessing ESG
risks for the non-retail segment and leasing transactions (see @2.4.2).The document aims to establish a
framework that provides sufficient flexibility to adapt to changing market conditions. The policy is related to
significant risks identified in the loan portfolio concerning climate change mitigation, climate change adaptation,
and energy transition.
Scope: This is a group-wide policy, applicable to domestic and international banking subsidiaries, in addition
to financial subsidiaries, including leasing companies.
Accountable for implementation: The policy is reviewed annually and approved by OTP Bank’s Board of
Directors.
Reference to third-party standards: MNB expects financial institutions under consolidated supervision to
consider group-level risk management requirements, including ESG-related risks, within the general risk
management requirements established by law, as outlined in the MNB Recommendation 11/2022 (VIII.2.) on
credit risk undertaking, measurement, management, and control (paragraph 11). The policy is in line with the
EBA guidelines on loan origination and monitoring (EBA/GL/2020/06).
72 The amount shows the current exposure of green product structures disbursed in Hungary and certain subsidiaries, a significan t domestic portion of
which is accounted for in the MNB's green capital requirement discount program for housing purposes. The above figure does not include the green
mortgage loan portfolio tied to non-green structures.
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Corporate Lending Policy / Operational Lending Limits and Guidelines (OLLP)
Key content: The Corporate Lending Policy (OLLP) defines the general principles of corporate lending,
including segment- and product-specific guidelines, related financing conditions and operational lending limits.
This policy provides a structured approach to financial risk assessment while ensuring consistent ESG risk
integration across the Group’s corporate lending activities. The corporate lending policy aims to set general
corporate lending guidelines and risk appetite and to define a set of tools to enforce this, including ESG risk-
related content. As part of this, lending guidelines for environmental and climate risks and guidelines for the
assessment of financial risks based on these risks have been included in the policy. The lending policy also
includes limits related to ESG risks. In this way, the policy is linked to the significant risks identified in the loan
portfolio in the areas of climate change mitigation, climate change adaptation and energy.
Scope: This policy serves as a Group-wide lending standard, with subsidiaries required to integrate the ESG
elements into their local lending policies. Exceptions: The Russian and Uzbek subsidiaries are not required to
implement ESG provisions in 2025, but ESG-related guidance has been shared with them for voluntary
adoption.
Accountable for implementation: The Hungarian corporate lending policy is approved by OTP Bank’s Board
of Directors. The subsidiaries’ lending policies are approved by their respective local decision-making bodies.
Climate Change Mitigation policies in Asset Management
Key content: Certain OTP Group asset management companies have adopted climate change mitigation
policies as part of their Sustainable Finance Disclosure Regulation (SFDR).73 These commitments are outlined
in the Principal Adverse Impact (PAI) Statement, which assesses the negative environmental impact of
investment portfolios. These policies also comprehensively address climate change. OTP Fund Management
primarily aims to reduce greenhouse gas emissions, particularly the carbon footprint, and decrease energy
consumption intensity in sectors with significant climate impact by carefully selecting new investments and, if
necessary, phasing out existing investments. OTP Real Estate Fund Management strives to achieve and
maintain a declining trend in indicators related to GHG emissions and energy use. DSK Asset Management
has formulated the general goal of mitigating impacts.
Scope: OTP Asset Management, DSK Asset Management, and investment portfolio of OTP Real Estate
Investment Fund Management.
Accountable for implementation: The CEOs of the companies are responsible for the implementation of the
policies.
Availability: The policies are available to the public on the companies' websites as part of the PAI
statements (@OTP Fund Management, @OTP Real Estate Investment Fund Management, @DSK Asset
Management).
OTP Group does not have a policy related to water, biodiversity, and ecosystems. The development of policies
related to water, biodiversity and ecosystems must be preceded by a deeper analysis of the emerging risks in
these areas.
Nevertheless, OTP Group's Code of Ethics declares the corporate group's commitment to environmental
sustainability and environmental values (see @4.1. Corporate Governance).
Targets
ESRS E1-4, E3-3, E4-4, E1-9
OTP Group has defined two main goals regarding climate change: firstly, a portfolio-specific GHG emission
reduction target as part of its climate target setting; and secondly, a goal related to green lending.74
73 Sustainable Finance Disclosure Regulation, Regulation (EU) 2019/2088
74 These goals should be interpreted as objectives in the subtopics of Climate Change Mitigation, Climate Change Adaptation, and Energy
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Climate target setting
In line with regulatory expectations, in 2024 OTP Group defined targets75 to reduce its financed GHG emissions
by 2030. These targets are derived from Net Zero 2050 (NZE 2050) scenarios of the International Energy
Agency (IEA) and national decarbonization plans as required by regulation, but they take into account the
portfolio composition of OTP Group (in terms of countries and portfolio segments broken down by borrowers’
activity types).
The Group-level targets were built up from country-, asset class- and sector-specific targets that were taken
over either from the IEA’s NZE 2050 sector-specific trajectories, which are by definition aligned with the
objective of the Paris Agreement, or from national decarbonization plans whose GHG emission trajectories
until 2030 are reasonably close the relevant sector-specific emission trajectories of the IEA’s NZE 2050.76
The interpretation of the targets OTP Group has set is the following: if the economic environment of OTP Group
progresses alongside the IEA’s Net Zero 2050 scenarios, then OTP Group’s financed emissions should reach
the pre-defined targets, unless the Group turns to the financing of borrowers which are more carbon-intensive
relative to the average of the economy than the current ones. Thus, these targets should be interpreted much
more like a “baseline scenario” on which OTP Group’s financed emissions progress if the worldwide transition
to a carbon-neutral economy is successful. It is important to emphasize that OTP Group alone cannot ensure
that these targets will be met if the economic environment follows a completely different trajectory. OTP Group
alone cannot enforce the carbon-neutral transition either in the world economy, or in the countries, in which
the Group is active. OTP Group can however put in place a number of measures to alter its course away from
the path of the general economic environment to some extent (see more below).
OTP Group's targets for the reduction of its own financed carbon footprint are set for a range of scopes. The
Group's primary goal is to reduce the financed Scope 1-2 emissions of its loan portfolio, excluding sovereign
exposure, by 203077. This target is based on the methodology for calculating financed emissions (Scope 3
emissions / Category 15), which we present in the @E1-6 disclosure requirement. OTP Group's primary goal
relates to the intensity of financed GHG emissions, i.e., the amount of financed Scope 1-2 GHG emissions per
euro of exposure (g CO2eq / euro)78. This is a relative target, as it focuses on reduction compared to the base
year (2023), not the level to be achieved in 203079. The metric underlying the target, which is limited to financed
Scope 1-2 emissions excluding sovereign exposures, provides the most reliable and robust indicator for
tracking the Group's financed emissions.
In addition to relative reduction targets, current legislation also requires OTP Group to set targets for absolute
financed GHG emissions by 2030. We derive absolute targets from relative reduction targets, using a "static
balance sheet assumption" (in line with various regulatory practices, such as EBA stress test procedures): that
is, we assume that the Group's balance sheet and its structure will not change until 2030. Although this is not
a realistic assumption, applying other assumptions would be highly speculative. OTP Group considers absolute
reduction targets for financed GHG emissions to be subordinate to relative reduction targets: OTP Group will
interpret that it has achieved its goals if the relative reduction targets are met, even if the absolute targets
published here are not met simultaneously (e.g., due to future acquisitions, increasing market share, etc.).
The Group’s relative reduction target for 2030 for financed Scope 1-2 emissions - excluding the sovereign
portfolio - is -29.8% compared to the 2023 base year, i.e., the reduction of the 2023 emission intensity of 219
gCO2eq / euro or 0.57 g CO2eq / forint in the defined portfolio segment and emission type to 154 g CO2eq /
euro (0.40 gCO2eq / forint, assuming an unchanged forint/euro exchange rate) by 2030. This reduction target
defined according to the composition of the Group's existing portfolios is consistent with the IEA NZE 2050
scenario's reduction target for the global economy.
75 These targets apply to the GHG emissions related to the financing directly provided by the members of OTP Group, and not to the GHG emissions
related to the assets managed by OTP Group's asset and fund management members.
76 Defining target was executed by OTP Group’s staff internally.
77 Interim targets between 2023 and 2030 were not set as they were not deemed to be reasonable: the underlying metrics have a le vel of uncertainty
due to data quality and methodological reasons that do not enable setting smaller, eventually annual targets. A lso, the benchmark scenarios – such as
NZE 2050 of IEA – do not have forecast points for intermittent targets until 2030.
78 However, the Group is required to report its financed GHG emissions in HUF due to CSRD requirements. Therefore, the baseline and outcome levels
of the reduction target are reported in g CO2eq/HUF. We assume that the HUF/EUR exchange rate of the base year (2023) remains unchanged, and
the effects of exchange rate fluctuations are excluded when assessing the achievement of the targets.
79 Relative targeting is indeed beneficial because it helps to avoid distortions caused by changes in the size of the Group, suc h as acquisitions,
divestitures, or fluctuations in market shares.
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OTP Group's target settings for financed Scope 1-2 emissions and without the sovereign portfolio
2023, base
year
Climate target setting 2023-
2030
2030,
target
Total financed Scope 1-2 emissions (t CO2eq)
9,183,905
static balance sheet
assumption
6,447,102
Total loan volume from all PCAF-asset classes except sovereign
(HUF million)
16,024,767
16,024,767
Financed Scope 1-2 GHG intensity of the portfolio without
sovereign
(g CO2eq / HUF)
0.57
-29.8%
0.40
CAGR of targeted reduction rate (2023-2030):
-4.9%
OTP Group sets targets for all GHG emissions, including scope 3 emissions, and for the entire portfolio,
including sovereign exposures, in accordance with the Partnership for Carbon Accounting Financials (PCAF)
Standard scope 3 emissions category 15. In this portfolio and emission scope, there are many items for which
the quantification of the financed emissions for the base year or for any future years will remain very speculative
and will lack robustness due to a series of methodological issues. Therefore, the OTP Group will consider its
climate targets for financed emissions to be met in the future even if it only achieves the above relative emission
reduction target for financed Scope 1-2 GHG emissions, excluding sovereign emissions, but does not meet its
targets that also include financed Scope 3 emissions and sovereign exposures.
OTP Group's target settings for all financed GHG emissions (including financed Scope 1, 2 and 3)
2023, base year
Climate target setting
2030, target
Total financed GHG emissions (t CO2eq)
25,007,832
static balance sheet
assumption
16,855,279
Total loan volume from all PCAF-asset
(HUF million)
22,058,449
22,058,449
Financed GHG intensity of the portfolio in all PCAF
asset classes (g CO2eq / HUF)
1.13
-32.6%
0.76
CAGR of targeted reduction rate (2023-2030):
-5.5%
Disclaimers and potential future revisions of targets
It is important to emphasize that the quantification methodology of financed GHG emissions still contains a
very high degree of uncertainty. Therefore, changes in this methodology and the underlying data that alter the
results of the estimations on the Group’s financed GHG emissions and make retrospective corrections
necessary – possibly even in terms of magnitudes – should be expected. Furthermore, the monitoring of the
financed emission reduction targets of OTP Group will inevitably make it necessary that the Group revises
either the targets themselves or – more likely – the base year data compared to which those targets were set.
The following events and developments might justify such retroactive revisions and a posteriori adjustments
necessary (non-exhaustive list): a) having more reliable (reported and measured) emission data from
borrowers; b) changes in price levels (inflation); c) changes in portfolio composition, d) changes in public
policies with regard to climate change or any other issues; or e) any other unforeseeable event that make such
adjustments reasonable.
OTP Group reserves all rights to adjust retroactively either the base year estimates of its financed GHG
emissions or any other GHG-related indicators related to its GHG reduction targets or the targets themselves,
if this is justified by the circumstances. If such retroactive adjustments are necessary to undertake, the Group
shall provide satisfactory explanation for them.
Measures to reduce financed GHG emissions
The Group will monitor the pathway on which its financed GHG emissions progress until 2030, to assess
whether reaching the reduction targets is still realistic. Also, the regulatory environment of the key GHG
emitting industries will remain key in the decarbonization process.
However, OTP Group can take some measures by which it is able to decrease its financed GHG emissions
on its own.80 A non-exhaustive list of such measures is listed in the table below alongside their estimated
impacts on the Group’s financed GHG emissions per exposure volume.
80 As these measures are related to the “business-as-usual” application of the lending policy, it is not reasonable to support them by a CAPEX and OPEX
plans – which are more reasonable for industrial companies that have to undertake large investments into technological shifts.
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Some of the measures (more green loans and transition financing, financing more electric cars) assume that
the Group would increase the share of the greener, low-emission exposures and thus lower its financed GHG
intensity measure. Other measures (cutting financing to coal-fuelled power plants, to the mining industries, to
pollutive industries and to vehicle finance) assume that the Group would exit from the financing of high GHG-
emitter industries and replace them with lower ones. Lowering financing ratios would decrease the Group’s
share in responsibility for the borrowers’ GHG emissions.
When interpreting the above list of measures, it is important to note that the Group might decide on the
implementation of these measures on a discretionary basis, but it does not commit automatically to taking all
or even any of these measures.
Furthermore, when deciding whether to introduce any of these measures, it also considers factors other than
the reduction of financed GHG emissions. These factors may include the Group's financial interests, social
responsibility, and the impacts on its environment and stakeholders, feasibility, or energy security.
List of potential steering measures and their estimated impacts on OTP Group’ financed Scope 1-2 emissions per euro of
exposure impacted
Short name of measure
Impact in g CO2 emission /
HUF of exposures impacted
Description of measures
1. More green loans
-2.29
Share of green loans would increase
2. Lower financing ratios
-0.76
The loan volume weighted average financing ratio (attribution factor)
would be decreased
3. Cutting financing to
coal-fueled power plants
-2.01
Annulate all loans where borrowers’ electricity production is fueled by
coal in more than 25% and provide the same amount of loans to average
companies
4. Cutting finance to the
mining industry
-2.64
Annulate all loans to the mining industry and provide the same amount
of loans to average companies
5. Less financing to
heavy industries
-0.25
Decrease loans to cement, steel, iron, aluminum, chemicals by 50% and
replace them with loans to the "rest of the economy" (service sector)
6. Less vehicle loans
-0.60
Decrease the amount of vehicle loans and provide the same amount of
loans to an "average" client (based on total portfolio average emission
intensity)
7. More electric cars
-0.38
An increase of electric cars within the car finance
Note: the interpretation of the above table is the following: the estimated impact indicates the amount of GHG emissions in grams of CO2eq per one euro
of exposure impacted by the measure. E.g. – 0.38 CO2eq / euro in case of measure “7. More electric cars” means that the Group’s Scope 3 / Category
15 GHG emission would decrease by 0.38 g CO2eq if 1 euro of loan amount would be allocated to a car loan financing an electric car, whereas 1 euro
of loan would be withdrawn from (or not provided to) a car loan financing an “average vehicle” (that is mostly a petrol-fueled one). Therefore, if we were
to perform the same operation for HUF 1,000, the Group's financed scope 1 and 2 emission would decrease by 380 g CO 2eq
The impacts of the measures presented in the table above were estimated using the following method:
assuming a static balance sheet, we examined the effect of replacing higher GHG-intensity assets with lower
GHG-intensity assets. We calculated the Group's exposure-weighted financed GHG emissions for both and
then their difference. The GHG intensity of each asset was estimated using the same methods as those later
presented in the section on GHG emissions (@Emissions, GHG Intensity). The impact calculation was based
on the 2023 GHG intensity of each asset type and was static in the sense that we did not consider potential
changes in the GHG intensity of each asset type by 2030, nor were the measures scalable. It should be noted
that some measures can only be applied to a limited extent by the exposures: for example, the Group cannot
withdraw more financing from coal-based power producers than it currently has exposure to such clients.
Furthermore, when estimating the impacts of the measures, we did not consider factors that might hinder their
implementation, such as the contractual maturities of existing exposures or the limited demand for "less
polluting" loans, etc. Therefore, the list of measures described above should be interpreted more as possible
decision directions rather than a detailed and feasible action plan.
The approval of the climate target setting document by the Executive Steering Committee is planned for
05.02.2025.
OTP Group does not have a transition plan; a decision on its development is expected in the near future.
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Green lending target
As in its ESG strategy declared in 2021, OTP Group's unchanged goal is to play a regional leading role in
financing a fair and gradual transition to a low-carbon economy and to build a sustainable future with
responsible solutions.81
The Banking Group plans to build a green loan portfolio worth HUF 1,500 billion by 2025.
Green lending is a goal in all countries except Russia and Ukraine. In Russia consumer lending is predominant,
so green lending is not a goal. In Ukraine, due to the war, there is no green lending that meets the standards,
and its development is not a goal until the conflict is resolved.
Green exposures refer to corporate green loan and bond exposures, as well as retail green loan exposures,
according to OTP Group's own definition (see. @green portfolio).
The goal for the green portfolio is not based on scientific evidence; it aligns with OTP Group's objective to
finance the transition to a low-carbon economy. Achieving this goal will result in revenue growth for the
corporate group. The relevant departments of OTP Group participated in setting this goal.
Additional targets
We do not publish a group-level goal for operational activities related to climate change mitigation. Partial
targets for Scope 1-2 emissions currently exist at the subsidiary level for some subsidiaries. A group-level
target, consistent with the Paris Agreement and based on the same reference, is planned for 2026, with further
details to be developed in the next period. Emissions are continuously monitored, but the effectiveness of
measures to reduce emissions is not currently measured.
OTP Bank's goal set in its 2021 ESG strategy is to achieve carbon-neutral operations by 2030. This absolute
target covers Scope 1-2 emissions, with a recorded net-zero emission of 0 tCO2e, without specifying a base
year. Net-zero emissions involve reducing greenhouse gas emissions as much as possible and neutralizing
unavoidable emissions through carbon removal. The goal is not based on scientific evidence; the relevant
departments of OTP Bank participated in its development. OTP Bank's market-based Scope 1-2 emissions
were 6,644 tCO2e in 202482. OTP Bank primarily uses green energy for electricity, with about three-quarters
of emissions coming from natural gas use and vehicle fuel consumption. The preparation of a plan to reduce
emissions intensity related to properties and the fleet has begun, with an ESG Committee resolution to
complete it in 2025.
81 Green financing is an objective in all three climate change-related subtopics named in the ESRS, and OTP Group does not treat these topics separately.
We have not identified a base year for the objective; we have been measuring green exposures in the portf olio since 2022.
82 Comparability with previous years is not feasible due to the different reporting methodology required by the ESRS.
267
656
1,027
1,500
0
200
400
600
800
1,000
1,200
1,400
1,600
2022
2023
2024
2025
HUF billion
Plan
End-of-year green exposure portfolio at group level HUF
billion
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Some foreign subsidiaries have expressed their commitment to reducing operational emissions in their ESG
strategies. Several subsidiaries have achieved significant results, primarily through green energy procurement.
Emissions are continuously monitored, but the effectiveness of measures to reduce emissions is not
comprehensively measured.
OTP Group currently does not have goals related to water, biodiversity, and ecosystems; developing these
goals requires deeper analysis. The corporate group currently does not monitor the effectiveness of its policies
and measures in these areas (the Group currently only has measures related to water).
Actions and resources
ESRS E1-3, E3-2, E4-3
OTP Group has defined two main packages of measures regarding climate change: firstly, the portfolio-specific
measures defined within the climate target setting detailed in the @E1-4 disclosure requirement, and
secondly, the green lending measures83 presented in chapter @2.1.2 and @Credit Rating. The measures of
OTP Fund Management are represented by the funds with environmental objectives presented in chapter
@2.1.1. Measures to reduce GHG emissions from operations are of lesser significance and are presented in
aggregate.
Measures to Reduce Scope 1-2 Emissions
Primarily, the larger banks in the Banking Group are implementing or planning to implement measures to
reduce carbon dioxide emissions. Among the planned measures, the procurement of green electricity has the
greatest impact; in 2024 OTP Bank, OTP Bank Slovenia, OTP Bank Croatia, and OTP Bank Serbia mainly
covered their consumption with green electricity. These practices are planned to continue in 2025. Additionally,
planned measures include lighting replacement, boiler replacement, optimization of heating and cooling,
insulation, and solar panel installation. OTP Bank Serbia and OTP Bank Albania have moved to more energy-
efficient central buildings, with the Albanian bank's headquarters being LEED Gold certified. The effectiveness
of the implemented measures is monitored at the subsidiary level using various methods, and the results are
not aggregated.
OTP Group has not yet defined measures related to biodiversity and ecosystems. A more detailed assessment
of the impacts is necessary before developing appropriate measures.
Emissions, GHG Intensity
ESRS E1-6: GHG
OTP Group's gross Scope 1, Scope 2, and Scope 3 GHG emissions are presented in the table below.
83 These measures should also be interpreted as actions in the subtopics of Climate Change Mitigation, Climate Change Adaptation, Energy, and Water
Withdrawal.
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OTP Group’s GHG emissions
Retrospective
Milestones and target years
Base year
2023
Comparison
20231
2024
2024/
2023
2025
2030
Annual% target
value / Base year
Scope 1 GHG emissions
Scope 1 gross GHG emissions
(tCO2e)
n.a.
n.a.
118,470
n.a.
n.a.
n.a.
n.a.
Percentage of GHG emissions from
regulated emissions trading schemes
in Scope 1 (%)
0
0
0
0
0
0
0
Scope 2 GHG emissions
Scope 2 gross GHG emissions –
location-based (tCO2e)
n.a.
n.a.
58,076
n.a.
n.a.
n.a.
n.a.
Scope 2 gross GHG emissions –
market-based (tCO2e)
n.a.
n.a.
48,834
n.a.
n.a.
n.a.
n.a.
Significant Scope 3 GHG emissions
Total2 gross indirect (Scope 3) GHG
emissions (tCO2e)
25,007,832
25,007,832
24,835,989
-1%
n.a.
16,855,279
-5.5%
15. Investments
25,007,832
25,007,832
24,835,989
-1%
n.a.
16,855,279
-5.5%
Total GHG emissions
Total GHG emissions (location-based)
(tCO2e)
n.a.
n.a.
25,012,535
n.a.
n.a.
n.a.
n.a.
Total GHG emissions (market-based)
(tCO2e)
n.a.
n.a.
25,012,535
n.a.
n.a.
n.a.
n.a.
1 Note: The issues disclosed in the "Comparative 2023" column are based on the composition of OTP Group as at 31 December 2024 and differ from the
"Base year 2023" data, which represents OTP Group as at 31 December 2023. There are no other differences in methodology.
Biogenic emissions in 2024 were 734 tones.
2 Note: The total gross indirect emissions of OTP Group (Scope 3) do not include funded emissions related to assets managed by the Group’s subsidiaries
acting as fund managers, as these assets are not part of the Group’s consolidated assets (as they are not owned by OTP Group). The emissions for the
year 2023 do not include the OTP Bank Romania group.
Among the Scope 2 emissions, OTP Group members cover part of their electricity consumption with green
electricity certified by guarantees of origin or renewable energy certificates. 36.49% of the total electricity
consumption comes from such sources. There is no district heating consumption certified by guarantees of
origin. 31.23% of energy consumption related to Scope 2 emissions comes from consumption certified by
guarantees of origin. The certificates are provided to the subsidiaries by utility providers.
GHG intensity based on revenue
Comparison
2024
%, 2024/2023
Total GHG emissions per net revenue (location-based) (tCO2e/million HUF)
n.a.
5,85
n.a
Total GHG emissions per net revenue (market-based) (tCO2e/million HUF)
n.a.
5,85
n.a.
Scope 3 / Category 15 emissions
Scope 3 / 15 emissions are also referred to as "OTP Group financed emissions" or "our financed emissions".
In this section of the report, we first present OTP Group's financed emissions and later describe the underlying
estimation methodology.
Scope 3 / Category 15 emissions in 2023
The below table provides an overview on OTP Group’s financed emissions (Scope 3 / Category 15) in 2023
by PCAF asset classes and by the type of emission scope of the clients. OTP Group considers the most
reasonable and reliable indicator of its financed emissions to be the sum of financed Scope 1-2 emissions of
all PCAF asset classes without sovereigns, which accounted for 9.2 million tons CO2eq. This is the most
meaningful indicator of OTP Group’s financed carbon footprint, as Scope 3 emission estimates are very
speculative and so are emission estimates for sovereign exposures in general. The bulk (73%) of this financed
Scope 1-2 emissions is coming from the business loan segment. A material contributor with a 20% share was
the vehicle financing portfolio. Financed emissions of the real estate related portfolios (whether residential or
commercial) represent a fraction of the total financed emissions – in line with macro-statistics of buildings’
share in global GHG emission.
Allocation of OTP Group Scope 1-2 emissions, 2024
Consolidated financial
reporting group
Operational
management
Scope 1 gross GHG emissions (tCO2e)
114,940
3,530
Scope 2 gross GHG emissions – location-based (tCO2e)
53,668
4,409
Scope 2 gross GHG emissions – market-based (tCO2e)
41,561
7,273
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OTP Group's financed GHG emissions broken down by PCAF asset classes, 2023 (w/o OBR Group)
PCAF asset class
PCAF average
data quality
score
Total
exposure
Financed Scope
1 emission
Financed Scope
2 emission
Financed Scope
3 emission
Total finance
emissions
(Unit of measurement):
(HUF million)
(tons CO2eq)
(tons CO2eq)
(tons CO2eq)
(tons CO2eq)
Listed equity and corporate
bonds
4.4
488,160
158,577
31,489
451,391
641,457
Business loans, unlisted
equity and project loans
4.2
8,284,605
5,266,204
1,222,157
10,763,652
17,252,014
Commercial real estate
financing
5.0
570,766
44,075
n.a.
44,075
Mortgages
4.1
5,134,422
651,600
n.a.
651,600
Vehicle loans
4.8
1,546,814
1,809,803
n.a.
1,809,803
Total without sovereign
debt
4.3
16,024,767
9,183,905
11,215,043
20,398,948
Sovereign debt
1.4
6,033,682
2,543,807
487,273
1,577,804
4,608,884
Total (all PCAF asset
classes)
3.5
22,058,449
12,214,985
12,792,847
25,007,832
Regarding the financed GHG intensity (financed emissions / outstanding financing volume), which forms the
basis of OTP Group's main climate target (financed emission reduction targets), the most relevant indicator
with the smallest estimation uncertainty is also the Group's financed Scope 1-2 intensity excluding the
sovereign portfolio, which was 0.57g CO2eq / HUF in 2023. The most GHG-intensive portfolio segments were
the corporate segment and vehicle financing.
Financed GHG intensity (financed emissions / loan volume provided) of OTP Group's portfolio in 2023, w/o OBR Group
PCAF asset class
Financed
Scope 1
intensity
Financed
Scope 2
intensity
Financed
Scope 3
intensity
Total emission
intensity
(Unit of measurement):
(g CO2eq /
HUF)
(g CO2eq /
HUF)
(g CO2eq /
HUF)
(g CO2eq / HUF)
Listed equity and corporate bonds
0.32
0.06
0.92
1.31
Business loans, unlisted equity and project loans
0.64
0.15
1.30
2.08
Commercial real estate financing
0.08
n.a.
0.08
Mortgages
0.13
n.a.
0.13
Vehicle loans
1.17
n.a.
1.17
Total without sovereign debt
0.57
0.70
1.27
Sovereign debt
0.42
0.08
0.26
0.76
Total (all PCAF asset classes)
0.55
0.58
1.13
Financed GHG emissions (Scope 3 / Category 15) of OTP Group in 2024
OTP Group prepared a preliminary estimation for its financed emissions for 2024. These estimations were
based on the same approach as in the estimates for 2023, however on less complete data. The underlying
reason for the latter is that much essential data84 to quantify the financed emissions of OTP Group was not
available before the cut-off date of the recent Integrated Report.
84 For example: financial figures (such as total assets and revenues) of corporate borrowers for the business year of 2024, beca use these will have to
be published only by May 2025 in many countries, whereas calculations of financed GHG emissions of OTP Group had to be submitted to the auditor by
the beginning of February 2024.
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The below table provides an overview on OTP Group’s financed emissions (Scope 3 / Category 15) in 2024
by PCAF asset classes and by the type of emission scope of the clients.
OTP Group’s total financed emissions broken down by emission scopes and asset classes as for 2024
PCAF asset class
PCAF average
data quality
score
Total
exposure
Financed
Scope 1
emission
Financed
Scope 2
emission
Financed
Scope 3
emission
Total finance
emissions
(Unit of measurement):
(1-5)
(million
HUF)
(tons
CO2eq)
(tons CO2eq)
(tons CO2eq)
(tons CO2eq)
Listed equity and corporate
bonds
4.4
549,420
169,045
32,618
472,556
674,219
Business loans, unlisted equity
and project loans
4.1
8,558,410
4,339,808
1,095,399
10,094,675
15,529,883
Commercial real estate
financing
4.8
706,425
47,570
n.a.
47,570
Mortgages
4.1
6,035,650
586,892
n.a.
586,892
Vehicle loans
4.6
1,980,147
2,025,430
n.a.
2,025,430
Total without sovereign debt
4.2
17,830,052
8,296,763
10,567,231
18,863,994
Sovereign debt
1.4
8,871,078
3,312,631
623,254
2,036,110
5,971,995
Total (all PCAF asset
classes)
3.3
26,701,130
12,232,648
12,603,341
24,835,989
The financed GHG intensity of OTP Group (financed emissions / financed volume) in 2024, according to the
most relevant indicator with the smallest estimation uncertainty, was 0.47 g CO2eq / HUF, which is 19% lower
than in 2023. This significant decrease can be explained by several factors: the weakening of the HUF against
the EUR in the meantime (excluding the exchange rate effect, the change in Group's financed GHG intensity
would have been only -13%). Other reasons for the decrease include: some major polluters repaid their loans,
other larger polluters significantly increased their balance sheets while the loans provided by the Banking
Group remained unchanged (thus the "attribution factor" allocating the debtor's GHG emissions to Group
decreased), and the financing ratio of heavy machinery, which is more GHG-intensive, decreased in the vehicle
financing portfolio. In addition, changes in the quality of the data used also affected the results. Overall, it can
be said that OTP Group had no influence on most of the factors causing the decrease in its financed carbon
footprint and will not have any influence in the future. Therefore, it is important to emphasize that the
decreasing trend observed between 2023 and 2024 cannot be projected into the future; on the contrary, this
relatively significant change in the Group's financed GHG emissions highlights the shortcomings and low
robustness of the carbon footprint calculation methodology defined by the PCAF standard, so a similar
magnitude but opposite change cannot be ruled out in the next year.
Financed GHG intensity (financed emissions / loan volume provided) of OTP Group's portfolio in 2024
PCAF asset class
Financed Scope 1
intensity
Financed Scope 2
intensity
Financed Scope 3
intensity
Total emission
intensity
(Unit of measurement):
(g CO2eq / HUF)
(g CO2eq / HUF)
(g CO2eq / HUF)
(g CO2eq / HUF)
Listed equity and corporate bonds
0.31
0.06
0.86
1.23
Business loans, unlisted equity and
project loans
0.51
0.13
1.18
1.81
Commercial real estate financing
0.07
n.a.
0.07
Mortgages
0.10
n.a.
0.10
Vehicle loans
1.02
n.a.
1.02
Total without sovereign debt
0.47
0.59
1.06
Sovereign debt
0.37
0.07
0.23
0.67
Total (all PCAF asset classes)
0.46
0.47
0.93
Financed Emissions of Managed Assets
Besides the above, OTP Group has group members which are asset and fund managers. Estimated financed
GHG emissions associated with the assets managed by these Group members amounted to 5.8 million tonnes
CO2eq in 2024 (for all emission types, calculated on a coverage-adjusted basis). The estimation of financed
GHG emissions of the assets managed was performed by MSCI as an external service provider (except for
assets in real estate funds, which is OTP Group's own internal estimate).
OTP Group does not consider the funded issuance related to the assets managed by the fund and asset
management Group members as part of the Group's funded issuance, as the Group does not own these assets
nor are they included in the consolidated assets of OTP Group.
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Financed GHG emissions related to assets managed by OTP Group's fund and asset management members in 2024
Asset class
PCAF average
data quality
score
Managed
assets
Coverage-adjusted
financed emissions
(Scope 1 and 2)
Coverage-adjusted
financed emissions
(Scope 3)
Coverage-adjusted
financed emissions
(Total)
(Unit of
measurement):
(1-5)
(HUF billion)
(tons CO2eq)
(tons CO2eq)
(tons CO2eq)
Assets not in real
estate funds
3.7
4,209
1,616,427
3,210,721
4,827,148
Assets in real estate
funds
5.0
691
4,055
16,386
20,441
GHG removals and carbon credits and Internal carbon pricing
ESRS E1-7, E1-8
In 2024, within the corporate group, OTP Bank purchased carbon credits amounting to 7,000 tCO2e. This
amount covers OTP Bank's total Scope 1-2 emissions. The carbon credits retired during the reporting period
were verified according to the Verified Carbon Standard by Verra. The Bank considers it essential that the
project supported through the offsetting is implemented in the country where the Banking Group operates.
Therefore, the only project supported by the purchase is the Sant Nikola Wind Farm near Kavarna, Bulgaria,
which is the largest wind farm in the country. The project is a reduction project and does not qualify as a
corresponding adjustment under Article 6 of the Paris Agreement.85
OTP Bank's goal of carbon-neutral operations includes the use of carbon credits as well. The use of carbon
credits does not hinder the achievement of the net-zero target for Scope 1-2 by 2030, considering that OTP
Bank has begun developing emission reduction plans based on energy efficiency and renewable energy use.
Additionally, as compensation for the Bank's operational carbon footprint, we plan to replace the carbon credits
purchased based on our current practice with so-called ‘ecosystem restoration certificates’.
In collaboration with Pilisi Parkerdő Zrt. as a partner, we aim to develop a 400-hectare nature conservation
area, the so-called Budakeszi Vadaskert, with a complex urban forest approach. This development somewhat
places the economic aspects of the classic triad of forest functions – economic, conservation, and public
welfare – into the background in order to preserve and enhance the natural and ecological values of forests
and promote ecotourism development that aligns with the natural values of forest areas. The Bank has multiple
goals in regard to this project: it offers a platform for professional collaborations and scientific work in
biodiversity, climate adaptation, carbon sequestration, and ecosystem services. On the other hand, it is
suitable for promoting sustainability awareness among our employees by focusing on the non-financial aspects
of forest area usage; furthermore, the project can also shape the Bank's image.
The corporate group does not apply internal carbon pricing.
Transition plan and consideration of biodiversity in strategy and business model,
significant negative impacts
ESRS E4-1
The disclosure requirement is presented as part of the @ESRS 2 SBM-3 .
2.3. Reporting policy regarding chapter E
Green lending criteria and definitions used in the voluntary Green Portfolio Report
Green exposure defined based on the bank's green definition: on-balance loans, advances, leasing, and bond
exposures that have undergone an internal green rating process and meet the technical screening criteria of
any of the following frameworks: OTP Group Green Loan Framework, OTP Group Sustainable Finance
Framework, the green housing, green corporate and municipal capital requirement discount program of the
Hungarian National Bank, and the NHP Green Home.
As for all Hungarian banks, the main criteria that underpin the bank's green definitions are the Green housing
capital requirement discount program 2020-2021 and the Green corporate and municipal capital requirement
discount program 2020-2021 of the Hungarian National Bank. These national programs define the baseline
criteria for the green portfolios reported by the Bank.
85 The project is 100% a mitigation project, implemented 100% in the EU, and certified 100% based on recognized quality standards.
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For information on the compliance with the EU Taxonomy eligibility and alignment criteria of the bank's
framework, please see
@OTP Group Green Loan Framework
@OTP Group Sustainable Finance Framework
Green criteria for non-financial corporations are set out in the following frameworks:
•
OTP Group Green Lending Framework
•
OTP Group Sustainable Finance Framework
•
Green corporate and municipal capital requirement discount program of the Hungarian National Bank
These frameworks form the basis of OTP Bank's voluntary green lending portfolio.
The update of the @OTP Group Green Loan Framework, also supported by an external expert opinion (SPO),
was approved by the Hungarian National Bank in July 2023. This also ensures that loans that meet the
conditions of the Bank's Framework are eligible for the Green corporate and municipal capital requirement
discount program of the Hungarian National Bank as „Category B” transactions, which defines the scope of
"eligible transactions under a Framework".
The Green Loan Framework covers nonresidential customers, from large multinational corporations to micro-
enterprises, including municipalities and condominiums.
Retail green lending
In terms of residential green lending, the Green housing capital requirement discount program of the Hungarian
National Bank and the NHP's Green Home program form the core of the lending. These programmes comply
with the specifics of Hungarian legislation - and EU legislation, e.g. (9/2023 (25.V.) of the Decree on the
Definition of the Energy Performance of Buildings and the NZEB requirements - ensuring that the OTP Group's
definition of green for residential green lending is in line with the relevant legislation.
Main differences between the mandatory EU taxonomy indicators and the voluntary green portfolio:
The voluntary GAR portfolio is defined in a centrally maintained Group controlling database, monitored
monthly, and extends to companies and households that are not subject to NFRD, as well as those outside
the EU. Compliance with criteria is assessed by the Bank's experts.
In contrast, the mandatory GAR KPIs of the OTP Group are prepared semi-annually with the help of dedicated
internal data requests, in accordance with the methodology prescribed by the regulation – EU 2021/2178,
using only the Taxonomy KPIs and their gross carrying amount (exposures) with unknown use of proceeds of
companies that fall under the NFRD in corporate financing and those exposures with known use of proceeds
that are aligned with EU Taxonomy.
Scope 1-2 emissions
50. a Emission of the Group preparing consolidated financial statements: emissions derived from the assets
listed in the balance sheet of entities belonging to the consolidated accounting group according to IFRS, in a
financial control approach, including emissions derived from assets under IFRS 16.
50. b Entities (except under 50. a) under operational control including investees (such as associates, joint
ventures, or unconsolidated subsidiaries that are not fully consolidated in the financial statements of the
consolidated accounting group), as well as contractual arrangements that are joint arrangements not structured
through an entity (i.e. jointly controlled operations and assets). Operational control: Operational control (over
an entity, site, operation or asset) is the situation where the undertaking has the ability to direct the operational
activities and relationships of the entity, site, operation or asset.
48. b The Group is not subject to emission trading schemes, therefore Scope 1 GHG emissions from regulated
emission trading schemes are not relevant.
The calculation methodology for Scope 1 and 2 emissions is the same for sections 50.a and 50.b.
48. b In those instances when the invoice for the consumption is not available, estimates will be made for the
missing items. Given the small amount of this emission item, this does not cause significant uncertainty in
Scope 1-2 emissions.
48. a, AR 43. a The Scope 1 emission calculation includes emissions resulting from fuel/energy consumption
of vehicles, natural gas, and the use of air conditioners and server coolers. CH4 and N2O content of biogenic
emissions is calculated separately from the Scope 1 emissions. Ratio of biofuel consumption is calculated by
using default values; If the fuel consumed has a different biofuel-content, then individual ratios are used.
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48. b If the quantity of emissions from air conditioners and server coolers is not available, an estimate will be
made. This does not cause a high degree of uncertainty in Scope 1 emissions, considering the small amount
of this type of emission.
For the calculation the latest IPCC report is used, which is currently the Sixth Assessment Report (AR6).
The Group discloses non-mechanical GHG emissions related to agricultural production in accordance with the
GHG Protocol Agricultural Guidance, the calculation calculation was carried out using a calculator developed
by AKI Agrárközgazdasági Nonprofit Kft. The emission source categories considered in the calculator were
determined in accordance with the GHG Protocol, and the methods were developed based on the methodology
published in 2006 by the Intergovernmental Panel on Climate Change (IPCC), taking into account the 2019
amendments (IPCC 2006, IPCC 2019). The calculator quantifies CO2, CH4, and N2O emissions related to
crop production and livestock farming. For crop production, the following were determined: N2O emissions
from the use of synthetic and organic fertilizers; CO2 emissions from the use of urea and CAN-type fertilizers;
CO2 emissions from soil liming; N2O emissions from crop residues; and indirect N2O emissions (from
atmospheric deposition and nitrate leaching). For livestock farming, CH4 emissions from animal digestion and
CH4 and N2O emissions from manure management were determined.
AR43. c Biogenic emissions are calculated separately from other Scope 1 emissions.
Scope 2 emissions are related to electricity and district heating consumption. OTP Group discloses Scope 2
emissions separately as location-based and market-based emissions.
Sources of emission factors:
Scope 1: Emissions from mineral and biofuels, as well as natural gas: local NIR (National Inventory Report)
or IPCC 2006 guidelines. Fuel calorific value: local NIRs or EMEP/EEA air pollutant emission inventory
guidebook. In Slovenia, the Slovenian Environmental Agency. Non-biogenic emissions from biofuels: DEFRA.
Other fuels: DEFRA or another credible source from the member company. The emission factors used
comprehensively cover all greenhouse gases.
Scope 2: Electricity: market-based emission factors are provided by utility providers, in the absence of which
the Group uses the residual mix factors of the AIB (Association of Issuing Body) where available. In countries
where residual mix is not available, the local and market factors are the same, with the source of emission
factors being the IFI harmonized grid factors. The emission factor for electricity includes only CO2.
For district heating, the Group uses the emission factor provided by MATÁSZSZ in Hungary, the Energy
Institute Hrvoje Požar in Croatia, and Bureau Veritas in Slovenia. For other countries, the DEFRA factor is
used. The local-based and market factors are the same. The emission factors include all relevant greenhouse
gases.
For renewable electricity purchased through contractual instruments (Guarantees of Origins or Renewable
Energy Certificates) the market-based emission factor applied is 0.
AR 45. D. The share of contractual instruments is calculated as the total amount of electricity purchased from
renewable contractual agreements, divided by the total amount of electricity purchased. Information about the
types of contractual instruments is determined in the Guarantees of Origins or Renewable Energy Certificates.
AR 43. Biogenic emissions related to Scope 2 are not relevant for the Group.
AR 46. Scope 3 emissions:
AR 46 c, d., i. OTP Group has conducted a high-level estimation of Scope 3 GHG emissions for Categories 1-
14 using the PCAF Score 5 / Option 3c methodology. Therefore, the calculation exclusively focuses on
Category 15.
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Category 15 emissions – emissions financed through investments
AR 46. A., b. Scope 3 / Category 15 GHG emissions of OTP Group are those that are related to emissions of
clients to which OTP Group provides funds in the form of loans or equity, or through investing into their
securities. The general logic of allocating such emissions to the bank is the following: we take the clients’
(borrowers’) total GHG emissions, then we allocate them to the Group in proportion to the financing ratio of
the client / borrower (e.g. the client’s loan outstanding / the client’s total assets or the client’s loan outstanding
/ financed asset of the client.
When covering clients’ (borrowers’) GHG emissions, all emission types have to be included as requested by
the relevant EU-regulation: Scope 1 emissions (resulting from fossil fuels that the client burns directly), Scope
2 emissions (resulting from the production of electricity and heating that the client uses) and Scope 3 emissions
(all emission that arise in the client’s supply chain). The reliability by which these estimations can be measured
or at least estimated is very different: Scope 1 emissions could ideally be even measured or at least estimated
with a relatively low level of uncertainty, if client would measure and report them (which is not the case for
most OTP Group clients). Scope 2 emissions cannot be measured, only estimated with some uncertainty:
while the volume of electricity or heat used by the client could be ideally measured and reported by the client
(though it is not the case for the bulk of OTP Group’s portfolio), the underlying GHG emissions of such energy
used can only be estimated, but not measured (as those depend on the actual fuel mix of the grid from which
the client bought such energy). Scope 3 emissions of clients can only be estimated with a very large level of
uncertainty, as even the clients do not fully control, and thus have not enough information of the emission
profile of their supply chain (except for a few exceptions). Therefore, OTP Group considers only estimations
on clients’ Scope 1 and 2 emission indicators as relatively reliable ones, whereas we deem estimations on
Scope 3 emissions of clients (borrowers) to be completely speculative.
OTP Group quantifies its financed emissions based on the methodology described by the PCAF Standard86
as requested by relevant EU regulation (ESRS/CSRD). The essence of the approach is that a bank providing
funds to a client has to use the client’s GHG emission as a basis and then allocate part of it to the bank’s
financed GHG emissions based on the client’s financing ratio (called also the “attribution factor”, equal to the
loan provided to the client / value of the financed asset or the total assets of the client). This financing ratio
defines the share of GHG emission of the borrower which the financing bank can be made responsible for
(according to the underlying regulation). GHG emission of the clients should be quantified on emission values
measured and reported by the client. However, by end of 2024, most borrowers of OTP Group have not
reported (and many of them not even measured) their own GHG emissions. In fact, OTP Group has reported
emission data only from 111 of its corporate clients (accounting for less than 4% of the total business loan
portfolio) and even most of these are not audited by an independent third party. The availability of reported
corporate emission data might improve somewhat as CSRD will apply to more and more companies. As the
first step to enhance the accessibility and quality of data, OTP Bank plans to analyze the gap regarding internal
data management processes.
Therefore, OTP Group had to prepare its own estimations for its borrowers’ GHG emissions. These estimations
were based on the financial figures (such as revenues and total assets) of clients (borrowers) and GHG
emission intensity factors (e.g. on emissions / revenue by activity types) from external data providers. OTP
Bank – as a PCAF signatory – has access to emission intensity factors that were made available by PCAF.87
However, the PCAF-databases do not provide emission intensity factors for all countries and/or asset types
which are relevant for OTP Group: in such cases, proxies of similar (in economic and environmental terms)
countries or asset types were used.
OTP Group prepares the estimate of financed GHG emissions disclosed in this document based on the same
methods and data as in its Pillar 3 disclosures on ESG risks.
86 PCAF (2022). The Global GHG Accounting and Reporting Standard Part A: Financed Emissions. Second Edition.
87 In case of corporate loans and bonds and equity exposures, OTP Group relied on the emission intensity factors of the PCAF/Exi obase dataset.
Emission intensity data in this dataset relies on environmentally extended IO tables, and thus does not cover (most ly) downstream Scope 3 emissions.
Therefore, our estimations on clients’ Scope 3 emissions might be underestimated – however, there are no reliable estimations on downstream emission
intensity factors for a wide spectrum of industries and countries according to our knowledge. Intensity data in the PCAF/Exiobase dataset is from the
year 2019 as it was made available by PCAF in 2024 – relying on data from 2019 to estimate borrowers’ emissions in 2023/2024 might lead to some
overestimation as national emissions (in countries where OTP Group is present) mostly stagnated between 2019-2024, whereas price levels – and thus
average sizes of loans or average levels of revenues – have gone up.
For commercial and residential real estate loans, OTP Group relied on emission intensity factors of residential and commercia l buildings (either per
building or per m2) the PCAF/CRREM (Carbon Risk Real Estate Monitor) dataset. Data in this dataset is from the year 2023. It has to be noted th at
emission intensity factors from this dataset sometimes differs from that published by national authorities. Also, PCAF/CRREM does not provide data
separately for Scope 1 and Scope 2 emissions of buildings, only for the combination of them.
For vehicle loans, OTP Group relied on emission intensity factors from the PCAF Motor Vehicle Loan Dataset. Although this dat aset provides intensity
factors for a wide range of different vehicles and car types, OTP Group relied only on the emission intensity by country and main vehicle types (passenger
car, van, heavy vehicle).
For the sovereign exposures, OTP Group relied on the exact same data sources as they were provided in the chapter on “Soverei gn debt” of the PCAF
Standard.
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GHG intensity
AR 53. A., b., c. GHG intensity ratio is calculated by the following formula: Total GHG emissions (tCO2eq) /
Net revenue (Monetary unit in million HUF). GHG intensity ratio is calculated with both the location-based and
the market-based method.
AR 53. D. The calculation of net revenue is in accordance with the accounting standards applied to financial
statements. Net revenue is the sum of Interest income and income similar to interest income + Income from
fees and commissions + Other operating income in the 2024 consolidated IFRS report of OTP Bank Nyrt.
Consolidated Income Statement.
2.4. ESG risk management
The Group pays particular attention to managing ESG risks and implementing climate protection aspects into
business practices. The Banking Group's risk management and business area pay special attention to
integrating various risks related to green loans.
OTP Bank has detailed risk management policies covering all types of risks (credit, market, liquidity,
operational), which are in line with the laws regulating prudent banking operations:
The assessment of the adequacy of ESG risk management is primarily based on the recommendation 10/2022
(VIII.2.) issued by the Hungarian National Bank (Green Recommendation), which describes the expectations
for credit institutions regarding climate change and environmental risks, as well as the enforcement of
sustainability aspects. The recommendation sets specific expectations for managing environmental risks.
Compliance with the Green Recommendation is regularly reported to the Board of Directors, the Management
Committee, the ESG Committee, and the Risk Management Committee.
The Bank also monitors the supervisory and regulatory expectations of the European Banking Authority (EBA)
and the European Central Bank (ECB). The ECB has direct supervisory authority (JST) over DSK Bank in
Bulgaria and OTP Bank Slovenia, so compliance with these institutions' expectations receives special attention
in examining and managing environmental and climate risks. DSK Bank, OTP Bank Slovenia and OTP Bank
Croatia have integrated ESG Risk factors into their risk management system with local supervisory
expectations.
The Bank manages its sustainability-related risk management guidelines based on the following non-public
documents:
•
Organizational and Operational Regulations
•
OTP Banking Group Governance Regulations
•
The internal defense lines system at OTP Bank
•
The Rules of the Remuneration Policy of OTP Bank and the Banking Group
•
The Rules of the Performance Measurement and Evaluation System of OTP Bank and the Banking
Group subsidiaries
•
The Guidelines for the Leading Bodies and Standing Committees of the Banking Group Credit
Institutions
•
Group Credit Risk Policy
•
Group-Level Trading Market Risk Management
•
Market Risk and Foreign Exchange Risk Management for the Trading Book
•
OTP Group Risk Strategy
•
OTP Group Risk Appetite Statement
•
Corporate Lending Policy / Operational Lending Limits and Guidelines (OLLP)
•
The CEO's directive on managing the greenwashing risk of OTP Bank
•
Corporate Client Risk Management Manual (OTP Bank)
•
OTP Banking Group Risk Appetite Framework
•
Collateral Valuation Policy
•
Operational Risk Management Policy
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The Bank develops its ESG risk management practices based on the following voluntary standard
expectations:
•
NGFS, The Network of Central Banks and Supervisors for Greening the Financial System
•
GHG, Greenhouse Gas Protocol
•
PCAF, Partnership for Carbon Accounting Financials
2.4.1. ESG Risk Management Function and Integration of ESG Risks into Risk Management
Procedure
OTP Bank has incorporated ESG risks into its group-level risk management guidelines and procedures,
enabling the identification and management of these risks to minimize emerging credit, reputational, regulatory,
and legal risks. ESG risk management within OTP Group is integrated into various levels of the risk ecosystem:
OTP Group Risk Strategy, OTP Group Risk Appetite Statement, the risk management frameworks for different
risk types, and the Operational Lending Limits and Guidelines. OTP Group applies a gradual approach to ESG-
related risk limits, and the Risk Appetite Statement and Group-Level Operational Lending Limits and
Guidelines (OLLP) already include such restrictions.
In connection with the group-level risk strategy for 2023-2025, a group-level risk strategy with ESG relevance
will be defined, aiming for a higher level of implementation of ESG risk factors. The ESG risk strategy will
define additional ESG-level focus programs to strengthen ESG risk awareness. The ESG risk strategy includes
assessing the short (<1 year), medium (1-5 years), and long-term (>5 years)88 physical and transitional risk
factors resulting from climate change in the portfolio (Climate and Environmental Materiality Assessment) for
significant sectors. As a result, it will further develop the ESG-relevant parts of the risk appetite and set limits
to serve the Bank's long-term sustainable portfolio more effectively. The assessment also supports the
preparation of the Group-Level Climate and Environmental Risk Heatmap and the implementation of all
identified relevant "E" (environmental) factors.
2.4.2. Credit Risk
Corporate Credit Risk Management
To manage the credit risk aspect of ESG risks, OTP Group has been applying its ESG risk management
framework in corporate lending since 2021. The main elements of the framework are the ESG exclusion list,
the sectoral ESG risk heatmap, and the ESG risk assessment.
The ESG exclusion list defines activities in which OTP Group does not participate directly due to their
controversial nature and impact. The sectoral ESG risk heatmap includes the ESG risk categorization of each
economic activity in the NACE classification, considering the environmental and social impact of the respective
industry.
The ESG risk assessment includes determining ESG risk categories at client and transaction levels, including
client due diligence in predefined cases. The Group applies a different method for leasing transactions where
the financed asset is motorized; in these cases, the ESG risk category is determined based on the estimated
environmental impact of the asset's engine (considering European vehicle emission standards). ESG aspects
are considered in individual corporate lending decisions. The methods are continuously developed in line with
the expansion of available data and methodologies.
In corporate lending – as for the Hungarian operations – the Hungarian National Bank (MNB) prescribes the
application of a special examination framework and a minimum ESG questionnaire for client due diligence
related to environmental and climate risk assessment, starting from 2025 with a phased implementation. The
Bank is working to ensure compliance with the recommendation according to the schedule outlined in the
recommendation.
In the Corporate Lending Policy / Operational Lending Limits and Policies (OLLP) – with the exception of the
Uzbek and Russian subsidiary banks – lending guidelines from an environmental and climate risk perspective,
as well as financial risk assessment guidelines based on environmental risks, have been formulated. As part
of the policy, financing guidelines and examination frameworks related to renewable energy production, a key
element of green lending, are also included. OTP Group currently has an internal, non-public guideline related
to financing coal mining and coal-based energy production activities. The review is currently in progress, and
upon its completion, the Group intends to make this policy public.
88 These time horizons are different from the time horizons used in OTP Group, in line with the EBA's expectations.
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Regarding credit risk, the group also applies limits related to the corporate ESG risk management process. A
group-level limit is applied to the ESG exclusion list, and in 2023 a new numerical limit was introduced in the
Hungarian operations and certain subsidiaries to limit the proportion of new transactions with high ESG risk
ratings within new risk-taking. The range of applied limits is gradually expanding, and the limits are recorded
in the Risk Appetite Statement or the Corporate Lending Policy, currently not public. Compliance with the limits
is regularly monitored on a quarterly and monthly basis. The methodology is continuously developed, with
plans to introduce additional risk limits and apply ESG-specific lending guidelines.
From 2023, monthly internal reports on group-level ESG credit risk exposure are prepared for the corporate
loan portfolio for the Credit and Limit Committee, and quarterly for the Board of Directors.
Collateral management
In the case of collateralized commercial real estate, the ESG assessment methodology developed by OTP
Mortgage Bank has been applied in the Hungarian operations since February 2023. This is due to the bank’s
significant exposure to commercial real estate, where the proper ESG-relevant evaluation is a primary
consideration.
The current rating is based on simplified ESG factors (E, S, G), and the general factors will be expanded based
on the relevant factors detailed in the C&E Materiality Assessment. ESG data fields have been created in the
bank's corporate loan registry system, and the process of populating these with actual content is partially
automated from the information available in the state Lechner Knowledge Center database, with the most
important data being the indicator of the energy efficiency of the collateral. The sharing of the collateral ESG
methodology with subsidiaries is currently ongoing.
For subsidiaries, the implementation of ESG methodologies for collateral related to vehicles is in progress
according to pre-agreed deadlines. Merkantil Bank has its own ESG methodology for leasing assets according
to the appendix of the current Group Credit Risk Policy. In this regard, the methodologies presented below
show the practice of OTP Bank, and the implementation in subsidiaries is currently ongoing.
Immovable property
OTP Mortgage Bank considers and records the location, technical, and energy characteristics of commercial
or residential real estate in its own records during the valuation of real estate collateral. As a result of the
developments already implemented, ESG-specific data fields have been created for real estate collateral in
the corporate segment's collateral registry system.
In the retail segment, residential properties taken as collateral are classified into the following risk categories
based on their energy rating on the energy certificate or estimated energy efficiency, which are updated
quarterly to monitor the portfolio-level transition risk:
•
Low (A+++, A++, A+, A, B)
•
Medium (C, D)
•
Moderately high (E, F)
•
High (G, H, I)
During the real estate collateral valuation process and related monitoring activities, the following physical risk
elements are integrated:
•
drought
•
flood
•
heatwave
Movable Property
For movable collateral relating to vehicles, OTP Bank has also developed an IT-supported framework for
identifying ESG risks. The guidelines and methodologies related to this are continuously shared with
subsidiaries. As a result, vehicle-type movable collateral is classified into ESG1/2/3/4 categories, and the
classification result is displayed in the corporate collateral registry system.
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The "ESG card" has been created in the collateral registry system to collect and store environmentally relevant
data, distinguishing between two types:
•
Vehicle: passenger car, SUV, truck, bus, caravan, moped, motorcycle, agricultural machine/tractor,
boat, airplane, other vehicle, trolleybus, tram, trailer/semi-trailer, and
•
Other movable: solar power plant technology
The classification into vehicle-type risk categories is done automatically based on the characteristics of the
asset (considering EURO motor standards), and the exposure of the movable collateral portfolio.
Stress-test
ESRS E1 SBM-3
Climate change mitigation is a significant risk associated with OTP Group's lending activities, primarily as a
transition risk, including expectations related to decarbonization. The extent of this risk is estimated through
stress testing of the corporate portfolio. The transition risk related to climate change mitigation is partly linked
to energy, as increasing energy efficiency and reducing the use of fossil fuels are necessary to mitigate climate
change. The risk of adaptation to climate change associated with lending is a physical risk, and part of the
transition risks (investments required for clients' adaptation) also fall into this category.
The Bank's 2023 group-level climate stress-test (resilience analysis) examined climate-related (transition and
physical) risks both in a long-term strategic perspective and in the short term (not broken down by ESRS
topics). Due to the different time dimensions, the climate stress-test consists of two elements with different
approaches. This assessment is presented to and approved by the Board of Directors as part of the annual
ICAAP assessment.
As part of the Internal Capital Adequacy Assessment Process (ICAAP), ESG risks affecting the Banking Group
are also assessed. ESG risks refer to risks related to or arising from these factors, which may result from the
Bank's investment, lending, and other activities. The Banking Group approaches ESG risks and factors
holistically, integrating them into the risk management frameworks of the main risk types, meaning ESG risk
is not treated as a separate risk type within the internal capital adequacy assessment process.
According to the Bank's assessment, risks arising from ESG factors within credit risk are not considered
significant. The Group does not create additional capital requirements for ESG risks under ICAAP; the
management of ESG factors and related risks is carried out through different processes and controls.
As part of the Internal Capital Adequacy Assessment Process (ICAAP), the Bank last conducted a climate
change stress-test in 2023. This test assesses the Group's short, medium, and long-term exposure to physical
and transition risks related to climate change. This assessment covers credit risks related to the corporate
portfolio, market risks related to the trading book, and operational risks related to short-term transition risks.
The stress-test scenarios are prepared with different forecasting horizons.
a) Short-medium term (next 3 years) forecast, focusing primarily on transition risk, and a strategic, long-
term (until 2050) forecast covering both transition and physical risks.
b) The long-term, strategic analysis examines the potential impacts on the Banking Group along the three
usual NGFS climate scenarios (orderly transition, disorderly transition, hot house) until 2050.
The Bank also examined exposure according to two risk types:
a) a transition risk
b) a physical risk.
The basis for comparison during the exposure assessment was the exposure of an "average bank operating
in the Eurozone." The assessment was carried out by comparing various country-level indicators (for transition
risk: the carbon intensity of the economies of the Bank's operating countries, for physical exposure: country-
level risk ratings from various organizations).
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The results showed that the countries within the Banking Group's operating area might be more exposed to
transition risks compared to the Eurozone average, as their economies are more carbon-intensive (in terms of
GHG emissions per unit of GDP) than the Eurozone average (although this difference is smaller when
calculated at purchasing power parity, which eliminates distortions due to different price levels in countries).
For physical risks, the assessment showed that the general exposure of the countries within the Banking
Group's operating area is not higher than the Eurozone average. Additionally, as part of the long-term analysis,
we quantified the expected credit loss ratios along the three NGFS climate scenarios (orderly transition,
disorderly transition, hot house) until 2050. The more precise estimates for the corporate loan portfolio were
extrapolated89 to the Banking Group's entire balance sheet, covering all OTP Group assets including the
analysis of additional risks.
In this process, we projected the results of the European Central Bank's 2021 top-down banking system stress
test (based on the NGFS scenarios used therein) onto the composition of the Banking Group's portfolio. These
results showed that under scenarios assuming a successful carbon-neutral transition (orderly transition,
disorderly transition), the Banking Group's lending losses may increase minimally – by a few basis points – in
the short term, while under the "hot house" scenario, the increase in losses is more significant – but still
manageable – in the period after 2040 (approximately +15 basis points loss per year).
Additionally, the Banking Group's climate stress-test framework includes a short-medium term (3-year
horizon) corporate credit risk model, which specifically focuses on the transition risk of companies, as the long-
term strategic analysis also indicated that the Banking Group's exposure to this risk type is higher compared
to an average bank operating in the Eurozone.
This short-medium term corporate credit risk model estimates the expected default rates of corporate
borrowers in various sectors based on the country and sector-level gross value added (GVA) paths of the
"short-term disorderly" scenario published in the ECB's 2022 bottom-up banking system stress test,90 and later
in the European Banking Authority's 2023 stress-test.91 The model results show that corporate credit losses
would remain manageable even under the assumed "short-term disorderly" scenario. This model does not
include physical risks, as the general approach is that physical risks materialize in the long term in negative
climate scenarios, while transition risks are dominant in the short-medium term. OTP Group has also integrated
these models into its prudential stress-test framework, which was examined by supervisory authorities – most
recently during the 2024 SREP.
OTP Group does not create its own climate scenarios that consistently cover92 all relevant macroeconomic
and social indicators alongside climate parameters. OTP Group – similar to other credit institutions – uses the
consistent scenarios of NGFS, IEA, ECB, and EBA, which include climate, commodity price, and
macroeconomic parameters, along with the detailed assumptions provided by the issuing institutions.
The above analyses – conservatively – do not take into account that the Banking Group can also adapt to the
circumstances, for example, by reducing its financing in vulnerable regions by 2050 in the long-term model. If
these were considered, the additional losses would be even lower.
Credit Rating93
In line with regulatory expectations, the Bank has started developing risk modeling procedures related to
climate change and environmental risks and integrating them into its current lending processes. To develop
the bank model related to climate risks, a basic database relying on geospatial data was created, which helps
determine the relationship between the financial data of companies financed by the Bank and climate risk data.
To map potential data sources, acute and chronic physical risks significantly affecting Hungary were identified.
After examining the data content and accessibility of various online data sources, the basic data of the ESG
physical risk database were procured and processed. The mapping of additional material acute and chronic
ESG risk factors will continue to expand at the group level.
89 By extrapolation, we mean that we assume that the loss rate on the other assets of the Banking Group is equal to the loss rat e on the corporate loan
portfolio.
90 2022 SSM Climate Risk Stress Test, https://www.bankingsupervision.europa.eu/press/pr/date/2022/html/ssm.pr220127~bd20df4d3a.en.html
91 https://www.eba.europa.eu/risk-and-data-analysis/risk-analysis/eu-wide-stress-testing/stress-test-2023
92 In business practice, commonly accepted scenario-setting organizations such as the NGFS or the International Energy Agency (IEA), or even the
European Central Bank or the European Banking Authority, do this.
93 Action on climate change mitigation, adaptation and energy.
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The Bank primarily considers it justified to apply ESG aspects in the PD (Probability of Default) model. The
Bank considers environmental risks within credit risk relevant by default, primarily concerning the exposure of
collateral to acute or chronic physical hazards (e.g., property damage caused by weather events, water
scarcity, and drought in agriculture), as well as potential new investment costs arising from transition risk.
Credit Rating System
Assessing physical risks involves significant technical challenges, including the need for detailed geographical
data to determine the severity of potential weather events at different locations.
In line with regulatory expectations, the Bank started developing risk modeling procedures related to climate
change and environmental risks and integrating them into current lending processes in 2023. Currently, the
procedure has been developed and applied only for OTP Bank, and the method is continuously being
expanded to other entities of the Banking Group.
The implementation of the developed ESG module into the customer rating system has been completed, thus
ESG factors were considered in the rating of joint ventures by the regulatory deadline. Based on the developed
physical risk module and the energy efficiency of residential collateral, the integration of ESG factors into
mortgage loan assessment has begun.
To determine physical risk exposure, the Bank uses a simplified climate risk heat mapping method, which
offers a quick and efficient way to map physical risks for entire portfolios by sectors, sub-sectors, and
geographical areas. The determination of physical risk exposure depends on the following factors:
Risk = f (Vulnerability [V], Hazard [H], Insurance [I]):
The vulnerability indicator varies by sector code: The vulnerability scores assigned to NACE codes can have
values of:
a) very low
b) low
c) medium
d) high
e) very high
Vulnerability scores are determined for each identified physical risk, reflecting their relative impact on the
affected sector.
The risk indicator varies by location unit:
a) low (4)
b) medium (3)
c) high (2)
d) very high (1)
hazard scores are assigned to each climate risk, reflecting their relative importance to the given location
The score indicates the extent to which the given location is exposed to the given physical risk (the customer's
location is determined using the collateral address, the company's site address, the company's headquarters
address). The following risk indicators were used:
a) Drought Index: Over the past 10 years, Hungary has experienced severe droughts. For example, the
7-week period starting in mid-June 2022 was catastrophic for Eastern Hungary. It hardly rained for
weeks, and the economic loss of the autumn harvest in the eastern part of the country was nearly
total. Agriculture is the most vulnerable sector to drought, so the current assessment focuses on the
agricultural sector. The Palfai Drought Index (PAI), developed in Hungary for users in agriculture and
water management, has been used since the early 1980s to numerically characterize droughts. The
Bank uses the modified Palfai Drought Index to identify the impact of drought risk.
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b) Flood Index: Directive 2007/60/EC on the assessment and management of flood risks (commonly
referred to as the Floods Directive or FD) mandates that all river basin districts identify areas where
there is a significant potential flood risk or where such occurrences are likely. In Hungary, the flood
risk concept defined in the Directive can be divided into three areas:
•
Flooding along unembanked watercourses
•
Flooding due to the failure or insufficient size of flood protection embankments
•
Flooding caused by precipitation and rising groundwater levels
Flood risk data providers: The Hungarian government announced the second revised river basin
management plan (VGT3) in April 2022. The preliminary vulnerability and risk assessment maps
prepared during the
c) Storm Index: a storm is defined as an adverse weather phenomenon with a wind speed of at least
20 m/s. The storm risk index indicates the number of days in a year when the maximum wind gust
speed reaches or exceeds 20 m/s.
d) Frost Index: Frost is categorized into spring, autumn, and winter frost.
•
Spring frost: At the risk location, a temperature of minus 2°C or lower measured at a height
of two meters above ground level during the spring period
•
Autumn frost: At the risk location, a temperature of minus 2°C or lower measured at a height
of two meters above ground level during the autumn period
•
Winter frost: At the risk location, a temperature of minus 15°C or lower measured at a height
of two meters above ground level during the winter period
The frost risk index indicates the number of days in a year when the minimum temperature does not
exceed minus 2°C at two meters above ground level. Late spring frosts can have severe impacts on
agriculture and forestry.
2.4.3. Managing operational risks
In terms of operational risk, severe weather conditions can affect business continuity, and there is reputational
risk from failing to adapt to the continuously increasing regulatory and supervisory ESG requirements.
The management of ESG risks within the operational risk framework began in 2021 and remained unchanged
in 2024. During the annual, group-level process-based risk and control self-assessments, respondents also
evaluate the expected losses for the following year from an ESG relevance perspective, which is also included
in scenario analyses.
Quarterly monitoring is associated with the ESG operational risk tolerance value applied at the group level.
We also monitor loss data from an ESG impact perspective, including ESG data quality aspects.
Relevant ESG risk factors for the development of the ESG Data System physical risk database
Temperature related
Wind related
Water-related
Surface cover
related
Chronic
Changing temperature (air,
freshwater, marine water)
Changing wind patterns
Changing precipitation patterns and
types (rain, hail, snow/ice)
Coastal erosion
Heat stress
Precipitation or hydrological
variability
Soil degradation
Temperature variability
Ocean acidification
Soil erosion
Permafrost thawing
Saline intrusion
Solifluction
Sea level rise
Water stress
Acute
Heat wave
Cyclones, hurricanes,
typhoons
Drought
Avalanche
Cold wave/freeze
Storms (including snow,
dust and sandstorms)
Heavy precipitation (rain, hail,
snow/ice)
Landslide
Wildfire
Tornado
Flooding
Subsidence
Glacial lake outburst
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2.4.4. Managing Market Risks
In market risk management, sustainability risks are considered in accordance with the Green
Recommendation. The risk management has established ESG rating-based position limits for trading and
discretionary portfolios. For the latter, the Bank also applies an ESG exclusion list. The consideration of
principal adverse impacts (PAI) in discretionary portfolio management (DPM) is done using MSCI standardized
PAI statements, available from 1Q 2023. The standard report covers all identified indicators, except for fossil
fuels and energy efficiency due to data gaps. Portfolio coverage shows an improving trend. Currently, the
observation of principal adverse impacts is ongoing, with no associated limits or explicit policy. Weekly stress-
tests are conducted on the ESG risks of corporate bond portfolios in both the trading and banking books.
2.4.5. Liquidity Risks
Given its relevance, Integrated Risk Management has begun developing an integration methodology for
assessing liquidity risks related to ESG risks.
2.4.6. ESG Risk Management at OTP Fund Management
At OTP Fund Management, ESG risk management is an integral part of the comprehensive risk management
framework. The sustainability risk level of funds and portfolios is determined based on ratings94 provided by
MSCI ESG Research, ranging from CCC (worst) to AAA (best).
When creating and rebalancing portfolios, the expected sustainability risk level is considered, and if the risk
exceeds the expected level, measures are taken to reduce it.
Funds with SFDR ratings must meet specific criteria, primarily regarding the minimum proportion of sustainable
investments and the ESG rating of investments.
OTP Fund Management regularly prepares reports on sustainability risks, which are sent to portfolio managers
and management, and quarterly summaries are presented to the Board of Directors. During investment
decision-making, portfolio managers must ensure that the aggregate sustainability risk of their portfolios is in
line with the expected level.
OTP Fund Management does not invest in companies involved in controversial weapon-related transactions
or in government bonds of countries with authoritarian regimes, and it emphasizes the environmental impact
of investments, including greenhouse gas intensity, waste and harmful substance emissions, and water usage.
94 ESG ratings measure and evaluate a company's resilience to long-term, industry-relevant environmental, social, and governance (ESG) risks. The
assessment is conducted in comparison with industry peers, and the ability to manage these risks is also taken into account in relation to exposure to
industry-relevant ESG risks.
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3. Social Information
3.1. Own Workforce
The employees of OTP Group represent one of its most important values and a crucial building block
of its success. Business goals can only be achieved with well-prepared and committed employees.
OTP Group demonstrates a responsible employer attitude towards all its employees.
Material impacts, Risks and Opportunities
ESRS S1 SBM-3
Regarding own workforce, the impacts always arise within the entire OTP Group’s operations.
Material sub sub-topic
Type of impact,
risk, opportunity
Description of impact, risk, opportunity
Working conditions
Work-life balance
positive impact
The implementation of practices that consider work-life balance affects a
large number of employees
potential negative
impact
The risk of practices that do not adequately consider employee interests
Health protection and safety
negative impact
In addition to typically non-hazardous jobs, stress emerges as a risk for a
large portion of employees
Equal treatment and opportunities for all
Gender equality and equal
pay for work of equal value
positive impact
Due to the high proportion of female employees, the impact is significant;
the pay ratio between men and women in the same positions differs only
slightly at most member companies
negative impact
The proportion of female leaders at higher management levels is
consistently lower
Employment and inclusion of
persons with disabilities
positive impact
The size of the corporate group and its wide customer base allow it to
significantly impact the employment of people with disabilities
negative impact
Currently, the employment rate of people with disabilities is low
Diversity
positive impact
The size of the corporate group allows it to significantly impact the
implementation of diversity, and all forms of discrimination are prohibited
negative impact
The practices of the Banking Group provide opportunities for development
Training and skill
development
positive impact
Access to training is ensured, and regular performance evaluations are
conducted at several subsidiaries
potential negative
impact
It may arise in practices that do not ensure equal opportunities
Measures against violence
and harassment in the
workplace
potential negative
impact
The risk of abuse is high due to the size of the corporate group and the
composition of its workforce
For a more details about the impacts, risks and opportunities, as well as their management, see @ESRS SMB-
3 and the following sections of this chapter.
The topics gender equality and equal pay for work of equal value; diversity; employment and inclusion of
persons with disabilities; being addressed together.
The workforce includes:
•
employees and
•
non-employee contracted workers,
•
as well as individual entrepreneurs who have contracted with an OTP Group member company
to perform specific work.
The significant impacts identified during the double materiality analysis cover all individuals within the
workforce who may be significantly impacted by the Banking Group.
The majority of the workforce at the Banking Group, 43,118 people, are employees working under full-time or
part-time contracts. OTP Group's influence on external workers is more limited, as their working conditions
and terms are not solely influenced by OTP Group. The Banking Group's practices focus on employees within
the own workforce.
The significant or potentially significant impacts affect most employees, and no significant impact has been
identified that is specific to certain countries/regions. The number of employees varies significantly by country,
therefore the magnitude of the impact differs by country (see @ESRS S1-5).
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The operations of the Group do not involve significant negative human rights aspects, such as the risk of child
labor, forced labor, or compulsory labor. Additionally, there are no negative impacts on the workforce resulting
from the implementation of transition plans aimed at reducing negative environmental impacts. The significant
impacts identified for OTP Group's own workforce can be both positive and negative, depending on the
Banking Group's practices. The Banking Group strives to achieve positive impacts while mitigating or avoiding
negative impacts.
Identifiable negative impacts,95 such as health and safety risks and workplace violence and harassment risks,
primarily occur in individual cases, while stress risk affects a broader range of employees.
We aim to achieve positive impacts in work-life balance, gender equality and equal pay for equal work, training
and skills development, and the diversity and the employment of people with disabilities. Activities aimed at
achieving positive impacts do not differ based on employees' contractual relationships, although most
measures have a well-identified target group (e.g., women, people with disabilities). Positive impacts vary by
country, depending on which area or activity a particular group member places greater emphasis on.
To protect vulnerable groups (gender, ethnicity, religion, age, disability, family status), a group-level policy
(Code of Ethics) is in place, which includes the prohibition against discrimination and measures against
workplace violence and harassment, applicable to the entire workforce.
OTP Group members identify and manage health and safety impacts differently, in compliance with local
regulatory requirements. Most companies conduct regular risk assessments to ensure a safe working
environment. At the group level, employees of companies engaged in agricultural activities work in higher-risk
roles (typically involving animals and machinery).
Policies related to own workforce
ESRS S1-1
Code of Ethics
Key content: The comprehensive policy for OTP Group's own workforce is the Code of Ethics of OTP Bank
Plc and OTP Group (presented in the @4.1. Corporate Governance disclosure requirement). OTP Group's
Code of Ethics expects respect for human rights, emphasizes equal treatment, workplace safety, principles for
preventing harassment, and fair employment. It recognizes OTP Group's responsibility to respect human
rights. OTP Group supports open dialogue and provides opportunities for feedback.
The Code of Ethics explicitly includes the goal of eliminating discrimination - including harassment - and
promoting equal opportunities, as well as diversity and inclusion. It specifies the following forms of
discrimination: based on ethnicity, skin color, gender, sexual orientation, gender identity, disability, age,
religion, political opinion, national origin, and other forms of discrimination covered by EU regulations and
national law.
External Expectations Related to Material Topics for Own Workforce: Related external expectations on
relevant topics related to our own workforce: expectations on human rights and labour standards were guided
by international guidelines, the UN Guiding Principles on Business and Human Rights (UNGP). The Code is
harmonised with the sections on human rights and labour principles of the UN Global Compact, as well as with
the human rights chapter of the OECD Guidelines for Multinational Enterprises, and with the core conventions
of the International Labour Organisation (ILO), including on freedom of association, collective bargaining rights,
equal pay and protection against discrimination in the workplace.
Policies outside the Code of Ethics are described in each sub-chapter, by topic.
95 In the materiality assessment, we identified that most impacts can be both positive and negative. The negative impact mention ed above should be
understood as focusing on avoiding negative impacts in these topics, while the goal for other topics is to achieve positive impacts.
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Processes for engaging with own workforce
ESRS S1-2
Within OTP Group, engagement with the workforce and employee representatives occurs through multiple
channels, always complying with legal requirements.
Employee Engagement Survey
OTP Group annually conducts a commitment survey, which is the most comprehensive and wide-ranging tool
for employee feedback and expression. All employees of the member companies96 are invited to take part. In
the 2024 commitment survey, 91% of the invited employees, totaling 31,134 individuals, responded at the
group level. The response rate exceeded 80% in all countries except Slovenia. The Uzbek Ipoteka Bank
participated in the survey for the first time. More about the survey @ESRS S1-5.
Employees provide anonymous feedback through a dedicated platform on issues related to compensation,
work organization, and human capital development. Based on the results of the survey at the organizational
unit level, unit leaders develop an annual action plan in collaboration with the employees.
The operational responsibility for the employee survey lies with the Managing Director of the Human and
Organizational Development Directorate of OTP Bank, ensuring appropriate involvement of stakeholders in
the process and supporting the company's management in the evaluation of survey results.
The Banking Group communicates the results of the survey and action planning, as well as the implemented
actions through internal channels (the most commonly used platforms are the corporate intranet, internal
newsletters, and employee forums and meetings). The results are presented to the management in
Presidential, Divisional, and Regional reports, as well as in the Executive Steering Committee report.
The engagement survey database allows for the analysis of the positive and negative impacts of employment
by different employee demographic groups.
At the group level, the effectiveness of collaboration with employees is measured through the engagement
survey: by employee participation rate, the nominal and relative values of key engagement indicators,
employee evaluations of the previous year's action plans, the year-over-year changes in commitment metrics,
and comparison to global benchmark values in the financial sector.
Consultation
Most of OTP Group's subsidiaries97 have trade unions, with which the head of human resources regularly
consults on employee-related issues.
OTP Group has not entered into a global framework agreement with employee representatives regarding the
respect for human rights of its workforce.
Processes to remediate negative impacts and channels for own workforce to raise concerns
ESRS S1-3, S1-17
OTP Group companies utilize various mechanisms to provide opportunities for both employees and external
workers to voice their complaints and grievances. These mechanisms include anonymous options to ensure
that employees can use these channels with confidence. The ethical reporting system is available to the entire
workforce (see @Business Conduct).
Trade unions also play an important role in raising employee concerns and addressing potential negative
impacts, as well as providing information (@S1-2). Additionally, several countries have occupational safety
representatives. Besides the internal channels provided by the Banking Group, employees also have legal
options available, depending on local institutional frameworks, allowing them to initiate proceedings directly by
approaching the courts, which we consider a suitable channel for raising concerns.98
96 At the group level, the vast majority of employees receive an invitation. In terms of size, agricultural companies, which are not negligible in size at the
group level, do not participate in it. Domestic subsidiaries involved in the survey: CIL Babér Ltd., BookYourDoctor Online Ltd.., Real Estate Investment
Fund Management Ltd., Merkantil Bank Ltd., Merkantil Leasing Ltd., OTP Fund Management Plc., OTP Ecosystem Ltd., OTP Life Annuity Plc.. , OTP
Factoring Ltd., OTP Hungaro Project Ltd., OTP Real Estate Ltd., OTP Real Estate Lease Ltd. , OTP IngatlanpontLtd., OTP Mortgage Bank Ltd, OTP
Card Factory Ltd., OTP Building Society Ltd., OTP Mobil Service LLC, OTP Home Solutions Ltd., OTP Funds Servicing and Consult ing Ltd., OTP
Financial Point Ltd., OTP PortfoLion Ltd., OTP Travel Ltd.
97 OTP Bank Plc., OTP Financial Point Ltd., OTP PortfoLion Ltd., OTP Travel Ltd., DSK Bank, OTP banka d. d. (Croatia), OTP banka Srbija a.d. (Serbia),
Crnogorska komercijalna banka a.d.(Montenegro), Ipoteka Bank.
98 The occupational safety authority and labor inspection institutions can also function as complaint mechanisms; however, their primary role is regulatory,
so we list their procedures in the Governance chapter in relation to legal compliance (GRI 2-27).
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Employee complaints are handled in accordance with the procedures and time limits set out in the law and in
the ethics and internal labour regulation documents. Employees may lodge a complaint regarding the
protection of their rights in accordance with the Code of Ethics and, where applicable, the internal labour
regulations and collective agreements, which are accessible and available to all employees.
Nearly 17% of OTP Group's ethical reports were submitted by its own employees, namely 106.99 No monetary
compensation was initiated in any case. Within OTP Group, there were no discrimination reports or justified
discrimination cases involving its own workforce. No complaints regarding discrimination against OTP Group's
own employees were submitted to the national contact points considering the OECD guidelines for
multinational enterprises. Two complaints were submitted to the trade union, which were resolved without
monetary compensation. No internal occupational safety complaints were received during the reporting year.
A total of 57 labor proceedings were initiated against OTP Group companies in the reporting year. During the
year, 17 proceedings from 2024 and 20 from previous years were concluded. 15 labor lawsuits resulted in
payment of fines. The compensation amount was HUF 235 million, a significant part of which was a fine paid
due to practices from previous periods (HUF 226 million).
A total of 166 complaints were received through the above-mentioned channels.
Targets
ESRS S1-5
The group-level engagement survey is the primary tool used by OTP Group to comprehensively measure,
evaluate, and monitor progress in all areas related to its employees, including the material topics identified
within the framework of the double materiality analysis100. The objective related to the level of engagement
represents OTP Group's overall goal for its employees and the topics affecting them. OTP Group's practices
contribute directly to increasing engagement, so this goal covers all the important issues related to employee
well-being.
Engagement is an extremely complex indicator101, as it depends on numerous factors that affect employee
satisfaction, well-being, and long-term commitment to the company. One of the key indicators of OTP Group's
engagement model is the engagement score. It is an output score that cannot be directly improved. The
elements of the survey, the drivers, are specific experiences (e.g. community building, empowerment,
recognition, etc.) through which an organization can positively or negatively influence engagement. The drivers
of the engagement survey are statements with which agreement is measured on a 5-point scale. Engagement
is a complex indicator that reflects the average proportion of positive responses to the statements included.
OTP Group aims to continuously increase employee engagement and to achieve the 75th percentile of
the financial sector benchmark and the global 75th percentile at Group level. The financial sector
target was 75% and the global target was 78% in 2024. OTP Group's engagement level reached 77%
compared to 2023, an increase of 5 percentage points, exceeding the financial sector benchmark.
There has been a positive shift in all engagement topics (so-called drivers). The indicator has moved in a
positive direction in most countries (Slovenia and Russia being exceptions). The most significant
improvements, exceeding 5 percentage points, occurred in Bulgaria, Montenegro, and Serbia.
The goal is a relative target, comparing the Group's performance with other large companies and global
benchmarks102. The Group measures the achievement of this goal on an annual basis. The survey is
conducted every October, with the results being available at the end of November.
Annual action plans are developed based on the survey results, resulting in the implementation of measures
during the execution phase. The action plan and its follow-up serve as effectiveness measurement indicators.
99 The identification of the reporter cannot be precise due to the possibility of anonymity.
100 The themes identified in the ESRS are not mentioned by name in the survey or in the objectives, and OTP Group does not disagg regate the survey
subcomponents into ESRS themes.
101 Qualtrics Employee Engagement
102 The external benchmark result is based on more than 20 million responses from over 750 companies, at least 20% of which are p art of the Fortune
500. The financial sector benchmark includes 121 companies with 3.3 million responses. The global 75th percentile represents the upper quartile based
on all responses.
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The survey covers the operations of OTP Group in 11 countries, encompassing the vast majority of employees
(see @S1-2). In terms of its content, the survey includes all factors affecting employee engagement, covering
topics such as:
• Workplace Atmosphere: Respectful treatment, trust in direct supervisors, open and honest
communication, freedom of expression, openness to ideas and opinions, importance of employee well-
being to senior management and the organization, work-life balance
• Performance Initiatives: Recognition for good work/performance-based rewards, constructive
feedback on work performance, responsibility for one’s performance, clear distinction between roles,
understandable
expectations,
appropriate
professional
knowledge,
learning/development
opportunities, good career prospects, attracting excellent professionals
• Work Environment: Appropriate authorizations, access to resources and information, sustainable
workload, helpful direct supervisor, cooperation within and between teams, effective decision-making
processes, workplace safety, and health protection
The survey is conducted based on international methodology, ensuring the tracking of trends of results through
the provided structure and questionnaire. External and internal benchmarks are used in data analysis to
contextualize and evaluate results. The external benchmark is based on responses from over 700 companies,
with the financial industry benchmark comprising 121 companies from the bank sector. The global 75th
percentile benchmark represents the top quartile of responses to all questions.
The survey preparation tasks were carried out in international working group collaboration within OTP Group,
with each country contributing to the content and methodological development of the survey. In 2024, the
company made minor technical adjustments based on working group feedback.
The non-target objectives related to the engagement measurement, if any, are described in each sub-chapter,
by topic.
Taking action on material impacts on own workforce
ESRS S1-4
At the group level, the employee engagement survey (see @S1-5) serves as the basis for annual action
planning, process improvement, and the implementation of further measures and programs. Despite improving
values, the group-level development focus remained on ensuring career opportunities, developing and
simplifying processes that ensure employee well-being, and senior management involvement in employee
dialogue in 2024.
The key measures are presented by topic in the following subsections (@S1-4, @S1-4, @S1-4, @S1-4, @S1-
4).
OTP Group's guidelines, objectives, and practices outlined in the Code of Ethics emphasize not causing or
contributing to significant negative impacts (see @S1 SBM-3).
The management of impacts affecting employees is carried out by the HR departments of each group member
- their headcount depending on the organization's size. The legal and compliance department support the
handling of complaints, investigation of ethical reports, ensuring legal compliance, and the compliance
department is responsible for measures against workplace violence and harassment. OTP Group aims to
employ an adequate number of internal human resources with experience and expertise in these areas and
external experts are engaged if necessary. The adequacy of resources is indirectly characterized by the results
of employee engagement surveys, employee complaints, and legal compliance. Improvement in engagement
is observed, and the number of employee complaints is not considered high relative to the number of
employees.
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Characteristics of Employees
ESRS S1-6
At the group level, the number of active employees decreased from 44,468 to 43,118. This change is primarily
explained by the sale of the Romanian subsidiary. The distribution by age and gender changed minimally
compared to the previous year: the ratio of women to men among active employees changed from 66 % to 65
%. The distribution of employees by country is presented in the @SBM-1 disclosure requirement.
OTP Group Employee headcount, persons, as of 31 December
2023
2024
Total
Men Women Total
Men Women
Employees, total
44,468 14,986 29,482 43,118 15,293 27,825
Full time employees
42,236 14,565 27,671 40,984 14,887 26,097
Part-time employees
2,232
421
1,811
2,134
406
1,728
Permanent employees (employees with indefinite-term contracts)
43,096 14,740 28,356 41,827 14,980 26,847
Temporary employees (employees with fixed-term contracts)
1,372
246
1,126
1,291
313
978
There were no employees with non-guaranteed working hours at the end of 2024.
Employee turnover, 2024
OTP Group
Turnover rate (%)
20.03%
Employees left (prs)
8,918
Percentage of employees leaving – compared to the total by categories
male (%)
17.57%
female (%)
21.35%
under 30 years (%)
39.91%
between 30-50 years (%)
16.28%
over 50 years (%)
12.89%
Employee turnover, 2024
ratio of employees leaving compared to the closing number (persons) by country)
In Russia and Ukraine, there is typically a high turnover rate among sales agents, so we also present the
ratios excluding the employed agents.
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3.1.1. Gender Equality and Diversity103
Policy
ESRS S1-1
Beyond the Code of Ethics, the following policies regulate the issue of diversity:
Strategy for Gender Equality
Key content: In 2021, OTP Bank developed a strategy to promote gender equality, aiming to ensure equal
opportunities for women. The Bank has set strategic goals to ensure equal opportunities for all employee
groups, creating an open and inclusive workplace free from discrimination and disadvantage, and supporting
a diverse, professionally outstanding, and collaborative work culture.
Scope: The strategy applies to OTP Bank.
Accountable for the implementation: In ethical matters, the compliance managing director, who reports
directly to the President-CEO, is responsible and reports to the Ethics Committee.
Availability: The strategy is publicly available on the Bank's @website and accessible online on internal
platforms for stakeholders.
Reference to third-party standards: The strategy complies with the relevant Hungarian legal requirements
(Act CCXXXVII of 2013 (Hpt.) Section 112 (3) f)), as well as the recommendations of the Hungarian National
Bank and the European Banking Authority's EBA-GL-2017-12 guidelines. The handling of complaints related
to discrimination is included in the @S1-3 disclosure.
OTP Bank regularly analyses key indicators for talent attraction and employee development opportunities, with
a focus on building a group-level leadership community and developing key skills to build international
professional knowledge and community.
Subsidiary Policies
Some subsidiaries also have diversity policies that prohibit workplace discrimination and support equal
opportunities. Due to space constraints, we present the main content, application scope, and responsible
parties for these policies.
Key content, scope and accountable for the implementation: In Bulgaria, DSK Bank renewed its "Diversity,
Inclusion, and Belonging" policy in 2024. The policy emphasizes gender equality and equal pay for equal work.
The Head of Human Resources and Transformation Division is responsible for the policy. A dedicated team
supports the implementation of the policy. A specific methodology has been developed for continuous
monitoring and review of these topics. Regular reviews are conducted based on real data, involving senior
management, and the topic is a regular agenda point at the Nomination and Remuneration Committee and the
Supervisory Board of the bank.
Key content, scope and accountable for the implementation: In Slovenia, the subsidiary's Diversity,
Inclusion, Equality, and Belonging (DIEB) policy declares the bank's commitment to these topics. The Head of
Human Resources is responsible for the implementation of the policy. The policy aims to enforce the principle
of a discrimination-free and harassment-free workplace for all employees and throughout the employee
lifecycle, recognizing individual differences. The document requires the definition of plans and measures, as
well as leadership responsibility for maintaining a diverse corporate culture. It also defines engagement
measurement indicators (KPIs) to track diversity goals on an annual, quarterly, or monthly basis.
Key content, scope and accountable for the implementation: The Croatian subsidiary's Diversity and
Inclusion Policy aims to create a discrimination-free, open, and inclusive workplace and support a diverse,
professionally outstanding, and collaborative work culture. The document applies to all employees. The
implementation of the policy is supported by specific action plans and training, with a dedicated responsibility
for compliance with internal rules and international standards, referencing the Universal Declaration of Human
Rights and the ILO Declaration on Fundamental Principles and Rights at Work. The highest level of
responsibility for the policy's implementation lies with the CEO.
103 „We present the practices related to the sub-subtopics of 'Gender Equality and Equal Pay for Equal Work,' 'Diversity,' and 'Employment of Persons
with Disabilities' in a consolidated manner.
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Taking action on Gender Equality and Diversity
ESRS S1-4
The principles of the Code of Ethics are incorporated into internal regulations in various ways. Generally, the
internal regulations of OTP Group members stipulate that positions must be filled and performed according to
specific conditions related to the type and level of qualifications, work experience, and other criteria, in
accordance with the complexity, responsibility, and specific description of the positions, without any
discrimination.
It is considered good practice in Slovenia that ensuring diversity and equal opportunities is enshrined not only
in the corporate charter and the Code of Ethics but also in policies related to the selection of executive board
members, as well as in regulations aimed at preventing workplace discrimination, mobbing, and other forms
of psychosocial risks.
Most group members continuously implement measures to promote equal opportunities and diversity. The
introduced measures are typically monitored, but criteria for effectiveness are not always defined. Here are
some programs, without claiming completeness:
In 2024, OTP Bank launched new diversity programs:
•
The international Women Network program is implemented with the involvement of subsidiary banks,
preparing and encouraging women for higher-level leadership roles. Additionally, a series of webinars
for female leaders and a mentoring program aim to support the career development of the most
talented female leaders.
•
The launch of OTP Digital GirlPower Program supports the employment of women in digital and IT
fields through a dedicated talent pipeline program.
•
To eliminate unconscious prejudice, diversity-supporting, awareness-raising training materials are
being prepared for leaders and employees on gender equality and diversity topics. The "Openness
and Inclusion" digital training material, which covers all employees, also serves as a foundation for
future inclusive leadership development programs.
At DSK Bank, the issues of diversity and equal opportunities are managed by the dedicated Culture & Change
team since 2024. The team has set clear and forward-looking goals. The bank has reviewed the methodology
for measuring gender pay gaps; regular KPI reporting and senior management meetings were established to
monitor diversity and inclusion topics. Detailed internal rules and procedures are being developed to monitor
diversity and pay gaps. A dedicated procedure is being developed for returning from maternity/paternity leave,
supported by the LaDySK community for easier reintegration. The goals of the LaDySK community, composed
of female leaders, have been redefined to increase the chances of women being among the potential
candidates for B-1104 level positions. The community has a clear activity plan and a coordinator team to support
development.
In accordance with the Gender Equality Act, OTP Bank Serbia has defined a package of measures focusing
on six topics. The measures address:
•
equal access to information within the bank
•
addressing gender differences in health insurance, e.g., additional benefits for pregnant women and
newborns
•
promoting gender equality by giving preference to male candidates, while ensuring non-discrimination
•
maintaining balanced gender ratios in top management
•
Using gender-sensitive language to influence the elimination of stereotypes relating to specific genders
•
disaggregation of relevant data by gender and submitting it to the competent institutions.
The subsidiary measures the effectiveness of its actions, including the number or absence of court cases
related to gender equality and based on employee feedback received in this regard.
The Uzbek subsidiary has established a separate reporting line within the HR Directorate for employees to
report potential violations of equal opportunities, in addition to the ethical reporting line.
The Russian subsidiary, in line with legal requirements, has introduced regulations and quotas for employing
people with disabilities. The quota is determined based on the proportion of the workforce.
The Ukrainian subsidiary has made a separate e-learning course available on the topic of interactions with
people with disabilities.
104 DSK Bank senior management
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Targets Related to Gender Equality and Diversity
ESRS S1-5
OTP Bank set measurable goals in 2021 in the so-called "Strategy for Achieving Gender Equality" document
(without a specified timeframe).
The goal is to have at least one female member on the Board of Directors and the Supervisory Board. The
Bank also considers the legal requirement that members of the governing bodies must have appropriate
knowledge, skills, and experience, which remain the primary and essential criteria for selecting suitable
candidates. The goal
was established considering relevant
Hungarian and
European Union
recommendations105. Since 2021, the Board of Directors has had one female member.
Succession planning for leadership positions is consciously designed and monitored at various leadership
levels. In order to ensure an adequate number of internally promotable female candidates in the company's
leading roles, OTP Group's leadership succession practice set a target of at least a 30% female candidate
ratio in 2024.
The goal of the Uzbek subsidiary is to maintain the current level of employee satisfaction (84) and to have no
discrimination complaints. The achievement of this goal is measured through internal surveys and feedback
systems.
Diversity metrics
ESRS S1-9, S1-12
Gender distribution of senior management, OTP Group 31/12/2024
Man
Female
Number of senior manager (person)
66
16
Proportion of senior managers (%)
80.49%
19.51%
Age distribution of employees, %, 31/12/2024
OTP Group
under 30 years
18.68%
between 30-50 years
60.70%
over 50 years
20.62%
Within OTP Group, the proportion of employees with disabilities is 1.23% (531 people). In Hungary and most
subsidiaries, the collection of data on the number of people with disabilities is not legally restricted.106 DSK
Bank employs the most people with disabilities, their number is 186. Local laws define who qualifies as a
person with a disability and member companies use these definitions.
Remuneration metrics (pay gap and total compensation)
ESRS S1-16
The average pay gap between female and male employees in OTP Group, expressed as a percentage of the
average pay level of male employees, is 34,83%. This difference is due to the fact that men and women
typically hold different positions, with a higher proportion of men being in higher-paid positions.
In OTP Group the ratio of the total annual compensation of the highest-paid individual to the median total
annual compensation of all employees (excluding the highest-paid individual) is 172.
3.1.2. Training and skill development
Training and development activities are directly linked to corporate strategies to ensure alignment with both
employee needs and organizational objectives. The aim of training programs is to develop employees'
professional competencies, contributing to the group's competitiveness and compliance with regulatory
requirements. Additionally, training supports the enhancement of employee engagement, which is crucial for
increasing overall organizational efficiency.Access to skill development is described in @S1-4.
105 Including the recommendation No. 11/2019 (V.6.) of the Hungarian National Bank and the guideline No. EBA-GL2017-12 of the European Banking
Authority.
106 For Serbia, Russia, and Uzbekistan information is not available.
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Taking actions on training and skill development
ESRS S1-4
OTP Group offers a wide range of training and development programs (from leadership and professional
programs, soft and hard skills training, external training and conferences, to individual and group online
courses)107 to support the professional growth of employees. Group members adapt to local needs based on
their own requirements and situations, so each organization develops the skills and knowledge of its
employees according to its own priorities. OTP Bank formulates training recommendations at the group level,
the implementation of which varies by country due to different legal and regulatory environments and other
local conditions.
All employees of the Group receive training, and every employee has the right to continuously develop their
knowledge and skills in line with business and personal development priorities. Mandatory trainings are
typically designed through a planning process. These plans combine mandatory training required by legal
regulations with the development of employees' professional competencies. Training plans are developed with
employee involvement, and where performance evaluations exist, their results are taken into account.
Subsidiary banks have the opportunity to utilize the parent bank’s e-learning trainings, the organization,
execution, and feedback of which are the responsibility of the subsidiaries.
The completion of training sessions is monitored by Group Members, primarily by the employee's supervisor
and the training area specialist and draw the attention of the employee's manager if training has not been
completed. Records are provided by the training framework.
The training budget is planned annually as part of the global annual budgeting process. The training budget is
prepared in line with identified training needs, business strategies, and priorities. In 2024, OTP Bank's total
financial expenditure for direct training and development purposes (including all trainings) amounted to
approximately HUF 2 billion. This represents approximately 1% of PEREX (personnel expenses), which aligns
with industry best practices according to international corporate benchmarks.
A good practice in relation to training planning is the Slovenian subsidiary's talent management principle, which
considers every employee as talent. The subsidiary categorizes its programs into three groups: leadership
development programs, expert development programs, and general development programs. Leadership
development has received significant emphasis in recent years, and OTP Bank plans to implement a series of
workshops for them in the coming year as well. Leaders have their own training budget, which they can
primarily use for the professional development of employees. The development programs available to all
employees focus on well-being and personal growth (e.g. motivation and optimism, life in the digital world).
In Ukraine, training goals and plans are developed through an extensive consultation process involving
employees to ensure that their expectations align with the subsidiary bank's strategy. The aim is to train at
least 80% of employees, thereby supporting their professional development, job satisfaction, and long-term
commitment to the company.
Group members implement numerous improvements in the scope of training or training organization year after
year. Below are some examples of developments introduced by group members in 2024, without aiming for
completeness:
At the group level, international talent management programs have been implemented as part of the OTP
Academy framework. Professional academies include IT Academy, Agile Academy, Chapter Leader Academy,
and Retail Academies.
Specifically related to ESG, the Risk Academy Foundation’s ESG Module, an English-language training course
available to everyone, was completed by more than 1,000 colleagues working in risk management across the
group. To enhance environmental awareness, OTP Bank piloted a 3-month awareness program called
GreenStorm, with about 40 participants.
OTP Bank has made skill development training available in three main areas based on the previously
introduced leadership role model, covering the topics of change, performance, and engagement. Skill
development training was organized for employees based on requests received from various departments and
the most important market trends. Both leaders and employees could choose from the available trainings
based on training discussions held with their respective evaluative leaders.
107 We consider this continuously implemented training program package as an action.
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In Serbia, the Skill4U educational program has been introduced for all employees, allowing them to select the
most suitable educational materials and development trainings through the House of Benefits online platform.
The program helps to reduce skill gaps, increases engagement, supports career development, and enhances
employee satisfaction and well-being, while also contributing to the company's talent development and
organizational agility goals.
CKB planned extensive leadership training for directors as part of a corporate culture change project.
The Ukrainian subsidiary developed a new competency matrix focusing on gaining soft and hard skills to
facilitate the development of business-critical skills. A new feedback platform has been introduced, allowing
employees to provide feedback in regards to the training programs.
In Russia, a comprehensive Learning & Development strategy was adopted at the end of 2023 to modernize
and improve the bank's learning and development processes. This includes updating training programs,
improving processes and technologies, increasing automation, developing a feedback culture, and involving
additional resources. The strategy was implemented in 2024. Key indicators, for which target values were
defined, measure employee engagement, retention (turnover), the effectiveness of internal training programs,
and leadership evaluations.
NAGISZ Zrt. and Nádudvari Élelmiszer Kft. focused on developing the competencies and leadership skills of
managers throughout the year.
Performance goals and development goals are set within the annual performance management process,
tailored to individual development needs necessary for doing the specific work or even develop further.
Performance evaluation, including the assessment of goals and competency/value-based behaviour, is
conducted within the evaluation process. Group members evaluate the performance of the employees in
different ways. At OTP Bank, evaluations are conducted twice a year, while in agile areas, this process is
divided into quarterly cycles.
At subsidiaries, the employees working at the head office undergo at least annual performance evaluations,
while the employees in branch network participate in quarterly performance evaluations based on goal
agreements. These evaluation systems focus on achieving individual and organizational goals, competencies,
and feedback methods. In 2024, Ipoteka Bank conducted only KPI evaluations and plans to introduce
performance and career development evaluations in 2025.
Targets related to training and skills development
ESRS S1-5
OTP Group members set numerous subsidiary-specific goals in the area of training and skills development,
such as the implementation of training plans, achieving goals set in competency matrices, and indirectly related
to satisfaction and engagement. Due to their diversity and lesser significance at the group level, we refrain
from detailing these goals.
Training and skills development metrics
ESRS S1-13
Employees receiving regular performance and career development reviews, %, 2024
OTP Group
Proportion of senior managers (%)
89.65%
Proportion of middle managers (%)
87.90%
Proportion of employees (%)
68.96%
Proportion of men (%)
66.35%
Proportion of women (%)
72.26%
Proportion of total (%)
70.91%
Annual training per employee, number of hours, 2024
OTP Group
Senior manager
110
Middle manager
80
Employee
31
Men
27
Women
41
Average 2024
36
Average 2023
34
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3.1.3. Health and safety in the workplace
OTP Group strives to maintain safe working conditions and preserve the health and safety of its employees.
Policies
ESRS S1-1
The occupational safety regulations of the subsidiaries are considered as policies related to workplace health
and safety, which are always prepared in compliance with local laws to ensure legal compliance. These
regulations are independently prepared by group members, and we refrain from presenting them individually
due to their lesser significance.
Key content: OTP Bank Occupational Safety Regulation is a comprehensive occupational safety prevention
strategy aimed at implementing the requirements for safe and healthy working conditions in accordance with
the Occupational Safety Act. The regulation uniformly defines the responsibilities for occupational safety tasks
across the entire workplace and regulates the processes for performing specific occupational safety tasks.
Subsidiary regulations also focus on creating and maintaining safe working conditions.
Accountable for the implementation: The relevant regulation of OTP Bank was adopted by the CEO. The
responsible manager for occupational safety activities at the Bank is the head of the CEO's Cabinet. As group
members, CEOs are responsible for adopting the policy, supported by the heads of operations and local
occupational safety officers in implementation.
Ensuring availability: Occupational safety regulations are available in internal regulatory repositories.
Reference to external requirements: The framework for occupational safety is provided by local legal
requirements.
Actions on health and safety
ESRS S1-4
OTP Group operates workplace health and safety programs to maintain a safe and healthy work environment.
These programs include targeted activities to prevent accidents, minimize workplace risks, and protect the
physical and mental health of employees, including risk analysis, occupational safety training, and the physical
design of a safe workplace. These activities108 are being routinely operated within the group, with minor annual
developments due to changes in legal requirements or independent initiatives by subsidiaries. OTP Group
employees primarily work in low-risk positions from an occupational safety perspective, and the framework for
occupational safety is regulated in accordance with legal requirements, with activities implemented
accordingly.
The effectiveness of occupational safety and occupational health processes is monitored and evaluated in
various ways by subsidiaries. Internal audits support compliance with health and safety regulations, and
feedback from stakeholders, especially from employees, plays a significant role in evaluating initiatives. At
companies with works councils, regular consultations are held with institutionalized employee representatives
on occupational safety issues.
Considered as a good practice, OTP Bank investigates near-miss incidents in addition to accidents and shares
lessons learned and best practices with affected employees through extraordinary training.
In Russia, an audited occupational health and safety management system is operated based on legal
requirements, recognized standards, and recommendations. The management system includes regular
briefings, training, and periodic checks of occupational safety knowledge for stakeholders. Preventive and
periodic medical examinations, including psychiatric evaluations, are organized, as well as daily pre- and post-
travel health checks for employees with transportation-related duties. These measures cover all facilities and
employees.
Key measures include ensuring a safe and healthy work environment; operating and auditing the occupational
health and safety management system; regular briefings, training, and education on occupational safety
knowledge; providing voluntary health insurance for employees; organizing pre- and periodic medical
examinations, including psychiatric evaluations; and conducting pre- and post-travel health checks.
In the context of workplace health and safety, measures include health promotion and preservation programs,
as well as stress management programs, which are presented below.
108 We do not consider these as measures according to the ESRS; however, it is important to describe the existence of these pract ices for context.
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The scope of key measures covers every country and applies to all employees, with any deviations noted
separately. The timeframe for implementing key measures varies by country and depends significantly on the
type of measure.
Health preservation
It is a general, ongoing practice within the group to conduct regular preventive health examinations for
employees109.
OTP Bank provides occupational health examinations for all positions, even though it is not a legal
requirement. Pre-employment and periodic medical examinations are conducted according to the schedule set
by health authorities. Within the framework of OTP Bank's occupational health services, 9,540 examinations
were conducted by the end of September. The examinations are tailored to the specifics of the job. Office and
customer service employees undergo basic examinations, while those in higher-risk positions also undergo
specialized examinations.
The Bank and its 24 domestic subsidiaries110 provide high-quality health insurance services for employees. As
a result, 6,835 participated in screening examinations or received care for complaints one or more times during
the year. Among them, 4,577 employees utilized the annual screening package, which we consider positive in
terms of prevention and health awareness. By the end of 2024, HAGE, NAGISZ Zrt., and Nádudvari Élelmiszer
Kft. introduced employer health insurance offering health insurance services and sum insurance for senior
employees.
The parent bank and subsidiaries offer various welfare programs for employees. These typically include
lectures, webinars, workshops, health days, screenings, and vaccinations. The programs are diverse, varying
by company, and primarily focus on health promotion, mental and physical health, and stress management,
and are continuously available to all employees.
The Slovenian subsidiary places a strong emphasis on health promotion. In 2024 it continued the previously
established practice of active breaks, encouraging refreshing office exercises, and holding health promotion
webinars. To earn the "Heart-Friendly Bank" title, they implemented a safety and resuscitation workshop,
among other initiatives.
Stress management
OTP Bank conducted a renewed psychosocial risk assessment in 2024 to promote mental well-being,
examining health status, stress, and workload anonymously. 12% of employees participated in the survey, and
the results served as the basis for further health programs.
To manage workplace stress, the Bank operates a program with supportive conversations: providing mental
health professionals, psychologists, and coaches to support employees in difficult, mentally demanding
situations. This service is available to all employees free of charge and is provided by an external partner
(otp.meghallgatunk.online). The conversations follow the guidelines of the International Coach Federation
(ICF) and mental health frameworks, and the confidentiality of the conversation is ensured. The service is
increasingly used by employees year after year, with over 1,000 conversations held in 2024.
Employee skill development training (e.g., mindfulness, stress management, effective assertive
communication) is available twice a year for Bank employees. Training is organized based on demand, with
an average of 350 employees participating in these sessions each semester.
Among Hungarian companies, NAGISZ Zrt. and Nádudvari Élelmiszer Kft. launched training projects for
managers in 2024 to learn stress and life management, and energizing techniques. Participants received
personalized support through individual coaching.
109 Ipoteka Bank has initiated the development of Voluntary Health Insurance (VHI) and the PUSH30 programme to promote healthy li festyles among
employees, in addition to compulsory insurance and health screening.
110 In addition to mandatory insurance and health screenings, Ipoteka Bank has initiated the development of voluntary health insu rance (VHI) and the
PUSH30 program to promote a healthy lifestyle among employees.
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In Montenegro, as part of the CKB Open Training program, employees had the opportunity to participate in
training on flexibility and stress management, effective time management, and conflict resolution. As part of
the CKB Wellbeing program, lectures were organized for employees on topics such as improving sleep quality,
tips and strategies for overcoming physical and mental obstacles, and a lecture on the world of extraordinary
responsibility from the perspective of a heart surgeon.
Targets Related to Workplace Health and Safety
ESRS S1-5
OTP Group strives to maintain safe working conditions. The low number and severity of accidents demonstrate
the effectiveness of these efforts. OTP Group monitors and reports workplace accidents and injuries. Three
subsidiaries have set measurable goals specifically related to workplace health and safety. For goal
achievement, see @ESRS S1-14 Health and Safety Metrics disclosure.
•
In Serbia, the goal is to reduce the number of workplace injuries in 2025 compared to 2024. The goal
applies to the entire bank and all workplaces, with a focus on reducing injuries at bank premises. In
2024, there were a total of 14 injuries (13 minor and 1 serious). The goal was set based on workplace
risk assessments and preventive inspections at bank premises. The measurement method has not
changed from previous years, and the method for recording workplace injuries is defined by the local
occupational safety and health law.
•
The goal of the Uzbek subsidiary is to maintain zero workplace accidents. Monitoring is conducted
through quarterly reviews.
The main goal of the Ukrainian subsidiary in the area of occupational safety is also to maintain a zero
injury and accident rate, which complies with the requirements of the Ukrainian Occupational Safety
Law and the regulations on occupational safety services. The target value has been met; no accidents
were registered in 2024.
Health and Safety Metrics
ESRS S1-14
Based on legal requirements and/or recognized standards or guidelines, the percentage of persons covered
by the company's health and safety management system within the company's own workforce is 83%111. In
those subsidiaries where such a system is in place, the number of persons covered is 100%112. Such a system
is not in place in small subsidiaries.
Working hours are mainly the number of hours actually worked, based on the time sheets. Where full records
were not available, hours were estimated as the number of staff multiplied by the average annual hours worked.
111 Apart from the small member companies, OTP Bank Croatia and CKB do not have such a system, and these member companies also comply with
the legal requirements, including training of employees in occupational safety and health, risk assessment, and assessme nt of the adequacy of working
conditions.
112 The exception is OTP Bank Albania, where the rate is 99.71%.
Work-related injuries and illnesses, 31/12/2024
OTP Group
2024
Number of accidents (pcs)
employees
66
Accident rate (per 1 million hours worked)
employees
0.85
Occupational illnesses (pcs)
employees
0
Total number of calendar days lost due to work-related accidents and illnesses (pcs)
1,384
Number of fatal accidents and illnesses (pcs)
employees
0
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3.1.4. Work-life Balance
Beside Code of Ethics, the work-life balance is covered by separate internal regulations according to specific
practices that vary by country, in line with the applicable Labor Code in each country.
Action on work-life balance
ESRS S1-4
OTP Group continuously strives to achieve work-life balance, which can be particularly important in positions
where working hours or activities carry specific stress factors. Various employee benefits and support systems
are continuously available within OTP Group to help maintain employee well-being.113
The measures primarily focus on working hours and flexibility, leaves and absences, and welfare and
recreational areas within the group. Effectiveness is monitored through regular employee engagement surveys
and feedback collected after specific events and initiatives. Employee participation and engagement levels
indicate the success of these measures.
89% of OTP Group employees positively evaluate that their direct supervisor supports them in maintaining
work-life balance. This result exceeds the international industry benchmark (87%) and shows a 1 percent
improvement compared to the previous year. Simultaneously, 81% of employees feel that their workload is
manageable, representing a 3-percent improvement compared to 2023 and exceeding the benchmark value.
Solutions for flexible employment and work-life balance, as well as a wellbeing/family-friendly approach, exist
at all subsidiary banks, tailored to the legal and operational possibilities of the respective country. The
above-average results within OTP Group are significantly supported by the practice of home office, part-time
employment opportunities, managerial support, and family-friendly measures such as organizing summer
camps and reward vacations or other benefits. (OTP Bank financially supports the use of paternity leave by
paying 100% of the absence fee for the entire duration).
OTP Group offers opportunities for atypical employment, including part-time employment, remote work, and
home office. Most countries provide flexible working arrangements.
•
The Slovenian subsidiary holds the Family-Friendly Company certification, under which 16 measures
are continuously available to various target groups to achieve better work-life balance. The certification
is confirmed annually through an external audit.
•
In Serbia, a hybrid work model (50% home office for employees whose job requirements allow it) and
flexible working hours were introduced in 2024. A birthday leave policy was introduced, allowing
employees to take an additional day off.
•
The Uzbek Ipoteka Bank introduced a flexible work schedule in 2024. Additionally, it provided summer
camp opportunities for employees' children.
•
In Russia, a large-scale community program was created, with a total of 1,500 individual users in 17
communities. The common feature of these communities is that they focus on hobbies and personal
interests, emotional intelligence development, talent development, and were created through
employee initiatives.
3.1.5. Measures Against Workplace Violence and Harassment
Policies
ESRS S1-1
The prohibition of workplace violence and harassment is declared at the group level in the Code of
Ethics (@G1-1, @S1-1).
Key content: Beyond the Code of Ethics, CKB within the Banking Group has a separate policy for handling
workplace harassment (Mobbing Policy). The policy prescribes detailed procedures for handling discrimination
cases.
113 These are considered as actions.
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Scope: The policy applies to CKB's own employees.
Accountable for implementation: The Head of Human Resources is responsible for implementation.
Consideration of the interests of key stakeholders: Employees were given the opportunity to provide
feedback or file complaints regarding the effectiveness of anti-harassment measures, contributing to the
continuous improvement of the policy. The policy was reviewed and amended in 2024.
Reference to third-party standards: Compliance with legal requirements, including the prohibition of
workplace harassment and labour laws.
Availability: The document is accessible to employees on the internal intranet platform.
Measures against violence and harassment in the workplace
ESRS S1-4
The Banking Group implements measures related to the application of the Ethical Code on this topic (see
@G1-3). The measures are considered effective and appropriate, given the low number of workplace violence
and harassment cases (@S1-17).
3.2. Reporting policy regarding Chapter S1
Engagement indicator: one of the key indicators of OTP Group’s engagement model is the engagement score.
It is an output score that cannot be developed directly. Drivers are specific experiences (e.g. community
building, empowerment, recognition, etc.) through which an organisation can positively or negatively influence
engagement. Engagement survey drivers are statements with which agreement is measured on a 5-point
scale. Engagement, a composite indicator, reflects the average of the proportion of positive responses to the
statements included.
S1-6 An employee is defined as any worker who has a direct employment contract with one of the Group's
subsidiaries. The report includes only employees who are part of the active workforce. OTP Group consists of
more than 100 subsidiaries, and we provide comprehensive metric data, except for certain specified
exceptions. The presentation of policies, measures, and objectives related to the workforce covers large
subsidiaries (with more than 250 employees). (see also @ESRS 2 IRO-2).
S1-6 50 a, b The number and distribution of employees at the end of the year are expressed in terms of the
number of employees in service. We provide breakdowns in countries where the Group has 50 or more
employees, who represent at least 10% of the total workforce. For gender breakdowns, the 'Other' category is
not used; OTP Group's records include male and female genders, which are recorded based on the identity
card.
Permanent employees: those employed under an indefinite-term employment contract.
Temporary employees: those employed under a fixed-term employment contract.
Non-guaranteed hours employees: the number of working hours is not specified in the employment contract.
The classification of full-time and part-time employees is based on the local regulations of each country.
S1-6 50 c When calculating turnover, the number of departed employees is the total number of employees
who left the Group during the reporting period, including those who left voluntarily, were dismissed, retired, or
passed away. The turnover rate is the number of departed employees divided by the year-end headcount.
S1-6 52 a, b The definition of a region in the report: country.
S1-6 50 d The employee data comes from the records of the companies' registration systems.
S1-9 AR 71 The Group applies the following definitions to senior management:
•
OTP Bank Nyrt.: CEO and all of their deputies;
•
Hungarian subsidiaries: the top executive of the subsidiary AND the managers covered by the
remuneration policy;
•
foreign subsidiary banks: The top executive of the bank (CEO) and their deputies, or the direct
managerial level below the CEO (CEO-1).
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S1-9 66 a, b At the senior management level, the gender distribution is determined based on the headcount
(number of individuals) according to year-end data.
The number of employees by age group is expressed in headcount, i.e., the number of employees (individuals)
at the end of the year. The age groups are as follows: under 30 years old (including the 30th birthday); between
30 and 50 years old (including the 50th birthday); over 50 years old.
S1-12 AR 76 Persons with disabilities include those employees who are classified as persons with disabilities
under the relevant local legislation.
S1-12 77 The proportion of persons with disabilities among own employees: the number of employees with
disabilities, divided by the total number of employees, in headcount, as of the balance sheet date (December
31).
S1-13 83 a, AR 77 A regular performance review is defined as a review based on criteria known to the
employee and his or her superior undertaken with the knowledge of the employee at least once per year.
The Group considers all evaluations carried out to be accepted by management. The denominator includes
the number of employees at the end of the year, expressed in headcount, broken down by gender and
employee category.
For each S1 data point, employee categories are:
•
Senior management: The definition is the same as the definition of senior management used to publish
S1-9 – Diversity indicators.
•
Middle management: Employees who are not part of the senior management group, but have
professional and human resource management responsibilities for a permanent organizational unit,
as defined at the company level.
•
Subordinates: All employees who are neither senior managers nor middle managers, according to
the definition defined at the company level.
S1-13 83 b, AR 78 When calculating the average training hours per employee, the total training hours are
divided by the number of employees at the end of the year used for S1-6 disclosures.
The trainings reported under this publication include all trainings except school-based trainings and vocational
qualification trainings. Recurring training (e.g. compliance, safety, occupational safety, etc.) is also included.
S1-14 The disclosure will apply to employees in 2024, in accordance with the definitions used for S1-6
disclosures.
Accidents to be recorded include accidents (including serious injuries and deaths) that occur during the
reporting period. Accidents while commuting to work are only work-related if the Group is responsible for
organizing commuting to work.
S1-14 88 c The accident rate is given per 1,000,000 hours worked.
The number of working hours is primarily the number of hours actually worked, based on the working time
record. Where there was no complete record, the number of hours was estimated as the product of the number
of employees and the average number of hours worked per year.
S1-14 88 e The Group publishes the number of days lost due to work-related accidents, work-related health
impairments and deaths due to health impairments for employees.
Lost days are calculated as the first full day and the last day of absence. Calendar days are taken into account
in the calculation.
S1-16 97 a Calculation of the gender pay gap (%) is: (Average gross hourly wage level of male employees -
average gross hourly wage level of female employees) / (Average gross hourly wage level of male employees).
The hourly wage level is the total benefit divided by the number of hours worked. The total allowance is the
total annual payment.
The calculation includes data on all employees of Group entities that have at least 15 employees on the
balance sheet date.
S1-16 97 b The annual total remuneration ratio of the highest paid individual to the median annual total
remuneration for all employees (excluding the highest-paid individual). The calculation includes the basic
salary and all other benefits and remuneration (additional or variable elements). Due to the difficulties of data
aggregation, the median data for employees includes data for a total of about 38,000 employees.
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S1-17 103 a The Group discloses the total number of incidents of discrimination, including harassment,
reported in the reporting period.
S1-17 103 b, c The Group Discloses the number of complaints submitted through the channels available to its
own workforce during the reporting period and the total number of fines, penalties and compensations.
3.3. Clients
Safety and secure operations are paramount for OTP Group. To this end, we assess and manage risks
affecting our operations and establish strong protections against fraud attempts.
In developing our products and ensuring the accessibility of our services, we adhere to ethical and
consumer protection principles and regulations that provide modern, high-quality, and fair services
that meet customer needs. We are committed to the financial well-being of our customers and offer
products that align with their real needs and capabilities. Financial products and services are often
complex and understanding them requires proper communication practices from the Banking Group.
We always strive for clear, understandable communication and customer service.
Material Impacts, Risks
ESRS S4 SBM-3
In all cases, the impacts and risks are aroused by member companies providing financial products and services
to customers.
Material sub-topic
Type of impact,
risk, opportunity
Description of impact, risk, opportunity
Information security and
data protection114
positive impact
The banks of the Banking Group possess a lot of sensitive data about their
customers, and the implementation of personal data protection and information
security has a positive impact.
negative impact
Despite strong protection, customers may still suffer damage.
financial risk
Data protection deficiencies and successful information security and
cybersecurity attacks pose a risk.
Quality information115
positive impact
The provision of quality information positively influences customers' well-being
and financial situation through a better understanding of financial products.
negative impact
Due to the complexity of financial products, the obligations of information
provision, and their changes, there is always room for improvement.
Access to Financial
products and services116
positive impact
The accessibility of financial products for people with disabilities and
disadvantaged customers helps improve the well-being of these customer
groups.
negative impact
Accessibility cannot be considered comprehensive.
For a more detailed description of the effects, risks and opportunities, and their management, see @SBM-3
and subsequent sections of this chapter.
Information security and data protection
The Banking Group's banks hold a lot of sensitive customer data. The protection of personal data and
information security, and cybersecurity breaches or improper handling, can undermine customers' sense of
security and cause harm. Successful attacks and incidents can also cause significant losses for the Banking
Group, thus posing financial risks.
Nowadays, a significant portion of property crimes (fraud) is committed online. This phenomenon is global and
widespread, and it is observed that property crimes are mostly committed online for both the parent bank and
subsidiaries of OTP Group. In response to these trends, legislators increasingly regulate banks' preventive
tasks.
Based on regular evaluations and analyses of fraud experiences and victimization processes, we have found
that the digitally less skilled segment may be negatively affected (see below for more details on the most
affected customer groups). The insufficiently cautious use of financial products (e.g., mobile applications) from
a security perspective and fraud can negatively impact the protection of their personal data. Given that fraud
114 Impacts on consumers and/or end-users related to information: Privacy protection (ESRS 1 AR 16). At OTP Group, this topic encompasses not only
the protection of personal data but also information security and cyber protection, as these are interconnected topics within the Banking Group, although
the ESRS does not specifically name the latter.
115 ESRS: Impacts on consumers and/or end-users related to information: Access to (quality) information (ESRS 1 AR 16)
116 ESRS: Social inclusion of consumers and/or end-users: Access to products and services (ESRS 1 AR 16)
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attempts increasingly occur in the digital space, the means of defense are also digitalized, and understanding
and effectively using these tools can be challenging for the mentioned customer group.
Quality information
Quality information provision ensures objective information and understanding of financial products for all
customers. Its implementation affects customers' well-being and financial situation, as a financial product can
significantly impact a customer's life, contributing to achieving financial or life goals (e.g. mortgage, consumer
loan, savings products). Vulnerable customers often hesitate to approach financial service providers,
especially if they struggle with literacy. For digital services, using electronic devices can be an insurmountable
barrier for many. Simple and transparent product design allows consumers to use products appropriately and
builds trust. If these individuals do not have access to financial products, it can make it more difficult for them
to buy a home, pursue further education, save effectively, and thus worsen their living conditions.
The quality of information primarily affects the most affected customer groups listed below. To prevent negative
impacts and achieve positive effects, we have created a Financial Awareness Strategy, continuously improved
the comprehensibility of our documents, and published educational and informative materials. The Banking
Group pays attention to imparting knowledge related to using online channels.
Access to Financial Products and Services
Access to financial products and services can help or hinder customers' well-being and success. In addition to
accessible services for people with disabilities, access for residents of disadvantaged areas and those in
disadvantaged social situations is significant.
Access to products and services primarily affects the most affected customer groups listed below. To prevent
negative impacts and achieve positive effects, we continuously improve both physical and digital accessibility.
In Hungary, we have established a mobile bank branch and are working on launching Social Lab social
projects. At the group level, we continuously expand the range of partially or fully digitally accessible products.
The Banking Group provides access to state-supported mortgage schemes in several countries.
The management of these impacts and risks is detailed in the chapter.
Most Affected Customer Groups
The most affected consumer groups in the listed impacts are as follows:117
•
Financially vulnerable individuals: These customers rely heavily on financial services to meet their
basic needs, often with limited financial knowledge and resources. They are more likely to fall victim
to poor financial management and fraud.
•
Elderly customers: This group often has less familiarity with digital services. Those with lower digital
literacy are at greater risk of cyber threats and misuse of digital financial services. They are also more
likely to be misinformed and may find it difficult to understand complex financial products and services.
•
Children and young adults: Due to their age and inexperience, they are particularly vulnerable to data
protection impacts and marketing strategies that may exploit their inexperience.
•
People with disabilities: They may face challenges accessing physical or digital services. They may
need accessible branches, services, and digital products to use financial services effectively.
OTP Group's customer policies are in line with the EU's consumer protection-related relevant regulations,
which have been implemented in Hungarian law118. Respect for human rights is declared in the Code of Ethics
117 Segmented by financial status (income level, creditworthiness, and dependence on financial support), age, digital literacy, a nd disability status. The
segmentation was carried out by OTP Bank Slovenia, but we consider it appropriate at the group level.
118 a./ Act XLVIII of 2008 on Essential Conditions of and Certain Limitations to Business Advertising Activity; Council Directive 84/450/EEC, Directives
97/7/EC, 98/27/EC, and 2002/65/EC of the European Parliament and of the Council, and Directive 2005/29/EC amending Regulation (EC) No 2006/2004
of the European Parliament and of the Council
b./Act LVII of 1996 on the Prohibition of Unfair and Restrictive Market Practices; Articles 85 and 86 of the Treaty of Rome ( EEC Treaty); Council
Regulation 19/65/EEC on the application of Article 85(3) of the Treaty to certain categories of agreements and concerted practices
c./ Act LVII of 1996 on the Prohibition of Unfair and Restrictive Market Practices; Directive 2005/29/EC of the European Parl iament and of the Council
of 11 May 2005 concerning unfair business-to-consumer commercial practices in the internal market and amending Council Directive 84/450/EEC,
Directives 97/7/EC, 98/27/EC and 2002/65/EC of the European Parliament and of the Council, and Regulation (EC) No 2006/2004 of the European
Parliament and of the Council (Directive on Unfair Commercial Practices)
d./ Act CVIII of 2001 on Certain Issues of Electronic Commerce Services and Information Society Services; Directive 2000/31/E C of the European
Parliament and of the Council of 8 June 2000 on certain legal aspects of information society services, in particu lar electronic commerce, in the Internal
Market ("Directive on electronic commerce")
e./ Act CCXXXVII of 2013 on Credit Institutions and Financial Enterprises; Directive 2013/36/EU of the European Parliament an d of the Council of 26
June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive
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(@Code of Ethics) and is thus incorporated in all customer policies, applied in the customer interaction
processes and included in the measures to ensure and/or enable remediation.
Processes for engaging with consumers and end-users about impacts
ESRS S4-2
To improve the customer experience, OTP Group regularly collects customer feedback and measures
customer satisfaction. We measure retail customer satisfaction at the group level in a unified manner using
the TRI*M methodology, supplemented by the NPS119 and SQM120 methodologies at some subsidiaries. We
analyze information by customer segments (e.g. entry-level, juniors, premium customers). Through TRI*M, we
measure the overall satisfaction and loyalty of our own banks as well as all significant competitor banks'
customers, along with the factors that most determine satisfaction. We conduct one measurement per country
annually, with a representative121 sample of 1,000 people.
Complaint handling is also a tool for engaging with customers (see @S4-3).
The Banking Group does not engage in regular cooperation with consumer organizations or consumer
representatives.
Customer-Centric Product Development
To support customer-centric product, process, and service development, we established a group-level
framework in 2024. OTP Group Service Design Framework emphasizes understanding customers and other
stakeholders involved in the development process before starting the design. The framework is based on
service design methodology and includes research and design tools that support data- and research-based
product and service development. We introduced the framework at the group level to ensure high-quality
services for customers at all OTP Group members. The Service Design Framework is available in Hungarian
and English to assist all colleagues and partners involved in designing or developing banking products,
services, or processes. The central pillar of the framework is the Service Design Portal, a practice-oriented
guide and knowledge base. The framework also includes a one-day customer-centricity training, a service
design methodology card set, digital tool templates, personal support from the Service Design Group, the
Research Group, or the CX Design CoE, and a Service Design Playbook for leaders.
To better understand customer opinions, the Montenegrin subsidiary introduced the Customer Live Voice
initiative in 2024. Workshops held under this initiative allow customers to provide feedback on their satisfaction
with services, what they appreciate, what they dislike, and what changes they would like to see. Workshops
have been held with young customers, retirees, and sailors so far.
Processes to remediate negative impacts and channels for consumers and end-users to
raise concerns
ESRS S4-3
The Banking Group members provide a wide range of complaint channels for their customers. Complaint
handling processes are regulated, and complaint handling is non-discriminatory and in line with internationally
recognized human rights. Group members respond to complaints in accordance with the local legal
environment. The Banking Group strives to engage in dialogue with complainants to achieve a prompt
resolution. In the case of justified complaints, OTP Group aims to restore the original state or establish an
appropriate state and, in individual cases, apply compensation considering fairness.
2002/87/EC, repealing Directives 2006/48/EC and 2006/49/EC, and Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26
June 2013 on prudential requirements for credit institutions and investment firms amending Regulation (EU) No 64 8/2012
f./ Act CLXII of 2009 on Consumer Credit; Directive 2008/48/EC of the European Parliament and of the Council of 23 April 2008 on credit agreements
for consumers and repealing Council Directive 87/102/EEC
g./ Government Decree 83/2010 (III. 25.) on the determination, calculation, and disclosure of the Annual Percentage Rate Indi cator
h./ Government Decree No. 82/2010 (III. 25.) on calculating and announcing deposit interest rates and returns on securities
i./ Government Decree 144/2018 (VIII. 13.) on certain issues of Information on issues related to the provision of information on fees for consumer payment
accounts (PAD) Directive 2014/92/EU of the European Parliament and of the Council of 23 July 2014
119 Net Promoter Score – customer satisfaction metric
120 Service Quality Management, which examines the quality of retail and SME branch customer service
121 By age, gender, educational attainment, type of settlement, and regional distribution
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Channels Available to Customers for Submitting Complaints
Customers can submit complaints through the ethical reporting system (see @G1-1) and complaint reporting
channels (website, telephone customer service, in person at branches, by postal mail). Customer access is
not restricted on any channel, and at OTP Bank, inquiries received through other channels (e.g., social media)
are also forwarded to the complaint handling area. At the Slovenian subsidiary, customers can submit
complaints to any bank email address, as all employees must enter received complaints into the complaint
handling program.
In Hungary and Bulgaria, in addition to the listed channels, customers can also submit complaints to the
National Bank and the financial arbitration body in EU member states where group members operate.
OTP Group informs customers about complaint reporting channels, the complaint investigation process,
through websites, publications, written communication with customers, regulations available in bank branches,
and social media. The channels are clearly usable for generally prepared customers. We do not specifically
examine the level of trust in the channels, but the fact that complaints are received through the channels
implies customer trust in the company and the operation of the channels.
OTP Group handles and stores the content of reports and related data confidentially in accordance with
applicable laws and its Code of Ethics. (ld. @G1-1).
Ensuring the Effectiveness of Complaint Handling, Tracking Issue
The tracking of raised and handled complaints at OTP Bank and several subsidiaries (DSK Bank, Slovenian,
Croatian subsidiaries, and CKB Bank) is done in dedicated complaint handling systems or other IT systems
(Ipoteka Bank, Ukrainian and Albanian subsidiaries). At subsidiaries where these are not available, operational
processes support effective complaint handling. Individual identifiers are allocated to the complaints, making
them easily trackable in the systems. Each case has a clearly designated responsible employee or group who
reviews and resolves the issue. Customers are informed about the complaint handling process and any
necessary actions.
Monthly, quarterly, and annual reports are prepared on the number, status, and resolution times of received
complaints. These reports help track process effectiveness and identify areas for improvement. By analyzing
aggregated data, we identify recurring problems that indicate potential systemic weaknesses and enable
corrective actions. We track the frequency of use of each channel. Traffic analysis provides insight into which
channels customers prefer and helps identify issues related to the channels. We evaluate response times:
delays may indicate deficiencies that need to be addressed.
In Bulgaria, customer satisfaction with complaint handling processes is measured using surveys, in Slovenia
through telephone interviews. Feedback on complaint handling is also collected in Serbia, Albania,
Montenegro, and Moldova. Feedback helps improve the effectiveness of complaint handling.
In the case of errors affecting multiple customers or significant financial losses, complaint handling collaborates
with the relevant department to track error corrections.
Improving Complaint Handling
OTP Group pays special attention to continuously improving its services, based on information and
experiences revealed during complaint investigations.
Several group members improved their complaint handling systems in 2024.
OTP Bank began developing a new complaint handling interface in 2024. The new structure will enable the
automation and process control of various complaint handling processes. Among other goals, it aims to
facilitate processing times and reporting.
DSK Bank conducted a comprehensive development: they analyzed complaint handling processes and their
key indicators, identified main problems, created standard workflows with clear steps and responsibilities,
renewed complaint handling policies, and provided development training and communication skills training for
employees to improve complaint handling quality. They improved the transparency of complaint handling for
affected customers by communicating the status of complaints. The Customer Experience Committee, chaired
by the bank's CEO, reviews incoming complaints monthly.
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The Slovenian subsidiary made several improvements to the complaint handling software to better protect
customer data, store attached files more transparently and improve the overview of complaint types. They
conducted numerous training sessions for different bank departments on the complaint handling process and
software use.
The Croatian subsidiary improved communication between departments to respond to complaints more
quickly.
CKB introduced new complaint handling software that ensures all complaints are automatically directed to the
expert group responsible for the specific service. The system significantly accelerated complaint handling
processes.
Number of Customer Complaints
OTP Group handles a large number of complaints year after year. Through the harmonization of complaint
handling procedures and definitions, the content of complaint handling data is becoming increasingly uniform
at the group level. However, the different cultures and financial knowledge in each country also influence
customer complaint habits, so the customer complaint data of subsidiaries is not comparable.
Customer complaints
2024
Number of closed complaints
~581,000 pcs
Number of substantiated complaints
~308,000 pcs
Beyond complaints, OTP Group received a total of 612 ethical reports through the Ethical Reporting System
in 2024, of which 106 were from employees, and the remaining from customers and other stakeholders. The
number of reports from customers cannot be specified due to anonymity.
The number of reports received through other channels was 7,811 in 2024, the vast majority of which were
received by the Ukrainian and Moldovan subsidiaries. The Ukrainian data includes all other reports, not just
those from customers and not just complaint-related reports (The Albanian and Russian subsidiaries could not
provide data).
Combining reports from these channels, the total number of customer complaints received by OTP Group was
approximately 589,000.
In 2024, there were no serious human rights incidents related to customers in OTP Group.
OTP Group does not currently require its business partners to have channels available for submitting
complaints. The Banking Group makes recommendations for terminating business relationships with
customers based on all facts and circumstances available and usable by the Banking Group, including the
actual or potential negative impacts of the recommendation on other customers.
3.3.1. Information Security and Data Protection
Policies
ESRS S4-1
Anti-fraud Policy
Key content: The policy covers the evaluation of current fraud prevention and management practices,
mapping future fraud trends, assessing the financial organization's involvement, responding to trends, and
defining related goals and tasks. The policy declares that OTP Group ensures the prevention, detection, and
investigation of fraud in accordance with legal requirements and the guidelines of European and domestic
financial supervisory authorities. It summarizes the regulatory environment, general goals of combating fraud
– emphasizing the role of employees – and defines the principles and basic concepts of anti-fraud activities,
as well as the place of the fraud prevention function within the internal defense lines system.
The policy outlines OTP Group's tasks for preventing fraud, highlighting the criteria for detecting and
uncovering fraud, the efficiency of information flow, real-time transaction monitoring, investigating suspicious
events, and necessary actions, provisions for determining or excluding internal perpetration, the role of
education, forums related to fraud prevention, and the role of feedback. It also includes provisions for fraud
risk self-assessment. It details the main tasks of the Fraud Competence Center and the framework for
cooperation with various internal control functions and departments. The policy is further detailed by the Fraud
Prevention Strategy and additional internal regulations and procedures, which are shared at the group level.
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Scope: The policy applies to the entire OTP Group organization, as foreign subsidiaries must also transpose
the regulations through an implementation annex. Fraud prevention and management activities apply to all
customers and all activities and services of the Banking Group.
Accountable for implementation: The Executive Steering Committee is accountable for the policy's
implementation. The Committee monitors anti-fraud functions that significantly impact customers, measures
activities, and determines corrections if necessary.
Availability: An @excerpt of the policy is available on the Bank's website, making it accessible to
stakeholders. The policy's requirements are integrated into the Banking Group's procurement processes, and
potential suppliers must attach a declaration during the tender process stating that they have understood and
will comply with the relevant policies of the Banking Group during cooperation.
Consideration of the interests of key stakeholders: Continuous monitoring of fraud events has mapped the
general characteristics and traits of victimized groups. These have been incorporated into the detailed rules of
fraud prevention and management activities, while the principles were uniformly defined for all stakeholder
groups during policy development.
Reference to third-party standards: Compliance with legal requirements, European and domestic financial
supervisory authorities' guidelines, and MNB Recommendations.
In 2024, most subsidiaries implemented the tasks and procedures of the Fraud Competence Center (CSEKK),
OTP Bank's anti-fraud policy, OTP Banking Group's anti-fraud strategy, or are in the process of establishing
the conditions for implementation. The second set of anti-fraud regulations issued for implementation in 2024
(detailed description of OTP Bank's fraud prevention process; procedures for the Investigation Department's
activities; Fraud Forum rules of procedure) is also being adopted.
Security Policy
Key content: The Security Policy aims to summarize security principles, outline the main directions of security
activities, and collectively define, facilitate, and support the proper, lawful, safe, and prudent operation of the
Banking Group, considering international and domestic laws, recommendations, expectations, and guidelines.
The Security Policy complies with international and domestic laws, recommendations, expectations, and
guidelines.
Scope: The Security Policy is a group-level regulatory document, and its implementation is mandatory for OTP
Group members operating in Hungary and abroad.
Accountable for implementation: The Security Directorate is responsible for implementing the policy and
reports to the Executive Steering Committee at least once a year.
Availability: The policy is available in the internal regulatory repository.
In addition to these policies, the adoption of OTP Bank's ICT (information and Communication Technology)
and information security policy is underway, and its group-level implementation will also be required.
Data Protection Policy
Key content: The Data Protection Policy is part of the Compliance Policy (see @G1-1). The policy states that
the Banking Group respects fundamental rights and ensures full compliance with data protection principles
when handling personal data and transferring data to third parties. OTP Bank and the affected OTP Banking
Group members handle personal, bank, securities, or pension fund secrets that come to their knowledge with
a high level of protection as required by law.
Scope: Group-level operations are unified in terms of data protection, with all companies implementing the
relevant compliance minimum standards in accordance with the laws of the respective country, making the
policy's scope group-wide.
Accountable for implementation: The Data and Consumer Protection Department coordinates the policy's
implementation. The head responsible for banking data management and protecting customers' personal data
is the Deputy CEO of the Digital Division and the Data Protection Officer (directly accountable to the highest
management of the data controller or processor; does not accept instructions from anyone regarding their
duties). The practices of group members are not uniform but always comply with local legal requirements.
Where there is a Data Protection Officer, they are responsible.
Availability: OTP Bank's policy is available on the @website, and subsidiaries also publish it.
There were no significant changes in the policies in 2024. Supervisory recommendations were incorporated
into procedures but did not result in substantial modifications.
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Actions
ESRS S4-4
Information security and Fraud Management
This section first provides information on the measures related to information security and fraud management,
followed by a presentation of the measures grouped by their nature.
The Executive Steering Committee (ESC), OTP Bank's coordination and operational decision-making forum,
includes discussions on fraud-related topics, ensuring coordination with business areas at the highest level.
Decisions on necessary measures for a predefined range of suspicious fraud events are made at various
committee levels. As a best practice, committees involve representatives from the business or other areas
directly affected by the suspicious event, members of the governance body, and representatives from other
committees (e.g. Group Operational Risk Management Committee and internal control functions).
Internal communication between organizational units is constant, with continuous analyses of fraud committed
against customers, and sharing of experiences with all relevant departments. The continuous evaluation and
analysis work is fed back into the decision-making process and used to determine appropriate measures.
Based on experiences, we develop necessary competencies and adjust the organizational structure.122 In
combating fraud, we uphold the following principles:
•
Protection of customers and the bank
•
Zero tolerance
•
Primacy of fraud prevention
•
Completeness
•
Speed
•
Objectivity and proportionality
•
Integrity and the role of employee ethics
•
Importance of cooperation
•
Emphasis on feedback and innovation
Since fraud behaviours are constantly changing, key measures must also be adapted to these ever-changing
circumstances. This activity is not time-bound. Immediate, as quick as possible action is essential. Time-bound
tasks are those defined by laws, regulations, and recommendations issued by legislators, which include
deadlines for us.123 We always adhere to the specified deadlines, which are indicated when presenting the
relevant measures.
We continuously develop the technology used, exploring the possibilities of applying artificial intelligence
during developments. We pay special attention to following best market practices. In technological
developments and education, we consider surveys that contain customer needs related to the given process.
Our latest survey on "customer bank security awareness" was completed in December 2023 and evaluated in
2024.
OTP Bank's Cyber Defense Center enables a wide-ranging and high-quality124 education for employees
involved in the Banking Group's fight against fraud, creating a positive impact that extends beyond the
workplace to broader social groups. Education is a continuous activity.
The measures listed below affect all activities of the Banking Group and all customer groups, except where
otherwise indicated in the text.
These practices generally apply to all measures listed below.
122 The principles are defined by the Anti-Fraud Policy and the Anti-Fraud Strategy.
123 MNB regulations and recommendations regarding the prevention, deterrence, and management of fraud.
124 Globally recognized certifications: CompTIA Information Technology (9 certifications), Blue Team Level 1 for handling cyberse curity incidents (7
certifications), Microsoft Cybersecurity (2 certifications), ITILv4 (2 certifications), and GIAC Forensic Exam iner for conducting computer forensic
investigations (1 certification).
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Organizational changes
In 2024, the Bank's Security Directorate implemented significant organizational changes to reduce fraud
against customers, enable the prompt reporting of fraud incidents, and recover stolen funds. These changes
included human resource reallocation and staff development. Units were created with dedicated tasks to
combat fraud and perform related activities (e.g. Investigation Department, Fraud Management Support
Department, Fraud Competence Center).
Supporting Subsidiaries’ Anti-Fraud Efforts
The parent bank continuously supports and monitors subsidiaries' anti-fraud efforts, strengthening or
establishing anti-fraud capabilities where they were not previously available. In 2024, subsidiaries also
established dedicated anti-fraud coordination or fraud prevention organizational units.
At subsidiaries where a comprehensive fraud monitoring system is not currently in place (Croatia, Serbia,
Uzbekistan, Ukraine, Albania, Moldova), the implementation, selection, or feasibility study of a comprehensive
or e-channel fraud monitoring system based on existing monitoring capabilities is underway. The Security
Group Management Department supports the anti-fraud activities of foreign subsidiaries and strengthens their
effectiveness by sharing best practices and raising awareness, organizing and conducting presentations and
workshops, and striving to optimize subsidiaries' own local practices and processes (e.g. anti-fraud
communication workshop). A significant result of this is the increasingly intensive use of the Fraud Information
Sharing SharePoint platform, created at the end of 2023 to share fraud prevention information more effectively.
Subsidiaries receive regular (monthly) feedback on platform utilization.
The Cyber Defense Center addresses cross-border fraud types and perpetrator groups through group-level
indicator sharing and incident management to detect and neutralize their impact.
Managing Product-related Risks
The Banking Group considers identified risks when developing new products and services and modifying
existing ones. To protect products and services we apply protective measures proportional to the risks, and
strive to achieve the highest level of security, with special attention to conducting electronic transactions in
cyberspace.
Developments
Numerous technical and software developments have been made to prevent fraud.
Following the development of the Bank's Cyber Defense Center, we can detect and take necessary actions
within a short time against written or visual misuse of the OTP brand in the online space. This solution has
managed the removal and reporting of thousands of phishing sites and misleading advertisements to
authorities, contributing to preserving customers' assets and avoiding significant rights violations. As a result
of our brand protection activities, 23.664 social media posts and 127 social media accounts were taken down.
These measures significantly reduced Foxpost-type fraud125, resulting in a positive social impact.
To reduce phone fraud, we implemented several developments, one of the most significant being the ability
for all InternetBank/MobileBank users to verify the identity of the caller claiming to represent the bank through
the mobile application.
In Hungary, we will join the state Central Fraud Filtering System (KVR) coordinated by the MNB, with the
necessary technical and system development completed in 2024.
As part of the CyberShield Program, a recommendation was developed to facilitate communication with victims
of online financial fraud through the cooperation of the Hungarian National Bank, the Ministry of Justice, and
the Hungarian Banking Association. Our bank fully complies with these provisions in communication with
customers.
The Slovenian subsidiary launched a development project to manage customer losses due to fraud. The
project aims to reduce customer losses even if they result from customers' insufficient caution or lack of
understanding of digital solutions. The bank operates a special @website to inform customers about fraud
types and protecting their data.
The Ukrainian subsidiary implemented an information security management system compliant with the
ISO/IEC 27001:2015 standard, certified by an external party. Additionally, it received independent certification
125 Foxpost fraud: one of the most common types of phishing scams. A buyer applies for a product advertised on an online classifi eds site and wants to
arrange delivery via Foxpost. You send a link to the seller with a fake Foxpost page, the seller (victim) navigates to the fake OTP internet bank login
page. Here, the data entered with the intention of logging in is used by the abusers in real time, to register a new device f or mobile banking.
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for compliance with the PCI DSS 4.0 payment system security standard and the SWIFT Customer Security
Program standard.
Customer Education
Based on the characteristics of actual or potentially negative impacts on customers, we strive to mitigate these
impacts through customer education. We centrally support subsidiaries on certain issues (e.g., workshop on
anti-fraud communication best practices) and expect them to organize up-to-date customer-side education
independently. OTP Bank and subsidiaries communicate with customers through various channels (e.g.
website, internet banking, social media), warning them about fraud and deception.
OTP Bank developed a segmented, continuously expanding educational campaign to inform existing and
potential customers and, more broadly, society, increasing security awareness. The campaign presents target
groups with the types of fraud that threaten them and the Bank's protective measures. In case of fraud or
abuse, we ask customers to report incidents immediately, providing a phone number and email address directly
connected to the Fraud Management Department. Several radio spots ran on the topic, warning older people
in clinics, newspapers, radio, and TV programs, and addressing young people beyond the online space in their
favourite shows. All these efforts directed them to an @educational page where they could test their
knowledge.
We distributed 150.000 leaflets in bank branches informing about fraud methods and avoidance possibilities.
To reach older, rural customers who do not or barely use electronic channels, we partnered with Mediaworks,
distributing 200.000 brochures on the most common fraud methods to households through county newspapers.
In the fall of 2022, the Hungarian National Bank, the Hungarian Banking Association, the National Police
Headquarters, the National Security Service's National Cyber Defense Institute, and the National Media and
Infocommunications Authority launched a joint communication and education campaign as part of the
previously mentioned CyberShield program. The organizations continuously examine consumer habits, their
changes, and fraud patterns and cybersecurity risks observed in financial transactions. They consider
international trends, incorporate these experiences into their professional work, and ultimately use them to
enhance the financial system's security and increase customers' financial awareness. OTP Bank also
participates in these activities. As a result of the cooperation between the National Bank of Hungary, the
Ministry of Justice and the Hungarian Banking Association, a recommendation has been prepared to facilitate
communication with victims of online financial abuse, and the Bank will comply with its provisions in all its
communications with customers.
The Slovenian bank runs a special @website to inform customers about types of fraud and how to protect their
data.
The Ukrainian subsidiary also participated in a fraud prevention campaign, the Ukrainian #Fraudster Goodbye
online initiative, under the auspices of the National Bank of Ukraine, organizing various training sessions and
courses on different fraud scenarios.
Collaborations
OTP Bank dedicates significant resources to establishing various collaborations. By involving sectoral
advocacy organizations, it makes proposals for developing sector-wide unified solutions for customer
education and protection, as well as for more effective customer protection through supervisory or legal
standards. Our bank representatives regularly participate in the working committees of the Hungarian Banking
Association.
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The Cyberlab operates within the framework of cooperation between OTP Bank and ELTE,126 where ELTE
students conduct research on cybersecurity topics. The Bank defines the research topics. The goal is always
to find quick and effective defense methods and practical implementation possibilities.
OTP Bank Plc. cooperates with the National Police Headquarters, establishing 24-hour contact to assist the
authorities in taking quick and effective action.
Our bank actively participates in the work of the Information Security Section of the Scientific Association for
Infocommunications (EIVOK – National Community of Electronic Information Security Leaders). The Bank
supports and hosts EIVOK's regular meetings and lecture series to enable other organizations to have a
positive social impact in cybersecurity through experience sharing.
Damages127
OTP Bank continuously analyzes customer damages to improve the efficiency and development of its systems.
Constant adaptation to changes in fraud behaviours is reflected in the Bank's protective systems. For example,
in 2024 there were more than 100 minor or major modifications to the rules applied in the real-time monitoring
system for fraud prevention. At the group level, active experience sharing occurs during regular fraud
prevention meetings. We monitor customer damage data at the group level. Where there are significant values
or trends, we request additional measures from the group member.
In the case of customer damages, we ensure correction through regulated and consistent evaluation and
analysis work, feedback, and, if necessary, the introduction of measures with responsible parties and
deadlines. This is followed by feedback on the effectiveness of the corrective steps, with regular reporting to
management.
OTP Bank always compensates the customer if the damage was caused by the Bank's fault (e.g. certain
banking systems did not function or functioned improperly at a given moment). Compensation is carried out in
accordance with the regulations in force in the respective country at all subsidiaries.
Data protection
The Banking Group's data management processes operate within constant frameworks and regular activities.
These processes are designed in accordance with data protection laws, with a focus on purpose limitation and
necessity. Customers are always informed about data management processes related to their personal data.
The compliance control tools monitor the adequacy of data protection processes. These include audits to check
the legal compliance of individual products and processes, and recommendations for action in case of
deficiencies. OTP Bank cooperates with the Banking Association and authorities, regularly participating in the
Banking Association's data protection working group meetings.
Data protection training is mandatory for everyone at the group level. Consumer protection training is
mandatory for colleagues dealing with customers or product development at OTP Bank and some domestic
subsidiaries.
Designated data protection officers in OTP Group banks ensure that data management expectations (e.g.
supervision of personal data management, data minimization principle, handling high-risk data) are met. To
this end, data protection officers participate in professional training annually.
Customers have access to complaint handling options in case of abuses due to OTP Group's data
management practices, and suspicions of ethical violations (including human rights abuses) can be reported
through the ethical reporting system.
Customer reports and complaints are examined, and if data protection deficiencies or errors are identified
during the investigation, improvements are initiated for the affected product, service, or process. OTP Bank's
Data and Consumer Protection Department informs the data protection officer network and compliance officers
about the prescribed measures for identified deficiencies through newsletters. The Data and Consumer
Protection Department regularly conducts risk analysis studies in the data and consumer protection area to
assess significant negative impacts. In preventing and mitigating risks, the Department cooperates with other
departments and makes recommendations for incorporating appropriate measures into processes.
Customers have access to complaint handling options in case of abuses due to OTP Group's data
management practices, and suspicions of ethical violations (including human rights abuses) can be reported
through the ethical reporting system. Among the data breaches that occurred in OTP Group, 130 incidents
happened at OTP Faktoring due to incorrect addressing. Another 21 data leakage incidents occurred at the
126 Eötvös Loránd University
127 Damages characterize the effectiveness of the measures, not the measures themselves.
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Slovenian subsidiary, primarily due to administrative negligence, and another 12 incidents occurred at the
Croatian subsidiary bank due to incorrect addressing.
GRI 418-1 Breaches of customer privacy and personal data, OTP Group, 2024
number of substantiated complaints by external parties
(cases)
39
number of complaints by regulatory authorities
(cases)
17
number of breaches of customer privacy
(cases)
37
number of data theft incidents
(cases)
0
number of times data were lost by the organization
(cases)
0
For legal proceedings related to data protection violations see @G1-4.
Targets
ESRS S4-5
The Fraud Prevention Strategy includes goals directly and indirectly related to information security and data
protection:
•
Obtaining ISO 27001 Information Security Management System certification for the Cyber Defense
Center's information security incident management process by December 31, 2025
•
Executing business-side tasks according to the schedule for implementing the MNB Central Fraud
Filtering System at OTP Bank and using data from the operational system for monitoring activities, with
a target start date of July 1, 2025
•
Installing cameras on 200 ATMs by the end of 2025, based on the 2024 baseline year, to increase the
chances of identifying individuals involved in fraud.
Some goals expect the implementation of specific measures, while others set targets for reducing fraud (in
addition to the above, several sub-goals are outlined in the strategy). The goals are partly absolute and partly
relative, and some, as well as the effects of measure-related goals, can be monitored with statistical data.
Based on data on fraud events, we monitor both the frequency of fraud and the damage caused, along with
the exact development of methods and the characteristics of the affected customer base.
Goals are generally set for a one-year period. Based on the analysis of results, we determine whether the goal
has been achieved or if further measures are needed. We do not modify the goal until it is achieved.
The achievement of goals is measured through trend analysis of values measured and periodically reported
at relevant points in the group-level risk framework. We analyze data on frauds committed against customers
within daily, bi-weekly, weekly, monthly, and quarterly trend tracking frameworks and intervene immediately if
necessary. Data is also reported to the governing bodies.
The goals were defined based on results from evaluation and analysis activities, aiming to reduce factors
identified as risks in our reports. Customer involvement was achieved through public forums, marketing
questionnaires, various surveys, and feedback. We involved organizational units affected by fraud prevention
in goal setting through continuous communication and had each unit review the finalized goals.
To ensure the stability of terms used in the goals, we included the basic concepts of anti-fraud activities in both
the Bank's Anti-Fraud Policy and Strategy, creating a unified terminology for describing various fraud activities
in everyday language, facilitating effective information flow during cooperation and communication between
different organizational units.
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Policies, standards, and other documents considered in goal setting:
•
The Banking Group's Anti-Fraud Policy and other internal regulations
•
OTP Bank's Fraud Risk Self-Assessment and the accompanying action plan
•
Commission Delegated Regulation (EU) 2018/389 supplementing Directive (EU) 2015/2366 of the
European Parliament and of the Council regarding regulatory technical standards for strong customer
authentication and common and secure open standards of communication
•
Regulation (EU) 2022/2554 of the European Parliament and of the Council of December 14, 2022, on
digital operational resilience for the financial sector (DORA)
•
ISO27001 standard
•
MNB Recommendation 12/2022 (VIII.11) on the establishment and operation of internal defense lines
and governance and control functions of financial organization”
•
MNB Recommendation 5/2023 (VI.23) on the prevention, detection, prevention, and management of
fraud observed through payment services”
3.3.2. Access to Quality Information
Policies
ESRS S4-1
Responsible Marketing Policy
Key content: The policy states that OTP Bank is committed to responsible marketing of its products,
prioritizing fair commercial communication, accurate information, and product recommendations. OTP Bank
ensures that existing and prospective customers are accurately, clearly, and comprehensively informed about
products and services and their conditions of use, complying with consumer protection regulations. The Bank
is committed to not encouraging irresponsible spending through borrowing, not promoting overconsumption,
helping consumers manage finances reasonably while considering sustainability, and not suggesting that
repaying loans is easy.
Scope: The policy applies to OTP Bank and is recommended for subsidiaries.
Accountable for implementation: The Head of OTP Bank's Marketing and Communications Directorate is
responsible for implementing the policy.
Availability: The policy is available on the @website and in the internal regulatory repository, and the
Marketing Director has shared it with subsidiaries via email.
Reference to third-party standards: The policy requires compliance with the Hungarian Advertising Code,
based on the International Chamber of Commerce's Advertising and Marketing Communication Code,
developed by the Self-Regulatory Advertising Board.
The implementation of the responsible marketing policy is supported by the group-level Tone of Voice
handbook, which defines the communication style. Clear and understandable language is a fundamental goal
and expectation. The handbook provides templates and guidelines for bank communication (from customer
letters to digital and social media platforms and advertisements). New employees in the Marketing and
Communications Directorate participate in internal training on clear communication, which includes using the
handbook. Regular training, repetition, and practical examples are provided to ensure clear communication
becomes a core competency for communication staff.
Financial Education Strategy
Key content: The strategy aims to increase the number of customers who navigate finances confidently and
consciously, managing their finances with a product portfolio that supports their goals.
Scope: The strategy was in effect for OTP Bank in 2024 and will be extended to subsidiaries in 2025.
Accountable for implementation: The strategy was adopted by the ESG Committee in 2024, and the Head
of the Marketing and Communications Directorate is responsible for its implementation.
Reference to third-party standards: The motivation was OTP Bank's commitment to the UNEPFI Principles
for Responsible Banking, aiming to reduce negative and increase positive social impacts in financial
awareness and access. The MNB also expects financial institutions to focus on developing financial awareness
as part of their social responsibility.
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Actions
ESRS S4-4
Customer Education
OTP Group places great emphasis on educating customers about various financial products and using digital
channels and tools. The Banking Group's banks conduct education according to their practices, with the parent
bank and several subsidiaries improving their information and communication practices throughout the year.
At OTP Bank, customer education is part of the expectations for branch network colleagues and their job
responsibilities. Customer service advisors in branches are tasked with educating walk-in customers on using
self-service channels, such as ATMs, InternetBank, and MobileBank applications. This expectation also
applies to other advisory roles.
For credit products, OTP Bank always emphasizes responsible borrowing to customers. The website provides
the Hungarian National Bank's information on the risks of excessive indebtedness and other MNB Financial
Navigator materials.
In recent years, OTP Bank has conducted several media campaigns to increase financial awareness,
conducting research to determine target groups and messages. Research shows that family patterns
significantly influence young people's money management, but parents often do not realize this and
intentionally avoid discussing finances in their children's presence. Due to the importance of the topic, our
year-end campaign in 2024, like the previous year, emphasized the importance of children's financial education
and family discussions about money. Our goal is to help more parents recognize the importance of financial
education and provide specific guidance to support them. The campaign highlighted the topic's importance
and provided specific tips for parents on the @website, social media content, newspaper articles, and podcast
discussions.
Our series "Finance Made Simple," launched in collaboration with RTL's online platform and Bank360,
continued in 2024. In the videos, OTP Bank and Bank360 experts discuss and propose solutions to financial
questions arising from typical life situations
The bank also aims to build financial awareness on its social media platforms. In addition to existing social
media channels, we launched two new channels (Instagram, TikTok) in 2024, focusing on this topic. We
regularly share content on everyday banking and financial products and services, with special attention to data
security.
In 2024, OTP Bank's branch locator on the website was updated to provide more accurate results and display
services and other information, including accessibility conditions, in a clear and filterable manner.
We plan to implement the Financial Education Strategy, define goals, quantify them, and plan and launch
developments and activities by 2025.
DSK Bank regularly publishes financial educational articles, training materials, and videos on the "DSK Helps"
website and YouTube channel. They organize annual campaigns to promote the use of electronic channels.
For example, many elderly customers find it challenging to pay at POS terminals, thinking it is costly or unsafe.
The Meta campaign targeted them and their children, who can explain the details to their parents. They created
an information booklet for retirees on using ATMs, card payments, and savings options.
The Slovenian subsidiary offers financial literacy programs for customers, with videos and various useful
information on their website: @Vsi smo lahko Bogatajevi | OTP banka. The 2023 videos present basic financial
knowledge and tips through the life of an imaginary Slovenian family. They also provide useful advice and
information for vulnerable groups (flyers in branches and online at @Finančna pismenost | OTP banka).
OTP Bank Croatia participates in initiatives by the Croatian Banking Association aimed at promoting
responsible financial behaviour among customers. Additionally, they publish tips and rules for safe online
shopping on their website and social media channels.
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OTP Bank Serbia's branch staff support customers in expanding their knowledge of products, mobile
applications, bank cards, ATMs, and other digital channels. To teach more customers to use digital services
independently, they organize special events, with administrative staff also assisting in knowledge transfer in
branches.
Ipoteka Bank regularly publishes video content on financial knowledge on social media platforms. They also
actively participate in initiatives like Global Money Week and Cybersecurity Awareness Month.
To encourage transactions through digital channels, they launched a pilot project in six branches, equipping
Meeter Greeter staff with comprehensive toolkits (e.g., dialogue scripts, detailed process descriptions, and
special badges) to help less digitally skilled customers transition to digital platforms.
The Ukrainian subsidiary published consumer information materials from the National Bank of Ukraine (e.g.,
on "#FinancialCybersecurity" and "Know Your Rights: Insurance") on their website and social media channels.
OTP Bank Ukraine supported the UCulture team for six months in creating a lecture series on Ukrainian
financial history. All recorded video materials are publicly available on the bank's YouTube channel and the
UCulture website.
The Montenegrin subsidiary publishes financial educational materials on their website and social media. The
subsidiary typically posts graphic materials and short videos on social media, and articles and guides on the
website.
In 2024, they introduced the Meeter Greeter position in three branches, responsible for welcoming customers
and demonstrating digital products, especially for older customers. This includes explaining the use of ATMs
and bank cards, as well as activating and demonstrating the CKB GO mobile application. They plan to
introduce this position in more branches in 2025. Throughout the year, they conducted targeted campaigns to
promote digital services, offering cash incentives or cashback. The digital platforms support multiple languages
to serve a diverse customer base. The website and mobile application include step-by-step tutorials and guides
to help customers learn to use digital services.
The Albanian subsidiary participated in the Albanian Banking Association's financial education campaign and
the state financial culture campaign. They also organized a year-long project providing advice and tips on
financial literacy and education as their initiative.
The Russian subsidiary tested a "stories" feature in the mobile application to increase customer knowledge
about new offers and changes.
Clarity
In 2024, several Group members implemented developments to improve the clarity of financial services.
At OTP Bank, texts for retail customers are written and edited by the Service Design Group colleagues based
on customer-centricity and clarity. The goal is to improve text clarity (clarity of information and tasks, structure,
transparency, relevance) and ensure that texts align with the requirements outlined in the Tone of Voice
Handbook.
The Croatian subsidiary worked on introducing a new content management system in 2024, emphasizing clear
communication and removing banking jargon from texts. They collaborated with an NMC (non-marketing
communication) company specializing in this area. Workshops were held with all content owners on clear and
simple wording.
The Serbian subsidiary's communication strategy includes providing accurate, transparent information in a
way that is easily understandable for the average person. Knowing that legal and regulatory provisions are
often complex to understand during customer communication, the bank strives to simplify the content's
essence. Communication materials are visually tailored to target groups for better understanding. They use
graphical representations to simplify financial presentations and developed a personal financial manager within
the mobile application to help customers manage their budgets transparently. They increasingly use video
format to present their products and services.
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The Uzbek subsidiary uses simple and clear language in its materials, avoiding banking jargon. They provide
clear and detailed information on all products, highlighting key benefits and potential risks. Ipoteka Bank
develops sample dialogue scripts for front-office staff, guiding consistent, polite, and knowledgeable
information provision and advice.
The Montenegrin subsidiary's customer experience team regularly visits branches to discuss the best ways to
welcome customers, approach different situations, and provide accurate and useful information. To
continuously improve communication, they actively seek and incorporate customer feedback. In 2024, they
introduced the SQM system, which tracks and measures customer satisfaction by branches, products, and
employees. The bank offers various communication options for customers to get direct information. Customer
service has expanded to include video calls and live chat, in addition to phone calls, international calls, and
email communication.
The Russian subsidiary conducts training for employees to explain complex financial issues clearly. They
continuously improve customer documents, simplify complex terms, and replace banking jargon to make
information easily understandable. All key conditions for products and services are presented clearly and
structured, with references to sections where detailed conditions can be found. They collect customer feedback
and adapt communication based on needs.
For legal proceedings related to violations of marketing communication and information provision rules see
@G1-4.
Targets
ESRS S4-5
We will set comprehensive, measurable goals for quality information based on the Financial Education
Strategy, first at the parent bank and then extending to the group level, focusing on:
•
increasing the number of customers who navigate finances confidently and consciously
•
ensuring customers have a product portfolio that supports their individual goals
•
improving the positive brand impact and perception of OTP Bank
The quantification and operationalization of goals will take place in the future. We did not measure the
effectiveness of policies and measures related to quality information in 2024.
3.3.3. Access to Financial Products and Services
Policies
ESRS S4-1
The principles of access to products and services are also defined in the Compliance Policy (see detailed
presentation in @G1-1), with the provision that the Banking Group ensures ethical and consumer protection
principles and regulations in product development and service accessibility, providing modern, high-quality,
and fair services that meet customer needs.
Accessibility Strategy
Key content: In accordance with legal requirements, OTP Bank has an Accessibility Strategy and internal
regulations for serving customers with disabilities. The strategy presents the methodology of needs
assessments conducted among customers with disabilities, describes the main measures and results achieved
since 2007 to ensure equal access for these customers, and sets goals for the next two years. The strategy is
regularly reviewed, most recently in 2023.
Scope: The strategy applies to OTP Bank, and the document "Group Recommendation for Compliance with
Accessibility Expectations" assists subsidiaries in achieving accessibility.
Accountable for implementation: The strategy was adopted by the Management Committee, and the Deputy
CEO of the Retail Division is responsible for its implementation.
Availability: Branch staff learn about the strategy's content through mandatory training, while colleagues not
directly interacting with customers can participate in voluntary training.
Consideration of the interests of key stakeholders: The strategy is based on needs assessments
conducted among customers with disabilities.
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Reference to third-party standards: The strategy complies with the Hpt.128 the Accessibility Act,129 and NGM
Decree 22/2016 (VI. 29.).130
Actions
ESRS S4-4
Accessibility
OTP Group continuously improves the accessibility of its infrastructure. To comply with the European
Accessibility Directive131 by the 2025 deadline, OTP Bank and the Slovenian subsidiary have implemented
several measures in both physical and digital accessibility.132
Physical Accessibility
By the end of 2024, OTP Group branches and ATMs largely ensured access for customers with mobility
impairments.
To support customers with mobility impairments:
•
1,110 branches are accessible to customers with mobility impairments (all branches in Hungary except
one heritage branch, over 70% of branches in Bulgaria, Slovenia, Croatia, Ukraine, and Montenegro,
and over 25% of branches in Serbia, Uzbekistan, Moldova, and Russia). In Hungary, branches where
wheelchair access is only possible with a mobile ramp have installed a disability bell for customers to
signal the need for assistance.
•
2,730 ATMs are accessible to customers with mobility impairments (all ATMs in Croatia and Russia,
and some ATMs in Hungary, Slovenia, Serbia, Ukraine, Albania, and Moldova)
To support customers with visual impairments:
•
386 branches have tactile guide paths (in some branches in Hungary and Russia, and one branch in
Croatia)).
•
444 branches have customer call devices with physical buttons featuring Braille to help visually
impaired customers request assistance from staff (in some branches in Hungary, Bulgaria, and
Croatia).
•
3,361 ATMs have Braille labels (in Hungary, Slovenia, Serbia, Uzbekistan, Ukraine, Moldova, and
Russia), of which 1,411 ATMs are fully accessible for the visually impaired in Hungary. These ATMs
are equipped with headphone jacks that provide narration through headphones during transactions,
and the screen can be completely darkened during such transactions.
To support deaf and hard-of-hearing customers:
•
342 branches are equipped with induction loop devices, which help the hard-of-hearing by providing
support through headphones and amplifying the staff's voice for those with hearing aids (in all
branches in Hungary and Croatia).
•
341 branches are equipped with sign language interpreter tablets, offering sign language interpretation
services supported by SINOSZ (Hungarian Association of the Deaf and Hard of Hearing) (in all
branches in Hungary and some branches in Serbia).
•
64 branches have staff who speak sign language (in some branches in Hungary and Serbia).
128 Act CCXXXVII of 2013 on Credit Institutions and Financial Enterprises
129 Act XVII of 2022 on the General Rules of Compliance with Accessibility Requirements for Products and Services
130 Decree 22/2016 (VI. 29.) of the Ministry for National Economy on the rules prescribing equal access to financial services for persons with disabilities
in credit institutions.
131 Directive (EU) 2019/882 of the European Parliament and of the Council of 17 April 2019 on the accessibility requirements for products and services
132 The relevant national legislation has not yet been adopted in Bulgaria and Croatia.
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Accessibility of branches and ATMs in OTP Group
Branches ATMs
Persons with reduced mobility
Proportion of accessible access points for people with mobility impairments
76%
49%
Persons with visual disabilities
Proportion of accessible access points for the blind and visually impaired
27%
25%
Persons with hearing disabilities
Proportion of branches accessible to the hearing impaired
22%
-
OTP Bank collaborates with relevant advocacy organizations, such as SINOSZ, to provide sign language
interpretation services and with the Hungarian Federation of the Blind and Partially Sighted (MVGYOSZ),
remaining open to their service development suggestions.
The bank informs customers about accessibility measures on its @website. Additionally, the branch locator on
the @website OTP Bank provides information under the "Accessibility Information" section about the solutions
available for customers with mobility, visual, or hearing impairments at each branch.
Key developments in 2024:
OTP Bank installed tactile guide paths in 151 branches, sign language interpreter tablets in 171 branches, and
induction loops in every branches. Over 100 accessible ATMs were also deployed. The related internal online
training was renewed, and all branch network employees completed it by September 2024. The training is
mandatory for all new employees.
DSK Bank purchased all new ATMs with modules for connecting external headphones, deploying about 30
such machines in 2024.
The Slovenian subsidiary conducted accessibility assessments for all branches and began renovation work.
They are introducing keyboard adjustments for ATMs (highlighting the middle key and the top left key) in line
with renovation possibilities and replacements. Text-to-speech solutions will be introduced on Bankart-
provided ATMs in 2025. Guidelines and instructions for working with vulnerable customers were prepared for
employees.
The Croatian subsidiary installed 13 new induction loop devices in 2024. Induction loops will be standard
equipment in all renovated branches.
The bank started collaborating with the digital startup Inclusio (inclusio.rs), which helps people with disabilities
access public places like banks, post offices, and shops. It notifies employees at these locations about the
person's arrival and provides information about their issue and the type of assistance needed.
In 2024, OTP Bank Ukraine conducted technical assessments for physical accessibility in 21 branches.
CKB Bank employees received training on assisting individuals with special needs, and clear signs and
directions were placed to help customers navigate branches easily.
The Russian subsidiary installed ramps, yellow circles on doors, yellow stripes, and tactile paving for
customers with mobility impairments. They updated training materials for employees.
Digital Accessibility
The accessibility of websites and digital platforms is also part of compliance with the EU directive.
By the end of 2024, the websites of OTP Bank, DSK Bank, and the Croatian, Serbian, Uzbek, and Russian
subsidiaries, as well as the internet banking and applications of OTP Bank and the Croatian, Serbian, and
Russian subsidiaries, were partially accessible.
During the design and development of websites and applications for OTP Bank and Hungarian subsidiaries
with retail websites and/or applications, and during content editing activities, we considered the WCAG 2.1 "A"
(and in some cases "AA") level recommendations, supporting navigation with alternative tools and the use of
screen readers. Comprehensive accessibility testing is planned for the first half of 2025. Full accessibility of
internet banking and mobile banking is also in progress, to be completed in 2025.
The Slovenian subsidiary launched a project to make digital channels accessible according to WCAG 2.2.
From 2024, built-in browser tools are available on the website for individuals with special needs. Texts for
those with mental disorders were supplemented with short formulations and non-textual elements (simple and
clear images, diagrams).
For legal proceedings related to violations of accessibility rules, see. @G1-4.
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Access points in low populated or economically disadvantaged areas by type
GRI G4: FS13. Due to its extensive branch network, OTP Group provides significant accessibility for personal
financial management in disadvantaged areas in several countries. However, branch and ATM density is lower
in these areas. Only some group members have information about competitors in these areas. 133
The Bulgarian, Serbian, and Russian bank networks are roughly equivalent to other banks in these areas, with
the Bulgarian ATM network being denser than competitors. The Croatian bank's access points are sparser in
both disadvantaged and non-disadvantaged areas compared to competitors. The Ukrainian bank has two
branches in low-density areas, important for providing financial services to Hungarian-speaking customers.
The Uzbek bank is present in all regions of the country, with a stronger presence in densely populated areas
compared to competitors.
Access points in disadvantaged areas¹
Branches
ATMs
OTP Bank – Hungary²
Access points – pcs (% of total access points)
57
(18%)
197
(10%)
New access points – pcs (in % of new ones)
0
(0%)
11
(12%)
Access points terminated – pcs (% of total terminated)
6
(24%)
8
(22%)
Change from previous year (%)
-10%
+2%
DSK Bank – Bulgaria
Access points – pcs (% of total access points)
47
(18%)
170
(18%)
New access points – pcs (in % of new ones)
0
(0%)
7
(21%)
Access points terminated – pcs (% of total terminated)
1
(5%)
5
(10%)
Change from previous year % 3
N/A
N/A
OTP Bank Slovenia
n.a. – no disadvantaged areas defined
OTP Bank Croatia
Access points – pcs (% of total access points)
9
(9%)
30
(7%)
New access points – pcs (in % of new ones)
0
N/A
1
(7%)
Access points terminated – pcs (% of total terminated)
1
(50%)
0
(0%)
Change from previous year (%)
-53%
+7%
OTP Bank Serbia
Access points – pcs (% of total access points)
8
(5%)
38
(13%)
New access points – pcs (in % of new ones)
0
(0%)
0
(0%)
Access points terminated – pcs (% of total terminated)
0
(0%)
0
(0%)
Change from previous year (%)
0%
-3%
OTP Bank Albania
Access points – pcs (% of total access points)
6
(12%)
22
(14%)
New access points – pcs (in % of new ones)
0
(0%)
2
(40%)
Access points terminated – pcs (% of total terminated)
0
(0%)
2
(33%)
Change from previous year (%)3
N/A
N/A
CKB – Montenegro
Access points – pcs (% of total access points)
0
(0%)
15
(14%)
New access points – pcs (in % of new ones)
0
(0%)
0
N/A
Access points terminated – pcs (% of total terminated)
0
(0%)
0
(0%)
Change from previous year (%)
N/A
0%
Ipoteka Bank - Uzbekistan
Access points – pcs (% of total access points)
0
(0%)
0
(0%)
New access points – pcs (in % of new ones)
0
(0%)
0
(0%)
Access points terminated – pcs (% of total terminated)
0
(0%)
0
(0%)
Change from previous year (%)
N/A
N/A
OTP Bank Russia
Access points – pcs (% of total access points)
5
(6%)
5
(4%)
New access points – pcs (in % of new ones)
0
(0%)
0
(0%)
Access points terminated – pcs (% of total terminated)
0
(N/A)
3
(8%)
Change from previous year (%)
0%
0%
OTP Bank Ukraine
Access points – pcs (% of total access points)
2
(3%)
40
(23%)
New access points – pcs (in % of new ones)
0
N/A
5
(31%)
Access points terminated – pcs (% of total terminated)
0
(0%)
0
(0%)
Change from previous year (%)
0%
+60%
OTP Bank Moldova
n.a. – no disadvantaged areas defined (based on changed methodology)
¹ Micro-regions/districts defined by social, demographic, housing and living conditions, local economy and labor market, as well as infrastructure and
environmental indicators, which are defined as such by the legislation of the given country (@S4).
² OTP Merkantil branches are not present in disadvantaged areas.
3 There were no disadvantaged areas defined last year.
133 In Slovenia, and Moldova, disadvantaged regions cannot be identified.
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Mobile Bank
In March 2024, the first OTP Mobile Bank Branch was launched in Hungary, providing personal service in
towns without a bank branch. By the end of 2024, three mobile buses were operating across the country. The
Mobile Bank Branch is a specially designed vehicle with two workstations, allowing us to serve two customers
simultaneously in a comfortable, modern, and discreet environment similar to our branches. The workstations
have access to live banking systems, enabling us to offer comprehensive services primarily to our retail
customers.
Social Lab
Our new initiative, OTP Group Social Lab, aims to maximize the impact of social projects aligned with OTP
Bank's commitments under the UN "Principles for Responsible Banking" framework, specifically in the
Financial Health & Inclusion impact area.
During the concept development, we established a standardized methodology for Social Lab's social
sustainability projects, with the following main stages:
1. Identifying social challenges: Mapping, prioritizing challenges, and defining an impact area for the
project
2. Problem definition: Identifying the problem space within the selected social challenge through
exploration/research and selecting a well-defined problem
3. Solution alternatives: Mapping and prioritizing solution alternatives for the selected problem by involving
relevant internal and external stakeholders. The prototype of the selected solution alternative is
developed through an iterative process based on stakeholder feedback
4. Scaling: Designating the business area responsible for operating and scaling the prototype business
model, which takes over operations and implements the solution's scaling
In 2024, we identified social challenges and defined problems. We prioritized solution alternatives and selected
those for which we will launch test projects in 2025. The test projects will focus on disadvantaged groups and
youth.
Housing Loans
The company provides housing loans on a market basis, significantly aiding home acquisition in several
countries due to its market presence. At the end of 2024, OTP Group had approximately 510,000 active
housing loan contracts, with about 59,000 new loans. Around 42% of these were Hungarian contracts, but
DSK Bank, the Slovenian, Croatian, Serbian, Uzbek subsidiaries, and (relative to the country's size) CKB
Group also had significant housing loan portfolios.134
In addition to market-based products, the Banking Group offers significant state-supported housing loan
schemes in several countries. OTP Bank plays a prominent role in these schemes, with around 91,000 active
contracts for state-subsidized Home Creation loans at the end of the year. The Croatian subsidiary had over
5,000, and Ipoteka Bank had nearly 15,000 state-supported housing loans.
Preventing Over-Indebtedness
One aspect of access to financial products is preventing customer over-indebtedness. This is ensured by the
appropriate lending policy and regulatory framework within the Banking Group. Our lending regulations are
based on the current lending policy, including customer and product-level lending conditions. This framework
ensures that lending conditions and related obligations are transparent, clear, and understandable for new or
already financed customers.
The product conditions derived from the lending policy ensure that we minimize lending risks at both product
and customer levels, including the level of indebtedness. This applies equally to all our products and
customers.
We continuously monitor the ratio of Stage 3 loans according to IFRS and report on it in our reports. (We do
not collect separate information on loans for disadvantaged customers.) In case of market or economic
changes, we intervene in the condition system to preventively enforce the prevention of increased lending
risks, ensuring that our customers' and potential customers' situations and solvency do not deteriorate.
134 OTP Bank Russia does not offer mortgage products, and this service is not significant at OTP Bank Ukraine.
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Targets
ESRS S4-5
We will define goals related to the availability and accessibility of products and services – beyond legal
compliance – through the @Social Lab, and have already set goals for accessibility.
Accessibility
The European Union's Directive 2019/882 on accessibility requirements for products and services applies to
OTP Group's EU subsidiaries with retail branches, websites, or digital platforms. The directive covers the
accessibility of branches, ATMs, and digital platforms (websites, internet banking, mobile banking).
OTP Bank aims to design and develop both physical (branch and contact center, ATM network) and digital
(Mobile and InternetBank) channels to ensure that customers with disabilities can access all services and
products, in line with new legal requirements.
Our goal is to equip all OTP Bank branches with tools to support customers with disabilities by June 2025,
including tactile guide paths, customer call systems, sign language interpreter tablets, induction loops, mobile
ramps, and disability bells. We aim to ensure that all ATMs have screen reader software and font size increase
options (or use large fonts by default), expanding screen reader software functions to all available features
(see @S4-4). Our goal is to ensure that OTP Bank's website and digital channels comply with the WCAG 2.1
standard at level A.
Since 2007, the Bank has aimed for accessibility and has an Accessibility Strategy. The strategy is regularly
reviewed and fine-tuned, with developments aligned with it and legal changes.
To develop and improve appropriate service processes, the Bank maintains regular contact with relevant
advocacy organizations (see @S4-4).
We continuously monitor the implementation of supportive tools for accessibility, maintaining the current status
in the Branch Unified Master Database. We also continuously monitor the completion of internal training to
develop staff sensitivity and preparedness according to our standard training processes.
The Ukrainian subsidiary aims to make 5 more branches accessible in 2025.
3.4. Reporting policy for heading S4
S4-3 AR23: The amount of compensation does not include refunds for transactions.
GRI 418-1: Number of confirmed cases of misuse of customer personal information in the organization's
sphere of interest. Each case is included for only one type, there is no overlap between the types.
Bank branch: A branch is a physical outlet where customers can get human assistance and at least daily
banking services are available (in addition to cash and transit services).
ATM: a device that allows at least automatic withdrawals.
S4-4 31a: Accessibility data refers to all branches and ATMs in countries.
Accessible drawers for disabled people: accessible part open to the public, safe to leave in case of emergency,
and objects and equipment can be used in the building as intended.
Bank branch with guide lane: Guide Lane: A strip placed on the floor of a branch to help blind and partially
sighted customers navigate within the branch.
Physical push button on the call ticket: Braille-labeled physical button on the caller.
Induction loop: induction signal amplifier/ audio frequency loop amplification system. The induction loop was
developed to make sound information more understandable to people with hearing impairments, enabling them
to absorb and understand it without problems.
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Sign interpreter: Sign language interpreters, or sign interpreters for short, mediate between hearers who do
not know sign language and those who are deaf or hard of hearing. Not only is speech translated into signing,
but also, if necessary, signage into speech. For people with communication difficulties, sign language
interpretation services use articulation interpretation services to ensure their understanding of communication
situations in everyday life. A sign interpreter enables communication using a multimedia device.
Sign Language Associate: The agent uses basic sign language to establish contact with deaf and hard of
hearing customers.
Total Accessible Accounts: The number of accounts where one of the previous three options is available,
counting only once for accounts with multiple options.
Total number of hearing-impaired accessible accounts: the number of accounts where one of the previous
three options is available, counting only once the number of accounts where more than one option is available.
ATM accessible for disabled people: accessible, open to the public part can be accessed, safely left in an
emergency, and objects and equipment can be used in the building for their intended purpose.
GRI G4: FS13: Branch and ATM definition see S4-4 31a: Accessibility of branches and ATMs in OTP Group.
Total amount and percentage of access points in sparsely populated or economically disadvantaged areas by
country and type (branch/ATM). These areas were defined differently from country to country.
The definition of these areas varies from country to country. In Hungary, the so-called districts to be developed
are defined by the Government Decree 290/2014 (XI. 26.). In Bulgaria, the "a" areas defined by the EU regional
aid maps. In Croatia, areas defined by the Law on Special State Care Areas. In Serbia, municipalities with less
than 12,000 inhabitants. In Uzbekistan, areas with lower than average population density as defined by Decree
No 98 of the President of the Republic of Uzbekistan. In Ukraine, municipalities with a population of less than
50 000 inhabitants. In Montenegro, the northern, agriculturally oriented areas of the country. In Albania, areas
with a low population density as defined by the Albanian Statistical Office, LAU2 (Local Administrative Units
level 2). In Russia, municipalities with a population of less than 50,000 inhabitants.
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4. Governance Information
4.1. Corporate Governance
For OTP Group, transparent operations and ethical business conduct are of paramount importance.
Ensuring legal compliance, reducing risks, and effectively enforcing business, ethical, and internal
controls are key objectives. Adhering to ethical norms and principles not only ensures legal
compliance but also fosters trust, cooperation, and fair behaviour within the organization. The
corporate culture of the Banking Group is characterized by long-term thinking and responsible
attitudes, striving for sustainability. At the same time, OTP Bank is mindful of its legal obligation to
ensure the profitable operation of OTP Bank and OTP Group for the benefit of its depositors,
shareholders, and investors. These two aspects must be balanced and interact with each other.
During the operation of the corporate group, special attention is paid to transparency, regulation, the definition
of internal responsibilities, and thus to actual compliance with the broadest environmental, social, and
regulatory expectations.
Disseminating and promoting these topics among employees is of paramount importance throughout the
Banking Group. Therefore, it aims to familiarize and encourage employees to comply with them through the
following means: intranet news and articles, branch knowledge management, international conferences, e-
learning training, and a network of compliance officers.
The place where the impacts and risks arise is the entire OTP Group, its own operations, with the exception
of the fight against money laundering, which is essential for the Group's banks.
Material subtopic
Type of impact,
risk, opportunity
Description of impact, risk, opportunity
Corporate culture, compliance, fight
against money laundering
positive impact
The implementation of ethical business conduct and ensuring
legal operations are of paramount importance to OTP Group.
Preventing money laundering attempts by customers has a
significant positive impact on society.
negative impact
Non-conformities cannot be completely eliminated even with
careful behaviour.
financial risk
Non-compliance with regulations can result in fines and
reputational damage. Violation of anti-money laundering
regulations also poses a financial risk.
Corruption and bribery
positive impact
Effective prevention of corruption brings important social
benefits.
negative impact
Even with careful and continuously evolving practices, abuse
can occur.
For a more detailed description of impacts, risks and opportunities and their management, see @SBM-3 and
the following sections of this chapter.
Policies on Corporate Culture and Business Conduct135
ESRS G1-1
The two most defining policies of OTP Group regarding corporate culture and business conduct are the Code
of Ethics and the Compliance Policy. The Code of Ethics includes the Gift Policy as an appendix. The
Compliance Policy includes the Sanctions Policy, the Anti-Corruption Policy, and the Anti-Money Laundering
and Counter-Terrorism Financing Policy. The most important policies of OTP Group, or their extracts, are
publicly available on the OTP Bank website @Due Diligence information.
Code of Ethics
Key content: OTP Bank adopted its group-level Code of Ethics in 2006, which continuously evolves in line
with external and internal changes and expectations. The Code of Ethics of OTP Bank and OTP Group sets
out clear and unambiguous guidelines and expectations for ethical business conduct for the entire OTP Group
and those associated with it, to protect the values of OTP Group. The Code of Ethics defines behavioural
expectations for employees, outlines the business ethical commitments of OTP Group, and details the
reporting method expected in case of violations of the Code of Ethics. It is a fundamental expectation for all
employees of OTP Group to perform their work in full compliance with moral and professional standards.
Familiarity with the Code of Ethics and tracking changes is also a fundamental expectation for all employees
and business partners.
135 The G1-1 disclosure requirement expects the presentation of information related to promoting corporate culture, in addition to polic ies. We consider
these as measures and objectives according to the ESRS.
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The Code of Ethics also includes provisions on gifts and corruption prevention. The Gift Policy, which details
the rules, restrictions, monetary limits, and prohibitions on gifts and invitations, and the method of record-
keeping, is an appendix to the Code. The Code declares the corporate group's commitment to environmental
sustainability and environmental values.
The Code did not change significantly in 2024.
Scope: The Code of Ethics applies to the entire OTP Group, imposing obligations on executives, employees,
and agents.136
Accountable for implementation: The Board of Directors and the Supervisory Board bear the governance
and organizational responsibility for compliance, including the Code of Ethics.
Availability: Familiarity with the Code is ensured through mandatory training and is also available in the
internal regulatory repository and on the Bank's @website. The Gift Policy is only available in the internal
regulatory repository.
Consideration of the interests of key stakeholders: The organizational units of the Banking Group, as the
most important stakeholders, reviewed and shared their comments and suggestions during the creation of the
Code of Ethics and related regulations.
Reference to third-party standards: The Code of Ethics is based on international standards, best practices,
and operational experiences that consider the expectations and practical feasibility for OTP Group members.
These include the International Code of Human Rights, the OECD Guidelines for Multinational Enterprises,
the UN Global Compact, the core conventions of the International Labour Organization (ILO), and the UN
Guiding Principles on Business and Human Rights. To ensure uniform application, the group-level Code serves
as the basis for local regulations for all subsidiaries and some affiliates of OTP Group, considering possible
deviations due to national characteristics or specific regulatory environments. The list of external guidelines
and relevant legislation underlying the Code of Ethics is included in the @Documents governing the application
of the Code of Ethics of OTP Bank and OTP Group.
Code of Ethics for Partners
Key content and scope: OTP Group expects its partners to adhere to the principles of the Code of Ethics.
Therefore, in addition to the Code of Ethics, there is also a group-level Partner Code of Ethics. This Code aims
to set out clear and unambiguous guidelines and expectations for ethical business conduct for those
associated with OTP Group. OTP Group strives to ensure that all its suppliers, business, agents, and other
contractual partners commit to complying with the provisions of the Code of Ethics or the Partner Code of
Ethics (or their equivalent regulations) by accepting the General Terms and Conditions, a separate contractual
provision, or a declaration of acceptance.
Availability: The Code is part of the General Terms and Conditions and is also publicly available on OTP
Bank’s @website.
In other aspects, the Partner Code of Ethics is identical to the Code of Ethics.
Compliance Policy
Key content: The purpose of the Compliance Policy is to summarize the principles related to the compliance
of OTP Bank, designate the main directions of independent compliance activities, which collectively define,
promote, and support proper, legal, safe, and prudent operation, based on the expectations and guidelines
formulated by senior management, considering applicable laws, regulatory guidelines, and internal regulations.
The Compliance Policy defines the principles for operating the compliance function. The Policy is guiding and
to be followed by OTP Group members. Each group member creates its own (local group-level) compliance
policy and develops the regulations and tools to ensure its implementation, based on the principles of the
Bank's Policy, adapted to the complexity of their activities and the differences in their size, and in the case of
foreign group members, the laws of the respective country.
136 Agents: those who fulfill contractual obligations for OTP Group and, in the course of their activities, interact with a wide range of OTP Group's clients
or potential clients, provide services on behalf of OTP Group, and clearly appear as representatives of OTP Group in public while fulfilling their contractual
obligations. This includes temporary employees and individual contractors supplying labour to the undertaking, as defined by the ESRS.
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The Compliance Policy requires the Bank to develop ethical norms and internal professional standards,
summarized in the Code of Ethics and the Partner Code of Ethics. The principles of corporate governance
(responsible corporate management) also appear in the Compliance Policy. In line with responsible corporate
governance, the Bank applies guidelines that promote compliance with internationally recognized rules and
standards of responsible corporate management, ensuring transparency and accountability through the public
disclosure of information related to its management and operations.
In line with OTP Group's geographical presence, markets, business, and customer relationships, a sanctions
compliance policy is applied to ensure compliance with economic, financial, and trade sanctions imposed by
the European Union, the United Nations Security Council, the relevant office of the United Kingdom, and the
United States. Additionally, local laws and national sanctions applicable to individual group members are also
considered. OTP Group has a unified Sanctions Compliance Policy and sanctions procedures that set
minimum requirements for OTP Bank and its affected subsidiaries. The applicable sanctions may restrict OTP
Group's business activities with certain sanctioned countries, individuals, and organizations. In line with its
sanctions compliance policy, OTP Group prohibits or restricts involvement in business activities, financial,
investment services, or products that may violate applicable sanctions regulations. The prohibitions also aim
to prevent participation in transactions and business behaviours that may directly or indirectly circumvent or
evade applicable sanctions.
OTP Group has policies, procedures, and numerous monitoring measures to ensure compliance with relevant
sanctions regulations. Accordingly, customers and financial transactions must be screened against sanctions
lists, including but not limited to those of the European Union, the United Nations, the United Kingdom, and
the United States, as well as national sanctions lists applicable to the respective Group member. In addition
to screening customers and financial transactions, OTP Group has introduced further processes for active
banking transactions with sanctions/sensitive involvement, where each identified transaction is separately
evaluated by examining relevant factors.
The Bank also publishes a group-level policy on financing services related to the defense industry on its
website, which is also part of the Compliance Policy.
Scope: The Compliance Policy applies to the entire Bank, all organizational units, and activities. The
Compliance Policy is applied at the group level, as it is guiding and to be followed by the Banking Group
members. The Sanctions Compliance Policy is a group-level document.
Accountable for implementation: The Board of Directors and the Supervisory Board bear the governance
and organizational responsibility for compliance, including the entire Compliance Policy.
Availability: The Compliance Policy is available in the internal regulatory repository and on the Bank's
@website, as is the @Sanctions Compliance Policy.
Consideration of the interests of key stakeholders: The Bank's organizational units reviewed the policy
during its creation.
Reference to third-party standards: The Bank establishes and operates internal defense and security lines
based on the main principles and requirements defined by the MNB Recommendation, which promote the
organization's prudent, reliable, and efficient operation in compliance with laws and internal regulations. This
is in line with the guidelines of European financial supervisory authorities and the recommendations of
international financial regulatory bodies. Additionally, the Compliance Policy refers to numerous legal
requirements. The main content of the Sanctions Compliance Policy has been detailed above.
Anti-Money Laundering and Counter-Terrorism Financing Policy
Key Content: The goal of the Banking Group's anti-money laundering and counter-terrorism financing
activities is to effectively prevent and combat the laundering of assets derived from criminal activities and the
financing of terrorism. The policy includes that the corporate group prepares a group-level risk assessment for
combating money laundering and terrorism financing, which is reviewed at least annually, to identify, analyze,
evaluate, and manage money laundering and terrorism financing risks. Furthermore, it categorizes its
customers into risk categories and applies customer due diligence measures appropriate to the risk category.
During customer due diligence, the "Know your customer" principle is applied to create a customer profile and
screen suspicious transactions that do not fit the customer profile, reporting to the financial intelligence unit
(FIU) if necessary. AML/CFT requirements are mandatory at the group level. Deviations are only possible with
the parent bank's permission due to local legal requirements, supervisory expectations, and recommendations.
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Scope: According to the policy's provisions, OTP Bank defines the group-level requirements, procedures, and
workflows related to AML/CFT activities.
Availability: The policy is available in the internal regulatory repository and on the Bank's @website.
Reference to third-party standards: The policy is designed to comply with the internal regulations governing
the prevention and combating of money laundering and terrorism financing, as well as the financial and asset
restrictive measures imposed by the European Union and the United Nations Security Council, and the relevant
sections of the General Business Rules.
In terms of other features, the policy is identical to the Compliance Policy.
Anti-Corruption Policy
Key Content: OTP Group is committed to fighting corruption and has declared zero tolerance for bribery and
all forms of illicit advantage. The policy aims to define the principles of OTP Group's anti-corruption activities,
identify areas particularly exposed to the risk of corruption, and serve as a fundamental document for the
Banking Group's anti-corruption activities in developing the necessary regulatory documents and during the
anti-corruption activities of the affected employees. The provisions of the policy are to be applied together with
the group-level Code of Ethics and Partner Code of Ethics.
Scope: The policy applies to all employees, contractual partners, and any other persons involved in the
activities of the Group members.
Accountable for implementation: The Board of Directors and the Supervisory Board bear the governance
and organizational responsibility for compliance, including the entire Compliance Policy.
Availability: The policy is available in the internal regulatory repository and on the Bank's @website. Given
the importance of anti-corruption measures in business relations, Group members pay special attention to
ensuring that all employees and contractual partners are fully aware of the policy's provisions. To this end,
Group members always provide free access to the policy and expect their employees and contractual partners
to familiarize themselves with the document, applying an anti-corruption clause (see @G1-3). Training related
to the Anti-Corruption Policy is part of the Compliance policy @training program.
Reference to third-party standards: The provisions of the Anti-Corruption Policy have been developed in
accordance with the applicable domestic and international137 anti-corruption laws and the Wolfsberg Group
Anti-Corruption Guide138.
The policy is identical to the Compliance Policy.
Actions and targets
Taking action on Corporate Culture and Compliance
Ethical Reporting System
According to the expectations of the Code of Ethics, OTP Group employees are required to draw attention to
any illegal practices, violations of the rules and values outlined in the Code of Ethics, or any practices that may
lead to abuse, by notifying the affected parties or their immediate supervisor. This should be done through the
contact points of OTP Bank Compliance Directorate or the compliance area of the affected OTP group
member.
137 (a) United Nations Convention against Corruption (Act CXXXIV of 2005), (b) the Treaty on the Functioning of the European Unio n, (c) Convention
drawn up on the basis of Article K.3 (2) (c) of the Treaty on European Union on the fight against corruption involving officials of the European Communities
or officials of Member States of the European Union, (d) Council Framework Decision 2003/568/JHA of 22 July 2003 on combating corruption in the
private sector (e) Council Decision (EU) 2008/852/JHA of 24 October 2008 on a network of contact points against corruption, (f) Act C of 2012 on the
Criminal Code, (g) Act XXV of 2023 on complaints, public interest reports and rules related to whistleblowing, or the relevant provisions of the legislation
in force at any time replacing the listed legal acts.
138 “The Wolfsberg Group – Wolfsberg Anti-Bribery and Corruption (ABC) Compliance Programme Guidance (2017)”
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External parties can also make ethical reports or ask questions related to the Partner Code of Ethics through
the same channels.
Ethical reports can be made in person during working hours, by letter, phone, email, or through the contact
points of the compliance area of the affected OTP group member, as well as through the dedicated online
Reporting System. Reports can also be made anonymously. The ethical reporting system operates
continuously. OTP Group handles all reports, inquiries, and investigations confidentially, in compliance with
applicable laws and regulations, and with the protection of the whistleblower.
The Banking Group member sends an acknowledgment of receipt to the whistleblower within seven days of
receiving a written report through the Reporting System and provides general information on the procedural
and data processing rules under the Whistleblower Act.
The Banking Group members investigate the contents of the report as soon as possible, but no later than thirty
days from the receipt of the report. The thirty-day processing period can be extended in particularly justified
cases, with simultaneous notification of the whistleblower. In such cases, the whistleblower must be informed
of the expected date of the investigation and the reasons for the extension. Even if extended, the investigation
period cannot exceed three months. The Banking Group members inform the whistleblower in writing about
the investigation or its omission and the reasons for the omission, as well as the results of the investigation.
Written notification can be omitted if the Banking Group member has verbally informed the whistleblower, who
has acknowledged the information.
All participants in procedures related to reports are required to act independently, fairly, impartially, and in
accordance with the Code of Ethics. To ensure fair procedures, the reported person is allowed to present their
position on the report, either personally or through their legal representative, and to support it with evidence.
According to the procedures for operating the ethical/violation reporting system, the head of the Ethics
Department139 decides on the closure of the first-instance procedure based on the investigation report,
determining whether there was a violation of the law and/or the provisions of OTP Group Code of Ethics, and
may propose measures to remedy the violation/ethical norm violation, or to take measures to avoid, prevent,
and reduce the risks of violations or breaches of the Code of Ethics. If the affected party (the whistleblower or
the person affected by the report) disagrees with the results of the investigation (first-instance procedure), they
can appeal in writing to the Ethics Committee, as the second-instance body, within 15 days of receiving the
notification, through the reporting channels.
If required by law, the Ethics Department initiates the procedure of the competent authority under the
conditions specified therein. If a criminal complaint appears justified, it should be made in consultation with the
Security Directorate, which is responsible for official contacts in criminal matters.
The head of the Ethics Department immediately notifies the head of the President-CEO organization and the
Supervisory Board if the report concerns the Bank's senior executives or senior managers; the first executives
of Hungarian or foreign subsidiaries; or if it concerns the activities of the Compliance Directorate. In the
framework of an ethical procedure, incidents, including cases of corruption and bribery, can be immediately,
independently, and objectively investigated outside the reporting system. If such a report is received by the
complaint handling department, it must immediately refer the matter to the Ethics Department. The Ethics
Department decides on classifying the case as an ethical procedure, which is investigated as detailed above.
Ethical training
OTP Group considers it particularly important to familiarize employees with ethical norms and the ethical
reporting system, and to raise awareness among them. Therefore, it conducts annual ethical training for all
employees, and it is mandatory for sales agents to complete the training within a specified period from the
start of their work. The training aims to enable all employees to act ethically and responsibly through the
acquired knowledge, contributing to the establishment of fair and just operations within the company. The
training material provides comprehensive guidance on the ethical behaviour expected within OTP Group. The
main points of the training include: ethical foundations; conflict of interest; ethical behaviour inside and outside
the bank; political involvement; finances in the workplace; corruption, undue influence; mutual respect and
cooperation. The training material helps understand and address the aforementioned issues, promoting ethical
behaviour and decision-making through practical examples and guidelines. The Banking Group regularly
reviews and monitors the understanding and adherence to ethical norms.
The role of leaders is crucial in conveying the expected behaviours, so leaders also undergo separate, annual
leadership ethical training. This helps them handle any issues related to ethical questions that may arise. The
139 From January 1, 2025, Integrity Department at OTP Bank; the name of the relevant class is not uniform among group members
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main points of the training include: the importance of leading by example; leadership challenge: creating an
appropriate work environment; equal treatment; managing conflicts of interest.
The Code of Ethics also sets specific expectations for leaders: OTP Group leaders make every effort to ensure
that employees are familiar with the rules of the Code of Ethics. It is important to create a work environment
where employees feel safe and comfortable. They support employees in raising ethical questions and issues
in good faith without facing any retaliation. OTP Group leaders lead by example in fully adhering to the
principles of the Code of Ethics. It is particularly important for leaders to set an example in terms of appropriate
tone, language, demeanour, gestures, and communication. They are responsible for maintaining a culture of
ethical operation, ensuring compliance with the principles and provisions of the Code by employees, which
they monitor using the lawful tools at their disposal. The expectations set out provide guidance, as the Code
cannot contain comprehensive instructions for appropriate actions in all situations and circumstances
In connection with compliance activities, the Bank provides a training program tailored to the organization's
needs, ensuring appropriate participation opportunities, time frames, budgets, and resources for employees,
and this is also expected of Group members.
The compliance function monitors the education and training of OTP Bank employees, ensuring that all new
hires receive the knowledge necessary to perform their work at a high level. Where deficiencies are identified,
it supplements the knowledge or refreshes the knowledge acquired during previous training. The training plan
is based on compliance risk assessment, legal obligations, and internal expectations. The plan consists of
compliance orientation for new hires, as well as ad-hoc or annual refresher mandatory training for employees.
The organizational units responsible for the compliance function prepare their own training materials and any
related tests and determine the criteria for the participants of each training. The training materials are reviewed
at least annually, and the annual training plan is modified as necessary to meet the needs identified by the
compliance risk analysis and other development plans.
Taking action against Money Laundering
The main measures related to combating money laundering include the training program and the operation of
the whistleblowing system.
Enhancing AML/CFT Awareness
To increase the AML/CFT awareness of the Banking Group's affected employees, regular (at least annual)
mandatory training sessions are held. The AML/CFT training is conducted in two ways by the Banking Group's
banks140. For some subsidiaries, the training is mandatory for all employees, while for others, it is mandatory
for those involved in AML/CFT-related activities during the bank's business operations and those who interact
with customers, as well as their managers. The training is typically conducted online, but there are also
instances of in-person training. The training topics usually include an overview of the regulatory environment,
current updates, and case studies. The training concludes with a test.
The training is mandatory for all employees at DSK Bank, OTP Bank Slovenia, Ipoteka Bank, OTP Bank
Ukraine, OTP Bank Albania, OTP Bank Moldova, and OTP Bank Russia.
In Hungary (OTP Bank and Merkantil Bank), training is provided to those involved in AML/CFT-related activities
during the Bank's business operations and those who interact with customers, as well as their managers,
based on the requirements of the Act on the Prevention and Combating of Money Laundering and Terrorist
Financing (the AML/CFT Act) and the Hungarian National Bank (MNB) regulation. OTP Bank ensures that its
managers and employees involved in the prevention and combating of money laundering and terrorism
financing receive the necessary depth of preventive training and at least annual refresher training (together:
general training) and take a written exam (including exams conducted in an electronic system). The Bank
provides more detailed specialized training at least once a year for employees who interact with customers.
Merkantil Bank's annual training is conducted in e-learning format and concludes with an online exam.
140 The topic is relevant at the banks of the Banking Group, and the trainings are also presented in this area.
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OTP Bank Serbia complies with the Serbian Anti-Money Laundering Act regarding training, which is mandatory
for those establishing business relationships with customers and conducting transactions.
The Croatian subsidiary also follows legal requirements, with training provided to employees who interact with
customers and senior management.
CKB Montenegro has identified employees and senior executives exposed to AML/CFT risks (those directly
or indirectly interacting with customers, transaction executors, compliance, internal audit, security, operational
risk management employees, senior management, and the Supervisory Board) and they receive training.
At the Romanian subsidiary, training was mandatory for employees responsible for or involved in AML/CFT or
KYC (Know Your Customer) processes.
To expand employees' AML knowledge, the Banking Group also shares information on properly conducted
customer due diligence, thorough customer knowledge, and behaviours indicative of AML suspicion (e.g.,
strawman suspicion, unjustified cash use) on internal banking forums (intranet, professional newsletter)
according to current trends.
AML Whistleblowing System
OTP Bank operates a whistleblowing system for reporting illegal activities related to the prevention and
combating of money laundering and terrorism financing. If OTP Bank violates the Anti-Money Laundering and
Counter-Terrorism Financing Act (the AML/CFT Act), employees can send anonymous notifications through
the whistleblowing system operated for this purpose. The investigation is conducted within thirty days by an
employee designated by the head of the Compliance Directorate for reports involving the Anti-Money
Laundering and Counter-Terrorism Financing Department or its employees, and by the head of the Anti-Money
Laundering and Counter-Terrorism Financing Department or an employee designated by them in other cases.
The designated person prepares a report on the investigation results, including action proposals, deadlines,
and responsible persons. The head of the Compliance Directorate approves the report on the investigation
results and ensures the proper implementation of its contents. If justified by the investigation results, the
designated person immediately reports to the competent authorities. The whistleblowing system operates
continuously.
Taking action against Corruption
OTP Group's anti-corruption measures include the anti-corruption training system, which is part of the Ethical
training (see the same disclosure requirement above). Risk assessments and anti-corruption investigations,
presented in the @G1-3 disclosure, also support the fight against corruption.
Prevention and Detection of Corruption and Bribery141
ESRS G1-3
The @Anti-corruption Policy and the @Compliance Policy stipulate that OTP Bank must strive to include an
anti-corruption clause in all contractual relationships and regulatory documents. This clause requires parties
to act carefully and minimize corruption risks during cooperation with contractual partners, especially in the
tendering and preparation process. Deviation from the anti-corruption clause is only allowed in exceptional
cases, based on the individual assessment of the contracting department, with the contracting department
assuming the risk and responsibility. The deviation or omission of the anti-corruption clause must be reported
to the compliance area with justification. The extension of the clause's application to group members is planned
gradually in 2025.
The organizational units or activities of group members that may be affected by corruption risks vary. The
@Anti-corruption Policy lists the activities most exposed to corruption risks: handling gifts and representation
expenses; charity and sponsorship; contact with contractual partners; undertaking contractual obligations;
investments, asset purchases, management, maintenance; hiring new employees; purchasing, managing,
selling real estate. It also states that the Banking Group shall pay attention to all activities not listed that carry
corruption risks.
141 We consider this disclosure requirement to be an action under the ESRS.
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Group members determine the organizational units or activities that are the current focus of anti-corruption
activities based on an annual risk-based assessment. Additionally, OTP Bank's Compliance area conducts
anti-corruption investigations according to its own defined anti-corruption investigations, which the Bank
gradually implements. This is a continuous/periodically recurring investigation with no predetermined deadline.
The plan includes examining areas with increased corruption risks, such as supplier or agent activities.
To effectively enforce the provisions of the Anti-Corruption Policy, OTP Group develops detailed rules and
procedures. Group members are expected to adopt anti-corruption rules, contractual provisions, implement
relevant procedures, and consistently comply with them.
The general training and information practices related to corruption and bribery are detailed in the @G1-1
disclosure.
Annual ethical training, which includes the topic of corruption, is mandatory for all OTP Group employees.
Thus, the training programs cover 100% of employees in functions exposed to corruption and bribery risks.
To detect corruption and bribery, the organizational unit/person responsible for the compliance function of the
affected group member monitors the implementation of the Policy in the group member's activities and its
compliance with applicable laws, as well as all other relevant expectations and best business practices. If the
organizational unit/person responsible for the compliance function detects or receives information about any
anomalies or irregularities, they initiate a review of the provision, modify it if necessary, and ensure that the
identified deficiency or irregularity is brought to the attention of the governing bodies. The governing bodies of
group members monitor the implementation of the Policy by receiving annual reports on the fulfillment of the
expectations outlined in the Policy.
Violations of the provisions of the Anti-Corruption Policy can be reported through the channels specified in the
@Code of Ethics and @Partner Code of Ethics , and the investigation is conducted according to the
procedures for operating the ethical/violation reporting system142 (see @Ethical Reporting System).
According to the Banking Group's Conflict of Interest Policy, the person under investigation and the investigator
are separated when handling corruption and bribery allegations and cases. It is a fundamental business
interest and legal obligation of the Bank to ensure that the personal interests of its senior executives, members
of its governing bodies, and employees do not conflict with the business interests and commitments of the
Bank, OTP Group, and its clients.
Corruption and Bribery Cases
ESRS G1-4
No convictions of guilty of violating anti-corruption and anti-bribery laws have been made against members of
OTP Group. In 2024, there were two confirmed cases of corruption and bribery at the Uzbek Ipoteka Bank,
which is considered a public legal case by the bank, although the case was eventually closed under internal
investigation, no decision was made by an official body. The cases were reported in the local media and were
subsequently investigated. During the investigations by the official bodies, the bank decided to investigate the
cases internally, using its option to do so. In both incidents, the employees concerned were held responsible
and dismissed. No termination of contract with a business partner was necessary.
In the first case, a financial adviser at a bank branch accepted money for assistance with a mortgage
application. The bribe was paid before the loan application was formally submitted. As a result of an internal
investigation by the compliance team, the consultant's employment was terminated. In the second case, two
employees of another bank branch attempted to provide assistance to a third party in connection with a
mortgage loan by falsifying documents. The illegal activity took place before the third party had submitted the
loan application. In this case too, the employee's employment was terminated.
Measures taken to address violations of procedures and standards related to combating corruption and bribery
are detailed in @G1-3.
142 Complying with Section 116 of the Credit Institutions Act, as well as the internal whistleblowing reporting system under the Whistleblower Protection
Act
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Legal Procedures
Above is a summary of the closed regulatory procedures and the amounts of fines paid by OTP Group
members.
GRI 2-27 Closed proceedings by authorities, and other legal procedures, fines paid, OTP Group – 2024
All
closed
cases
Number
of
significant
cases
All cases
closed
with fines
Total
fine
paid
Fine charged
for
practice
applied
in
2024
Fine
charged
for
practice
applied
in
earlier period
pcs
HUF million
violation of competition rules ¹
3
0
3
2.1
2.1
0
violation of consumer protection rules
256
0
55
69.3
28.5
40.8
violation of rules on equal opportunity (own
workforce)
2
0
0
0
0
0
violation of rules on equal opportunity (not own
workforce
0
0
0
0
0
0
violation of accessibility rules
0
0
0
0
0
0
supervisory procedures
138
3
64
584.7
572.5
12.3
violation of IT security / Cyber security rules
0
0
0
0
0
0
violation of taxation rules
2
0
1
0.2
0
0.1
violation of environmental rules
1
0
1
0.4
0.4
0
violation of marketing communication rules
1
0
1
0.5
0.5
0
violation of information provision rules
6
0
6
6.6
6.6
0
violation of marketing communication and
information provision rules
0
0
0
0
0
0
violation of data protection rules
19
1
3
215.0
6.5
208.5
Violation of anti-corruption and anti-bribery rules
0
0
0
0
0
0
violation of labor law rules
6
0
0
0
0
0
violation of health and safety rules
1
0
1
0.3
0
0.3
other proceedings
5
0
0
0.2
0.2
0
Total 2024
440
4
135
879.4
617.4
262.0
The regulatory practices of individual countries can differ significantly, which contributes to the significant differences in the number of procedures.
¹ This also includes cases related to violations of antitrust and monopoly rules.
In 2024, three competition law proceedings were ongoing involving members of the Banking Group, one each
against OTP Bank, Ipoteka Bank in Uzbekistan and OTP Bank of Russia. Of the three closed competition law
cases, one involved Ipoteka Bank, which was fined HUF 600,000 by the Monopoly Prevention Committee for
non-compliance with marketing communication rules related to microloan advertising. Two cases involved the
Russian subsidiary, with fines totaling HUF 1.5 million.
Due to its significance, we present the ongoing competition law case against OTP Bank. The so-called
Interchange case, a repeated procedure, began in 2021. In 2009, the Hungarian Competition Authority (GVH)
fined OTP Bank HUF 281 million in the Interchange (interbank commission) case, alongside Mastercard, Visa,
and several other banks. OTP Bank challenged the decision in court: in March 2017, the appellate court
annulled the GVH's fine decision and ordered a new procedure, which the Supreme Court upheld, rendering
the 2009 fine decision null and void. The GVH had already refunded the paid fine. Following the court's
guidance, the GVH initiated a new (repeated) competition supervision procedure against the parties in June
2021, which was still ongoing in 2024.
Other significant procedures:
In 2024, the Hungarian National Bank (MNB) concluded a supervisory procedure initiated in 2022 against OTP
Bank regarding payment services, resulting in a HUF 102 million fine and requiring the Bank to implement
measures for violating several legal provisions.
The Bulgarian Commission for Personal Data Protection (CPDP) fined DSK Bank HUF 209 million for violating
personal data protection rules in a 2019 case, with a final decision in 2024.
The Montenegrin Central Bank fined the Montenegrin subsidiary HUF 424 million for deficiencies in internal
control systems and operational risk management following a fraud incident at a bank branch (payment
occurred after the reporting period).
The Albanian National Bank conducted a procedure against the Albanian subsidiary, requiring the Bank to
modify two practices, but no fine was imposed.
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In 2024, there were no non-compliance incidents regarding voluntary codes related to product and service
information or marketing communication.
In 2024, two legal proceedings related to equal opportunity were closed within OTP Group member company,
at OTP Bank Serbia. None of these four cases resulted in fines.
In 2024, there were a total of 14 discrimination-related reports143 within OTP Group. Nine at OTP Bank, two at
OTP Bank Romania, and one each at Bulgarian DSK Bank, Montenegrin CKB subsidiary, and OTP Factoring.
None of the cases were found to be justified.
4.2. Reporting policy for heading G1
G1-3 21. b: In the case of anti-corruption and bribery training programs for employees in risky functions, when
calculating the percentage of employees working in vulnerable functions covered by these programs, the group
takes into account employees who completed the training program during the reporting period and those who
were assigned to complete the program, whether or not they completed it by the reporting date.
G1-4 23. a: The Group publishes the number of convictions for violations of anti-corruption and anti-bribery
regulations and the total amount of fines imposed during the reporting period. The reported figures do not
include judgments which may be the subject of appeal or which are still pending at the reporting date.
G1-4 24.a, GRI 2-27: The disclosure requirements for non-compliance are presented together by the Group,
but the expectations of the ESRS and the GRI Standards 2021 GRI 2-27 indicator used as entity-specific
disclosure differ in part in relation to non-conformities on different topics.
•
G1-4 24. the number of convictions for breaches of anti-corruption and anti-bribery legislation;
•
GRI 2-27 non-compliance with laws and regulations;
The Group publishes information by topics of violation; there is no overlap between cases per topic. The Group
publishes the total number of cases closed. It publishes the total number of cases with fines and the amount
of fines paid, including:
•
Fines for practices during the reporting period: practice still in place at the time the fine was imposed;
•
Fines for practices belonging to an earlier period: the practice complained of had already ceased in a
previous year before the fine was imposed.
The Group shall publish the number of significant cases of non-compliance. Non-compliance is significant
where:
•
the fine for a case reaches HUF 10 million;
•
several fines paid for the same practice amount to HUF 10 million;
•
a case not involving the imposition of a fine is normally considered not significant, except if the
competent area of expertise of the Group Member considers otherwise.
For Discrimination Cases and Elimination Measures, discrimination (as defined in the ESRS) means
discrimination based on gender identity, racial or ethnic origin, nationality, religion or belief, disability, age,
sexual orientation; It also includes cases of harassment as a specific form of discrimination.
The Group reports the total number of cases of discrimination received, including separately the number of
cases of discrimination against own workforce (S1-17 103. a). The Group also reports the number of cases of
legitimate discrimination, including cases of discrimination against an entity’s own workforce.
143 Information on cases of discrimination against an entity’s own workforce can be found in Chapter S1 - Own workforce
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5. Appendix
The professional experience of the members of the Supervisory Board and the Board of Directors
(governing bodies)
Senior management and executive members of the Board of Directors of OTP Bank
Internal members
Dr. Sándor Csányi:
Chairman of the BoD
Chairman & CEO
From 1980 he worked at the Tax Revenue Directorate and then at the Secretariat (Banking Supervision
Section) of the Ministry of Finance then from 1983 to 1986, he was Head of Department at the Ministry of
Agriculture and Food Industry. From 1986 to 1989 he was a senior department head at the Hungarian Credit
Bank (MHB).
From 1989 to 1992 he was Deputy CEO of K&H Bank.
He has been the Chairman and CEO of OTP Bank Plc. since 1992.
He is Vice Chairman of the Board of Directors of MOL Plc. and Co-Chairman of the
Chinese-Hungarian Business Council.
In 2022, through contributing 100% of the shares of Bonitás 2002 Zrt. and Hungerit Zrt. as well as substantial
cash, he founded Unity Asset Management Foundation, which acts as his “Family Office” and manages sizable
investments.
Bonitás 2002 Zrt. is the holding company that oversees his investments in agriculture, the food industry, real
estate and asset management, which comprise some 240 directly or indirectly owned companies.
Bonitás 2002 Zrt. is one of the largest investors in agriculture and food industry in the CEE region through
Bonafarm Group, Hungerit Zrt. and KITE Zrt. generating a total annual revenue of EUR 2.5 billion with more
than 9,500 employees and with a total of 40,000 hectares of cultivated farmland. The Bonafarm Group is
vertically integrated with agricultural companies producing the raw materials for food processors: Hungary’s
largest meat processor, Pick Szeged Co and MCS Vágóhíd Zrt., the dairy company Sole-Mizo Zrt. and the
winery Csányi Pincészet Zrt. It also has significant investments in real estate and construction companies as
well as in venture capital and real estate funds through the Bonitás Venture Capital and Real Estate Fund. The
size of venture capital fund is EUR 20 million and the average VC investment is between EUR 900,000 and
EUR 2 million, while the size of the real estate fund is EUR 80 million. Bonitás 2002 Zrt.’s portfolio also includes
the largest hungarian private hospital, BEK Zrt.
Péter Csányi
Deputy CEO
Digital Division
He began his career in 2006 at Merrill Lynch’s London office as an intern and he was working part-time on
corporate finance projects for financial institutions while attending university as well.
From 2007 to 2011, he was an analyst in Deutsche Bank's London office and then a financial advisor in the
field of corporate finance (for Central and Eastern European corporate customers).
From 2011-2016, he worked for McKinsey & Company Inc. as a senior consultant mostly working on banking
related projects.
He joined OTP Bank in 2016 as managing director of the Digital Sales and Development Directorate. After the
agile transformation at the Bank, he became responsible for the management of the Omnichannel Tribe from
2019. In addition, since January 2021, he was the head of the Daily Banking Tribe.
Since March 2021, he has been the Deputy CEO of OTP Bank, the head of the IT Division (as of 1 May 2021
Digital Division) and the Member of the Management Committee. Since July 2023 he is the Chairman of the
Executive Steering Committee.
He has been a member of OTP Bank's Board of Directors since 16 April 2021.
From 2020 he has been Chairman of the Supervisory Board of OTP banka d.d. in Croatia. He is also a member
of the OTP Mobil Kft. Supervisory Board, the Board of Directors of PortfoLion Ltd., and the Supervisory Board
of Fizz.hu (Ecosystem Ltd.). He is also the head of the Digitization Working Group of the Hungarian Banking
Association and a member of the Mastercard European Advisory Board and the vice president responsible for
digital transformation of IVSZ IT Association of Hungary.
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László Wolf
Deputy CE
Commercial Banking Division
From 1983 after graduation, he worked at the Bank Relations Department of the National Bank of Hungary for
8 years, and then he was head of Treasury at BNP-KH-Dresdner Bank between 1991 and 1993.
From April 1993 he was managing director of OTP Bank’s Treasury Directorate, and since 1994 he has been
the head of Commercial Banking Division as Deputy CEO of OTP Bank Plc.
Since 2003 he has been a member of DSK Bank’s Supervisory Board.
He has been a member of OTP Bank's Board of Directors since 15 April 2016.
External members:
Tamás György Erdei
Deputy Chairman of the BoD
BSc Business Administration
He began his professional career at OTP, in a variety of administrative roles (his last position was branch
manager), before going on to work at the Ministry of Finance in the area of bank supervision
From 1983 he was employed by the Hungarian Foreign Trade Bank, where he gradually worked his way up
through the ranks. In 1985 he became managing director, in 1990 he was appointed Deputy CEO, then in
1994 he became CEO, and from 1997 until the end of March 2012 he was Chairman & CEO.
Between 1997 and 2008, and between 2009 and 2011, he was the elected president of the Hungarian Banking
Association.
He is the Chairman of the Supervisory Board of the International Children’s Safety Service.
He has been a member of OTP Bank’s Board of Directors since 27 April 2012. He has been the Chairman of
OTP Bank's Risk Assumption and Risk Management Committee, and he was a member of the Nomination
Committee between 2014 and 2020.
He has been the Deputy Chairman of the Board of Directors of OTP Bank Plc. since April 2019 and the
Chairman of the Work-out Committee since October 2019.
He has been Chairman of the Board of Directors at OTP Factoring Ltd. since December 2019.
Gabriella Balogh
Chemical engineer, MSc Economics, specialization in marketing
She worked as a marketing associate between 1993 and 1998, as director of the Marketing Department from
1998 to 2005 and as managing director of the Marketing and Sales Directorate between 2005 and 2008 at
OTP Bank Plc.
She has been the managing director of GoodStep Consulting Kft. since 2008. She fulfilled group management
tasks as a member of the Board of Directors at the Central European Media and Publishing Company between
2010 and 2017. She has been co-owner and Board of Directors member of Net Media Plc. since 2016. She is
Presidium member and Chairwoman of the Marketing and Media Board of the Hungarian Football Federation.
She is the Chairwoman of the Supervisory Board of Művészetek Palotája Ltd. Since 2023 she has been the
Member of the Board of Directors of Richter Gedeon Plc.
She has been a member of OTP Bank's Board of Directors since 16 April 2021.
Mihály Baumstark
BSc Agricultural Business Administration,
MSc Economics
He was employed by the Ministry of Agriculture and Food Industry between 1978 and 1989. When he left the
Ministry he was Deputy Head of the Investment Policy Department. Then he was managing director of
Hubertus Bt., and from 1999 to 2011 he was deputy CEO and then Chairman & CEO of Villányi Winery Ltd.
(now Csányi Winery Ltd.). He is currently retired.
He was a member of OTP Bank’s Supervisory Board from 1992 to 1999 and has been a non-executive member
of OTP Bank’s Board of Directors since 1999. He has been Chairman of OTP Bank's Ethics Committee since
2010, as well as a member of its Remuneration Committee since 2011. He was the member of the Nomination
Committee between 2014 and 2020.
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Dr. István Gresa
PhD Business Administration and Economics
He has been working in the banking sector since 1989. Between 1989 and 1993 he was branch manager of
Budapest Bank’s Zalaegerszeg branch.
From 1993 he was director of OTP Bank’s Zala County Directorate, and from 1998 he was the managing
director of the Bank’s West Transdanubian Region.
From 1 March 2006 until 14 April 2016 – when he retired – he was Deputy CEO of OTP Bank Plc., the Head
of the Credit Approval and Risk Management Division. He was Chairman of the Board of Directors at OTP
Factoring Ltd. between 2006 and 2017.
He has been a member of OTP Bank’s Board of Directors since 27 April 2012.
Antal György Kovács
MSc Economics
He began his professional career in 1990 at the Nagyatád branch of K&H Bank, where he worked as a branch
manager between 1993 and 1995.
He has been working at OTP Bank Plc. since 1995, first as a county director and from 1998 as the executive
director of OTP Bank’s South Transdanubian Region. From 1 July 2007 to 31 December 2022 he was the
head of Retail Division as OTP Bank’s Deputy CEO.
He has received additional training at the International Training Centre for Bankers and on various courses
held by the World Trade Institute.
Between April 2007 and April 2012 he was Chairman of the Supervisory Board of OTP banka Hrvatska d.d.
He was the Chairman of the Supervisory Board of OTP Bank Romania SA from 12 December 2012, until the
sale of the Romanian subsidiary bank.
He has been Chairman of the Board of Directors of OTP Mortgage Bank Ltd. and OTP Building Society Ltd.
since 24 April 2014.
Between 15 April 2016 and 27 April 2023 he was a member of OTP Bank’s Board of Directors, on 28 April
2023 the General Meeting of OTP Bank elected him as non-executive member of the Board of Directors.
György Nagy
Msc International Economics
He was a founding owner of Wallis Holding (founded in 1990) and he managed the Wallis Group as CEO until
2000. He founded Westbay Holding Kft. in 2004, the company’s portfolio includes several successful
investments.
He has been a member of OTP Bank's Board of Directors since 16 April 2021.
Dr. Márton Gellért Vági
General Secretary
Hungarian Football Federation
From 1987 to 2000 he was lecturer at University of Economic Science of Budapest (today Corvinus University
of Budapest) and from 1994 onwards associate professor and head of department. He has a university
doctorate and a PhD in economics. He has authored or co-authored more than 80 studies, essays and books.
Between 2000 and 2006 he worked at the State Holding and Privatisation Co. (ÁPV Zrt.) as managing director,
Deputy CEO and then CEO.
Between 2006 and 2010 he was the Chairman of the National Development Agency.
In various periods between 2000 and 2010, he was the Chairman of the Board of Directors of Magyar Villamos
Művek, Paks Nuclear Power Plant and the National Textbook Publishing House. Between 2002 and 2010, he
was a member of the Board of Directors of Földhitel és Jelzálogbank Nyrt., and the Chairman of the Board of
Directors for 4 years.
Since 2010 he has been general secretary of the Hungarian Football Federation.
He was a member of UEFA’s HatTrick Financial Assistance Committee between 2011 and 2023. He has been
a member of FIFA’s Financial Committee since 2017 and since 2023 he has been one of the Vice Presidents
of the UEFA National Teams Competition Committee.
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He was a member of OTP Bank’s Supervisory Board between 2011-2021.He was a member of OTP Bank’s
Audit Committee between 2014-2021. He was a member of OTP Bank’s Nomination Committee between
2020-2021.
He has been a member of OTP Bank's Board of Directors since 16 April 2021.
Dr. József Zoltán Vörös
Professor emeritus, academician
University of Pécs
He has been a member of the Hungarian Academy of Sciences since 2013. Between 1990 and 1993 he was
the dean of the Faculty of Business and Economics, Janus Pannonius University (JPTE) in Pécs. In 1993 he
attended a course in management for senior executives at Harvard University.
From 1994 he was a professor at JPTE, from 2021 he has been professor emeritus. He was the senior Vice
Rector of the University from 2004-2007, between 2007 and 2011 he was the Chairman of the Economic
Council of the University of Pécs.
He has been a non-executive member of OTP Bank’s Board of Directors since 1992. He has been the
Chairman of OTP Bank's Remuneration Committee since 2009, and member of its Risk Assumption and Risk
Management Committee since 2014.
Members of the Supervisory Board of OTP Bank Plc.
Tibor Tolnay
Chairman of the SB
From 1989 to 1994, he was the director of State Construction Company No. 21. From 1994 to 2015 he was
the Chairman & CEO of the already privatized Magyar Építő Joint Stock Company.
He has been the managing director of Érték Ltd. since 1994.
From 2018 to 2021 he was the President of the National Association of Entrepreneurs and Employers, since
2021 co-President.
Since 1992 he has been a member of OTP Bank's Supervisory Board, and Chairman of the Supervisory Board
since 1999. He was a member and Deputy Chairman of OTP Bank’s Audit Committee between 2007 and 2011
and has been again since 2014. He has been the Chairman of OTP Bank’s Nomination Committee since 2020.
Dr. József Gábor Horváth
Deputy Chairman of the SB
Retired Lawyer
From 1983 he worked for the Hungarian State Development Bank. He has been a lawyer since 1986, and from
1990 to 2023 he run his own law firm, which was specialised in corporate finance and corporate governance.
He has been a member of the Supervisory Board of OTP Bank since 1995 and was a member of MOL Plc.’s
Board of Directors between 1999 and 2014.
He has been Deputy Chairman of OTP Bank's Supervisory Board since 2007. He was Chairman of OTP Bank's
Audit Committee between 2007 and 2011 and has been again since 2014. He has been a member of OTP
Bank’s Nomination Committee since 2020. He was a member of the Board of Directors of INA Industrija Nafte
d.d. from 2014 to 2018.
Dr. Tamás Gudra
BSc Business Administration, Lawyer
He worked as an auditor from 1993 to 2001 at Deloitte & Touche. Between 2001 and 2003 he was an
accounting expert of subsidiaries at the Accounting and Tax Directorate of the Hungarian Oil and Gas Public
Limited Company (MOL Rt). Then he was managing director at the Auditor, Financial and Accounting
Directorate of the National Privatization and Asset Manager Plc. (ÁPV Zrt.) between 2003 and 2007 and
became the director of Controlling Directorate at the Hungarian National Asset Manager Plc. (MNV Zrt.) from
2008 to 2010, then he worked as the CFO of the Hungarian Football Federation from 2011 until June of 2020.
Between 2020 and 2024 he was the group-level CFO of Bonafarm Zrt. He has been the strategic advisor of
OTP Pension Fund since May 2024.
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He was a member of the Supervisory Board of OTP Lakástakarék Zrt. between 2012 and 2021 and he is
Chairman of the Hungarian Paralympic Committee’s Supervisory Board since 2016. Since 2021 he has been
property inspector of Hungarian University of Agriculture and Life Sciences. Since 2022, he has been the
asset controller of the Unity Asset Management Foundation
He has been a member of the Supervisory Board and Audit Committee of OTP Bank since 16 April 2021.
Olivier Péqueux
Groupama International SA
Started to work in 1998 as an insurance commissioner for the French Insurance Supervisory Authority. In
2003, he joined the French Ministry of Finance to take part in the pension law reform and the setup of a pension
fund for French civil servants. Then he became technical adviser to the French Minister of health and pensions.
In 2005 he joined Groupama Group, first in charge of the actuary and accounting department of Gan
Patrimoine, a life insurance company, and then in 2007 as Chief Financial Officer
f Groupama Paris Val de Loire.
He moved to China in March 2011 as Deputy General Manager of Groupama China, in charge of finance,
actuary and investments in the joint venture between AVIC and Groupama.
From 2015 to 2017, he was the General Manager of Groupama AVIC. He wasthe Chief International Officer
of Groupama Assurances Mutuelles between 2018 and 2024. Since May 2024 he is Deputy CEO in charge of
Finance, Actuarial, Audit and Risks at Groupama Assurances Mutuelles.
He has been a member of OTP Bank’s Supervisory Board, and Audit Committee since 2018.
Employees delegates:
Klára Bella
Director
Large Corporate Department
From 1992 to 1994 she worked as a clerk at the Fertőszentmiklós branch of OTP Bank.
From 1994 to 1995 she was a lending consultant at Polgári Bank.
From 1995 to 1996 she worked as a risk manager at the Central Branch of OTP Bank.
From 1996 to 1997 she was authorizer in the Credit Approval and Risk Management Division.
From 1997 to 2010 she was Deputy Managing Director at the Central Branch.
From 2010 to 2016 she was Director at the Central Branch.
Between 2017 and 2020, she was Director of the Corporate Directorate.
Since 1 July 2020, she has been the Director of the Large Corporate Department of the Specialised Finance
Directorate.
She has been a member of OTP Bank’s Supervisory Board, and representative of the Bank’s employees since
12 April 2019.
András Michnai
President of OTP Bank’s Employees’ Trade Union
He has been an employee of the Bank since 1974, and until 1981 held a variety of posts in the branch network.
Following this he held a management position in the central network coordination department before returning
to work in the branch network. From 1994, as deputy managing director, he participated in the central
coordination of the branch network. Between 2005 and 2014 he was the managing director of the Bank’s
Compliance Department.
He has been a member of OTP Bank’s Supervisory Board, and representative of the Bank’s employees since
2008. He has been President of OTP Bank’s Employees’ Trade Union since December 2011.
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6. ESRS Index
56.
ESRS
Standard
Code
ESRS Standard
Disclosure
requirement
code
Disclosure requirements
Reference to
presentation of disclosures
(page number)
ESRS 2
General Disclosures
BP-1
General basis for preparation of sustainability statements
155
BP-2
Disclosures in relation to specific circumstance
156
GOV-1
The role of the administrative, management and supervisory bodies
156
GOV-2
Information provided to and sustainability matters addressed by the undertaking’s administrative, management
and supervisory bodies
159
GOV-3
Integration of sustainability-related performance in incentive schemes
160
GOV-4
Statement on due diligence
160
GOV-5
Risk management and internal controls over sustainability reporting
161
SBM-1
Strategy, business model and value chain
162
SBM-2
Interests and views of stakeholders
166
SBM-3
Material impacts, risks and opportunities and their interaction with strategy and business model
173
IRO-1
Description of the process to identify and assess material impacts, risks and opportunities
167
IRO-2
Disclosure requirements in ESRS covered by the undertaking’s sustainability statement
178
ESRS E1 Climate Change
ESRS 2 GOV-3 Integration of sustainability-related performance in incentive schemes
160
E1-1
Transition plan for climate change mitigation
250
ESRS 2 SBM-3 Material impacts, risks and opportunities and their interaction with strategy and business model
173
ESRS 2 IRO-1
Description of the process to identify and assess material impacts, risks and opportunities
167
E1-2
Policies related to climate change mitigation and adaptation
246
E1-3
Actions and resources in relation to climate change policies
252
E1-4
Targets related to climate change mitigation and adaptation
247
E1-6
Gross Scopes 1, 2, 3 and Total GHG emissions
252
E1-7
GHG removals and GHG mitigation projects financed through carbon credits
256
E1-8
Internal carbon pricing
256
E1-9
Anticipated financial effects from material physical and transition risks and potential climate-related opportunities Not yet reported due to phase-in
ESRS E2 Pollution
ESRS 2 IRO-1
Description of the processes to identify and assess material pollution-related impacts, risks and opportunities
167
ESRS E3 Water and Marine
Resources
ESRS 2 IRO-1
Description of the processes to identify and assess material water and marine resources-related impacts, risks
and opportunities
167
E3-1
Policies related to water and marine resources
246
E3-2
Actions and resources related to water and marine resources
252
E3-3
Targets related to water and marine resources
247
E3-5
Anticipated financial effects from water and marine resources-related impacts, risks and opportunities
Not yet reported due to phase-in
ESRS E4 Biodiversity and
Ecosystem
ESRS 2 SBM-3 Material impacts, risks and opportunities and their interaction with strategy and business model
173
ESRS 2 IRO-1
Description of processes to identify and assess material biodiversity and ecosystem-related impacts, risks and
opportunities
167
E4-1
Transition plan and consideration of biodiversity and ecosystems in strategy and business model
256
E4-2
Policies related to biodiversity and ecosystems
246
E4-3
Actions and resources related to biodiversity and ecosystems
252
E4-4
Targets related to biodiversity and ecosystem
247
ESRS E5 Resource use and
Circular economy
ESRS 2 IRO-1
Description of the processes to identify and assess material climate-related impacts, risks and opportunities
167
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56.
ESRS
Standard
Code
ESRS Standard
Disclosure
requirement
code
Disclosure requirements
Reference to
presentation of disclosures
(page number)
ESRS S1 Own Workforce
ESRS 2 SBM-3 Material impacts, risks and opportunities and their interaction with strategy and business model
173
S1-1
Policies related to own workforce
282
S1-2
Processes for engaging with own workers and workers’ representatives about impacts
270
S1-3
Processes to remediate negative impacts and channels for own workers to raise concerns
270
S1-4
Taking action on material impacts on own workforce, and approaches to mitigating material risks and pursuing
material opportunities related to own workforce, and effectiveness of those actions
283
S1-5
Targets related to managing material negative impacts, advancing positive impacts, and managing material
risks and opportunities
281
S1-6
Characteristics of the undertaking’s employees
273
S1-9
Diversity metrics
276
S1-12
Persons with disabilities
276
S1-13
Training and skills development metrics
278
S1-14
Health and safety metrics
281
S1-15
Work-life balance metrics
Not yet reported due to phase-in
S1-16
Compensation metrics (pay gap and total compensation)
276
S1-17
Incidents, complaints and severe human rights impacts
270
ESRS S4 Consumers and end
users
ESRS 2 SBM-3 Material impacts, risks and opportunities and their interaction with strategy and business model
173
S4-1
Policies related to consumers and end-users
299
S4-2
Processes for engaging with consumers and end-users about impacts
287
S4-3
Processes to remediate negative impacts and channels for consumers and end-users to raise concerns
287
S4-4
Taking action on material impacts on consumers and end-users, and approaches to managing material risks
and pursuing material opportunities related to consumers and end-users, and effectiveness of those actions
300
S4-5
Targets related to managing material negative impacts, advancing positive impacts, and managing material
risks and opportunities
304
GRI G4: FS13*
Access points in low-populated or economically disadvantaged areas
302
GRI 418-1*
Substantiated complaints concerning breaches of customer privacy and losses of customer data
295
ESRS G1 Business conduct
ESRS 2 GOV-1 The role of the administrative, supervisory and management bodies
156
ESRS 2 IRO-1
Description of the processes to identify and assess material climate-related impacts, risks and opportunities
167
G1-1
Corporate culture and business conduct policies and corporate culture
306
G1-3
Prevention and detection of corruption and bribery
312
GRI 2-27
Compliance with laws and regulations
314
*Entity-specific disclosures
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56. List of data points originating from EU legislation
Materiality
ESRS 2 GOV-1
Board's gender diversity paragraph 21 (d)
p. 156
ESRS 2 GOV-1
Percentage of board members who are independent paragraph 21 (e) of paragraph 21
p. 156
ESRS 2 GOV-4
Due diligence statement paragraph 30
p. 160
ESRS 2 SBM-1
Participation in fossil fuel activities Paragraph 40(d)(i)
not material
ESRS 2 SBM-1
Participation in activities related to the production of chemicals Paragraph 40(d)(ii)
not material
ESRS 2 SBM-1
Participation in activities related to disputed weapons, paragraph 40(d)(iii)
not material
ESRS 2 SBM-1
Participation in activities related to tobacco production and production paragraph 40(d)(iv)
not material
ESRS E1-1
Transition plan to reach climate neutrality by 2050 paragraph 14
p. 250
ESRS E1-1
Undertakings excluded from Paris-aligned Benchmarks paragraph 16 (g)
p. 250
ESRS E1-4
GHG emission reduction target paragraph 34
p. 247
ESRS E1-5
Use of energy from fossil sources, broken down by source (only sectors with a significant impact
on climate) paragraph 38
not material
ESRS E1-5
Energy consumption and structure, paragraph 37
not material
ESRS E1-5
Energy intensity in relation to activities in sectors with a high climate impact paragraphs 40 to 43 not material
ESRS E1-6
Scope 1, 2, 3 gross and total GHG emissions paragraph 44
p. 253
ESRS E1-6
Gross GHG intensity paragraphs 53 to 55
p. 253
ESRS E1-7
GHG capture and carbon credits paragraph 56
p. 256
ESRS E1-9
Exposure of the benchmark portfolio to climate-related physical risks paragraph 66
Not yet reported due to phase-in
ESRS E1-9
Amounts of funds broken down into acute and chronic physical risk, paragraph 66(a)
Not yet reported due to phase-in
ESRS E1-9
Location of significant assets exposed to substantial physical risk paragraph 66(c)
ESRS E1-9.
Real estate assets book value breakdown by energy efficiency class paragraph 67(c)
not material
ESRS E1-9
Extent of portfolio exposure to climate-related opportunities paragraph 69
69. a) Not yet reported due to
phase-in
ESRS E2-4
Emissions to air, water and land of each pollutant listed in Annex II to the European PRTR
Regulation European Pollutant Release and Transfer Register, paragraph 28
not material
ESRS E3-1
Water and marine resources paragraph 9
p. 246
ESRS E3-1
Dedicated policy, paragraph 13
not material
ESRS E3-1
Sustainable oceans and seas paragraph 14
p. 246
SRS E3-4
Total water recycled and reused paragraph 28(c)
not material
ESRS E3-4
Total water consumption in m3 per net revenue on own operations paragraph 29
not material
ESRS 2 – IRO 1 – E4 Paragraph 16 (a) i
not material
ESRS 2 – IRO 1 – E4 Paragraph 16 (b)
p. 167
ESRS 2 – IRO 1 – E4 Paragraph 16 (c)
not material
ESRS E4-2
Sustainable land / agriculture practices or policies paragraph 24 (b)
p. 246
ESRS E4-2
Sustainable oceans / seas practices or policies paragraph 24 (c)
p. 246
ESRS E4-2
Policies to address deforestation paragraph 24 (d)
p. 246
ESRS E5-5
Non-recycled waste paragraph 37 (d)
not material
ESRS E5-5
Hazardous waste and radioactive waste paragraph 39
not material
ESRS 2- SBM3 - S1
Risk of incidents of forced labour paragraph 14 (f)
p. 175
ESRS 2- SBM3 - S1
Risk of incidents of child labour paragraph 14 (g)
p. 175
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56. List of data points originating from EU legislation
Materiality
ESRS S1-1
Human rights policy commitments paragraph 20
p. 282
ESRS S1-1
Due diligence policies on issues addressed by the fundamental International Labor Organisation
Conventions 1 to 8, paragraph 21
p. 282
ESRS S1-1
processes and measures for preventing trafficking in human beings paragraph 22
not material
ESRS S1-1
workplace accident prevention policy or management system paragraph 23
p. 282
ESRS S1-3
grievance/complaints handling mechanisms paragraph 32 (c)
p. 270
ESRS S1-14
Number of fatalities and number and rate of work- related accidents paragraph 88 (b) and (c)
p. 281
ESRS S1-14
Number of days lost to injuries, accidents, fatalities or illness paragraph 88 (e)
p. 281
ESRS S1-16
Unadjusted gender pay gap paragraph 97 (a)
p. 276
ESRS S1-16
Excessive CEO pay ratio paragraph 97 (b)
p. 276
ESRS S1-17
Incidents of discrimination paragraph 103 (a)
p. 270
ESRS S1-17
Non-respect of UNGPs on Business and Human Rights and OECD paragraph 104 (a)
not material
ESRS 2- SBM3 – S2
Significant risk of child labour or forced labour in the value chain paragraph 11 (b)
not material
ESRS S2-1
Human rights policy commitments paragraph 17
not material
ESRS S2-1
Policies related to value chain workers paragraph 18
not material
ESRS S2-1
Non-respect of UNGPs on Business and Human Rights principles and OECD guidelines
paragraph 19
not material
ESRS S2-1
Due diligence policies on issues addressed by the fundamental International Labor Organisation
Conventions 1 to 8, paragraph 19
not material
ESRS S2-4
Human rights issues and incidents connected to its upstream and downstream value chain
paragraph 36
not material
ESRS S3-1
Human rights policy commitments paragraph 16
not material
ESRS S3-1
non-respect of UNGPs on Business and Human Rights, ILO principles or and OECD guidelines
paragraph 17
not material
ESRS S3-4
Human rights issues and incidents paragraph 36
not material
ESRS S4-1
Policies related to consumers and end-users paragraph 16
p. 299
ESRS S4-1
Non-respect of UNGPs on Business and Human Rights and OECD guidelines paragraph 17
p. 299
ESRS S4-4
Human rights issues and incidents paragraph 35
p. 300
ESRS G1-1
United Nations Convention against Corruption paragraph 10 (b)
p. 306
ESRS G1-1
Protection of whistleblowers paragraph 10 (d)
not material
ESRS G1-4
Fines for violation of anti- corruption and anti-bribery laws paragraph 24 (a)
p. 313
ESRS G1-4
Standards of anti- corruption and anti- bribery paragraph 24 (b)
p. 313
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STATEMENT
On behalf of OTP Bank Plc. we declare that, to the best of our knowledge, the separate and consolidated
financial statements which have been prepared in accordance with the applicable accounting standards,
present a true and fair view of the assets, liabilities, financial position and profit and loss of OTP Bank Plc.
and its consolidated subsidiaries and associates, and give a fair view of the position, development and
performance of OTP Bank Plc. and its consolidated subsidiaries and associates, describing the principal
risks and uncertainties, and do not conceal facts or information which are relevant to the evaluation of the
Issuer’s position. Moreover, we declare that the Sustainability Report, as part of the Management Report,
was prepared in accordance with sustainability reporting standards of the Accounting Act (Act C of 2000 on
Accounting), the European Sustainability Reporting Standards (ESRS), and with the provisions of Article 8
of Regulation (EU) 2020/852 of the European Parliament and of the Council (EU Taxonomy Regulation).
Budapest, 19 March 2025
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SUPPLEMENTARY DATA
MANAGEMENT REPORT (CONSOLIDATED)
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327
METHODOLOGICAL SUMMARY OF THE CHANGE IN THE SCOPE OF ADJUSTMENT ITEMS
In accordance with the management’s decision, the scope of adjustment items presented on consolidated level
changed from 2024.
According to the methodology applied until the end of 2023 (hereinafter: old methodology), in 2023 the
following adjustment items were carved out of the regular P&L accounts of individual segments, with after tax
amount: dividends and net cash transfers, goodwill/investment impairment charges, special tax on financial
institutions, expected one-off effect of the interest rate cap for certain loans in Hungary and Serbia, effect of
the winding up of Sberbank Hungary, effect of acquisitions, result of the treasury share swap agreement, and
impairments on Russian government bonds at OTP Core and DSK Bank.
According to the methodology applied from 2024 onwards (hereinafter: new methodology), only the following
adjustment items are carved out and presented on consolidated level, with after tax amount: goodwill
impairment, and the direct effect of acquisitions. Starting from 2024, the direct effect of acquisitions includes
only three items: badwill and initial risk cost related to acquisitions, and the gain or loss on the sale of a
subsidiary. Under the old methodology, the effect of acquisitions line included further acquisition-related items,
such as integration costs, and customer base value amortization.
From 3Q 2024, a materiality threshold was introduced: the relevant items are presented amongst adjustments
only if the given item exceeds 10% of the quarterly consolidated profit after tax.
Under the new methodology, items previously presented as adjustments are now presented in the relevant
geographical or business segment where they occurred (e.g. the special banking taxes in Hungary are
presented partly within OTP Core and partly within Merkantil Group segment).
For the sake of comparability, in the report the relevant consolidated tables are presented in accordance with
both the old and the new methodologies, including data for 2024 under the old methodology144.
This change in methodology does not affect the consolidated and separate balance sheets, as, according to
both the old and the new methodologies, the adjustment items affect only the profit and loss statement and
the relevant performance indicators calculated from the profit and loss lines concerned, but not the balance
sheet.
144 For the actual period, under the old methodology the Dividends and net cash transfers adjustment line is zero, as taking into account its magnitude,
this item is presented on the Other net non-interest income line.
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FOOTNOTES OF THE TABLE ‘CONSOLIDATED PROFIT AFTER TAX BREAKDOWN BY SUBSIDIARIES
(IFRS)’
General note: regarding OTP Core and other subsidiaries, the adjusted profit after tax is calculated without the
effect of adjustment items according to the new methodology.
(1) Aggregated adjusted profit after tax of OTP Core and foreign banks.
(2) OTP Core is an economic unit for measuring the result of core business activity of OTP Group in Hungary.
Financials of OTP Core are calculated from the partially consolidated IFRS financial statements of certain
companies engaged in OTP Group’s operation in Hungary. These companies include OTP Bank Hungary Plc.,
OTP Mortgage Bank Ltd, OTP Building Society Ltd, OTP Factoring Ltd, OTP Financial Point Ltd., and
companies providing intragroup financing; OTP Bank Employee Stock Ownership Plan Organization was
included from 4Q 2016; OTP Card Factory Ltd., OTP Facility Management Llc., MONICOMP Ltd. and OTP
Real Estate Leasing Ltd. were included from 1Q 2017 (from 1Q 2019 OTP Real Estate Lease Ltd. was
eliminated from OTP Core); OTP Mobile Service Llc. and OTP Ingatlanpont Llc. were included from 1Q 2019;
OTP Ecosystem Ltd. (previous name: OTP eBIZ Ltd., it was eliminated from 1Q 2023) was included from 1Q
2020; OTP OTP Home Solutions was included from 2Q 2021; Bajor-Polár Center Real Estate Management
Ltd., CIL Babér Ltd., BANK CENTER No. 1. Ltd. and MFM Project Investment and Development Ltd. were
included from 1Q 2024 (in 4Q 2024, MFM Project Investment and Development Ltd and Bajor-Polár Center
Real Estate Management Ltd merged into BANK CENTER No. 1. Investment and Development Ltd. At the
same time OTP Facility Management Ltd., which was already part of OTP Core before 2024, merged into CIL
Babér Ltd.).
(3) The result and balance sheet of OTP Factoring Bulgaria EAD and DSK Leasing AD is included.
(4) Until August 2024, including the statement of recognised income and balance sheet of SKB Banka d.d.
Ljubljana, SKB Leasing d.o.o., SKB Leasing Select d.o.o. and from February 2023 Nova Kreditna Banka
Maribor d.d. In august 2024, the merger of SKB Banka and Nova KBM was completed.
(5) The statement of recognised income and balance sheet of OTP Leasing d.d. was included.
(6) The financial performance of OTP Factoring Serbia d.o.o, OTP Lizing d.o.o., OTP Leasing Srbija d.o.o.,
OTP Osiguranje A.D.O. and OTP Services d.o.o. is included.
(7) The balance sheet of Ipoteka Bank in Uzbekistan was consolidated from June 2023, whereas the adjusted
profit of Ipoteka Bank was recognized in the consolidated P&L from 3Q 2023.
(8) Figures are based on the aggregated financial statements of OTP Bank JSC, LLC OTP Leasing, and OTP
Factoring Ukraine LLC.
(9) The statement of recognised income and balance sheet of OTP Debt Collection d.o.o., and the acquired
Podgoricka banka (which merged into the Montenegrin bank in 4Q 2020) was included.
(10) The balance sheet of the newly acquired Alpha Bank Albania was included from July 2022, its statement
of recognised income from August 2022. Alpha Bank Albania merged with OTP Bank Albania in December
2022.
(11) The statement of recognised income and balance sheet of LLC MFO “OTP Finance” is included.
(12) In July 2024 the sale of the Romanian bank was financially closed, therefore the Romanian segment
contributed to the Group results until June 2024.
(13) The subconsolidated adjusted profit after tax of Merkantil Group (Merkantil Bank Ltd., Merkantil Bérlet
Ltd., OTP Real Estate Leasing Ltd., NIMO 2002 Ltd., SPLC-P Ltd., SPLC Ltd.) was presented.
(14) LLC AMC OTP Capital, DSK Asset Management EAD (Bulgaria), ILIRIKA DZU a.d. Belgrade (Serbia),
and OTP Asset Management SAI S.A. (Romania) until September 2024.
(15) Velvin Ventures Ltd. (Belize), SC Aloha Buzz SRL, SC Favo Consultanta SRL, SC Tezaur Cont SRL
(Romania), OTP Solution Fund (Ukraine), Mendota Invest d.o.o. (Slovenia), R.E. Four d.o.o., Novi Sad
(Serbia).
(16) The adjusted profit after tax of the Hungarian operation line includes the adjusted profit after tax of the
Hungarian subsidiaries, as well as the eliminations allocated onto these entities.
(17) The adjusted profit after tax of the Foreign operation line includes the adjusted profit after tax of the
Foreign subsidiaries, as well as the eliminations allocated onto these entities.
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329
CALCULCULATION OF THE ADJUSTED LINES OF IFRS PROFIT AND LOSS STATEMENTS, AS WELL
AS THE ADJUSTED BALANCE SHEET LINES PRESENTED IN THE REPORT, AND THE METHODOLOGY
FOR CALCULATING THE FX-ADJUSTED BALANCE SHEET AND P&L DYNAMICS
In order to present Group performance reflecting the underlying business trends, the presented consolidated
and separate / sub-consolidated profit and loss statements of this report were adjusted, among others, in the
following ways, and the adjusted P&Ls are shown and analysed in the Report (unless otherwise stated).
Consolidated financial statements together with separate figures of OTP Bank are disclosed in the Financial
Data section.
The details of the methodology change affecting adjustment items can be found in the Methodological
summary of the change in the scope of adjustment items section.
Adjustments affecting the income statement:
• The after tax effect of adjustment items (certain, typically one-off items from banking operations’ point of
view) are shown and analysed separately in the Statement of Recognised Income.
• Performance indicators (such as cost/income ratio, net interest margin, risk cost to average gross loans as
well as ROA and ROE ratios, etc.) presented in this report are calculated on the basis of the adjusted profit
and loss statement excluding adjustment items (unless otherwise indicated).
• In the Consolidated financial highlights and share data table the Book Value Per Share and the Tangible
Book Value Per Share, as well as indicators derived from these are calculated based on the consolidated
diluted share count used for EPS calculation.
• Within the report, FX-adjusted statistics for business volume developments and their product breakdown, as
well as the FX-adjusted stock of allowances for loan losses are disclosed, too. For FX-adjustment, the closing
cross currency rates for the current period were used to calculate the HUF equivalent of loan and deposit
volumes in the base periods. Thus, the FX-adjusted volumes for the base periods are different from those
published in previous reports.
• The FX-adjusted changes of certain consolidated or sub-consolidated P&L lines in HUF terms may be
presented in this Report. According to the applied methodology in the case of the P&L lines, the FX effect is
filtered out only in relation to the currency of the given country, irrespective of the transactional currency mix
in which the given P&L line materialized. Thus, for instance, as for the consolidated FX-adjusted operating
cost development, the effect of the Hungarian Forint rate changes against the given currency is not eliminated
in the case of the cost items arising in FX within the Hungarian cost base.
Adjustments affecting the balance sheet:
• On 9 February 2024 OTP Bank announced the signing of the share sale and purchase agreement to sell its
Romanian operation, and the transaction was financially completed on 30 July 2024. As a result of this,
according to IFRS 5, starting from the end of 2023 until June 2024, the Romanian operation was presented
as an asset classified as held for sale in the consolidated balance sheet, and as discontinued operation in
the income statement. With regards to the consolidated balance sheet, from 4Q 2023 all Romanian assets
and liabilities were shown on a separate line in the balance sheet. As for the consolidated income statement,
in 4Q 2023 for full-year 2023, and in the 2024 actual period the Romanian contribution was shown separately
from the result of continuing operation, on the Net loss / gain from discontinued operation line, i.e. from 4Q
2023 the particular P&L lines in the ‘continuing operations’ section of the P&L don’t incorporate the
contribution from the Romanian subsidiaries. As opposed to this, in the adjusted financial statements
presented in the Management Report – in line with the structure of the financial statements monitored by the
management – until its deconsolidation the Romanian operation was presented in a way as if it was still
classified as continuing operation, i.e. its net interest income contribution was presented on the net interest
income line in the consolidated adjusted income statement.
• In the adjusted balance sheet, net customer loans include the stock of loans at amortized cost, loans
mandatorily at fair value through profit or loss, and finance lease receivables.
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
330
Alternative performance measures
pursuant to the National Bank of Hungary 5/2017. (V.24.) recommendation145
Alternative
performance
measures
name
Description
Calculation
(data in HUF million)
Measures value
2023
old
methodology
2023
new
methodology
2024
new
methodology
Leverage,
consolidated146
The leverage ratio
is calculated
pursuant to Article
429 CRR. The
calculation of the
indicator is
designed quarterly
by the Bank for the
prudential
consolidation
circle.
The leverage ratio shall be calculated as an institution’s capital
measure divided by that institution's total exposure measure and
shall be expressed as a percentage.
9.3%
9.3%
10.4%
Example for 2024:
4,842,978.2
=
10.4%
46,412,734.7
Example for 2023:
3,945,569.6
=
9.3%
new methodology
42,426,769.2
Liquidity
Coverage
Ratio (LCR)
According to Article
412 (1) of CRR,
the liquidity
coverage ratio
(LCR) is designed
to promote short-
term resilience of
the Issuer’s /
Group's liquidity
risk profile and
aims to ensure that
the Issuer / Group
has an adequate
stock of
unencumbered
High Quality Liquid
Assets (HQLA) to
meet its liquidity
needs for a 30
calendar day
liquidity stress
scenario.
The LCR is expressed as: (stock of HQLA) / (total net cash outflows
over the next 30 calendar days) ≥ 100%.
The numerator of the LCR is the stock of HQLA (High Quality Liquid
Assets). In order to qualify as HQLA, assets should be liquid in
markets during a time of stress and, in most cases, be eligible for use
in central bank operations.
The denominator of the LCR is the total net cash outflows, defined as
total expected cash outflows minus total expected cash inflow in the
specified stress scenario for the subsequent 30 calendar days. Total
cash inflows are subject to an aggregate cap of 75% of total
expected cash outflows, thereby ensuring a minimum level of HQLA
holdings at all times.
246.1%
246.1%
265.6%
Example for 2024:
12,296,693.9
= 265.6%
6,618,330.9 -
1,987,679.4
Example for 2023:
11,062,683.8
= 246.1%
6,528,404.6 -
2,033,178.9
ROE,
consolidated
The return on
equity ratio shall be
calculated the
consolidated
accounting profit
after tax for the
given period
divided by the
average equity,
thus shows the
effectiveness of the
use of equity.
The numerator of the indicator is the consolidated profit after tax for
the given period (annualized for periods less than one year), the
denominator is the average consolidated equity. (The definition of
average equity: calendar day-weighted average of the average
balance sheet items in periods comprising the given period, where
periods comprising the given period are defined as quarters (and
within that months) in case of 1H, 9M and FY periods, and months in
case of quarters. Furthermore, the average of the average balance
sheet items is computed as the arithmetic average of closing balance
sheet items for the previous period and the current period.)
27.2%
27.2%
23.5%
Example for 2024:
1,076,139.4 *
1.0
=
23.5%
4,582,285.5
Example for 2023:
990,459.5 *
1.0
=
27.2%
new methodology
3,639,782.4
Example for 2023:
990,459.5 *
1.0
=
27.2%
old methodology
3,639,782.4
145 The NBH’s recommendation (5/2017, 24 May) on Alternative Performance Measures (APM) came into effect from 1 June 2017, in lin e with ESMA’s
guidance (ESMA/2015/1415) on the same matter. The recommendation is aimed at – amongst other things – enhancing the transparency, reliability,
clarity and comparability of those APMs within the framework of regulated information and thus facilitating the protection of existing and potential
investors.
146 Based on the prudential consolidation scope, which is different from the consolidation scope used in this report.
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
331
Alternative
performance
measures
name
Description
Calculation
(data in HUF million)
Measures value
2023
old
methodology
2023
new
methodology
2024
new
methodology
ROE
(adjusted),
consolidated
The return on
equity ratio shall be
calculated the
consolidated
adjusted profit after
tax for the given
period divided by
the average equity,
thus shows the
effectiveness of the
use of equity.
The numerator of the indicator is the consolidated adjusted profit
after tax for the given period (annualized for periods less than one
year), the denominator is the average consolidated equity.
27.7%
24.9%
23.5%
Example for 2024:
1,076,139.4 *
1.0
=
23.5%
4,582,285.5
Example for 2023:
904,952.5 *
1.0
=
24.9%
new methodology
3,639,782.4
Example for 2023:
1,008,582.9 *
1.0
=
27.7%
old methodology
3,639,782.4
ROA
(adjusted),
consolidated
The return on
asset ratio shall be
calculated the
consolidated
adjusted net profit
for the given period
divided by the
average total
asset, thus shows
the effectiveness of
the use of equity.
The numerator of the indicator is the consolidated adjusted net profit
for the given period, the denominator is the average consolidated
total asset. (The definition of average asset: calendar day-weighted
average of the average balance sheet items in periods comprising
the given period, where periods comprising the given period are
defined as quarters (and within that months) in case of 1H, 9M and
FY periods, and months in case of quarters. Furthermore, the
average of the average balance sheet items is computed as the
arithmetic average of closing balance sheet items for the previous
period and the current period.)
2.7%
2.4%
2.6%
Example for 2024:
1,076,139.4 *
1.0
=
2.6%
41,688,546.3
Example for 2023:
904,952.5 *
1.0
=
2.4%
new methodology
37,168,362.1
Example for 2023:
1,008,582.9 *
1.0
=
2.7%
old methodology
37,168,362.1
Operating profit
margin
(adjusted),
consolidated
The operating
profit margin shall
be calculated the
consolidated
adjusted net
operating profit for
the given period
divided by the
average total
assets, thus shows
the effectiveness of
the operating profit
generation on total
assets.
The numerator of the indicator is the consolidated adjusted net
operating profit for the given period, the denominator is the average
consolidated total assets.
3.39%
3.41%
3.71%
Example for 2024:
1,545,377.0 *
1.0
=
3.71%
41,688,546.3
Example for 2023:
1,265,909.2 *
1.0
=
3.41%
new methodology
37,168,362.1
Example for 2023:
1,260,849.8 *
1.0
=
3.39%
old methodology
37,168,362.1
Total income
margin
(adjusted),
consolidated
The total income
margin shall be
calculated the
consolidated
adjusted total
income for the
given period
divided by the
average total
assets, thus shows
the effectiveness of
income generation
on total assets.
The numerator of the indicator is the consolidated adjusted total
income for the given period (annualized for periods less than one
year), the denominator is the average consolidated total assets.
5.99%
6.04%
6.32%
Example for 2024:
2,633,907.7 *
1.0
=
6.32%
41,688,546.3
Example for 2023:
2,245,706.5 *
1.0
=
6.04%
new methodology
37,168,362.1
Example for 2023:
2,224,584.2 *
1.0
=
5.99%
old methodology
37,168,362.1
Net interest
margin
(adjusted),
consolidated
The net interest
margin shall be
calculated the
consolidated
adjusted net
interest income for
the given period
divided by the
average total
assets, thus shows
the effectiveness of
net interest income
generation on total
assets.
The numerator of the indicator is the consolidated adjusted net
interest income for the given period (annualized for periods less than
one year), the denominator is the average consolidated total assets.
3.93%
3.93%
4.28%
Example for 2024:
1,782,603.6 *
1.0
=
4.28%
41,688,546.3
Example for 2023:
1,461,849.8 *
1.0
=
3.93%
new methodology
37,168,362.1
Example for 2023:
1,459,693.5 *
1.0
=
3.93%
old methodology
37,168,362.1
Operating cost
(adjusted)/ total
assets,
consolidated
The indicator
shows the
operational
efficiency.
The numerator of the indicator is the consolidated adjusted operating
cost for the given period (annualized for periods less than one year),
the denominator is the average consolidated total assets.
2.59%
2.64%
2.61%
Example for 2024:
1,088,530.7 *
1.0
=
2.61%
41,688,546.3
Example for 2023:
979,797.3 *
1.0
=
2.64%
new methodology
37,168,362.1
Example for 2023:
963,734.3 *
1.0
=
2.59%
old methodology
37,168,362.1
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
332
Alternative
performance
measures
name
Description
Calculation
(data in HUF million)
Measures value
2023
old
methodology
2023
new
methodology
2024
new
methodology
Cost/income
ratio
(adjusted),
consolidated
The indicator is
another measure
of operational
efficiency.
The numerator of the indicator is the consolidated adjusted operating
cost for the given period, the denominator is the adjusted operating
income for the given period.
43.3%
43.6%
41.3%
Example for 2024:
1,088,530.7
=
41.3%
2,633,907.7
Example for 2023:
979,797.3
=
43.6%
new methodology
2,245,706.5
Example for 2023:
963,734.3
=
43.3%
old methodology
2,224,584.2
Provision for
impairment on
loan and
placement
losses
(adjusted)/
average
(adjusted)
gross loans,
consolidated
The indicator
provides
information on the
amount of
impairment on loan
and placement
losses relative to
gross customer
loans.
The numerator of the indicator is the consolidated adjusted provision
for impairment on loan and placement losses for the given period
(annualized for periods less than one year), the denominator is the
adjusted consolidated gross customer loans for the given period.
(The definition of average (adjusted) gross customer loans: calendar
day-weighted average of the average balance sheet items in periods
comprising the given period, where periods comprising the given
period are defined as quarters (and within that months) in case of 1H,
9M and FY periods, and months in case of quarters. Furthermore,
the average of the average balance sheet items is computed as the
arithmetic average of closing balance sheet items for the previous
period and the current period.)
0.16%
0.34%
0.38%
Example for 2024:
89,863.8 *
1.0
=
0.38%
23,446,341.1
Example for 2023:
71,689.9 *
1.0
=
0.34%
new methodology
21,377,407.9
Example for 2023:
34,780.7 *
1.0
=
0.16%
old methodology
21,377,407.9
Total risk cost
(adjusted)/ total
asset ratio,
consolidated
The indicator
shows the amount
of total risk cost
relative to the
balance sheet
total.
The numerator of the indicator is consolidated adjusted total risk cost
for the given period (annualized for periods less than one year), the
denominator is the average consolidated total assets for the given
period.
0.01%
0.11%
0.16%
Example for 2024:
66,032.5 *
1.0
=
0.38%
41,688,546.3
Example for 2023:
39,098.5 *
1.0
=
0.23%
new methodology
37,168,362.1
Example for 2023:
2,970.4 *
1.0
=
0.10%
old methodology
37,168,362.1
Effective tax
rate (adjusted),
consolidated
The indicator
shows the amount
of corporate
income tax
accounted on pre-
tax profit.
The numerator of the indicator is consolidated adjusted corporate
income tax for the given period, the denominator is the consolidated
adjusted pre-tax profit for the given period.
17.5%
23.3%
22.4%
Example for 2024:
310,743.2
=
22.4%
1,386,882.6
Example for 2023:
274,271.5
=
23.3%
new methodology
1,179,224.0
Example for 2023:
213,745.5
=
17.5%
old methodology
1,222,328.4
Net
loan/deposit
ratio (FX-
adjusted),
consolidated
The net loan to
deposit ratio is the
indicator for
assessing the
bank's liquidity
position.
The numerator of the indicator is the consolidated net consumer loan
volume (gross loan reduced the amount of provision), the
denominator is the end of period consolidated consumer FX-adjusted
deposit volume.
73%
73%
77%
Example for 2024:
23,361,637.9
=
74%
31,666,401.0
Example for 2023:
22,549,534.3
=
73%
new methodology
30,937,626.9
Example for 2023:
22,549,534.3
=
73%
old methodology
30,937,626.9
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
333
ADJUSTMENTS ON THE CONSOLIDATED STATEMENT OF PROFIT OR LOSS (IFRS)
in HUF million
2023
2023
2024
old
methodology
HUF million
new
methodology
HUF million
new
methodology
HUF million
Net interest income
1,386,706
1,386,706
1,745,341
(-) Direct effect of acquisitions
(1,867)
(4,023)
0
(-) Reclassification due to the introduction of IFRS16
(2,970)
(2,970)
(3,557)
(+) Presentation of the contribution from discontinued operation and assets held for sale on
the adjusted P&L lines
68,151
68,151
33,706
Net interest income (adj.)
1,459,694
1,461,850
1,782,604
Net fees and commissions
691,994
691,994
842,654
(+) Financial Transaction Tax
(98,472)
(98,472)
(123,298)
(-) Direct effect of acquisitions
220
247
0
(+) Presentation of the contribution from discontinued operation and assets held for sale on
the adjusted P&L lines
5,537
5,537
3,503
(-) Structural shift of income from currency exchange from net fees to the FX result
120,693
120,693
177,228
Net fees and commissions (adj.)
478,146
478,119
545,631
Foreign exchange result
13,827
13,827
(12,048)
(-) Direct effect of acquisitions
(191)
(190)
0
(+) Presentation of the contribution from discontinued operation and assets held for sale on
the adjusted P&L lines
(11,397)
(11,397)
(1,705)
(+) Structural shift of income from currency exchange from net fees to the FX result
120,693
120,693
177,228
Foreign exchange result (adj.)
123,314
123,313
163,475
Gain/loss on securities, net
7,283
7,283
10,326
(-) Direct effect of acquisitions
(1,125)
-
-
(+) Presentation of the contribution from discontinued operation and assets held for sale on
the adjusted P&L lines
194
194
5,536
(-) Revaluation result of the treasury share swap agreement
(3,868)
-
-
(+) Structural adjustment due to the Gain from derecognition of financial assets at amortized
cost line (against Gain/loss on securities, net)
(18,716)
(18,716)
(9,495)
(+) Shifting of the Gains and losses on non-trading securities mandatorily at fair value through
profit or loss line from the Net other non-interest income to the Gains or losses from securities
line
8,240
8,240
6,043
Gain/loss on securities, net (adj.)
1,994
(2,999)
12,410
Result of discontinued operation and gains from disposal of subsidiaries classified as
held for sale
(21,246)
(21,246)
19,756
(-) Direct effect of acquisitions
(55,913)
(55,913)
0
Result of discontinued operation and gains from disposal of subsidiaries classified as
held for sale (adj.)
34,667
34,667
19,756
Gains and losses on real estate transactions
7,195
7,195
15,918
Result of discontinued operation and gains from disposal of subsidiaries classified as
held for sale (adjusted)
34,667
34,667
19,756
(+) Other non-interest income
315,155
315,155
129,280
(+) Net results on derivative instruments and hedge relationships
(12,760)
(12,760)
12,004
(+) Net insurance result
1,915
1,915
2,697
(+) Losses on loans measured mandatorily at fair value through other comprehensive
income and on securities at amortized cost
94,613
94,613
27,373
(+) Profit from associates
-
14,766
12,970
(-) Shifting of the Gains and losses on non-trading securities mandatorily at fair value through
profit or loss line from the Net other non-interest income to the Gains or losses from securities
line
8,240
8,240
6,043
(-) Received cash transfers
531
-
-
(+) Other other non-interest expenses
(54,490)
(54,490)
(72,638)
(+) Change in shareholders' equity of companies consolidated with equity method, and the
change in the net asset value of the private equity funds managed by PortfoLion
2,738
-
-
(-) Direct effect of acquisitions
191,783
191,793
0
(+) Presentation of the contribution from discontinued operation and assets held for sale on
the adjusted P&L lines
(13,697)
(13,676)
(8,971)
(+) Shifting of the costs of mediated services at Merkantil Bérlet Ltd. to the net other non-
interest result line
(2,119)
(2,119)
(2,387)
(+) Structural adjustment due to the Gain from derecognition of financial assets at amortized
cost line (against Net other non-interest result)
191
191
(172)
(-) Effect of the winding up of Sberbank Hungary (recovery leg)
11,416
-
-
Net other non-interest result (adj.)
161,436
185,423
129,788
Gain from derecognition of financial assets at amortized cost
(17,182)
(17,182)
(14,409)
(-) Structural adjustment due to the Gain from derecognition of financial assets at amortized
cost line (against Gain/loss on securities, net)
(18,716)
(18,716)
(9,495)
(-) Structural adjustment due to the Gain from derecognition of financial assets at amortized
cost line (against Provision for impairment on loan losses)
1,343
1,343
(4,741)
(-) Structural adjustment due to the Gain from derecognition of financial assets at amortized
cost line (against Net other non-interest result)
191
191
(172)
Gain from derecognition of financial assets at amortized cost (adj.)
(0)
(0)
(0)
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
334
in HUF million
2023
2023
2024
old
methodology
HUF million
new
methodology
HUF million
new
methodology
HUF million
Provision for impairment on loan and placement losses
(109,223)
(109,223)
(72,383)
(+) Modification gains or losses
(38,141)
(38,141)
(13,193)
(+) Change in the fair value attributable to changes in the credit risk of loans
mandatorily measured at fair value through profit of loss
(91)
(91)
5,504
(+) Loss allowance on securities at fair value through other comprehensive income and
on securities at amortized cost
8,831
8,831
(39,907)
(+) Provision for commitments and guarantees given
19,870
19,870
(2,371)
(+) Impairment of assets subject to operating lease and of investment properties
1,333
1,333
18
(-) Direct effect of acquisitions
(51,873)
(51,873)
0
(-) Structural correction between Provision for loan losses and Other provisions
10,164
10,164
(39,890)
(+) Presentation of the contribution from discontinued operation and assets held for sale on
the adjusted P&L lines
2,758
2,758
(4,714)
(+) Structural adjustment due to the Gain from derecognition of financial assets at amortized
cost line (against Provision for impairment on loan losses)
1,343
1,343
(4,741)
(-) Shifting of provision for impairment on placement losses to the other provisions line
79
79
(2,035)
(-) Expected one-off effect of the interest rate cap for certain loans in Hungary and Serbia
(36,909)
-
-
Provision for impairment on loan losses (adj.)
(34,781)
(71,690)
(89,864)
Profit from associates
14,766
-
-
(+) Received cash transfers
531
-
-
(+) Paid cash transfers
(15,360)
-
-
(-) Film subsidies and cash transfers to public benefit organisations
(15,067)
-
-
(-) Dividend income of swap counterparty shares kept under the treasury share swap
agreement
14,200
-
-
(-) Change in shareholders' equity of companies consolidated with equity method, and the
change in the net asset value of the private equity funds managed by PortfoLion
2,738
-
-
(+) Presentation of the contribution from discontinued operation and assets held for sale on
the adjusted P&L lines
22
-
-
After tax dividends and net cash transfers
(1,911)
-
-
Depreciation
(111,996)
(111,996)
(134,293)
(-) Direct effect of acquisitions
(4,900)
(3)
0
(-) Reclassification due to the introduction of IFRS16
(15,575)
(15,575)
(17,358)
(+) Presentation of the contribution from discontinued operation and assets held for sale on
the adjusted P&L lines
(4,040)
(4,040)
(1,692)
(+) Structural shift of right of use asset depreciation between other non-interest expenses and
depreciation line
0
0
0
Depreciation (adj.)
(95,561)
(100,458)
(118,628)
Personnel expenses
(478,695)
(478,695)
(550,175)
(-) Direct effect of acquisitions
(1,307)
1,199
0
(+) Presentation of the contribution from discontinued operation and assets held for sale on
the adjusted P&L lines
(26,571)
(26,571)
(14,198)
Personnel expenses (adj.)
(503,959)
(506,465)
(564,374)
Income taxes
(189,477)
(189,477)
(253,440)
(-) Corporate tax impact of goodwill/investment impairment charges
(3,919)
0
0
(-) Corporate tax impact of the special tax on financial institutions
6,079
-
-
(+) Tax deductible transfers to spectator sports (offset against corporate taxes)
(73)
(12,131)
(12,092)
(-) Corporate tax impact of the direct effect of acquisitions
9,375
6,892
0
(+) Presentation of the contribution from discontinued operation and assets held for sale on
the adjusted P&L lines
(3,575)
(3,575)
(2,652)
(-) Corporate tax impact of the result of the treasury share swap agreement
348
-
-
(-) Corporate tax impact of the impairments on Russian government bonds booked at OTP
Core and DSK Bank
311
-
-
(-) Corporate tax impact of the winding up of Sberbank Hungary (contribution to the Deposit
Protection Fund)
(1,027)
-
-
(-) Corporate tax impact of the expected one-off effect of the interest rate cap for certain loans
in Hungary and Serbia
3,830
-
-
(+) Structural reclassification between Corporate income tax and Other non-interest expenses
(5,624)
(5,624)
(4,159)
(+) Special taxes on financial institutions
-
(56,572)
(38,400)
Corporate income tax (adj.)
(213,746)
(274,272)
(310,743)
Other operating expense
(110,569)
(110,569)
(127,175)
(-) Other costs and expenses
(10,143)
(10,143)
(10,206)
(-) Other non-interest expenses
(69,850)
(69,850)
(89,334)
(-) Direct effect of acquisitions
(12,511)
(4,186)
0
(+) Structural correction between Provision for loan losses and Other provisions
10,164
10,164
(39,890)
(+) Presentation of the contribution from discontinued operation and assets held for sale on
the adjusted P&L lines
(98)
(98)
(186)
(-) Impairments on Russian government bonds booked at OTP Core and DSK Bank
(3,110)
-
-
(+) Shifting of provision for impairment on placement losses to the other provisions line
79
79
(2,035)
(-) Shifting of certain expenses arising from mediated services from other provisions to the
other non-interest expenses line
(1,252)
(1,252)
(1,115)
(-) Expected one-off effect of the interest rate cap for certain loans in Hungary and Serbia
181
-
-
Other provisions (adj.)
(3,741)
(14,995)
(68,631)
Other general expenses
(483,646)
(483,646)
(528,308)
(+) Other costs and expenses
(10,143)
(10,143)
(10,206)
(+) Other non-interest expenses
(69,850)
(69,850)
(89,334)
(-) Paid cash transfers
(15,360)
-
-
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
335
in HUF million
2023
2023
2024
old
methodology
HUF million
new
methodology
HUF million
new
methodology
HUF million
(+) Film subsidies and cash transfers to public benefit organisations
(15,067)
-
-
(-) Other other non-interest expenses
(54,490)
(54,490)
(72,638)
(-) Special taxes on financial institutions
(68,630)
(56,572)
(38,400)
(-) Tax deductible transfers to spectator sports (offset against corporate taxes)
(73)
(12,131)
(12,092)
(-) Financial Transaction Tax
(98,472)
(98,472)
(123,298)
(-) Direct effect of acquisitions
(6,803)
1,563
0
(+) Reclassification due to the introduction of IFRS16
(18,545)
(18,545)
(20,914)
(+) Presentation of the contribution from discontinued operation and assets held for sale on
the adjusted P&L lines
(17,284)
(17,284)
(8,627)
(-) Shifting of the costs of mediated services at Merkantil Bérlet Ltd. to the net other non-
interest result line
(2,119)
(2,119)
(2,387)
(+) Shifting of certain expenses arising from mediated services from other provisions to the
other non-interest expenses line
(1,252)
(1,252)
(1,115)
(-) Structural shift of right of use asset depreciation between other non-interest expenses and
depreciation line
0
0
0
(-) Structural reclassification between Corporate income tax and Other non-interest expenses
(5,624)
(5,624)
(4,159)
Other non-interest expenses (adj.)
(364,215)
(372,874)
(405,529)
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
336
ADJUSTMENTS OF CONSOLIDATED IFRS BALANCE SHEET LINES
2023
HUF million
2024
HUF million
Cash, amounts due from Banks and balances with the National Banks
7,125,050
6,079,012
(+) Allocation of Assets classified as held for sale among balance sheet lines
199,587
20
Cash, amounts due from Banks and balances with the National Banks (adjusted)
7,324,636
6,079,032
Placements with other banks, net of allowance for placement losses
1,567,777
1,891,901
(+) Allocation of Assets classified as held for sale among balance sheet lines
8,147
0
Placements with other banks, net of allowance for placement losses (adjusted)
1,575,924
1,891,901
Securities at fair value through profit and loss
288,884
743,399
(+) Allocation of Assets classified as held for sale among balance sheet lines
2,091
704
Securities at fair value through profit or loss (adjusted)
290,975
744,104
Securities at fair value through other comprehensive income
1,601,461
1,705,554
(+) Allocation of Assets classified as held for sale among balance sheet lines
39,430
0
Securities at fair value through other comprehensive income (adjusted)
1,640,891
1,705,554
Gross customer loans (incl. finance lease receivables and accrued interest receivables related to loans)
21,329,908 24,334,694
(+) Allocation of Assets classified as held for sale among balance sheet lines
1,136,507
0
Gross customer loans (adjusted)
22,466,415 24,334,694
Allowances for loan losses (incl. impairment of finance lease receivables)
(963,179)
(973,056)
(+) Allocation of Assets classified as held for sale among balance sheet lines
(55,856)
0
Allowances for loan losses (adjusted)
(1,019,035)
(973,056)
Associates and other investments
96,110
124,524
(+) Allocation of Assets classified as held for sale among balance sheet lines
236
0
Associates and other investments (adjusted)
96,346
124,524
Securities at amortized costs
5,249,490
7,447,176
(+) Allocation of Assets classified as held for sale among balance sheet lines
226,427
565
Securities at amortized costs (adjusted)
5,475,917
7,447,741
Tangible and intangible assets, net
860,449
985,864
(+) Allocation of Assets classified as held for sale among balance sheet lines
18,500
22
Tangible and intangible assets, net (adjusted)
878,949
985,886
Other assets
2,455,664
1,080,060
(+) Allocation of Assets classified as held for sale among balance sheet lines
(1,575,068)
(1,311)
Other assets (adjusted)
880,596
1,078,749
Amounts due to banks, the National Governments, deposits from the National Banks and other banks, and
Financial liabilities designated at fair value through profit or loss
2,011,569
2,094,681
(+) Allocation of Liabilities directly associated with assets classified as held-for-sale among balance sheet lines
1,764
0
Amounts due to banks, the National Governments, deposits from the National Banks and other banks, and
Financial liabilities designated at fair value through profit or loss (adjusted)
2,013,333
2,094,681
Deposits from customers
28,332,271 31,658,190
(+) Fair value changes of the hedged items in portfolio hedge of interest rate risk
160
8,209
(+) Allocation of Liabilities directly associated with assets classified as held-for-sale among balance sheet lines
1,095,852
0
Deposits from customers (adjusted)
29,428,284 31,666,399
Other liabilities
2,514,876
1,575,553
(+) Allocation of Liabilities directly associated with assets classified as held-for-sale among balance sheet lines
(1,097,617)
0
Other liabilities (adjusted)
1,417,260
1,575,553
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
337
STATEMENT OF PROFIT OR LOSS OF OTP BANK PLC., ACCORDING TO IFRS STANDARDS AS
ADOPTED BY THE EUROPEAN UNION (CONSOLIDATED)1
2024
HUF million
2023
HUF million
Change
%
CONTINUING OPERATIONS
Interest income calculated using the effective interest method
2,542,138
2,314,677
10
Income similar to interest income
539,984
633,587
(15)
Interest incomes
3,082,122
2,948,264
5
Interest expenses
(1,336,782)
(1,561,558)
(14)
NET INTEREST INCOME
1,745,340
1,386,706
26
Risk cost total
(109,142)
(79,281)
38
Loss allowance / Release of loss allowance on loans, placements, amounts due from
banks and repo receivables
(72,385)
(109,223)
(34)
Change in the fair value attributable to changes in the credit risk of loans mandatorily
measured at fair value through profit of loss
5,504
(91)
Loss allowance / Release of loss allowance on securities at fair value through other
comprehensive income and on securities at amortized cost
(39,907)
8,831
Provision for commitments and guarantees given
(2,371)
19,870
Impairment / (Release of impairment) of assets subject to operating lease and of
investment properties
17
1,332
NET INTEREST INCOME AFTER RISK COST
1,636,198
1,307,425
25
Income from fees and commissions
1,045,987
861,309
21
Expense from fees and commissions
(203,332)
(169,316)
20
Net profit from fees and commissions
842,655
691,993
22
Modification gain or loss
(13,193)
(38,141)
(65)
Foreign exchange gains / losses, net
(44)
1,067
(104)
Foreign exchange gains / losses, net
(12,048)
13,827
Net results on derivative instruments and hedge relationships
12,004
(12,760)
Gains / Losses on securities, net
10,326
7,283
Gains / Losses on financial assets /liabilities measured at fair value through profit or
loss
27,374
94,613
(71)
Gain from derecognition of financial assets at amortized cost
(14,409)
(17,182)
(16)
Profit from associates
12,970
14,766
(12)
Other operating income
147,895
324,266
(54)
Gains and losses on real estate transactions
15,918
7,195
121
Other non-interest income
129,280
315,155
(59)
Net insurance result
2,697
1,915
41
Other operating expense
(127,174)
(110,570)
15
Net operating income
56,938
314,243
(82)
Personnel expenses
(550,175)
(478,696)
15
Depreciation and amortization
(134,293)
(111,996)
20
Other administrative expenses
(528,306)
(483,645)
9
Other administrative expenses
(1,212,774)
(1,074,337)
13
PROFIT BEFORE INCOME TAX
1,309,824
1,201,183
9
Income tax expense
(253,440)
(189,478)
34
PROFIT AFTER INCOME TAX FOR THE PERIOD FROM CONTINUING OPERATIONS
1,056,384
1,011,705
4
DISCONTINUED OPERATIONS
Net loss / gain from discontinued operation
19,756
(21,246)
PROFIT AFTER INCOME TAX FROM CONTINUING AND DISCOUNTINUED OPERATION
1,076,140
990,459
9
From this, attributable to:
Non-controlling interest
4,227
1,801
135
Owners of the company
1,071,913
988,658
8
1 The rows of the table are based on audited numbers, but the structure of the table can differ from the IFRS financial statements presented in the Annual
Report (certain rows might be merged or represent different level of aggregation).
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
338
STATEMENT OF FINANCIAL POSITION OF OTP BANK PLC., ACCORDING TO IFRS STANDARDS AS
ADOPTED BY THE EUROPEAN UNION (CONSOLIDATED)1
2024
HUF million
2023
HUF million
Change
%
Cash, amounts due from banks and balances with the National Banks
6,079,012
7,125,049
(15)
Placements with other banks, net of loss allowance for placements
1,891,901
1,566,998
21
Repo receivables
331,837
223,884
48
Financial assets at fair value through profit or loss
743,400
288,885
157
Securities at fair value through other comprehensive income
1,705,553
1,601,461
6
Loans at amortized cost
20,290,381 17,676,533
15
Loans mandatorily at fair value through profit or loss
1,559,781
1,400,485
11
Finance lease receivables
1,511,477
1,289,712
17
Associates and other investments
124,523
96,110
30
Loans at amortized cost
7,447,177
5,249,272
42
Property and equipment
581,240
523,124
11
Intangible assets and goodwill
356,564
291,358
22
Right-of-use assets
79,830
74,698
7
Investment properties
88,240
53,381
65
Derivative financial assets designated as hedge accounting
50,381
41,967
20
Deferred tax assets
56,583
55,691
2
Current income tax receivable
7,060
7,773
(9)
Other assets
514,188
509,430
1
Assets classified as held for sale
0
1,533,333
TOTAL ASSETS
43,419,128 39,609,144
10
Amounts due to banks, the National Governments, deposits from the National Banks and
other banks
2,022,191
1,940,862
4
Repo liabilities
132,137
126,237
5
Financial liabilities designated at fair value through profit or loss
72,490
70,707
3
Deposits from customers
31,658,189 28,332,271
12
Fair value changes of the hedged items in portfolio hedge of interest rate risk
8,209
160
Liabilities from issued securities
2,593,124
2,095,548
24
Derivative financial liabilities held for trading
114,089
140,488
(19)
Derivative financial liabilities designated as hedge accounting
14,605
63,899
(77)
Leasing liabilities
82,109
76,313
8
Deferred tax liabilities
32,637
28,663
14
Current income tax payable
76,787
69,948
10
Provisions
131,637
121,119
9
Other liabilities
991,552
745,820
33
Subordinated bonds and loans
369,359
562,396
(34)
Liabilities directly associated with assets classified as held for sale
0
1,139,920
TOTAL LIABILITIES
38,299,115 35,514,351
8
Share capital
28,000
28,000
0
Retained earnings and reserves
5,327,652
4,179,322
27
Treasury shares
(245,319)
(120,489)
104
Total equity attributable to the parent
5,110,333
4,086,833
25
Total equity attributable to non-controlling interest
9,680
7,960
22
TOTAL SHARHOLDERS' EQUITY
5,120,013
4,094,793
25
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
43,419,128 39,609,144
10
1 The rows of the table are based on audited numbers, but the structure of the table can differ from the IFRS financial statements presented in the Annual
Report (certain rows might be merged or represent different level of aggregation)
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
339
SECURITY LISTED ON THE BUDAPEST STOCK EXCHANGE BETWEEN 01/01/2014 AND 31/12/2024
Issuer
Type of security
Security name
Date of issue
Date of
maturity
Ccy
OTP Bank Plc.
Retail bond
OTP_EURO_1 2015/II
17/01/2014
31/01/2015
EUR
OTP Bank Plc.
Retail bond
OTP_EURO_2 2016/I
17/01/2014
17/01/2016
EUR
OTP Bank Plc.
Retail bond
OTP_EURO_1 2015/III
31/01/2014
14/02/2015
EUR
OTP Bank Plc.
Retail bond
OTP_EURO_2 2016/II
31/01/2014
31/01/2016
EUR
OTP Bank Plc.
Retail bond
OTP_EURO_1 2015/IV
14/02/2014
28/02/2015
EUR
OTP Bank Plc.
Retail bond
OTP_EURO_2 2016/III
14/02/2014
14/02/2016
EUR
OTP Bank Plc.
Retail bond
OTP_ EURO_1 2015/V
28/02/2014
14/03/2015
EUR
OTP Bank Plc.
Retail bond
OTP_EURO_2 2016/IV
28/02/2014
28/02/2016
EUR
OTP Bank Plc.
Retail bond
OTP_EURO_1 2015/VI
14/03/2014
28/03/2015
EUR
OTP Bank Plc.
Retail bond
OTP_EURO_2 2016/V
14/03/2014
14/03/2016
EUR
OTP Bank Plc.
Retail bond
OTP_EURO_1 2015/VII
21/03/2014
04/04/2015
EUR
OTP Bank Plc.
Retail bond
OTP_EURO_2 2016/VI
21/03/2014
21/03/2016
EUR
OTP Bank Plc.
Retail bond
OTP_EURO_1 2015/VIII
11/04/2014
25/04/2015
EUR
OTP Bank Plc.
Retail bond
OTP_EURO_2 2016/VII
11/04/2014
11/04/2016
EUR
OTP Bank Plc.
Retail bond
OTP_EURO_1 2015/IX
18/04/2014
02/05/2015
EUR
OTP Bank Plc.
Retail bond
OTP_EURO_2 2016/VIII
18/04/2014
18/04/2016
EUR
OTP Bank Plc.
Retail bond
OTP_EURO_1 2015/X
09/05/2014
23/05/2015
EUR
OTP Bank Plc.
Retail bond
OTP_EURO_2 2016/IX
09/05/2014
09/05/2016
EUR
OTP Bank Plc.
Retail bond
OTP_EURO_1 2015/XI
23/05/2014
06/06/2015
EUR
OTP Bank Plc.
Retail bond
OTP_EURO_2 2016/X
23/05/2014
23/05/2016
EUR
OTP Bank Plc.
Retail bond
OTP_EURO_1 2015/XII
06/06/2014
20/06/2015
EUR
OTP Bank Plc.
Retail bond
OTP_EURO_2 2016/XI
06/06/2014
06/06/2016
EUR
OTP Bank Plc.
Retail bond
OTP_EURO_1 2015/XIII
20/06/2014
04/07/2015
EUR
OTP Bank Plc.
Retail bond
OTP_EURO_2 2016/XII
20/06/2014
20/06/2016
EUR
OTP Bank Plc.
Retail bond
OTP_EURO_1 2015/XIV
04/07/2014
18/07/2015
EUR
OTP Bank Plc.
Retail bond
OTP_EURO_2 2016/XIII
04/07/2014
04/07/2016
EUR
OTP Bank Plc.
Retail bond
OTP_EURO_1 2015/XV
18/07/2014
01/08/2015
EUR
OTP Bank Plc.
Retail bond
OTP_EURO_2 2016/XIV
18/07/2014
18/07/2016
EUR
OTP Bank Plc.
Retail bond
OTP_EURO_1 2015/XVI
30/07/2014
13/08/2015
EUR
OTP Bank Plc.
Retail bond
OTP_EURO_2 2016/XV
30/07/2014
30/07/2016
EUR
OTP Bank Plc.
Retail bond
OTP_EURO_1 2015/XVII
08/08/2014
22/08/2015
EUR
OTP Bank Plc.
Retail bond
OTP_EURO_2 2016/XVI
08/08/2014
08/08/2016
EUR
OTP Bank Plc.
Retail bond
OTP_EURO_1 2015/XVIII
29/08/2014
12/09/2015
EUR
OTP Bank Plc.
Retail bond
OTP_EURO_2 2016/XVII
29/08/2014
29/08/2016
EUR
OTP Bank Plc.
Retail bond
OTP_EURO_1 2015/XIX
12/09/2014
26/09/2015
EUR
OTP Bank Plc.
Retail bond
OTP_EURO_2 2016/XVIII
12/09/2014
12/09/2016
EUR
OTP Bank Plc.
Retail bond
OTP_EURO_1 2015/XX
03/10/2014
17/10/2015
EUR
OTP Bank Plc.
Retail bond
OTP_EURO_2 2016/XIX
03/10/2014
03/10/2016
EUR
OTP Bank Plc.
Retail bond
OTP_EURO_1 2015/XXI
22/10/2014
05/11/2015
EUR
OTP Bank Plc.
Retail bond
OTP_EURO_1 2015/XXII
31/10/2014
14/11/2015
EUR
OTP Bank Plc.
Retail bond
OTP_EURO_1 2015/XXIII
14/11/2014
28/11/2015
EUR
OTP Bank Plc.
Retail bond
OTP_EURO_1 2015/XXIV
28/11/2014
12/12/2015
EUR
OTP Bank Plc.
Retail bond
OTP_VK_USD_2 2016/I
28/11/2014
28/11/2016
USD
OTP Bank Plc.
Retail bond
OTP_EURO_1 2015/XXV
19/12/2014
02/01/2016
EUR
OTP Bank Plc.
Retail bond
OTP_EURO_1 2015/XXVI
09/01/2015
23/01/2016
EUR
OTP Bank Plc.
Retail bond
OTP_EURO_1 2016/I
30/01/2015
13/02/2016
EUR
OTP Bank Plc.
Retail bond
OTP_EURO_1 2016/II
20/02/2015
06/03/2016
EUR
OTP Bank Plc.
Retail bond
OTP_EURO_1 2016/III
20/03/2015
03/04/2016
EUR
OTP Bank Plc.
Retail bond
OTP_VK_USD_2 2017/I
10/04/2015
10/04/2017
USD
OTP Bank Plc.
Retail bond
OTP_EURO_1 2016/IV
10/04/2015
24/04/2016
EUR
OTP Bank Plc.
Retail bond
OTP_EURO_1 2016/V
24/04/2015
08/05/2016
EUR
OTP Bank Plc.
Retail bond
OTP_VK_USD_1 2016/I
24/04/2015
24/04/2016
USD
OTP Bank Plc.
Retail bond
OTP_EURO_1 2016/VI
29/05/2015
12/06/2016
EUR
OTP Bank Plc.
Retail bond
OTP_EURO_1 2016/VII
30/06/2015
14/07/2016
EUR
OTP Bank Plc.
Retail bond
OTP_EURO_1 2016/VIII
24/07/2015
07/08/2016
EUR
OTP Bank Plc.
Retail bond
OTP_VK_USD_1 2016/II
24/07/2015
24/07/2016
USD
OTP Bank Plc.
Retail bond
OTP_VK_USD_1 2016/III
25/09/2015
25/09/2016
USD
OTP Bank Plc.
Retail bond
OTP_EURO_1 2016/IX
25/09/2015
09/10/2016
EUR
OTP Bank Plc.
Retail bond
OTP_EURO_1 2016/X
30/10/2015
13/11/2016
EUR
OTP Bank Plc.
Retail bond
OTP_EURO_1 2016/XI
11/11/2015
25/11/2016
EUR
OTP Bank Plc.
Retail bond
OTP_EURO_1 2016/XII
27/11/2015
11/12/2016
EUR
OTP Bank Plc.
Retail bond
OTP_EURO_1 2016/XIII
30/12/2015
13/01/2017
EUR
OTP Bank Plc.
Retail bond
OTP_VK_USD_1 2017/I
29/01/2016
29/01/2017
USD
OTP Bank Plc.
Retail bond
OTP_EURO_1 2017/I
29/01/2016
12/02/2017
EUR
OTP Bank Plc.
Retail bond
OTP_EURO_1 2017/II
12/02/2016
26/02/2017
EUR
OTP Bank Plc.
Retail bond
OTP_EURO_1 2017/III
26/02/2016
12/03/2017
EUR
OTP Bank Plc.
Retail bond
OTP_VK_USD_1 2017/II
18/03/2016
18/03/2017
USD
OTP Bank Plc.
Retail bond
OTP_EURO_1 2017/IV
18/03/2016
01/04/2017
EUR
OTP Bank Plc.
Retail bond
OTP_EURO_1 2017/V
15/04/2016
29/04/2017
EUR
OTP Bank Plc.
Retail bond
OTP_VK_USD_1 2017/III
27/05/2016
27/05/2017
USD
OTP Bank Plc.
Retail bond
OTP_EURO_1 2017/VI
27/05/2016
10/06/2017
EUR
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
340
Issuer
Type of security
Security name
Date of issue
Date of
maturity
Ccy
OTP Bank Plc.
Retail bond
OTP_EURO_1 2017/VII
10/06/2016
24/06/2017
EUR
OTP Bank Plc.
Retail bond
OTP_EURO_1 2017/VIII
01/07/2016
15/07/2017
EUR
OTP Bank Plc.
Retail bond
OTP_EURO_1 2017/IX
10/08/2016
24/08/2017
EUR
OTP Bank Plc.
Retail bond
OTP_VK_USD_1 2017/IV
16/09/2016
16/09/2017
USD
OTP Bank Plc.
Retail bond
OTP_EURO_1 2017/X
16/09/2016
30/09/2017
EUR
OTP Bank Plc.
Retail bond
OTP_VK_USD_1 2018/I
20/01/2017
20/01/2018
USD
OTP Mortgage Bank
Mortgage bond
OJB2021/I
15/02/2017
27/10/2021
HUF
OTP Mortgage Bank
Mortgage bond
OJB2020/III
23/02/2017
20/05/2020
HUF
OTP Mortgage Bank
Mortgage bond
OJB2022/I
24/02/2017
24/05/2022
HUF
OTP Bank Plc.
Retail bond
OTP_VK_USD_1 2018/II
03/03/2017
03/03/2018
USD
OTP Bank Plc.
Retail bond
OTP_VK_USD_1 2018/III
13/04/2017
13/04/2018
USD
OTP Bank Plc.
Retail bond
OTP_VK_USD_1 2018/IV
02/06/2017
02/06/2018
USD
OTP Bank Plc.
Retail bond
OTP_VK_USD_1 2018/V
14/07/2017
14/07/2018
USD
OTP Bank Plc.
Retail bond
OTP_VK_USD_1 2018/VI
04/08/2017
04/08/2018
USD
OTP Bank Plc.
Retail bond
OTP_VK_USD_1 2018/VII
29/09/2017
29/09/2018
USD
OTP Bank Plc.
Retail bond
OTP_VK_USD_1 2018/VIII
17/11/2017
17/11/2018
USD
OTP Bank Plc.
Retail bond
OTP_VK_USD_1 2018/IX
20/12/2017
20/12/2018
USD
OTP Bank Plc.
Retail bond
OTP_VK_USD_1 2019/I
16/02/2018
16/02/2019
USD
OTP Bank Plc.
Retail bond
OTP_VK_USD_1 2019/II
29/03/2018
29/03/2019
USD
OTP Mortgage Bank
Mortgage bond
OJB2023/I
05/04/2018
24/11/2023
HUF
OTP Bank Plc.
Retail bond
OTP_VK_USD_1 2019/III
18/05/2018
18/05/2019
USD
OTP Bank Plc.
Retail bond
OTP_VK_USD_1 2019/IV
28/06/2018
28/06/2019
USD
OTP Bank Plc.
Retail bond
OTP_VK_USD_1 2019/V
06/08/2018
06/08/2019
USD
OTP Mortgage Bank
Mortgage bond
OJB2024/A
17/09/2018
20/05/2024
HUF
OTP Mortgage Bank
Mortgage bond
OJB2024/B
18/09/2018
24/05/2024
HUF
OTP Bank Plc.
Retail bond
OTP_VK_USD_1 2019/VI
04/10/2018
04/10/2019
USD
OTP Mortgage Bank
Mortgage bond
OJB2024/II
10/10/2018
24/10/2024
HUF
OTP Bank Plc.
Retail bond
OTP_VK_USD_1 2019/VII
15/11/2018
15/11/2019
USD
OTP Bank Plc.
Corporate bond
OTP_DK_HUF_2019/II
15/12/2018
31/05/2019
HUF
OTP Bank Plc.
Corporate bond
OTP_DK_HUF_2020/I
15/12/2018
31/05/2020
HUF
OTP Bank Plc.
Corporate bond
OTP_DK_HUF_2021/I
15/12/2018
31/05/2021
HUF
OTP Bank Plc.
Corporate bond
OTP_DK_HUF_2022/I
15/12/2018
31/05/2022
HUF
OTP Bank Plc.
Corporate bond
OTP_DK_HUF_2023/I
15/12/2018
31/05/2023
HUF
OTP Bank Plc.
Retail bond
OTP_VK_USD_1 2019/VIII
20/12/2018
20/12/2019
USD
OTP Bank Plc.
Retail bond
OTP_VK_USD_1 2020/I
21/02/2019
21/02/2020
USD
OTP Bank Plc.
Retail bond
OTP_VK_USD_1 2020/II
04/04/2019
04/04/2020
USD
OTP Bank Plc.
Retail bond
OTP_VK_USD_1 2020/III
16/05/2019
16/05/2020
USD
OTP Bank Plc.
Corporate bond
OTP_DK_HUF_2024/I
30/05/2019
31/05/2024
HUF
OTP Bank Plc.
Corporate bond
OTP_DK_HUF_2025/I
30/05/2019
31/05/2025
HUF
OTP Bank Plc.
Retail bond
OTP_VK_USD_1 2020/IV
27/06/2019
27/06/2020
USD
OTP Bank Plc.
Retail bond
OTP_VK_USD_1 2020/V
15/08/2019
15/08/2020
USD
OTP Bank Plc.
Retail bond
OTP_VK_USD_1 2020/VI
26/09/2019
26/09/2020
USD
OTP Bank Plc.
Retail bond
OTP_VK_USD_1 2020/VII
07/11/2019
07/11/2020
USD
OTP Bank Plc.
Retail bond
OTP_VK_USD_1 2020/VIII
19/12/2019
19/12/2020
USD
OTP Mortgage Bank
Mortgage bond
OJB2025/II
03/02/2020
26/11/2025
HUF
OTP Bank Plc.
Retail bond
OTP_VK_USD_1 2021/I
20/02/2020
20/02/2021
USD
OTP Mortgage Bank
Mortgage bond
OJB2024/C
24/02/2020
24/10/2024
HUF
OTP Bank Plc.
Retail bond
OTP_VK_USD_1 2021/II
02/04/2020
02/04/2021
USD
OTP Bank Plc.
Retail bond
OTP_VK_USD_1 2021/III
14/05/2020
14/05/2021
USD
OTP Bank Plc.
Corporate bond
OTP_DK_HUF_2022/II
29/05/2020
31/05/2022
HUF
OTP Bank Plc.
Corporate bond
OTP_DK_HUF_2023/II
29/05/2020
31/05/2023
HUF
OTP Bank Plc.
Corporate bond
OTP_DK_HUF_2024/II
29/05/2020
31/05/2024
HUF
OTP Bank Plc.
Corporate bond
OTP_DK_HUF_2025/II
29/05/2020
31/05/2025
HUF
OTP Bank Plc.
Corporate bond
OTP_DK_HUF_2026/I
29/05/2020
31/05/2026
HUF
OTP Bank Plc.
Corporate bond
OTP_DK_HUF_2027/I
29/05/2020
31/05/2027
HUF
OTP Bank Plc.
Retail bond
OTP_VK_USD_1 2021/IV
18/06/2020
18/06/2021
USD
OTP Mortgage Bank
Mortgage bond
OJB2027/I
23/07/2020
27/10/2027
HUF
OTP Bank Plc.
Corporate bond
OTP_DK_HUF_2025/III
31/05/2021
31/05/2025
HUF
OTP Bank Plc.
Corporate bond
OTP_DK_HUF_2024/III
31/05/2021
31/05/2024
HUF
OTP Bank Plc.
Corporate bond
OTP_DK_HUF_2027/II
31/05/2021
31/05/2027
HUF
OTP Bank Plc.
Corporate bond
OTP_DK_HUF_2026/II
31/05/2021
31/05/2026
HUF
OTP Bank Plc.
Corporate bond
OTP_DK_HUF_2028/I
31/05/2021
31/05/2028
HUF
OTP Bank Plc.
Corporate bond
OTP_DK_HUF_2029/I
31/05/2021
31/05/2029
HUF
OTP Bank Plc.
Corporate bond
OTP_DK_HUF_2030/I
31/05/2021
31/05/2030
HUF
OTP Mortgage Bank
Mortgage bond
OJB2031/I
18/08/2021
22/10/2031
HUF
OTP Bank Plc.
Corporate bond
OTP_DK_HUF_2026/III
31/03/2022
31/05/2026
HUF
OTP Bank Plc.
Corporate bond
OTP_DK_HUF_2027/III
31/03/2022
31/05/2027
HUF
OTP Bank Plc.
Corporate bond
OTP_DK_HUF_2028/II
31/03/2022
31/05/2028
HUF
OTP Bank Plc.
Corporate bond
OTP_DK_HUF_2029/II
31/03/2022
31/05/2029
HUF
OTP Bank Plc.
Corporate bond
OTP_DK_HUF_2030/II
31/03/2022
31/05/2030
HUF
OTP Bank Plc.
Corporate bond
OTP_DK_HUF_2031/I
31/03/2022
31/05/2031
HUF
OTP Bank Plc.
Corporate bond
OTP_DK_HUF_2032/I
31/03/2022
31/05/2032
HUF
OTP Mortgage Bank
Mortgage bond
OJB2029/A
25/07/2022
24/05/2029
HUF
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
341
Issuer
Type of security
Security name
Date of issue
Date of
maturity
Ccy
OTP Bank Plc.
Retail bond
OTP_HUF_2025/1
18/11/2022
18/11/2025
HUF
OTP Bank Plc.
Retail bond
OTP_HUF_2026/1
22/12/2022
05/01/2026
HUF
OTP Bank Plc.
Retail bond
OTP_HUF_2024/1
17/02/2023
17/02/2024
HUF
OTP Bank Plc.
Retail bond
OTP_HUF_2024/2
10/03/2023
10/03/2024
HUF
OTP Bank Plc.
Retail bond
OTP_HUF_2024/3
31/03/2023
31/03/2024
HUF
OTP Bank Plc.
Retail bond
OTP_HUF_2024/4
21/04/2023
21/04/2024
HUF
OTP Bank Plc.
Retail bond
OTP_HUF_2024/5
12/05/2023
12/05/2024
HUF
OTP Bank Plc.
Corporate bond
OTP_DK_HUF_2028/III
01/06/2023
31/05/2028
HUF
OTP Bank Plc.
Corporate bond
OTP_DK_HUF_2029/III
01/06/2023
31/05/2029
HUF
OTP Bank Plc.
Corporate bond
OTP_DK_HUF_2030/III
01/06/2023
31/05/2030
HUF
OTP Bank Plc.
Corporate bond
OTP_DK_HUF_2031/II
01/06/2023
31/05/2031
HUF
OTP Bank Plc.
Corporate bond
OTP_DK_HUF_2032/II
01/06/2023
31/05/2032
HUF
OTP Bank Plc.
Corporate bond
OTP_DK_HUF_2033/I
01/06/2023
31/05/2033
HUF
OTP Bank Plc.
Retail bond
OTP_HUF_2024/6
02/06/2023
02/06/2024
HUF
OTP Bank Plc.
Retail bond
OTP_HUF_2024/7
23/06/2023
23/06/2024
HUF
OTP Bank Plc.
Retail bond
OTP_HUF_2024/8
30/06/2023
30/06/2024
HUF
OTP Bank Plc.
Retail bond
OTP_HUF_2025/2
30/06/2023
30/06/2025
HUF
OTP Bank Plc.
Retail bond
OTP_HUF_2024/9
28/07/2023
28/07/2024
HUF
OTP Bank Plc.
Retail bond
OTP_HUF_2024/10
07/08/2023
07/08/2024
HUF
OTP Bank Plc.
Retail bond
OTP_HUF_2024/11
01/09/2023
01/09/2024
HUF
OTP Mortgage Bank
Mortgage bond
OJB2032/A
20/09/2023
24/11/2032
HUF
OTP Bank Plc.
Retail bond
OTP_HUF_2024/12
25/09/2023
25/09/2024
HUF
OTP Bank Plc.
Retail bond
OTP_TBSZ_HUF_2028/1
13/10/2023
15/12/2028
HUF
OTP Bank Plc.
Retail bond
OTP_HUF_2024/13
20/10/2023
20/10/2024
HUF
OTP Bank Plc.
Retail bond
OTP_HUF_2024/14
17/11/2023
17/11/2024
HUF
OTP Bank Plc.
Retail bond
OTP_HUF_2026/2
15/12/2023
15/12/2026
HUF
OTP Bank Plc.
Retail bond
OTP_HUF_2024/15
20/12/2023
20/12/2024
HUF
OTP Bank Plc.
Retail bond
OTP_HUF_2025/3
12/01/2024
12/01/2025
HUF
OTP Bank Plc.
Retail bond
OTP_HUF_2025/4
02/02/2024
02/02/2025
HUF
OTP Bank Plc.
Retail bond
OTP_HUF_2025/5
01/03/2024
01/03/2025
HUF
OTP Bank Plc.
Retail bond
OTP_HUF_2025/6
28/03/2024
28/03/2025
HUF
OTP Mortgage Bank
Mortgage bond
OJB2029/B
10/04/2024
20/06/2029
HUF
OTP Bank Plc.
Retail bond
OTP_HUF_2025/7
26/04/2024
26/04/2025
HUF
OTP Bank Plc.
Retail bond
OTP_HUF_2025/8
24/05/2024
24/05/2025
HUF
OTP Bank Plc.
Corporate bond
OTP_DK_HUF_2029/IV
31/05/2024
31/05/2029
HUF
OTP Bank Plc.
Corporate bond
OTP_DK_HUF_2030/IV
31/05/2024
31/05/2030
HUF
OTP Bank Plc.
Corporate bond
OTP_DK_HUF_2031/III
31/05/2024
31/05/2031
HUF
OTP Bank Plc.
Corporate bond
OTP_DK_HUF_2032/III
31/05/2024
31/05/2032
HUF
OTP Bank Plc.
Corporate bond
OTP_DK_HUF_2033/II
31/05/2024
31/05/2033
HUF
OTP Bank Plc.
Corporate bond
OTP_DK_HUF_2034/I
31/05/2024
31/05/2034
HUF
OTP Bank Plc.
Retail bond
OTP_HUF_2025/9
07/06/2024
07/06/2025
HUF
OTP Bank Plc.
Retail bond
OTP_HUF_2025/10
05/07/2024
05/07/2025
HUF
OTP Bank Plc.
Retail bond
OTP_HUF_2025/11
02/08/2024
02/08/2025
HUF
OTP Bank Plc.
Retail bond
OTP_HUF_2025/12
30/08/2024
30/08/2025
HUF
OTP Mortgage Bank
Mortgage bond
OJB2029/I
16/09/2024
31/10/2029
HUF
OTP Bank Plc.
Retail bond
OTP_HUF_2025/13
27/09/2024
27/09/2025
HUF
OTP Bank Plc.
Retail bond
OTP_HUF_2025/14
31/10/2024
31/10/2025
HUF
OTP Bank Plc.
Retail bond
OTP_HUF_2025/15
29/11/2024
29/11/2025
HUF
OTP Bank Plc.
Retail bond
OTP_HUF_2025/16
18/12/2024
18/12/2025
HUF
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
342
COMPANIES INVOLVED IN THE SCOPE OF CONSOLIDATION
(in IFRS consolidated accounts)
Name of the company
Country
Initial capital/Equity
(in LCY)
Ownership
Directly
+
indirectly
(%)
Voting rights
(%)
Classification1
1 OTP Real Estate Ltd.
Hungary
HUF
1,101,000,000
100.00
100.00
L
2 BANK CENTER No. 1. Ltd.
Hungary
HUF
11,500,000,000
100.00
100.00
L
3 OTP Fund Management Ltd.
Hungary
HUF
900,000,000
100.00
100.00
L
4 OTP Factoring Ltd.
Hungary
HUF
500,000,000
100.00
100.00
L
5 OTP Close Building Society
Hungary
HUF
2,000,000,000
100.00
100.00
L
6 Merkantil Bank Ltd.
Hungary
HUF
3,000,000,000
100.00
100.00
L
7 OTP Factoring Management Ltd.
Hungary
HUF
3,100,000
100.00
100.00
L
8 Merkantil Bérlet Ltd.
Hungary
HUF
6,000,000
100.00
100.00
L
9 OTP Mortgage Bank Ltd.
Hungary
HUF
82,000,000,000
100.00
100.00
L
10 OTP Funds Servicing and Consulting
Company Limited
Hungary
HUF
2,351,000,000
100.00
100.00
L
11 DSK Bank AD
Bulgaria
BGN
1,328,659,920
99.92
99.92
L
12 POK DSK-Rodina AD
Bulgaria
BGN
10,010,198
99.85
99.85
L
13 NIMO 2002 Ltd.
Hungary
HUF
1,156,000,000
100.00
100.00
L
14 OTP Real Estate Investment Fund
Management Ltd.
Hungary
HUF
100,000,000
100.00
100.00
L
15 OTP Card Factory Ltd.
Hungary
HUF
450,000,000
100.00
100.00
L
16 DSK Asset Management EAD
Bulgaria
BGN
1,000,000
100.00
100.00
L
17 OTP banka dioničko društvo
Croatia
EUR
539,156,898
100.00
100.00
L
18 Air-Invest Ltd.
Hungary
HUF
700,000,000
100.00
100.00
L
19 OTP Invest društvo s ograničenom
odgovornošću za upravljanje fondovima
Croatia
EUR
2,417,030
100.00
100.00
L
20 OTP Nekretnine d.o.o.
Croatia
EUR
39,635,100
100.00
100.00
L
21 SPLC-P Ltd.
Hungary
HUF
15,000,000
100.00
100.00
L
22 SPLC Ltd.
Hungary
HUF
10,000,000
100.00
100.00
L
23 OTP Real Estate Leasing Ltd.
Hungary
HUF
214,000,000
100.00
100.00
L
24 OTP Life Annuity Real Estate Investment
Plc.
Hungary
HUF
1,229,300,000
100.00
100.00
L
25 OTP Leasing d.d.
Croatia
EUR
1,067,560
100.00
100.00
L
26 Joint-Stock Company OTP Bank
Ukraine
UAH
6,186,023,111
100.00
100.00
L
27 JSC "OTP Bank" (Russia)
Russian Federation RUB
2,797,887,853
97.92
97.92
L
28
Montenegrin Commercial Bank
Shareholding Company, Podgorica
Montenegro
Montenegro
EUR
181,875,221
100.00
100.00
L
29 OTP banka Srbija, joint-stock company,
Novi Sad)
Serbia
RSD
56,830,752,260
100.00
100.00
L
30 OTP Nekretnine doo Novi Sad
Serbia
RSD
203,783,061
100.00
100.00
L
31 OTP Ingatlanpont Ltd.
Hungary
HUF
8,000,000
100.00
100.00
L
32 OTP Hungaro-Projekt Ltd.
Hungary
HUF
27,720,000
100.00
100.00
L
33 OTP Mérnöki Ltd.
Hungary
HUF
3,000,000
100.00
100.00
L
34 LLC AMC OTP Capital
Ukraine
UAH
10,000,000
100.00
100.00
L
35 CRESCO d.o.o.
Croatia
EUR
5,170
100.00
100.00
L
36 LLC OTP Leasing
Ukraine
UAH
45,495,340
100.00
100.00
L
37 OTP Financing Solutions
Netherlands
EUR
18,000
100.00
100.00
L
38 Velvin Ventures Ltd.
Belize
USD
50,000
100.00
100.00
L
39 OTP Insurance Broker EOOD
Bulgaria
BGN
5,000
100.00
100.00
L
40 PortfoLion Venture Capital Fund
Management Ltd.
Hungary
HUF
59,050,000
66.98
66.98
L
41 OTP Holding Ltd.
Cyprus
EUR
131,000
100.00
100.00
L
42 OTP Debt Collection d.o.o. Podgorica
Montenegro
EUR
49,000,001
100.00
100.00
L
43 OTP Factoring Serbia d.o.o.
Serbia
RSD
782,902,282
100.00
100.00
L
44 MONICOMP Ltd.
Hungary
HUF
320,500,000
100.00
100.00
L
45 CIL Babér Ltd.
Hungary
HUF
71,890,330
100.00
100.00
L
46 Project 01 Consulting, s. r. o.
Slovak Republic
EUR
22,540,000
100.00
100.00
L
47 R.E. Four d.o.o., Novi Sad
Serbia
RSD
1,983,643,761
100.00
100.00
L
48 OTP Financial point Ltd.
Hungary
HUF
53,000,000
100.00
100.00
L
49 OTP Mobile Service Ltd.
Hungary
HUF
1,400,000,000
100.00
100.00
L
50 OTP Holding Malta Ltd.
Malta
EUR
104,950,000
100.00
100.00
L
51 OTP Financing Malta Ltd.
Malta
EUR
105,000,000
100.00
100.00
L
52 LLC MFO "OTP Finance"
Russian Federation RUB
6,533,000,000
100.00
100.00
L
53 OTP Travel Limited
Hungary
HUF
27,000,000
100.00
100.00
L
54 OTP Ecosystem Limited Liability
Company; OTP Ecosystem Llc.
Hungary
HUF
281,300,000
100.00
100.00
L
55 DSK ventures EAD
Bulgaria
BGN
250,000
100.00
100.00
L
56 OTP Bank ESOP
Hungary
HUF
154,977,590,235
0.00
0.00
L
57 PortfoLion Digital Ltd.
Hungary
HUF
101,000,000
100.00
100.00
L
58 OTP Ingatlankezelő Ltd.
Hungary
HUF
50,000,000
100.00
100.00
L
59 OTP Leasing d.o.o. Beograd
Serbia
RSD
112,870,710
100.00
100.00
L
60 OTP Services Ltd.
Serbia
RSD
40,028
100.00
100.00
L
61 Club Hotel Füred Szálloda Ltd.
Hungary
HUF
90,000,000
100.00
100.00
L
62 DSK DOM EAD
Bulgaria
BGN
100,000
100.00
100.00
L
63 ShiwaForce.com Inc.
Hungary
HUF
114,107,000
84.92
84.92
L
MANAGEMENT REPORT (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
343
Name of the company
Country
Initial capital/Equity
(in LCY)
Ownership
Directly
+
indirectly
(%)
Voting rights
(%)
Classification1
64 OTP Leasing EOOD
Bulgaria
BGN
4,100,000
100.00
100.00
L
65 Regional Urban Development Fund AD
Bulgaria
BGN
250,000
52.00
52.00
L
66 Banka OTP Albania SHA
Albania
ALL
6,740,900,000
100.00
100.00
L
67 OTP Leasing Srbija d.o.o. Beograd
Serbia
RSD
314,097,580
100.00
100.00
L
68 OTP Osiguranje AKCIONARSKO
DRUŠTVO ZA
Serbia
RSD
537,606,648
100.00
100.00
L
69 OTP Bank S.A.
Moldavia
MDL
100,000,000
98.26
98.26
L
70 SKB Leasing d.o.o.
Slovenia
EUR
16,809,031
100.00
100.00
L
71 SKB Leasing Select d.o.o.
Slovenia
EUR
5,000,000
100.00
100.00
L
72 OTP Home Solutions Limited Liability
Company
Hungary
HUF
20,000,000
100.00
100.00
L
73 Georg d.o.o
Croatia
EUR
3,000
76.00
76.00
L
74 OTP banka d.d.
Slovenia
EUR
150,000,000
100.00
100.00
L
75 ALEJA FINANCE, FINANCNE IN DRUGE
STORITVE, D.O.O.
Slovenia
EUR
500,000
100.00
100.00
L
76 OTP Luxembourg S.à r.l.
Luxembourg
EUR
2,711,440
100.00
100.00
L
77 Foglaljorvost Online Ltd
Hungary
HUF
7,202,400
100.00
100.00
L
78 OD Ltd.
Hungary
HUF
6,000,000
60.00
60.00
L
79 JN Parkoló Ltd.
Hungary
HUF
11,000,000
100.00
100.00
L
80 JSCMB "IPOTEKA BANK"
Uzbekistan
UZS
3,834,217,638,941
79.82
98.98
L
81
OTP INVEST DRUŠTVO ZA
UPRAVLJANJE UCITS I
ALTERNATIVNIM FONDOVIMA AD
BEOGRAD
Serbia
RSD
411,432,000
100.00
100.00
L
82 Hello Pay IT and Service cPlc.
Hungary
HUF
5,000,000
100.00
100.00
L
83 LLC OTP Financial Technologies
Russian Federation RUB
10,000
100.00
100.00
L
84 ZAGREBTOWER D.O.O.
Croatia
EUR
2,036,890
100.00
100.00
L
85 PortfoLion Munkavállalói Résztulajdonosi
Program Szervezet
Hungary
HUF
2,030,000,000
0.00
0.00
L
86 Balansz Real Estate Institute Fund
Hungary
HUF
100,428,671,936
100.00
100.00
L
87 PortfoLion Zöld Fund
Hungary
HUF
37,500,000,000
100.00
100.00
L
88 PortfoLion Digitális Magántőkealap I.
Hungary
HUF
7,000,000,000
100.00
100.00
L
89 PortfoLion Regionális Fund II.
Hungary
HUF
25,060,000,000
49.88
49.88
L
90 PortfoLion Partner Fund
Hungary
HUF
72,004,608,295
30.56
30.56
L
91 PortfoLion Digitális Magántőkealap II.
Hungary
HUF
14,000,000,000
100.00
100.00
L
92
"Nemesszalóki
Mezőgazdasági"Állattenyésztési,
Növénytermesztési,Termelő és Szolgáltató
Zrt.
Hungary
HUF
924,124,000
100.00
100.00
L
93 ZA-Invest Béta Ltd.
Hungary
HUF
8,000,000
100.00
100.00
L
94 NAGISZ Mezőgazdasági Termelő és
Szolgáltató Ltd.
Hungary
HUF
3,802,080,000
100.00
100.00
L
95 Nádudvari Élelmiszer Feldolgozó és
Kereskedelmi Ltd.
Hungary
HUF
1,954,680,000
99.96
99.96
L
96 HAGE Ltd.
Hungary
HUF
2,689,000,000
99.61
99.61
L
97 AFP Private Equity Invest Zártkörűen
Működő Részvénytársaság
Hungary
EUR
452,000
29.14
29.14
L
98 Mendota Invest, Nepremicninska druzba,
d.o.o.
Slovenia
EUR
257,500
100.00
100.00
L
99 ZA-Invest Delta Ltd.
Hungary
HUF
4,000,000
100.00
100.00
L
100 ZA-Invest Kappa Ltd.
Hungary
HUF
11,000,000
100.00
100.00
L
101 ZA Invest Gamma Ltd.
Hungary
HUF
3,100,000
100.00
100.00
L
102 ZA Gamma HoldCo Ltd.
Hungary
HUF
3,100,000
100.00
100.00
L
103 Aranykalász 1955. Ltd
Hungary
HUF
55,560,000
75.00
100.00
L
104 AGROMAG-PLUSZ Ltd.
Hungary
HUF
39,110,000
73.25
98.34
L
105 ARANYMEZŐ 2001. Ltd
Hungary
HUF
3,000,000
75.00
100.00
L
106 Agricultural Privatey Held Joint-Stock
Company Szekszárd
Hungary
HUF
862,000,000
100.00
100.00
L
107 Szajk Agricultural Closed Company
Limited by shares
Hungary
HUF
659,859,000
100.00
100.00
L
1 Full consolidated - L
INTEGRATED ANNUAL REPORT 2024
344
RESULTS OF THE INDEPENDENT AUDITORS’S
REPORT FOR THE YEAR ENDED 2024 AND
THE RESULTS OF THE ASSURANCE REPORT OF THE
2024 SUSTAINABILITY REPORT
REPORTS OF THE AUDITOR
INTEGRATED ANNUAL REPORT 2024
345
REPORTS OF THE AUDITOR
INTEGRATED ANNUAL REPORT 2024
346
REPORTS OF THE AUDITOR
INTEGRATED ANNUAL REPORT 2024
347
REPORTS OF THE AUDITOR
INTEGRATED ANNUAL REPORT 2024
348
REPORTS OF THE AUDITOR
INTEGRATED ANNUAL REPORT 2024
349
REPORTS OF THE AUDITOR
INTEGRATED ANNUAL REPORT 2024
350
REPORTS OF THE AUDITOR
INTEGRATED ANNUAL REPORT 2024
351
REPORTS OF THE AUDITOR
INTEGRATED ANNUAL REPORT 2024
352
REPORTS OF THE AUDITOR
INTEGRATED ANNUAL REPORT 2024
353
REPORTS OF THE AUDITOR
INTEGRATED ANNUAL REPORT 2024
354
REPORTS OF THE AUDITOR
INTEGRATED ANNUAL REPORT 2024
355
REPORTS OF THE AUDITOR
INTEGRATED ANNUAL REPORT 2024
356
REPORTS OF THE AUDITOR
INTEGRATED ANNUAL REPORT 2024
357
REPORTS OF THE AUDITOR
INTEGRATED ANNUAL REPORT 2024
358
REPORTS OF THE AUDITOR
INTEGRATED ANNUAL REPORT 2024
359
REPORTS OF THE AUDITOR
INTEGRATED ANNUAL REPORT 2024
360
REPORTS OF THE AUDITOR
INTEGRATED ANNUAL REPORT 2024
361
REPORTS OF THE AUDITOR
INTEGRATED ANNUAL REPORT 2024
362
REPORTS OF THE AUDITOR
INTEGRATED ANNUAL REPORT 2024
363
REPORTS OF THE AUDITOR
INTEGRATED ANNUAL REPORT 2024
364
REPORTS OF THE AUDITOR
INTEGRATED ANNUAL REPORT 2024
365
REPORTS OF THE AUDITOR
INTEGRATED ANNUAL REPORT 2024
366
REPORTS OF THE AUDITOR
INTEGRATED ANNUAL REPORT 2024
367
REPORTS OF THE AUDITOR
INTEGRATED ANNUAL REPORT 2024
368
REPORTS OF THE AUDITOR
INTEGRATED ANNUAL REPORT 2024
369
REPORTS OF THE AUDITOR
INTEGRATED ANNUAL REPORT 2024
370
REPORTS OF THE AUDITOR
INTEGRATED ANNUAL REPORT 2024
371
REPORTS OF THE AUDITOR
INTEGRATED ANNUAL REPORT 2024
372
REPORTS OF THE AUDITOR
INTEGRATED ANNUAL REPORT 2024
373
REPORTS OF THE AUDITOR
INTEGRATED ANNUAL REPORT 2024
374
REPORTS OF THE AUDITOR
INTEGRATED ANNUAL REPORT 2024
375
REPORTS OF THE AUDITOR
INTEGRATED ANNUAL REPORT 2024
376
REPORTS OF THE AUDITOR
INTEGRATED ANNUAL REPORT 2024
377
REPORTS OF THE AUDITOR
INTEGRATED ANNUAL REPORT 2024
378
REPORTS OF THE AUDITOR
INTEGRATED ANNUAL REPORT 2024
379
INTEGRATED ANNUAL REPORT 2024
380
SEPARATE FINANCIAL STATEMENTS IN ACCORDANCE WITH IFRS (2024)
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
381
OTP BANK PLC.
SEPARATE STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2024
(in HUF mn)
Note
31 December 2024
31 December 2023
Cash, amounts due from banks and balances with the National Bank of
Hungary
5.
2,075,179
2,708,232
Placements with other banks
6.
2,948,536
2,702,433
Repo receivables
7.
238,079
201,658
Financial assets at fair value through profit or loss
8.
651,236
257,535
Financial assets at fair value through other comprehensive income
9.
592,602
559,527
Securities at amortised cost
10.
3,334,145
2,710,848
Loans at amortised cost
11.
4,670,795
4,681,359
Loans mandatorily measured at fair value through profit or loss
11.
998,410
934,848
Investments in subsidiaries
12.
2,169,031
2,001,952
Property and equipment
13.
111,772
107,306
Intangible assets
13.
137,860
98,115
Right of use assets
35.
58,956
66,222
Investment properties
14.
4,227
4,203
Deferred tax assets
34.
-
408
Derivative financial assets designated as hedge accounting relationships
15.
43,130
21,628
Non-current assets held for sale
46.
-
130,718
Other assets
16.
357,095
365,961
TOTAL ASSETS
18,391,053
17,552,953
Amounts due to banks and deposits from the National Bank of Hungary
and other banks
17.
1,606,969
1,761,579
Repo liabilities
18.
227,632
443,694
Deposits from customers
19.
10,891,924
10,734,241
Fair value changes of the hedged items in portfolio hedge of interest rate
risk
19.
4,303
84
Leasing liabilities
35.
64,380
68,282
Liabilities from issued securities
20.
1,750,893
1,163,109
Financial liabilities designated at fair value through profit or loss
21.
17,024
19,786
Derivative financial liabilities designated as held for trading
22.
144,499
183,565
Derivative financial liabilities designated as hedge accounting
relationships
23.
19,438
27,423
Deferred tax liabilities
34.
1,707
-
Current tax liabilities
34.
23,591
14,393
Provisions
24.
25,647
22,497
Other liabilities
24.
449,522
295,399
Subordinated bonds and loans
25.
362,271
520,296
TOTAL LIABILITIES
15,589,800
15,254,348
Share capital
26.
28,000
28,000
Retained earnings and reserves
27.
2,896,319
2,276,759
Treasury shares
28.
(123,066)
(6,154)
TOTAL SHAREHOLDERS' EQUITY
2,801,253
2,298,605
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
18,391,053
17,552,953
Budapest, 19 March 2025
Dr. Sándor Csányi
László Wolf
Chairman and Chief Executive Officer
Deputy Chief Executive Officer
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
382
OTP BANK PLC.
SEPARATE STATEMENT OF PROFIT OR LOSS FOR THE YEAR ENDED
31 DECEMBER 2024
(in HUF mn)
Note
Year ended 31
December 2024
Year ended 31
December 2023
Interest Income:
Interest income calculated using the effective interest method
29.
1,040,534
1,227,173
Income similar to interest income
29.
585,619
795,906
Interest income and similar to interest income total
1,626,153
2,023,079
Interest Expense:
Interest expenses total
29.
(1,107,551)
(1,556,361)
NET INTEREST INCOME
518,602
466,718
(Loss allowance) / Release of loss allowance on loan, placement
and repo receivables losses
6., 7., 11., 30.
(19,955)
8,616
(Loss allowance) / Release of loss allowance on securities at fair
value through other comprehensive income and on securities
at amortised cost
9., 10., 30.
(35,128)
11,879
(Provision) / Release of provision for loan commitments and
financial guarantees given
24., 30.
(2,565)
7,172
Change in the fair value attributable to changes in the credit risk
of loans mandatorily measured at fair value through profit of
loss
45.4.
4,193
(980)
Risk cost total
(53,455)
26,687
NET INTEREST INCOME AFTER RISK COST
465,147
493,405
LOSSES ARISING FROM DERECOGNITION OF
FINANCIAL ASSETS MEASURED AT AMORTISED
COST
(9,856)
(19,707)
MODIFICATION LOSS
4.
(1,999)
(9,017)
Income from fees and commissions
31.
468,566
402,885
Expenses from fees and commissions
31.
(92,217)
(78,755)
NET PROFIT FROM FEES AND COMMISSIONS
376,349
324,130
Foreign exchange losses
32.
(6,885)
(12,269)
Gains on securities, net
32.
120,863
7,073
Gains on financial instruments at fair value through profit or loss
32.
27,377
91,268
Net results on derivative instruments and hedge relationships
32.
(6,063)
13,055
Dividend income
32.
413,262
275,705
Other operating income
33.
18,380
26,184
Other operating expenses
33.
(37,072)
63,590
NET OPERATING INCOME
529,862
464,606
Personnel expenses
33.
(200,268)
(195,404)
Depreciation and amortization
33.
(63,551)
(50,814)
Other administrative expenses
33.
(284,128)
(281,918)
OTHER ADMINISTRATIVE EXPENSES
(547,947)
(528,136)
PROFIT BEFORE INCOME TAX
811,556
725,281
Income tax expense
34.
(66,557)
(70,293)
PROFIT AFTER INCOME TAX
744,999
654,988
Earnings per share (in HUF)
Basic
43.
2,692
2,344
Diluted
43.
2,692
2,344
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
383
OTP BANK PLC.
SEPARATE STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED
31 DECEMBER 2024
(in HUF mn)
Note
Year ended 31
December 2024
Year ended 31
December 2023
PROFIT AFTER INCOME TAX
744,999
654,988
Items that may be reclassified subsequently to profit or loss:
Fair value adjustment of debt instruments at fair value through other
comprehensive income
9,751
37,917
Deferred tax related to fair value adjustment of debt instruments at fair
value through other comprehensive income
34.
(848)
(3,503)
Gains / (Losses) on separated currency spread of financial instruments
designated as hedging instrument
(359)
3,752
Deferred tax related to (losses) / gains on separated currency spread of
financial instruments designated as hedging instrument
34.
32
(338)
(Losses) / Gains on derivative financial instruments designated as cash
flow hedge
136
5,700
Items that will not be reclassified to profit or loss:
Fair value adjustment of equity instruments at fair value through other
comprehensive income
11,547
3,308
Deferred tax related to equity instruments at fair value through other
comprehensive income
34.
(1,305)
(374)
Total
18,954
46,462
TOTAL COMPREHENSIVE INCOME
763,953
701,450
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
384
OTP BANK PLC.
SEPARATE STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY FOR THE YEAR ENDED
31 DECEMBER 2024
(in HUF mn)
Note
Share
Capital
Capital
reserve
Retained earnings
and other reserves
Treasury
Shares
Total
Balance as at 1 January 2023
28,000
52
1,655,549
(2,724)
1,680,877
Net profit for the period
-
-
654,988
-
654,988
Other comprehensive income
-
-
46,462
-
46,462
Total comprehensive income
-
-
701,450
-
701,450
Share-based payment
39.
-
-
3,292
-
3,292
Sale of treasury shares
28.
-
-
-
36,388
36,388
Acquisition of treasury shares
28.
-
-
-
(39,818)
(39,818)
Loss on treasury shares
28.
-
-
416
-
416
Dividend for the year 2022
-
-
(84,000)
-
(84,000)
Other transaction with owners
-
-
(80,292)
(3,430)
(83,722)
Balance as at 31 December 2023
28,000
52
2,276,707
(6,154)
2,298,605
Balance as at 1 January 2024
28,000
52
2,276,707
(6,154)
2,298,605
Net profit for the period
-
-
744,999
-
744,999
Other comprehensive income
-
-
18,954
-
18,954
Total comprehensive income
-
-
763,953
-
763,953
Share-based payment
39.
-
-
4,411
-
4,411
Sale of treasury shares
28.
-
-
-
36,193
36,193
Acquisition of treasury shares
28.
-
-
-
(153,105)
(153,105)
Loss on sale of treasury shares
28.
-
-
1,196
-
1,196
Dividend for the year 2023
-
-
(150,000)
-
(150,000)
Other transaction with owners
-
-
(144,393)
(116,912)
(261,305)
Balance as at 31 December 2024
28,000
52
2,896,267
(123,066)
2,801,253
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
385
OTP BANK PLC.
SEPARATE STATEMENT OF CASH FLOWS FOR THE YEAR ENDED
31 DECEMBER 2024
(in HUF mn)
Note
Year ended
31 December
2024
Year ended
31 December
2023
OPERATING ACTIVITIES
Profit before income tax
811,556
725,281
Net accrued interest
8,015
3,136
Depreciation and amortization
13.
63,700
50,834
Loss allowance on loans and placements
30.
23,478
357
Loss allowance / (Release of loss allowance) on securities at fair value through
other comprehensive income
9.
24,560
(3,303)
Impairment loss / (Reversal of impairment loss) on investments in subsidiaries
12.
7,428
(87,609)
Loss allowance / (Release of loss allowance) on securities at amortised cost
10.
10,568
(8,576)
Loss allowance on other assets
16.
5,514
3,575
Provision on off-balance sheet commitments and contingent liabilities
24.
2,561
(6,663)
Share-based payment
39.
4,411
3,292
Unrealised gains on fair value adjustment of financial instruments at fair value
through profit or loss
45.
(31,315)
(95,953)
Unrealised gains on fair value adjustment of derivative financial instruments
45.
(21,014)
(76,357)
Gains on securities
32.
7,017
18,890
Interest expense from leasing liabilities
35.
(2,495)
(2,081)
Foreign exchange (loss) / gain
32.
69,407
(20,842)
Proceeds from sale of tangible and intangible assets
33.
19
(1,225)
Net changing in assets and liabilities in operating activities
Net (increase) / decrease in placements with other banks and repo receivables
before allowance for placement losses
6., 7.
(214,250)
291,024
Changes in held for trading securities
8.
(419,957)
52,640
Change in financial instruments mandatorily measured at fair value through profit
or loss
8.
3,727
(2,200)
Changes in derivative financial instruments at fair value through profit or loss
8.
108,979
(32,338)
Net decrease in loans
11.
87,202
(35,369)
Increase in other assets, excluding advances for investments and before
provisions for losses
16.
(6,918)
(22,571)
Net (decrease) / increase in amounts due to banks and deposits from the National
Bank of Hungary and other banks and repo liabilities
17., 18.
(523,976)
105,778
Financial liabilities designated as fair value through profit or loss
21.
(1,446)
(1,332)
Net decrease in deposits from customers
19.
(48,969)
(237,889)
Increase/(decrease) in other liabilities
24.
133,922
(73,221)
Net increase in the compulsory reserve established by the National Bank of
Hungary
5.
(20,036)
(402,879)
Dividend income
12.
(413,262)
(275,705)
Income tax paid
(37,966)
(19,213)
Net cash used in operating activities
(369,540)
(150,519)
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
386
OTP BANK PLC.
SEPARATE STATEMENT OF CASH FLOWS FOR THE YEAR ENDED
31 DECEMBER 2024
(in HUF mn) [continued]
Note
Year ended
31 December
2024
Year ended
31 December
2023
INVESTING ACTIVITIES
Purchase securities at fair value through other comprehensive income
9.
(375,295)
(342,984)
Proceeds from sale of securities at fair value through other comprehensive income
9.
347,083
628,817
Change in derivative financial instruments designated as hedge accounting
(22,624)
1,580
Increase in investments in subsidiaries
12.
(16,479)
(445,637)
Dividend income
435,295
254,694
Increase in securities at amortised cost
10.
(90,219,009)
(81,661)
Redemption of securities at amortised cost
10.
89,669,606
588,288
Additions to property, equipment and intangible assets
13.
(101,092)
(86,251)
Disposal of property, equipment and intangible assets
13.
333
1,903
Net increase in investment properties
14.
(173)
(134)
Net (used in) / provided by cash used in investing activities
(282,355)
518,615
FINANCING ACTIVITIES
Leasing payments
(6,594)
(5,341)
Cash received from issuance of securities
20.
960,124
829,166
Cash used for redemption of issued securities
20.
(491,946)
(140,736)
Cash received from issuance of subordinated bonds and loans
25.
16,314
293,590
Cash used for redemption of subordinated bonds and loans
25.
(213,410)
(44,611)
Purchase of Treasury shares
28.
(153,105)
(39,818)
Sale of Treasury shares
28.
37,389
36,804
Dividends paid
27.
(149,966)
(83,995)
Net cash (used in) / provided by financing activities
(1,194)
845,059
Net (decrease) / increase in cash and cash equivalents
(653,089)
1,213,155
Cash and cash equivalents at the beginning of the year
1,564,925
351,770
Cash and cash equivalents at the end of the year
911,836
1,564,925
Interest received
1,574,048
1,848,542
Interest paid
1,016,302
1,320,920
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
387
NOTE 1:
ORGANIZATION AND BASIS OF FINANCIAL STATEMENTS
1.1.
General information
OTP Bank Plc. ("Bank" or "OTP Bank") was established on 31 December 1990, when the previously State-owned
company was transformed into a limited liability company.
The Bank’s registered office address is 16, Nádor Street, Budapest 1051. Internet homepage: http://www.otpbank.hu/
Signatory of the separate financial statements is the Chief Executive Officer, dr. Sándor Csányi and Deputy Chief
Executive Officer, László Wolf.
The Bank’s owners have the power to amend the separate financial statements after issue if applicable.
Responsible person for the control and management of accounting services: Zoltán Tuboly (Budapest), Managing
Director of Accounting and Financial Directorate, Registration Number: 177289, IFRS qualified chartered accountant.
Due to Hungarian legislation audit services are statutory for OTP Bank. Disclosure information about the auditor: Ernst
& Young Audit Ltd. (001165), 1132 Budapest Váci Street 20. Registered under 01-09-267553 by Budapest-Capital
Regional Court, as registry court. Statutory registered auditor: Zsolt Kónya, registration number: 007383.
Audit service fee agreed by the Annual General Meeting of the Bank for the year ended 2024 is an amount of EUR 458
thousand + VAT.
All other fees charged by the Auditor for non-audit services during the financial year are disclosed in the consolidated
financial statements of the Bank.
In 1995, the shares of the Bank were introduced on the Budapest and the Luxembourg Stock Exchanges and were also
traded on the SEAQ board on the London Stock Exchange and PORTAL in the USA.
The structure of the Share capital by shareholders (%):
31 December
2024
31 December
2023
Domestic and foreign private and institutional investors
96,77%
99,25%
Employees
0,51%
0,48%
Treasury shares
2,52%
0,20%
Other
0,20%
0,07%
Total
100,00%
100,00%
The Bank’s Registered Capital consists of 280.000.010 pieces of ordinary shares with the nominal value of HUF 100
each, representing the same rights to the shareholders.
The Bank provides a full range of commercial banking services through a nationwide network of 317 branches in
Hungary.
31 December
2024
31 December
2023
Number of employees
10,679
10,715
Average number of employees
10,820
10,591
1.2.
Basis of accounting
These Separate Financial Statements were prepared based on the assumption of the Management that the Bank will remain
in business for the foreseeable future. The Bank will not be forced to halt operations and liquidate its assets in the near
term at what may be very low fire-sale prices.
The Bank maintains its accounting records and prepares their statutory accounts in accordance with the commercial,
banking and fiscal regulations prevailing in Hungary.
The presentation and functional currency of the Bank is the Hungarian Forint ("HUF").
The separate financial statements have been prepared in accordance with International Financial Reporting Standards
(“IFRS”) as adopted by the European Union (“EU”).
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
388
NOTE 1:
ORGANIZATION AND BASIS OF FINANCIAL STATEMENTS [continued]
1.2.1.
The effect of adopting new and revised IFRS standards effective from 1 January 2024
The following amendments to the existing standards and new interpretation issued by the International Accounting
Standards Board (IASB) and adopted by the EU are effective for the current reporting period:
o
IAS 1 Presentation of Financial Statements: Classification of Liabilities as Current or Non-current (Amendments)
- The amendments are effective for annual reporting periods beginning on or after January 1, 2024, and are applied
retrospectively.
o
The objective of the amendments is to clarify the principles in IAS 1 for the classification of liabilities as either
current or non-current. The amendments clarify the meaning of a right to defer settlement, the requirement for
this right to exist at the end of the reporting period, that management intent does not affect current or non-current
classification, that options by the counterparty that could result in settlement by the transfer of the entity’s own
equity instruments do not affect current or non-current classification. Also, the amendments specify that only
covenants with which an entity must comply on or before the reporting date will affect a liability’s classification.
Additional disclosures are also required for non-current liabilities arising from loan arrangements that are subject
to covenants to be complied within twelve months after the reporting period.
•
IFRS 16 Leases: Lease Liability in a Sale and Leaseback (Amendments) - The amendments are effective for annual
reporting periods beginning on or after January 1, 2024.
o
The amendments are intended to improve the requirements that a seller-lessee uses in measuring the lease
liability arising in a sale and leaseback transaction in IFRS 16, while it does not change the accounting for leases
unrelated to sale and leaseback transactions. Under the amendments, the seller-lessee determines ‘lease
payments’ or ‘revised lease payments’ in such a way that the seller-lessee would not recognise any amount of
the gain or loss that relates to the right of use it retains. Applying these requirements does not prevent the seller-
lessee from recognising, in profit or loss, any gain or loss relating to the partial or full termination of a lease. The
amendments apply retrospectively to sale and leaseback transactions entered into after the date of initial
application, being the beginning of the annual reporting period in which an entity first applied IFRS 16.
•
IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments Disclosures - Supplier Finance Arrangements
(Amendments) - The amendments are effective for annual reporting periods beginning on or after January 1, 2024.
o
The amendments supplement requirements already in IFRS and require an entity to disclose the terms and
conditions of supplier finance arrangements. Additionally, entities are required to disclose at the beginning and
end of reporting period the carrying amounts of supplier finance arrangement financial liabilities and the line
items in which those liabilities are presented as well as the carrying amounts of financial liabilities and line items,
for which the finance providers have already settled the corresponding trade payables. Entities should also
disclose the type and effect of non-cash changes in the carrying amounts of supplier finance arrangement
financial liabilities, which prevent the carrying amounts of the financial liabilities from being comparable.
Furthermore, the amendments require an entity to disclose at the beginning and end of the reporting period the
range of payment due dates for financial liabilities owed to the finance providers and for comparable trade
payables that are not part of those arrangements.
The adoption of these amendments to the existing standards has not led to any material changes in these Separate Financial
Statements.
1.2.2.
New and revised Standards and Interpretations issued by IASB and adopted by the EU but not yet
effective
•
IAS 21 The Effects of Changes in Foreign Exchange Rates: Lack of Exchangeability (Amendments) - The
amendments are effective for annual reporting periods beginning on or after January 1, 2025, with earlier application
permitted.
o
The amendments specify how an entity should assess whether a currency is exchangeable and how it should
determine a spot exchange rate when exchangeability is lacking. A currency is considered to be exchangeable
into another currency when an entity is able to obtain the other currency within a time frame that allows for a
normal administrative delay and through a market or exchange mechanism in which an exchange transaction
would create enforceable rights and obligations. If a currency is not exchangeable into another currency, an entity
is required to estimate the spot exchange rate at the measurement date. An entity’s objective in estimating the
spot exchange rate is to reflect the rate at which an orderly exchange transaction would take place at the
measurement date between market participants under prevailing economic conditions. The amendments note that
an entity can use an observable exchange rate without adjustment or another estimation technique.
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
389
NOTE 1:
ORGANIZATION AND BASIS OF FINANCIAL STATEMENTS [continued]
1.2.3.
Standards and Interpretations issued by IASB but not yet adopted by the EU
At present, IFRS as adopted by the EU do not significantly differ from regulations adopted by the IASB except for the
following new standards, amendments to the existing standards and new interpretation, which were not endorsed for use
in EU as at date of publication of these financial statements:
•
Amendments to IFRS 10 “Consolidated Financial Statements” and IAS 28 “Investments in Associates and
Joint Ventures” - Sale or Contribution of Assets between an Investor and its Associate or Joint Venture and further
amendments (effective date deferred indefinitely until the research project on the equity method has been concluded).
o
The amendments address an acknowledged inconsistency between the requirements in IFRS 10 and those in IAS
28, in dealing with the sale or contribution of assets between an investor and its associate or joint venture. The
main consequence of the amendments is that a full gain or loss is recognized when a transaction involves a
business (whether it is housed in a subsidiary or not). A partial gain or loss is recognized when a transaction
involves assets that do not constitute a business, even if these assets are housed in a subsidiary. In December
2015 the IASB postponed the effective date of this amendment indefinitely pending the outcome of its research
project on the equity method of accounting.
•
IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures - Classification and Measurement
of Financial Instruments (Amendments) - The amendments are effective for annual reporting periods beginning on
or after January 1, 2026. Early adoption of amendments related to the classification of financial assets and the related
disclosures is permitted, with the option to apply the other amendments at a later date.
o
The amendments clarify that a financial liability is derecognised on the ‘settlement date’, when the obligation is
discharged, cancelled, expired, or otherwise qualifies for derecognition. They introduce an accounting policy
option to derecognise liabilities settled via electronic payment systems before the settlement date, subject to
specific conditions. They also provide guidance on assessing the contractual cash flow characteristics of financial
assets with environmental, social, and governance (ESG)-linked features or other similar contingent features.
Additionally, they clarify the treatment of non-recourse assets and contractually linked instruments and require
additional disclosures under IFRS 7 for financial assets and liabilities with contingent event references (including
ESG-linked) and equity instruments classified at fair value through other comprehensive income.
•
IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures - Contracts Referencing Nature-
dependent Electricity (Amendments) - The amendments are effective for annual reporting periods beginning on or
after January 1, 2026, with earlier application permitted.
o
The amendments include clarifying the application of the 'own-use' requirements, permitting hedge accounting
if contracts in scope of the amendments are used as hedging instruments, and introduce new disclosure
requirements to enable investors to understand the impact of these contracts on a company's financial
performance and cash flows. The clarifications regarding the 'own-use' requirements must be applied
retrospectively, but the guidance permitting hedge accounting have to be applied prospectively to new hedging
relationships designated on or after the date of initial application.
•
IFRS 18 Presentation and Disclosure in Financial Statements - IFRS 18 is effective for reporting periods
beginning on or after January 1, 2027, with earlier application permitted. Retrospective application is required in
both annual and interim financial statements.
o
IFRS 18 introduces new requirements on presentation within the statement of profit or loss. It requires an entity
to classify all income and expenses within its statement of profit or loss into one of the five categories: operating;
investing; financing; income taxes; and discontinued operations. These categories are complemented by the
requirements to present subtotals and totals for ‘operating profit or loss’, ‘profit or loss before financing and
income taxes’ and ‘profit or loss’. It also requires disclosure of management-defined performance measures and
includes new requirements for aggregation and disaggregation of financial information based on the identified
‘roles’ of the primary financial statements and the notes. In addition, there are consequential amendments to
other accounting standards. The Bank anticipates that the adoption of these new standards, amendments to the
existing standards and new interpretations will have no material impact on the financial statements of the Bank
in the period of initial application.
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
390
NOTE 1:
ORGANIZATION AND BASIS OF FINANCIAL STATEMENTS [continued]
1.2.3.
Standards and Interpretations issued by IASB but not yet adopted by the EU [continued]
•
IFRS 19 Subsidiaries without Public Accountability: Disclosures - IFRS 19 is effective for reporting periods
beginning on or after January 1, 2027, with early application permitted.
o
IFRS 19 permits subsidiaries without public accountability to use reduced disclosure requirements if their parent
company (either ultimate or intermediate) prepares publicly available consolidated financial statements in
compliance with IFRS accounting standards. These subsidiaries must still apply the recognition, measurement
and presentation requirements in other IFRS accounting standards. Unless otherwise specified, eligible entities
that elect to apply IFRS 19 will not need to apply the disclosure requirements in other IFRS accounting standards.
•
Annual Improvements to IFRS Accounting Standards – Volume 11 - An entity shall apply those amendments
for annual reporting periods beginning on or after January 1, 2026.
o
The IASB’s annual improvements process deals with non-urgent, but necessary, clarifications and amendments
to IFRS. In July 2024, the IASB issued Annual Improvements to IFRS Accounting Standards — Volume 11.
The Annual Improvements to IFRS Accounting Standards - Volume 11, includes amendments to IFRS 1, IFRS
7, IFRS 9, IFRS 10, and IAS 7. These amendments aim to clarify wording, correct minor unintended
consequences, oversights, or conflicts between requirements in the standards.
•
Amendment in IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates and Joint
Ventures: Sale or Contribution of Assets between an Investor and its Associate or Joint Venture - In December 2015
the IASB postponed the effective date of this amendment indefinitely pending the outcome of its research project on
the equity method of accounting.
o
The amendments address an acknowledged inconsistency between the requirements in IFRS 10 and those in IAS
28, in dealing with the sale or contribution of assets between an investor and its associate or joint venture. The
main consequence of the amendments is that a full gain or loss is recognised when a transaction involves a
business (whether it is housed in a subsidiary or not). A partial gain or loss is recognised when a transaction
involves assets that do not constitute a business, even if these assets are housed in a subsidiary.
The Bank anticipates that the adoption of these new standards, amendments to the existing standards and new
interpretations will have no material impact on the financial statements of the Bank in the period of initial application.
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
391
NOTE 2:
SUMMARY OF MATERIAL ACCOUNTING POLICIES
Significant accounting policies applied in the preparation of the accompanying separate financial statements are
summarized below:
2.1. Basis of presentation
These separate financial statements have been prepared under the historical cost convention with the exception of certain
financial instruments, which are recorded at fair value. Revenues and expenses are recorded in the period in which they
are earned or incurred. The Bank does not offset assets and liabilities or income and expenses unless it is required or
permitted by an IFRS standard.
During the preparation of separate financial statements assets and liabilities, income and expenses are presented
separately, except in certain cases, when one of the IFRS standards prescribes net presenting related to certain items. (See
below 2.5.5.)
The presentation of separate financial statements in conformity with IFRS requires the Management of the Bank to make
estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and
liabilities as at the date of the financial statements and their reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Future changes in economic conditions, business strategies, regulatory requirements, accounting rules and other factors
could result in a change in estimates that could have a material impact on future separate financial statements.
2.2. Foreign currency translation
Monetary assets and liabilities denominated in foreign currencies are translated into HUF that is the presentation currency,
at exchange rates quoted by the National Bank of Hungary ("NBH") as at the date of the separate financial statements.
Income and expenses arising in foreign currencies are converted at the rate of exchange on the transaction date. Resulting
foreign exchange gains or losses are recorded to the separate statement of profit or loss.
2.3. Consolidated financial statements
These financial statements present the separate financial position and results of operations of the Bank. Consolidated
financial statements are prepared by the Bank and consolidated net profit for the year and shareholders’ equity differs
significantly from that presented in these separate financial statements. See Note 2.4 for the description of the method of
accounting for investments in subsidiaries and associated companies in these separate financial statements. The
consolidated financial statements and the separate financial statements will be published on the same date.
2.4. Investments in subsidiaries, associated companies and other investments
Investments in subsidiaries comprise those investments where OTP Bank, through direct and indirect ownership interest,
controls the investee. Control is achieved when the Bank has power over the investee, is exposed or has rights, to variable
returns from its involvement with the investee and has the ability to use its power to affect its returns.
Investments in subsidiaries are recorded at the cost of acquisition, less impairment for permanent diminution in value,
when appropriate. After initial measurement investments in subsidiaries are measured at cost, in the case of foreign
currency denominated investments for the measurement the Bank uses the exchange rate at the date of transaction.
Impairment is determined based on the future economic benefits of the subsidiary and macroeconomic factors.
OTP Bank calculates the fair value based on discounted cash flow model. The 3 year period explicit cash flow model
serves as a basis for the impairment test by which the Bank defines the impairment need on investment in subsidiaries
based on the strategic factors and financial data of its cash-generating units.
OTP Bank in its strategic plan has taken into consideration the cautious recovery of global economic situation and outlook,
the associated risks and their possible effect on the financial sector as well as the current and expected availability of
wholesale funding.
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
392
NOTE 2:
SUMMARY OF MATERIAL ACCOUNTING POLICIES [continued]
2.5. Financial assets
2.5.1. Business model and SPPI test
A business model refers how the Bank manages its financial instruments in order to generate cash flows. It is determined
at a level that reflects how groups of financial instruments are managed rather than at an instrument level.
The financial assets held by the Bank are classified into three categories depending on the business model within the
financial assets are managed.
•
Business model whose objective is to hold financial assets in order to collect contractual cash flows. Some sales
can be consistent with hold to collect business model and the Bank assesses the nature, frequency and
significance of any sales occurring. The Bank does not consider the sale frequent when at least six months have
elapsed between sales. The significant sales are those when the sales exceed 2% of the total hold to collect
portfolio. Within this business model the Bank manages mainly loans and advances and long term securities and
other financial assets.
•
Business model whose objective is achieved by both collecting contractual cash flows and selling financial
assets. Within this business model the Bank only manages securities.
•
Business model whose objective is to achieve gains in a short term period. Within this business model the Bank
manages securities and derivative financial instrument.
If cash flows are realised in a way that is different from the expectations at the date that the Bank assessed the business
model, that does not give rise to a prior error in the Bank’s financial statements nor does it change the classification of
the remaining financial assets held in that business model.
When, and only when the Bank changes its business model for managing financial assets it reclassifies all affected assets.
Such changes are determined by the Bank’s senior management as a result of external or internal changes and must be
significant to the Bank’s operations and demonstrable to external parties. The Bank shall not reclassify any financial
liability.
Classification of a financial asset is based on the characteristics of its contractual cash flows if the financial asset is held
within a business model whose objective is to hold assets to collect contractual cash flows or within a business model
whose objective is achieved by both collecting contractual cash flows and selling financial assets.
The Bank should determine whether the asset’s contractual cash flows are solely payments of principal and interest on
the principal amount outstanding (SPPI test). Contractual cash flows that are solely payments of principal and interest on
the principal amount outstanding are consistent with a basic lending arrangement.
Contractual terms that introduce exposure to risks or volatility in the contractual cash flows that is unrelated to a basic
lending arrangement, such as exposure to changes in equity prices or commodity prices, do not give rise to contractual
cash flows that are solely payments of principal and interest on the principal amount outstanding. The Bank assesses
whether contractual cash flows are solely payments of principal and interest on the principal amount outstanding for the
currency in which the financial asset is denominated.
Time value of money is the element of interest that provides consideration for only the passage of time. However, in some
cases, the time value of money element may be modified. In such cases, the Bank assesses the modification to determine
whether the contractual cash flows represent solely payments of principal and interest on the principal amount
outstanding.
When assessing a modified time value of money element, the objective is to determine how different the undiscounted
contractual cash flows could be from undiscounted cash flows that would arise if the time value of money element was
not modified (the benchmark cash flows). The benchmark instrument can be an actual or a hypothetical financial asset. If
the undiscounted contractual cash flows significantly – above 2% – differ from the undiscounted benchmark cash flows,
the financial asset should be subsequently measured at fair value through profit or loss.
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
393
NOTE 2:
SUMMARY OF MATERIAL ACCOUNTING POLICIES [continued]
2.5.2. Securities at amortised cost
The Bank measures at amortized cost those securities which are held for contractual cash collecting purposes, and
contractual terms of these securities give rise to cash flows that are solely payment of principal and interest on the principal
amount outstanding. The Bank initially recognises these securities at fair value. Securities at amortised cost are
subsequently measured using the effective interest (EIR) method and are subject to impairment. The amortisation of any
discount or premium on the acquisition of a security at amortized cost is part of the amortized cost and is recognised as
interest income so that the revenue recognized in each period represents a constant yield on the investment. Securities at
amortized cost are accounted for on a trade date basis. Such securities comprise mainly securities issued by the Hungarian
Government bonds and corporate bonds.
2.5.3.
Financial assets at fair value through profit or loss
2.5.3.1. Securities held for trading
Investments in securities are accounted for on a trade date basis and are initially measured at fair value. Securities held
for trading are measured at subsequent reporting dates at fair value. Unrealised gains and losses on held for trading
securities are recognized in profit or loss and are included in the separate statement of profit or loss for the period. The
Bank holds held for trading securities within the business model to obtain short-term gains, consequently realised and
unrealised gains and losses are recognized in the net operating income, while interest income is recognised in income
similar to interest income. The Bank applies FIFO147 inventory valuation method for securities held for trading. Such
securities consist of discounted and interest bearing Treasury bills, Hungarian Government bonds, mortgage bonds, shares
in non-financial commercial companies, shares in investment funds, shares in venture capital funds and shares in financial
institutions.
2.5.3.2. Derivative financial instruments
In the normal course of business, the Bank is a party to contracts for derivative financial instruments, which represent a
low initial investment compared to the notional value of the contract and their value depends on value of underlying asset
and are settled in the future. The derivative financial instruments used include interest rate forward or swap agreements
and currency forward or swap agreements and options. These financial instruments are used by the Bank both for trading
purposes and to hedge interest rate risk and currency exposures associated with its transactions in the financial markets.
(It is the so-called economic hedge, accounting hedge is described later.)
Derivative financial instruments are accounted for on a trade date basis and are initially measured at fair value and at
subsequent reporting dates also at fair value. Fair values are obtained from quoted market prices, discounted cash flow
models and option pricing models as appropriate. OTP Bank adopts multi curve valuation approach for calculating the
net present value of future cash flows – based on different curves used for determining forward rates and used for
discounting purposes. It shows the best estimation of such derivative deals that are collateralised as OTP Bank has almost
its entire open derivative transactions collateralised. Changes in the fair value of derivative financial instruments that do
not qualify for hedge accounting are recognized in profit or loss and are included in the separate statement of profit or
loss for the period. Each derivative deal is determined as asset when fair value is positive and as liability when fair value
is negative.
Certain derivative transactions, while providing effective economic hedges under risk management positions of the Bank,
do not qualify for hedge accounting under the specific rules of IFRS 9 and are therefore treated as derivatives held for
trading with fair value gains and losses charged directly to the separate statement of profit or loss.
Foreign currency contracts
Foreign currency contracts are agreements to exchange specific amounts of currencies at a specified rate of exchange, at
a spot date (settlement occurs two days after the trade date) or at a forward date (settlement occurs more than two days
after the trade date). The notional amount of forward contracts does not represent the actual market or credit risk
associated with these contracts.
Foreign currency contracts are used by the Bank for risk management and trading purposes. The Bank’s risk management
foreign currency contracts were used to hedge the exchange rate fluctuations of loans and deposits denominated in foreign
currency.
147 First In First Out
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
394
NOTE 2:
SUMMARY OF MATERIAL ACCOUNTING POLICIES [continued]
2.5.3.2. Derivative financial instruments [continued]
Foreign exchange swaps and interest rate swaps
The Bank enters into foreign-exchange swap and interest rate swap (“IRS”) transactions. The swap transaction is a
complex agreement concerning the swap of certain financial instruments, which usually consists of a spot and one or
more forward contracts.
Interest rate swaps obligate two parties to exchange one or more payments calculated with reference to fixed or
periodically reset rates of interest applied to a specific notional principal amount (the base of the interest calculation).
Notional principal is the amount upon which interest rates are applied to determine the payment streams under interest
rate swaps.
Such notional principal amounts are often used to express the volume of these transactions but are not actually exchanged
between the counterparties. The Bank’s interest rate swap contracts can be hedging or held for trading contracts.
Cross-currency interest rate swaps
The Bank enters into cross-currency interest rate swap (“CCIRS”) transactions which have special attributes, i.e. the
parties exchange the notional amount at the beginning and also at the maturity of the transaction. A special type of these
deals is the mark-to-market CCIRS agreements. At this kind of deals the parties – in accordance with the foreign exchange
prices – revalue the notional amount during lifetime of the transaction.
Equity and commodity swaps
Equity swaps obligate two parties to exchange more payments calculated with reference periodically reset rates of interest
and performance of indices. A specific notional principal amount is the base of the interest calculation. The payment of
index return is calculated on the basis of current market price compared to the previous market price. In the case of
commodity swaps payments are calculated on the basis of the strike price of a predefined commodity compared to its
average market price in a period.
Forward rate agreements (“FRA”)
A forward rate agreement is an agreement to settle amounts at a specified future date based on the difference between an
interest rate index and an agreed upon fixed rate. Market risk arises from changes in the market value of contractual
positions caused by movements in interest rates.
The Bank limits its exposure to market risk by entering into generally matching or offsetting positions and by establishing
and monitoring limits on unmatched positions. Credit risk is managed through approval procedures that establish specific
limits for individual counter-parties. The Bank’s forward rate agreements were transacted for management of interest rate
exposures.
Foreign exchange options
A foreign exchange option is a derivative financial instrument that gives the owner the right to exchange money
denominated in one currency into another currency at a pre-agreed exchange rate at a specified future date. The
transaction, for a fee, guarantees a worst-case exchange rate for the futures purchase of one currency for another. These
options protect against unfavourable currency movements while preserving the ability to participate in favourable
movements.
2.5.4. Hedge accounting
The Bank implemented hedge accounting rules for micro hedge transactions prescribed by IFRS 9 in 2018.
The Bank elected – as an accounting policy choice permitted under IFRS 9 – to apply IAS 39 hedge accounting rules for
portfolio (macro) hedge transactions.
For further details please see Note 45.3
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
395
NOTE 2:
SUMMARY OF MATERIAL ACCOUNTING POLICIES [continued]
2.5.4. Hedge accounting [continued]
2.5.4.1. Derivative financial instruments designated as fair value
Micro hedge transactions
The Bank elected to apply IFRS 9 for the micro hedge transactions.
Changes in the fair value of derivatives that are designated and qualify as hedging instruments fair value hedges and that
prove to be highly effective in relation to the hedged risk, are recorded in the separate statement of profit or loss along
with the corresponding change in fair value of the hedged asset or liability that is attributable to the specific hedged risk.
Changes in the fair value of the hedging instrument in fair value hedges are charged directly to the separate statement of
profit or loss. The conditions of hedge accounting applied by the Bank are the following: formally designated as hedging
relationship, proper hedge documentation is prepared, effectiveness test is performed and based on it the hedge is qualified
as effective.
In the case of a financial instrument measured at amortised cost the Bank recognises the hedging gain or loss on the
hedged item as the modification of its carrying amount and it is recognised in profit or loss. These adjustments of the
carrying amount are amortised to the profit or loss using the effective interest rate method. The Bank starts the
amortisation when the hedged item is no longer adjusted by the hedging gains or losses. If the hedged item is derecognised,
the Bank recognises the unamortised fair value in profit or loss immediately. For the fair value hedges inefficiencies and
the net revaluation of hedged and hedging item are recognised in the Net result on derivative instruments and hedge
relationships.
Macro (portfolio) hedge transactions
The Bank elected, as a policy choice permitted under IFRS 9, to continue to apply hedge accounting in accordance with
IAS 39 in the case of macro hedge transactions.
The Bank applies macro fair value hedging to its core part sight deposit to mitigate the interest rate risk arising from the
interest rate mismatch of assets with floating behaviour and the fixed rate nature of the deposit. The nature of the hedged
risk is interest rate risk arising from the fixed nature and the term structure of the interest rate risk characteristics of the
hedged core sight deposits.
The hedging instruments are fixed-to-floater interest rate swaps measured at fair value through profit or loss designated
in a proportion defined as the declared hedging ratio.
The hedging gain or loss is recognized in accordance with IAS39 paragraph 89 and 90.
The gain or loss on the hedging instrument is recognized in profit or loss, the fair value adjustment attributable to the
hedged risk is presented on a separate line in the separate statement of financial position.
The assessment of hedge effectiveness is measured on a monthly basis. The hedging relationship is considered appropriate
if the difference of fair value change of the hedging instrument and the hedged item is between the 80% -125% range in
the case of all or all but one valid stress scenarios.
The aggregated fair value changes on the hedged assets are recognised on the Derivative financial asset / liability
designated as hedge accounting in the Separate Statement of Financial Position.
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
396
NOTE 2:
SUMMARY OF MATERIAL ACCOUNTING POLICIES [continued]
2.5.4. Hedge accounting [continued]
2.5.4.2. Derivative financial instruments designated as cash flow hedge
Changes in fair value of derivatives that are designated and qualify as hedging instrument in cash flow hedges and that
prove to be highly effective in relation to hedged risk are recognized as reserve in other comprehensive income. Amounts
deferred in other comprehensive income are transferred to the separate statement of profit or loss and classified as revenue
or expense in the periods during which the hedged assets and liabilities effect the separate statement of recognized and
comprehensive income for the period. The ineffective element of the hedge is charged directly to the separate statement
of profit or loss. The Bank terminates the hedge accounting if the hedging instrument expires or is sold, terminated, or
exercised, or the hedge no longer meets the criteria for hedge accounting. In the case of cash flow hedges - in line with
the standard – hedge accounting is still applied as long as the underlying asset is derecognised or terminated.
When the Bank discontinues hedge accounting to a cash-flow hedge the amount in the cash flow hedge reserve is
reclassified to the profit or loss if the hedged future cash flows are no longer expected to occur. If the hedged future cash
flows are still expected to occur, the amount remains in the cashflow hedge reserve and reclassified to the profit and loss
only when the future cash flows occur.
2.5.5. Offsetting
Financial assets and liabilities may be offset and the net amount is reported in the statement of financial position when
the Bank has a legally enforceable right to set off the recognised amounts and the transactions are intended to be reported
in the statement of financial position on a net basis. In the case of the derivative financial instruments the Bank applies
offsetting and net presentation in the Statement of Financial Position when the Bank has the right and the ability to settle
the assets and liabilities on a net basis.
2.5.6. Embedded derivatives
Sometimes, a derivative may be a component of a combined or hybrid contract that includes a host contract and a
derivative (the embedded derivative) affecting cash flows or otherwise modifying the characteristics of the host
instrument. An embedded derivative must be separated from the host instrument and accounted for as a separate derivative
if, and only if:
-
The economic characteristics and risks of the embedded derivative are not closely related to the economic
characteristics and risks of the host contract;
-
A separate financial instrument with the same terms as the embedded derivative would meet the definition
of a derivative as a stand-alone instrument; and
-
The host instrument is not measured at fair or is measured at fair value but changes in fair value are
recognised in other comprehensive income.
As long as a hybrid contract contains a host that is a financial asset the general accounting rules for classification,
recognition and measurement of financial assets are applicable for the whole contract and no embedded derivative is
separated.
Derivatives that are required to be separated are measured at fair value at initial recognition and subsequently. If the Bank
is unable to measure the embedded derivative separately either at acquisition or at the end of a subsequent financial
reporting period, the Bank shall designate the entire hybrid contract as at fair value through profit or loss. The Bank shall
assess whether an embedded derivative is required to be separated from the host contract and accounted for as a derivative
when the Bank first becomes a party to the contract.
The separation rules for embedded derivatives are only relevant for financial liabilities.
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
397
NOTE 2:
SUMMARY OF MATERIAL ACCOUNTING POLICIES [continued]
2.5.7. Securities at fair value through other comprehensive income (“FVOCI securities”)
FVOCI securities are held within a business model whose objective is achieved by both collecting of contractual cash
flows and selling securities. Furthermore contractual terms of FVOCI securities give rise on specified dates to cash flows
that are solely payment of principal and interest on the principal amount outstanding.
Debt instruments
Investments in debt securities are accounted for on a trade date basis and are initially measured at fair value. Securities
at fair value through other comprehensive income are measured at subsequent reporting dates at fair value. Unrealised
gains and losses on FVOCI financial instruments are recognized in other comprehensive income, except for interest and
foreign exchange gains/losses on monetary items, unless such FVOCI security is part of an effective hedge. Such gains
and losses will be reported when realised in profit or loss for the applicable period. The Bank applies FIFO148 inventory
valuation method for FVOCI securities.
For debt securities at fair value through other comprehensive income the loss allowance is calculated based on expected
credit loss model. The expected credit loss is accounted for against Other Comprehensive Income.
FVOCI securities are remeasured at fair value based on quoted prices or values derived from cash flow models. In
circumstances where the quoted market prices are not readily available, the fair value of debt securities is estimated using
the present value of the future cash flows and the fair value of any unquoted equity instruments are calculated using the
EPS ratio.
Fair value through other comprehensive income option for equity instruments
In some cases the Bank made an irrevocable election at initial recognition for certain non-trading investments in an equity
instrument to present subsequent changes in fair value of these securities in other comprehensive income instead of in
profit or loss.
The use of the fair value option is based only on direct decision of management of the Bank.
2.5.8. Loans, placements with other banks, repo receivables and loss allowance for loan, placements and repo
receivables losses
The Bank measures Loans, placements with other banks and repo receivables at amortised cost, which are held to collect
contractual cash flows, and contractual terms of these assets give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal amount outstanding. The Bank recognises loans, which are not held
for trading and do not give rise contractual cash flows that are solely payments of principal and interest on the principal
amount outstanding as loans measured at fair value through profit or loss (“FVTPL loans”).
Loans, placements with other banks and repo receivables are accounted at amortised cost, stated at the principal amounts
outstanding including accrued interest, net of allowance for loan or placement losses, respectively.
In the case of the above mentioned financial assets measured at amortised cost transaction fees and charges adjust the
carrying amount at initial recognition and are included in effective interest calculation. In the case of FVTPL loans fees
and charges are recognised when incurred in the separate statement of profit or loss.
Loans, placements with other banks and repo receivables loans are derecognised when the contractual rights to the cash
flows expire or they are transferred. When a financial asset is derecognised the difference of the carrying amount and the
consideration received is recognised in the profit or loss. In the case of the above mentioned financial assets at amortised
cost gains or losses from derecognition are presented in “Gains/losses arising from derecognition of financial assets at
amortised cost” line. In the case of FVTPL loans gains or losses from derecognition are presented in “Net operating
income”.
Change in the fair value of FVTPL loans is broken down into two components and presented in the separate statement of
profit or loss as follows:
•
Portion of the change in fair value arising from changes in credit risk are presented within “Risk cost” as “Change
in the fair value attributable to changes in the credit risk of loans mandatorily measured at fair value through
profit of loss”.
•
The remaining component of the change is presented in fair value within “Net operating income” as
“Gains/(Losses) on financial instruments at fair value through profit or loss”.
148 First In First Out
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
398
NOTE 2:
SUMMARY OF MATERIAL ACCOUNTING POLICIES [continued]
2.5.8.
Loans, placements with other banks, repo receivables and loss allowance for loan, placements and repo
receivables losses [continued]
Initially, financial assets shall be recognised at fair value which is usually equal to the transaction value in the case of
loans and placements. However, when the amounts are not equal, the initial fair value difference should be recognized.
If the fair value of financial assets is based on a valuation technique using only inputs observable in market transactions,
the Bank recognises the initial fair value difference in the Separate Statement of Profit or Loss.
When the fair value of financial assets is based on models for which inputs are not observable, the difference between the
transaction price and the fair value is deferred and only recognised in profit or loss when the instrument is derecognised
or the inputs became observable.
Initial fair value of loans lent at interest below market conditions is lower than their transaction price, the subsequent
measurement of these loans is under IFRS 9.
Allowance for losses on loans, placements with other banks and repo receivables represent management assessment for
potential losses in relation to these activities.
The Bank recognises a loss allowance for expected credit losses on a financial asset at each reporting date. The loss
allowance for a financial asset equals to 12-month expected credit loss or equals to the lifetime expected credit losses.
The maximum period over which expected credit losses shall be measured is the maximum contractual period over which
the Bank is exposed to credit risk.
If the credit risk on a financial asset has not increased significantly since initial recognition then 12-month expected credit
losses, otherwise (in the case of significant credit risk increase) lifetime expected credit losses should be calculated. The
expected credit loss is the present value of the difference between the contractual cash flows that are due to the Bank
under the contract and the cash flows that the Bank expects to receive.
When the contractual cash flows of a financial asset are modified and the modification does not result in the derecognition
of the financial asset the Bank recalculate the gross carrying amount of the financial asset by discounting the expected
future cash flows with the original effective interest rate of the asset. The difference between the carrying amount and the
present value of the expected cash flows is recognised as a “Modification gain or loss” in the statement of profit or loss.
Interest income and amortised cost are accounted for using the effective interest rate method.
Write-offs are generally recorded after all reasonable restructuring or collection activities have taken place and the
possibility of further recovery is considered to be remote. The loan is written off against the related account “Loss
allowance on loan, placement and repo receivables losses” in the Statement of Profit or loss.
OTP Bank applies partial or full write-off for loans based on the definitions and prescriptions of financial instruments in
accordance with IFRS 9. If OTP Bank has no reasonable expectations regarding a financial asset (loan) to be recovered,
it will be written off partially or fully at the time of emergence.
The gross amount and loss allowance of the loans shall be written off in the same amount to the estimated maximum
recovery amount while the net carrying value remains unchanged.
If there are reasonable expectations of recovery for a financial asset that is written-off fully or partially, OTP Bank shall
re-estimate cash flows of that financial asset and write-off reversal is applied in the financial statements.
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
399
NOTE 2:
SUMMARY OF MATERIAL ACCOUNTING POLICIES [continued]
2.5.9. Modification of contractual cash flows
If the net present value of the contracted cash flows changes due to the modification of the contractual terms and it is not
qualified as derecognition, modification gain or loss should be calculated and accounted for in the separate statement of
profit or loss. Modification gain or loss is accounted in the cases like restructuring – as defined in internal policies of the
Bank – prolongation, renewal with unchanged terms, renewal with shorter terms and prescribing capital repayment rate,
if it doesn’t exist or has not been earlier.
The changes of net present value should be calculated on portfolio level in the case of retail exposures. Each retail contract
is restructured based on restructuring frameworks. The Bank has to evaluate these frameworks (and not individual
contracts). The changes of net present value should be calculated individually on contract level in the case of corporate
portfolio.
Among the possible contract amendments, the Bank considers as a derecognition and a new recognition the followings:
- merging several debts into a single debt, or one single debt splitting into several tranches,
- change of currency,
- change in counterparty,
- failing SPPI test after modification,
- interest rate change (fixed to floating or floating to fixed),
when the discounted present value – discounted at the original effective interest rate – of the cash flows under the new
terms is at least 10 per cent different from the discounted present value of the remaining cash flows.
In the case of derecognition and new recognition of a financial asset, the unamortized fees of the derecognized asset
should be presented as Income similar to interest income. The newly recognized financial asset is initially measured at
fair value and is placed in stage 1 if the derecognized financial asset was in stage 1 or stage 2 portfolio. The newly
recognized financial asset will be purchased or originated credit impaired financial asset (“POCI”) if the derecognized
financial asset was in stage 3 portfolio or it was POCI.
The modification gain or loss shall be calculated at each contract amendments unless they are handled as a derecognition
and new recognition. In the case of modification the Bank recalculates the gross carrying amount of the financial asset.
To do this, the new contractual cash flows should be discounted using the financial asset’s original effective interest rate
(or credit-adjusted effective interest rate for POCI financial asset). Any costs or fees incurred adjust the carrying amount
of the modified financial asset are amortized over the remaining term of the modified financial asset.
2.5.10. Purchased or originated credit impaired financial assets
Purchased or originated financial assets are credit-impaired on initial recognition. A financial asset is credit-impaired
when one or more events that have a detrimental impact on the estimated future cash flows of that financial asset have
occurred.
A purchased credit-impaired asset is likely to be acquired at a deep discount. In unusual circumstances, it may be possible
that an entity originates a credit-impaired asset, for example, following a substantial modification of a distressed financial
asset that resulted in the derecognition of the original financial asset.
In the case of POCI financial assets, interest income is always recognized by applying the credit-adjusted effective interest
rate.
For POCI financial assets, in subsequent reporting periods an entity is required to recognize:
-
the cumulative changes in lifetime expected credit losses since initial recognition as a loss allowance,
-
the impairment gain or loss which is the amount of any change in lifetime expected credit losses.
An impairment gain is recognized (with the parallel increase of the net amortized cost of receivable) if due to the
favourable changes after initial recognition the lifetime expected credit loss estimation is becoming lower than the
original estimated credit losses at initial recognition.
The POCI qualification remains from initial recognition to derecognition in the Bank’s books.
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
400
NOTE 2:
SUMMARY OF MATERIAL ACCOUNTING POLICIES [continued]
2.6. Loss allowance
Loss Allowance for loans and placements with other banks and repo receivables are recognised by the Bank based on the
expected credit loss model in accordance with IFRS 9. Based on the three stage model loss allowance is recognised in
amount of 12 month expected credit loss from the initial recognition. Financial assets with significantly increased credit
risk or credit impaired financial assets (based on objective evidences) loss allowance is recognised in amount of lifetime
expected credit loss.
In the case of purchased or originated credit impaired financial assets loss allowance is recognised in amount of lifetime
expected credit loss since initial recognition. Impairment gain is recognised if lifetime expected credit loss for purchased
or originated credit impaired financial assets at measurement date are less than the estimated credit loss at initial
recognition.
A loss allowance for loans and placements with other banks and repo receivables represents Management’s assessment
for potential losses in relation to these activities.
The default occurs when either or both of the following events have taken place:
• objective criterion meaning that the credit obligation of the client is overdue exceeding the materiality threshold
for more than 90 consecutive days (90+ default DPD), or the obligor has breached the limit of the overdraft with
an amount exceeding the materiality threshold for more than 90 consecutive days (90+ default DPD), or
• probability criterion meaning the probability that the obligor will be unable to pay its credit obligations in full
(UTP= Unlikely to Pay). The following conditions indicate the occurrence of the probability criterion: specific
credit risk adjustment, sell of credit obligation with significant loss, distressed restructuring, termination of the
contract on the initiative of the Bank, Bankruptcy, liquidation, personal bankruptcy, forced deleted status.
Previously described conditions should result in default status mandatorily. Moreover, during the individual expert-based
assessment the client’s default status shall be established if in the specific case the default can be justified on subjective
basis. The default status should be terminated if in the last 3 months no other default criterion exists and the condition
(either probability criterion or objective criterion) that resulted in the default status ceased at least 3 months ago.
The expected loss calculation should be forward looking. Available forward-looking information has to be included in
the parameter estimation by using different scenarios, including forecasts of future economic conditions. The
determination of probability-weighted forward-looking scenarios are based on the OTP Bank’ macro model. In general,
there are two crisis scenarios (4-5), and three non-crisis scenarios (1-3) but the calculation of impairment should be based
on at least two scenarios in the OTP Bank. The macro conditioning is performed by Vasicek-model, which captures the
relationship between point-in-time (PiT) and through-the-cycle (TTC) PD.
The Vasicek PD transformation can also be used to estimate the PIT PDs of the buckets. The required parameters (such
as correlation coefficient and macro condition parameter) can be derived from the OTP’s macro model.
In the collective provisioning methodology credit risk and the change of credit risk can be correctly captured by
understanding the risk characteristics of the portfolio. At portfolio segmentation, setting the segments is a key element of
the provisioning calculation and requires the extensive knowledge of the portfolio. The segmentation is expected to stay
stable from month to month. The segmentation must be performed separately for each parameter, since in each case
different factors may have relevance.
The estimation of one-year and lifetime probability of default (PD) of collectively assessed exposures is performed via
transition matrices. The assets should be allocated to groups representing similar credit risk based on major credit risk
characteristics and their capability to fulfil contractual obligations. The mandatory variables of the group level assessment
procedure are payment delay, deal/client rating, the restructured flag, the default status and product type. Further
segmentation is advisable in the case significant differences are observed in probability of default. Transition matrices
should be determined for each portfolio segment separately. The Bank model handles healing (from default) rate in the
PD parameter, thus the calculated probabilities should be reduced by this rate.
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
401
NOTE 2:
SUMMARY OF MATERIAL ACCOUNTING POLICIES [continued]
2.6.
Loss allowance [continued]
Two different methods are applied in OTP Bank for LGD parameter calculation: Retail mortgage loans and non-retail
portfolios (MSE and Wholesale) that are significantly secured by mortgage: modified LGD methodology based on the
Asset Quality Review (AQR) – the primary source of the recovery the collateral itself but cash recovery is also taken into
account. The calculation is performed for each exposure individually based on the estimated parameters (main parameters:
FSR – foreclosure success rate, SR – sales ratio, TTS – time to sale, C – cost, REC – cash recovery) and the actual value
of collaterals (e.g. property, guarantee, surety, bail).
For Consumer loans and car finance: recovery based LGD methodology estimated from historical recoveries. The LGD
calculation should not be automatically identified with historic actual data. The direction and degree of the shift in the
factors impacting the LGD, also considering the macroeconomic effects, in addition to the anticipated developments in
those, must always be analysed. The LGD – just like the PD – is not independent of the business cycles either; typically
it increases in parallel with the economic downturn.
Loss allowance for loan and placements are determined at a level that provides coverage for individually identified credit
losses. Collective impairment loss is recognised for loans with similar credit risk characteristics when it is not possible to
determine the amount of the individually identified credit loss in the absence of objective evidence. The expected cash
flows for loan portfolios are estimated based on historical loss experience.
At subsequent measurement the Bank recognises through “Loss allowance on loan, placement and repo receivables
losses” in the Statement of Profit or Loss impairment gain or loss as an amount of expected credit losses or reversal that
is required to adjust the loss allowance at the reporting date to the amount that is required to be recognised in accordance
with IFRS 9.
If a financial asset, which previously classified in the first stage, classified subsequently in the second or third stage than
loss allowance is adjusted to lifetime expected credit loss. If a financial asset, which previously classified in the second
or third stages, classified subsequently in the first stage than loss allowance is adjusted to level of 12 month expected
credit loss.
Classification into risk classes
According to the requirements of the IFRS9 standard, the Bank classifies financial assets measured at amortised cost and
fair value through other comprehensive income, and loan commitments and financial guarantees into the following
categories in accordance with IFRS9:
Stage 1
Performing
Stage 2
Performing, but compared to the initial recognition it shows significant increase in credit risk
Stage 3
Non-performing
POCI
Purchased or originated credit impaired
In the case of trade receivables, contract assets and lease receivables the Bank applies the simplified approach and
calculates only lifetime expected credit loss. Simplified approach is the following:
•
for the past 3 years the average annual balance of receivables under simplified approach is calculated,
•
the written-off receivables under simplified approach are determined in the past 3 years,
•
the loss allowance ratio will be the sum of the written-off amounts divided by the sum of the average
balances,
•
historical losses are adjusted to reflect information about current conditions and reasonable forecasts of
future economic conditions,
•
the loss allowance is multiplied by the end-of-year balance and it will be the actual loss allowance on these
receivables,
•
loss allowance should be recalculated annually.
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
402
NOTE 2:
SUMMARY OF MATERIAL ACCOUNTING POLICIES [continued]
Classification into risk classes [continued]
The Bank assumes that the credit risk on a financial instrument has not increased significantly since initial recognition if
the financial asset is determined to have low credit risk at the reporting date. This might occur if the financial asset has a
low risk of default, the borrower has a strong capacity to meet its contractual cash flow obligations in the near term and
adverse changes in economic and business conditions in the longer term may, but will not necessarily, reduce the ability
of the borrower to fulfil its contractual cash flow obligations. The Bank considers souvereign exposures having low credit
risk.
Stage 1: financial instruments for which the events and conditions specified in respect of Stage 2 and Stage 3 do not exist
on the reporting date.
A financial instrument shows significant increase in credit risk, and is allocated to Stage 2, if in respect of which any of
the following triggers exist on the reporting date, without fulfilling any of the conditions for the allocation to the non-
performing stage (stage 3):
• the payment delay exceeds 30 days,
• it is classified as performing forborne,
• based on individual decision, its currency suffered a significant "shock" since the disbursement of the loan,
• the transaction/client rating exceeds a predefined value or falls into a determined range, or compared to the historic
value it deteriorates to a predefined degree,
• in the case retail mortgage loans, the loan-to-value ratio exceeds a predefined rate,
• default on another loan of the retail client, if no cross-default exists,
• monitoring classification of corporate and municipal clients above different thresholds defined on group
- financial difficulties at the debtor (capital adequacy, liquidity, deterioration of the instrument quality),
- significant decrease of the liquidity or the activity on the active market of the financial instrument can be
observed,
- the rating of the client reflects high risk, but it is better than the default one,
- significantly decrease in the value of the recovery from which the debtor would disburse the loan,
- clients under liquidation.
A financial instrument is non-performing and it is allocated to Stage 3 when any of the following events or conditions
exists on the reporting date:
• default (based on the group level default definition),
• classified as non-performing forborne (based on the group level forborne definition),
• the monitoring classification of corporate and municipal clients above different thresholds defined on group level
(including but not limited to):
-
breaching of contracts,
-
significant financial difficulties of the debtor (like capital adequacy, liquidity, deterioration of the instrument
quality),
-
bankruptcy, liquidation, debt settlement processes against debtor,
-
forced strike-off started against debtor,
-
termination of loan contract by the Bank,
-
occurrence of fraud event,
-
termination of the active market of the financial instrument.
If the exposure is no longer considered as credit impaired, the Bank allocates this exposure to Stage 2.
When loss allowance is calculated at exposures categorized into stages the following process is needed by stages:
• Stage 1 (performing): loss allowance at an amount equal to 12-month expected credit loss should be recognized,
• Stage 2 (significant increase in credit risk): loss allowance at an amount equal to lifetime expected credit loss
should be recognized,
• Stage 3 (non-performing): loss allowance at an amount equal to lifetime expected credit loss should be
recognized.
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
403
NOTE 2:
SUMMARY OF MATERIAL ACCOUNTING POLICIES [continued]
Classification into risk classes [continued]
For lifetime expected credit losses, the Bank shall estimate the risk of a default occurring on the financial instrument
during its expected life. 12-month expected credit losses are a portion of the lifetime expected credit losses and represent
cash flow shortfalls that will result if a default occurs in the 12 months after the reporting date (or a shorter period if the
expected life of the financial instrument is less than 12 months), weighted by the probability of that default occurring.
An entity shall measure expected credit losses of a financial instrument in a way that reflects:
•
an unbiased and probability-weighted amount that is determined by evaluating a range of possible outcomes,
•
the time value of money, and
•
reasonable and supportable information that is available without undue cost of effort at the reporting date about
past events, current conditions and forecasts of future economic conditions.
2.7.
Option to designate a financial asset/liability measured at fair value through profit or loss (FVTPL option)
The Bank may, at initial recognition, irrevocably designate a financial asset or liability as measured at fair value through
profit or loss. The Bank may use FVTPL option in the following cases:
-
if doing so eliminates or significantly reduces a measurement or recognition inconsistency (accounting
mismatch) that would otherwise arise from measuring assets or liabilities or recognising the gains and losses on
them on different bases
-
if the group of financial liabilities or assets is managed and its performance is evaluated on a fair value basis, in
accordance with a documented risk management or investment strategy, and information about the group is
provided internally on that basis to the Bank’s key management personnel.
The use of the fair value option is limited only to special situations, and it can be based only on direct decision of
management of the Bank.
2.8.
Sale and repurchase agreements, security lending
Where debt or equity securities are sold under a commitment to repurchase them at a pre-determined price, they remain
on the statement of financial position and the consideration received is recorded in Other liabilities or Amounts due to
banks and deposits from the National Bank of Hungary and other banks, or Deposits from customers. Conversely, debt
or equity securities purchased under a commitment to resell are not recognized in the statement of financial position and
the consideration paid is recorded either in Placements with other banks or Deposits from customers. Interest is accrued
evenly over the life of the repurchase agreement. In the case of security lending transactions the Bank does not recognize
or derecognize the securities because it is believed that the transferor retains substantially all the risks and rewards of the
ownership of the securities. Only a financial liability or financial receivable is recognized for the consideration amount.
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
404
NOTE 2:
SUMMARY OF MATERIAL ACCOUNTING POLICIES [continued]
2.9.
Property, equipment and intangible assets
Property, equipment and intangible assets are stated at cost, less accumulated depreciation and amortization and
impairment, if any. The depreciable amount (book value less residual value) of the non-current assets must be allocated
over their useful lives. Depreciation and amortization are calculated using the straight-line method over the estimated
useful lives of the assets based on the following annual percentages:
Depreciation key
Useful lifetime (years)
Intangible assets
Software
20%-33%
3-5
Property rights
17%-50%
2-6
Property
1%-7%
15-100
Office equipment and vehicles
7%-50%
2-15
Depreciation and amortization on properties, equipment and intangible assets starts on the day when such assets are placed
into service. At each balance sheet date, the Bank reviews the carrying value of its tangible and intangible assets to
determine if there is any indication that those assets have suffered an impairment loss.
If such indication exists, the recoverable amount of the asset is estimated to determine the extent (if any) of the impairment
loss. Where it is not possible to estimate the recoverable amount of an individual asset, the Bank estimates the recoverable
amount of the cash-generating unit to which the asset belongs.
Where the carrying value of property, equipment, other tangible fixed assets and intangible assets is greater than the
estimated recoverable amount, it is impaired immediately to the estimated recoverable amount.
2.10. Inventories
The inventories shall be measured at the lower of cost and net realisable value. The cost of inventories shall comprise all
costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and
condition. The Bank uses generally FIFO formulas to the measurement of inventories. Inventories shall be derecognised
when they are sold, unusable or destroyed. When inventories are sold, the carrying amount of those inventories shall be
recognized as an expense in the period in which the related revenue is recognized. Repossessed assets are classified as
inventories. The Bank's policy is to sell repossessed assets and not to use them for its internal operations.
2.11. Investment properties
Investment properties of the Bank are land, buildings, part of buildings which are held (as the owner or as the lessee under
a finance lease) to earn rentals or for capital appreciation or both, rather than for use in the production or supply of services
or for administrative purposes or sale in the ordinary course of business. The Bank measures the investment properties at
cost less accumulated depreciation and impairment, if any. The depreciable amount (book value less residual value) of
the investment properties must be allocated over their useful lives. Depreciation and amortization are calculated using the
straight-line method over the estimated useful lives of the assets.
The fair value of the investment properties is established mainly by external experts. According to the opinion of the
Management there is no significant difference between the fair value and the carrying value of these properties.
2.12. Financial liabilities
The financial liabilities are presented within these lines in the Separate Financial Statements:
•
Amount due to banks and deposits from the National Banks and other banks
•
Repo liabilities
•
Financial liabilities designated at fair value through profit or loss
•
Deposits from customers
•
Liabilities from issued securities
•
Derivative financial liabilities held for trading
•
Derivative financial liabilities designated as hedge accounting
•
Other financial liabilities
At initial recognition, the Bank measures financial liabilities at fair value plus or minus – in the case of a financial liability
not at fair value through profit or loss – transaction costs that are directly attributable to the acquisition or issue of the
financial liability.
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
405
NOTE 2:
SUMMARY OF MATERIAL ACCOUNTING POLICIES [continued]
2.12.
Financial liabilities [continued]
Usually, the initial fair value of financial liabilities equals to transaction value. However, when the amounts are not equal,
the initial fair value difference should be recognized.
If the fair value of financial liabilities is based on a valuation technique using only inputs observable in market
transactions, the Bank recognizes the initial fair value difference in the Separate Statement of Profit or Loss.
When the fair value of financial liabilities is based on models for which inputs are not observable, the difference between
the transaction price and the fair value is deferred and only recognized in profit or loss when the instrument is
derecognized or the inputs became observable.
Financial liabilities at fair value through profit or loss are either financial liabilities held for trading or they are designated
upon initial recognition as at fair value through profit or loss.
In connection to the derivative financial liabilities measured at fair value through profit or loss, the Bank presents the
amount of change in their fair value originated from the changes of market conditions and business environment.
The Bank designated some financial liabilities upon initial recognition to measure at fair value through profit or loss. This
classification eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise
from measuring assets or liabilities or recognising the gains and losses on them on different bases (“accounting
mismatch”). The changes in fair value of these liabilities are recognized in profit or loss, except the fair value changes
attributable to credit risk which are recognized among other comprehensive income.
In the case of financial liabilities measured at amortised cost, fees and commissions related to the origination of the
financial liability are recognised through profit or loss during the maturity of the instrument. In certain cases the Bank
repurchases a part of financial liabilities (mainly issued securities or subordinated bonds) and the difference between the
carrying amount of the financial liability and the amount paid for it is recognised in the statement of profit or loss and
included in other operating income.
2.13.
Leases
An agreement is a lease or contains a lease if it transfers the rights to control the use of an identified asset for a given
period in exchange for compensation.
Expenses related to the use of lease assets, the majority of which were previously recognised in external services costs,
will be currently classified as depreciation/amortisation and interest costs. Usufruct rights are depreciated using a straight
line method, while lease liabilities are settled using an effective discount rate.
Recognition of lease liabilities
The Bank will recognise lease liabilities related to leases which were previously classified as "operating leases" in
accordance with IAS 17 Leases. These liabilities will be measured at the present value of lease payments receivable as at
the date of commencement of the application of IFRS 16. Lease payments shall be discounted using the interest rate
implicit in the lease or, if that rate cannot be readily determined, the incremental borrowing rate.
At their date of initial recognition, lease payments contained in the measurement of lease liabilities comprise the following
types of payments for the right to use the underlying asset for the life of the lease:
-
fixed lease payments less any lease incentives,
-
variable lease payments which are dependent on market indices,
-
amounts expected to be payable by the lessee under residual value guarantees,
-
the strike price of a purchase option, if it is reasonably certain that the option will be exercised, and
-
payment of contractual penalties for terminating the lease, if the lease period reflects that the lessee used the
option of terminating the lease.
The Bank makes use of expedients with respect to short-term leases (less than 12 months) as well as in the case of leases
in respect of which the underlying asset has a low value (less than HUF 1.4 million) and for which agreements it will not
recognise financial liabilities nor any respective right-of-use assets. These types of lease payments will be recognised as
costs using the straight-line method during the life of the lease.
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
406
NOTE 2:
SUMMARY OF MATERIAL ACCOUNTING POLICIES [continued]
2.13. Leases [continued]
Recognition of right-of-use assets
Right-of-use assets are initially measured at cost.
The cost of a right-of-use asset comprises:
-
the amount of the initial measurement of lease liabilities,
-
any lease payments made at or before the commencement date, less any lease incentives received,
-
any initial direct costs incurred by the lessee,
-
estimates of costs to be incurred by the lessee as a result of an obligation to disassemble and remove an
underlying asset or to carry out renovation/restoration.
Right-of-use assets are presented separately in the financial statements.
2.14.
Share capital
Share capital is the capital determined in the Articles of Association and registered by the Budapest-Capital Regional
Court. Share capital is the capital the Bank raised by issuing common stocks at the date the shares were issued. The
amount of share capital has not changed over the current period.
2.15.
Treasury shares
Treasury shares are shares which are purchased on the stock exchange and the over-the-counter market by the Bank and
are presented in the separate statement of financial position at acquisition cost as a deduction from shareholders’ equity.
Gains and losses on the sale of treasury shares are recognised directly to shareholder’s equity. Derecognition of treasury
shares is based on the FIFO method.
2.16.
Non-current assets held-for-sale and discontinued operations
A discontinued operation is a component of an entity that either has been disposed of or is classified as held-for-sale.
Hereinafter non-current assets classified as held-for-sale, disposal group and discontinued operations are referred to as
assets in accordance with IFRS 5.
The Bank classifies assets under IFRS 5 if their carrying amount will be recovered principally through a sale transaction
rather than through continuing use. The Bank does not account for an asset under IFRS 5 that has been temporarily taken
out of use as if it had been abandoned.
The Bank measures an asset under IFRS 5 at the lower of its carrying amount and fair value less costs to sell. When the
sale is expected to occur beyond one year, the Bank measures the costs to sell at their present value.
Any increase in the present value of the costs to sell that arises from the passage of time shall be presented in profit or
loss. Immediately before the initial classification of the asset under IFRS 5, the carrying amounts of the asset (or all the
assets and liabilities in the group) are measured in accordance with applicable IFRS.
The Bank does not depreciate (or amortize) an asset under IFRS 5 while it is classified as asset in accordance with IFRS
5. Interest and other expenses attributable to the liabilities of the asset under IFRS 5 shall continue to be recognized.
If the Bank has classified an asset under IFRS 5, but the criteria for that are no longer met, the Bank ceases to classify the
asset under IFRS 5. The Bank measures these assets which cease to be classified as asset under IFRS 5 at the lower of:
-
its carrying amount before the asset was classified as asset under IFRS 5, adjusted for any depreciation,
amortisation or revaluations that would have been recognized had the asset not been classified as asset under
IFRS 5, and
-
its recoverable amount at the date of the subsequent decision not to sell.
The Bank presents an asset classified as asset under IFRS 5 separately from other assets in the Separate Statement of
Financial Position. The liabilities of the asset under IFRS 5 are presented separately from other liabilities in the Separate
Statement of Financial Position. Those assets and liabilities shall not be offset and presented as a single amount. The
major classes of assets and liabilities classified as held for sale or discontinued operations are separately disclosed in the
Notes.
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
407
NOTE 2:
SUMMARY OF MATERIAL ACCOUNTING POLICIES [continued]
2.16. Non-current assets held-for-sale and discontinued operations [continued]
The Bank presents separately any cumulative income or expense recognized in other comprehensive income relating to a
non-current asset (or disposal group) classified as held for sale. Results from discontinued operations are reported
separately in the Consolidated Statement of Profit or Loss as result from discontinued operations.
2.17.
Interest income, income similar to interest income and interest expense
Interest income and expenses are recognised in profit or loss in the period to which they relate, using the effective interest
rate method.
For exposures categorized into stage 1 and stage 2 the interest income is recognized on a gross basis. For exposures
categorized into stage 3 (using effective interest rate) and for POCI (using credit-adjusted effective interest rate) the
interest income is recognized on a net basis.
The time-proportional income similar to interest income of derivative financial instruments calculated without using the
effective interest method and the positive fair value adjustment of interest rate swaps are also included in income similar
to interest income. Interest income of FVTPL loans is calculated based on interest fixed in the contract and presented in
“Income similar to interest income” line.
Interest from loans and deposits are accrued on a daily basis. Interest income and expense include certain transaction cost
and the amortisation of any discount and premium between the initial carrying amount of an interest-bearing instrument
and its amount at maturity calculated on an effective interest rate basis.
All interest income and expense recognised are arising from loans, placements with other banks, repo receivables,
securities at fair value through other comprehensive income, securities at amortised cost, and amounts due to banks, repo
liabilities, deposits from customers, liabilities from issued securities, subordinated bonds and loans are presented under
these lines of financial statements
2.18.
Fees and Commissions
Fees and commissions that are not involved in the amortised cost model are recognised in the Separate Statement of Profit
or Loss on an accrual basis according to IFRS 15 (For details see Note 31). These fees are related to deposits, cash
withdrawal, security trading, bank card, etc.
The Bank earns fee and commission income from a diverse range of financial services it provides to its customers. Fee
and commission income is recognised at an amount that reflects the consideration to which the Bank expects to be entitled
in exchange for providing the services. The performance obligations, as well as the timing of their satisfaction, are
identified, and determined, at the inception of the contract. When the Bank provides a service to its customers,
consideration is invoiced and generally due immediately because it typically controls the services before transferring them
to the customer.
The Bank provides foreign exchange trading services to its customers, the profit margin achieved on these transactions is
presented as Net profit from fees and commissions in the Separate Statement of Profit or Loss.
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
408
NOTE 2:
SUMMARY OF MATERIAL ACCOUNTING POLICIES [continued]
2.18 Fees and Commisions [continued]
Performance obligations satisfied over time include asset management, deposit and account maintenance services, where
the customer simultaneously receives and consumes the benefits provided by the Bank’s performance as the Bank
performs.
The Bank’s fee and commission income from services where performance obligations are satisfied over time are
followings:
Deposit and account maintenance fees and commissions and fees related to cash withdrawal
The Bank provides a number of account management services for both retail and corporate customers in which they
charge a fee. Fees related to these services can be typically account transaction fees (money transfer fees, direct debit
fees, money standing order fees, etc.), internet banking fees (e.g. OTP Direct fee), account control fees (e.g. sms fee), or
other fees for occasional services (account statement fees, other administration fees, etc.). Fees for ongoing account
management services are charged to the customer’s account on a monthly basis. The fees are commonly fixed amounts
that can be vary per account package and customer category. In the case of the transaction-based fees where the services
include money transfer the fee is charged when the transaction takes place. The rate of the fee is typically determined in
a certain % of the transaction amount. In the case of other transaction-based fees (e.g. SMS fee), the fee is settled monthly.
In the case of occasional services, the Bank basically charges the fees when the services are used by the customer. The
fees can be fixed fees or they can be set in %. The rates are reviewed by the Bank regularly.
These fees for ongoing account management services are charged on a monthly basis during the period when they are
provided. Transaction-based fees are charged when the transaction takes place or charged monthly at the end of the month.
Fees and commission related to the issued bank cards
The Bank provides a variety of bank cards to its customers, for which different fees are charged. The fees are basically
charged in connection with the issuance of cards and the related card transactions. The annual fees of the cards are charged
in advance in a fixed amount. The amount of the annual card fee depends on the type of card. In the case of transaction-
based fees (e.g. cash withdrawal/payment fee, merchant fee, interchange fee, etc.), the settlement of the fees will take
place immediately after the transaction or on a monthly basis. The fee is typically determined in % of the transaction with
a fixed minimum amount. For all other cases where the Bank provides a continuous service to the customers (e.g. card
closing fee), the fees are charged monthly. The fee is calculated in a fix amount. The rates are reviewed by the Bank
regularly.
These fees for ongoing services are charged on a monthly basis during the period when they are provided. Transaction-
based fees are charged when the transaction takes place or charged monthly at the end of the month.
Fees and commissions related to security account management services
The Bank provides its clients security account management services. Fees will be charged for account management and
transactions on accounts. Account management fees are typically charged quarterly or annually. The amount is determined
in %, based on the stocks of securities managed by the clients on the account in a given period. Fees for transactions on
the securities account are charged immediately after the transaction. They are determined in %, based on the transaction
amount. Fees for complex services provided to clients (e.g. portfolio management or custody) are typically charged
monthly or annually. The fees are fixed monthly amounts and in some cases a bonus fee are charged.
These fees for ongoing services are charged quarterly or annually during the period when they are provided. The fees are
accrued monthly. Transaction-based fees are charged when the transaction takes place.
Fees and commissions related to fund management
Fees from fund management services provided to investment funds and from portfolio management provided to insurance
companies, funds. The fee income are calculated on the basis of net asset value of the portfolio and by the fee rates
determined in the contracts about portfolio management.
These fees for ongoing services are charged usually on monthly (mutual funds) or semi-annually (venture capital funds)
during the period when they are provided but accrued monthly.
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
409
NOTE 2:
SUMMARY OF MATERIAL ACCOUNTING POLICIES [continued]
2.18 Fees and Commisions [continued]
Net insurance fee income
Due to the fact that the Bank rarely provides insurance services to its clients, only acts as an agent, the fee income charged
to the customers and fees payable to the insurance company are presented net in the fee income. In addition, agency fee
charged for the sale of insurance contracts is also recorded in this line. The fee is charged on a monthly basis and
determined in %.
Fees for ongoing services are charged on a monthly basis during the period when they are provided.
Other fees
Fees that are not significant in the Bank total income are included in Other fees category. Such fees are safe lease, special
procedure fee, account rent fee, fee of a copy of document, etc. Other fees may include charges for continuous services
or for ad hoc administration services. Continuous fees are charged monthly (e.g., safe lease fees) at the beginning of the
period, typically at a fixed rate. Fees for ad hoc services are charged immediately after the service obligation were met,
usually in a fixed amount.
These fees for ongoing services are charged on a monthly basis during the period when they are provided. Fees for ad hoc
services are charged when the transaction takes place.
2.19.
Dividend income
Dividend income refers to any distribution of entity’s earnings to shareholders from stocks or mutual funds that is owned
by the Bank. The Bank recognizes dividend income in the separate financial statements when its right to receive the
payment is established.
2.20.
Income tax
The Bank considers corporate income tax and local business tax and the innovation contribution as income tax in Hungary.
The annual taxation charge is based on the tax payable under Hungarian fiscal law, adjusted for deferred taxation. Deferred
taxation is accounted for using the balance sheet liability method in respect of temporary differences between the tax
bases of assets and liabilities and their carrying value for financial reporting purposes, measured at the tax rates that are
expected to apply when the asset is realised or the liability is settled.
Current tax asset or current tax liability is presented related to income tax and innovation contribution separately in the
Separate Statement of Financial Position.
Pillar Two – Global Anti-base Erosion Model Rules (“GloBE”), global minimum tax – introduces a minimum effective
tax rate of at least 15%, calculated based on a specific rule set. Pillar Two legislation has been enacted or substantively
enacted in certain jurisdictions the Group operates. The legislation will be effective for the Group’s financial year
beginning 1 January 2024, but in year 2023 no income tax results obtained from Pillar Two rules.. The Group considers
this top-up tax as an income tax according to IAS 12.
Deferred tax assets and liabilities are presented in a net way in the statement of financial position. Current tax asset or
current tax liability is presented related to income tax and innovation contribution separately in the statement of financial
position.
Deferred tax assets are recognized by the Bank for the amounts of income tax that are recoverable in future periods in
respect of deductible temporary differences as well as the carry forward of unused tax losses and the carryforward of
unused tax credits.
The Bank recognizes a deferred tax asset for all deductible temporary differences arising from investments in subsidiaries,
branches and associates, and interests in joint arrangements, to the extent that, and only to the extent that, it is probable
that:
- the temporary difference will reverse in the foreseeable future; and
- taxable profit will be available against which the temporary difference can be utilised.
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
410
NOTE 2:
SUMMARY OF MATERIAL ACCOUNTING POLICIES [continued]
2.20 Income tax [continued]
The Bank considers the availability of qualifying taxable temporary differences and the probability of other future taxable
profits to determine whether future taxable profits will be available.
The Bank recognizes a deferred tax liability for all taxable temporary differences associated with investments in
subsidiaries, branches and associates, and interests in joint arrangements, except to the extent that both of the following
conditions are satisfied:
- the Bank is able to control the timing of the reversal of the temporary difference, and
- it is probable that the temporary difference will not reverse in the foreseeable future.
The Bank only offsets its deferred tax liabilities against deferred tax assets when:
-
there is a legally enforceable right to set-off current tax liabilities against current tax assets, and
-
the taxes are levied by the same taxation authorities on either
• the same taxable entity or
• different taxable entities which intend to settle current tax liabilities and assets on a net basis.
2.21.
Banking tax
The Bank is obliged to pay banking tax based on Act LIX of 2006. As the calculation is not based on the taxable profit
(but the adjusted Assets total calculated based on the Separate Financial Statements for the second period preceding the
current tax year), banking tax is not considered as income tax. Therefore, the banking tax is considered as an other
administrative expense, not as income tax.
Pursuant to Government Decree No. 197/2022 published on 4 June 2022, the Hungarian Government decided to impose
a windfall tax on credit institutions and financial enterprises temporarily, that is for 2022 and 2023.
During 2024, the Government amended the Decree on the windfall tax and the obligation was extended to 2025.
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
411
NOTE 2:
SUMMARY OF MATERIAL ACCOUNTING POLICIES [continued]
2.22.
Off-balance sheet commitments and contingent liabilities, provisions
In the ordinary course of its business, the Bank has entered into off-balance sheet commitments such as guarantees,
commitments to extend credit, letters of credit and transactions with financial instruments. The provision on off-balance
sheet commitments and contingent liabilities is maintained at a level adequate to absorb probable future losses which are
probable and relate to present obligations.
Those commitments and contingent liabilities Management determines the adequacy of the provision based upon reviews
of individual items, recent loss experience, current economic conditions, the risk characteristics of the various categories
of transactions and other pertinent factors.
The Bank recognizes a provision for off-balance sheet commitment and contingent liabilities in accordance with IAS 37
when it has a present obligation as a result of a past event; it is probable that an outflow of resources embodying economic
benefits will be required to settle the obligation; and a reliable estimate can be made of the obligation.
Expected credit loss model is applied for given financial guarantees and loan commitments which are under IFRS 9 the,
when the provision is calculated (see more details in Note 2.6.). After initial recognition the Bank subsequently measures
those contracts at a higher of the amount of the loss allowance or of the amount initially recognised less the cumulative
amount of income recognized in accordance with IFRS 15.
2.23.
Share-based payment
The Bank applies the requirements of IFRS 2 Share-based Payment.
The Bank issues equity-settled share-based payments to certain employees. Equity-settled share-based payments are
measured at fair value at the grant date. The fair value determined at the grant date of the equity-settled share-based
payments is expensed on a straight-line basis over the year, based on the Bank’s estimate of shares that will eventually
vest.
Fair value is measured by use of a binomial model. The expected life used in the model has been adjusted, based on
Management’s best estimate, for the effects of non-transferability, exercise restrictions, and behavioural considerations.
2.24.
Employee benefits
The Bank has applied the requirement of IAS 19 Employee Benefits. The Bank’s short-term employee benefits are wages,
salaries and bonuses, premium, paid annual leave and paid sick leave and other free services (health care, reward holiday).
Short-term employee benefits are expected to pay by the Bank within 12 month. These benefits are recognised as an
expense and liability undiscounted in the separate financial statements.
Short-term employee benefits are employee benefits (other than termination benefits) that are expected to be settled
wholly before twelve months after the end of the annual reporting period in which the employees render the related
service. These can be wages, salaries and bonuses, premium, paid annual leave and paid sick leave and other free services
(health care, reward holiday). Long-term employee benefits are mostly the jubilee reward.
Post-employment benefits are employee benefits (other than termination and short-term employee benefits) that are
payable after the completion of employment. Post-employment benefit plans are formal or informal arrangements under
which an entity provides post-employment benefits for one or more employees. Post-employment benefit plans are
classified as either defined contribution plans or defined benefit plans, depending on the economic substance of the plan
as derived from its principal terms and conditions.
Termination benefits are employee benefits provided in exchange for the termination of an employee’s employment as a
result of either: an entity’s decision to terminate an employee’s employment before the normal retirement date or an
employee’s decision to accept an offer of benefits in exchange for the termination of employment. Other long-term
employee benefits are all employee benefits other than short-term employee benefits, postemployment benefits and
termination benefits.
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
412
NOTE 2:
SUMMARY OF MATERIAL ACCOUNTING POLICIES [continued]
2.25.
Separate statement of cash flows
Cash flows arising from the operating, investing or financing activities are reported in the Statement of Cash-Flows of
the Bank primarily on a gross basis. Net basis reporting are applied by the Bank in the following cases:
▪
when the cash flows reflect the activities of the customer rather than those of the Bank, and
▪
for items in which the turnover is quick, the amounts are large, and the maturities are short.
For the purposes of reporting cash flows “Cash, due from banks and balances with the NBH” line item excluding
compulsory reserve are considered as cash and cash equivalents by the Bank. This line item shows balances of HUF and
foreign currency cash amounts, and sight depos from NBH and from other banks, furthermore balances of current
accounts.
Cash flows from hedging activities are classified in the same category as the item being hedged. The unrealised gains and
losses from the translation of monetary items to the closing foreign exchange rates and the unrealised gains and losses
from derivative financial instruments are presented separately net in the statement of cash flows for the monetary items
which have been revalued.
2.26.
Segment reporting
IFRS 8 Operating Segments requires operating segments to be identified on the basis of internal reports about components
of the Bank that are regularly reviewed by the chief operating decision maker in order to allocate resources to the segments
and to assess their performance.
At separate level, the Management does not separate and makes decisions based on different segments; the segments are
identified by the Bank only at consolidated level in line with IFRS 8 paragraph 4. At Group level the segments identified
by the Bank are the business and geographical segments.
The Group’s operating segments under IFRS 8 are therefore as follows: OTP Core Hungary, Russia, Ukraine, Bulgaria,
Romania, Serbia, Croatia, Montenegro, Albania, Moldova, Slovenia, Uzbekistan, Merkantil Group, Asset Management
subsidiaries, other subsidiaries, Corporate Centre. Romanian segment is classified as discontinued operation from 2023
but in line with management report it is still presented in Segment reporting as separate segment.
2.27.
Comparative figures
These separate financial statements are prepared in accordance with the same accounting policies in all respects as the
Financial Statements prepared in accordance with IFRS as adopted by the EU for the year ended 31 December 2023
In Note 12 the table about list of associates was changed in order to be more transparent by aggregating associates which
are owned through venture capital fund as these companies are immaterial. The comparative previous year’s table was
transformed to the same structure as well.
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
413
NOTE 3:
SIGNIFICANT ACCOUNTING ESTIMATES AND DECISIONS IN THE APPLICATION OF
ACCOUNTING POLICIES
The presentation of separate financial statements in conformity with IFRS requires the Management of the Bank to make
judgements about estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure
of contingent assets and liabilities as at the date of the financial statements and their reported amounts of revenues and
expenses during the reporting period. The estimates and associated assumptions are based on expected loss and other
factors that are considered to be relevant. The estimates and underlying assumptions are reviewed on an on-going basis.
Revisions to accounting estimates are recognized in the period. Actual results could differ from those estimates.
Significant areas of subjective judgements include:
3.1.
Loss allowance on financial instruments
The Bank regularly assesses its financial instruments for impairment. Management determines the adequacy of the
allowances based upon reviews of individual loans and placements, recent loss experience, current economic conditions,
the risk characteristics of the various categories of loans and other pertinent factors. The use of a new, three stage model
was implemented for IFRS 9 purposes. The new impairment methodology is used to classify financial instruments in
order to determine whether credit risk has significantly increased since initial recognition and able to identify credit-
impaired assets. For instruments with credit-impairment or significant increase of credit risk lifetime expected losses
will be recognized. (For details see note 36.1.1.)
3.2.
Valuation of instruments without direct quotations
Financial instruments without direct quotations in an active market are valued using the valuation model technique. The
models are regularly reviewed and each model is calibrated for the most recent available market data. While the models
are built only on available data, their use is subject to certain assumptions and estimates (e.g. for correlations, volatilities,
etc). Changes in the model assumptions may affect the reported fair value of the relevant financial instruments.
IFRS 13 Fair Value Measurement seeks to increase consistency and comparability in fair value measurements and related
disclosures through a 'fair value hierarchy'. The hierarchy categorises the inputs used in valuation techniques into three
levels. The hierarchy gives the highest priority to (unadjusted) quoted prices in active markets for identical assets or
liabilities and the lowest priority to unobservable inputs. The Bank evaluates the levelling at each reporting period on an
instrument-by-instrument basis and reclassifies instruments when necessary, based on the facts at the beginning of the
reporting period. The objective of a fair value measurement is to estimate the price at which an orderly transaction to sell
the asset or to transfer the liability would take place between market participants at the measurement date under current
market conditions.
3.3.
Provisions
Provision is recognised and measured for commitments to extend credit and for warranties arising from banking activities
based on IFRS 9 Financial Instruments. Provision for these instruments is recognised based on the credit conversion
factor, which shows the proportion of the undrawn credit line that will be probably drawn.
Other provision is recognised and measured based on IAS 37 Provisions, Contingent Liabilities and Contingent Assets.
The Bank is involved in a number of ongoing legal disputes. Based upon historical experience and expert reports, the
Bank assesses the developments in these cases, and the likelihood and the amount of potential financial losses which are
appropriately provided for. (See Note 24.)
Other provision for off-balance sheet items includes provision for litigation, provision for retirement and expected
liabilities and provision for Confirmed letter of credit.
A provision is recognised by the Bank when it has a present obligation as a result of a past event, it is probable that an
outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be
made of the amount of the obligation.
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
414
NOTE 4:
MACRO-ENVIRONMENT, IMPACT OF ECONOMIC SITUATION ON THE BANK
Macro economy and financial situation in Hungary
In 2024, inflation continued to recede in advanced economies, so the Fed and the ECB both started rate-cutting cycles.
The US presidential election and the expectations ahead of it led to a sharp turnaround in bond markets and interest rate
expectations, as the victory of Donald Trump, whose election promises included several highly inflationary elements,
became increasingly likely. In mid-September, yields started to pick up from the decline that had started in spring, and
expectations of further rate cuts began to ease. Growth remained strong in the United States, but the euro area continued
to struggle to recover from the downturn, where the energy crisis and the inflation shock owing to the Russia-Ukraine
war had thrown it. Meanwhile, labour markets remained tight on both sides of the Atlantic, with low unemployment and
strong wage dynamics.
As the year was nearing its end, it became clear that the USA’s growth was robust, as consumer spending and private
investment steadily boosted the economy, which expanded by 2.8%, well above the 1-1.5% rate expected at the beginning
of the year. Labour market conditions also surpassed expectations: despite minor temporary wobbling, employment
growth remained strong, the unemployment rate remained low, and wages increased by 4%. In the autumn, disinflation
stalled, and core inflation reflected 3-3.5% underlying price growth, well above the inflation target. Nevertheless, the Fed
reduced its base rate by 100 basis points, to 4.25-4.5% by the end of the year, as expected.
In the euro area, the recovery was also driven by consumption, but the pace of the rebound was slower than in the USA
and was uneven in the area. The best performers were tourism-driven southern member states, while the industry-heavy
economies struggled to recover from the shock of the energy crisis. Political crises are also weighing on the recovery,
with two major economies, Germany and France, both facing government crises. In the autumn, inflation temporarily fell
below the target but has been accelerating again since October as the drop in food and energy prices faded. Nevertheless,
the ECB continued its easing cycle, reducing the effective rate to 3% by the end of 2024; this is consistent with 100-basis-
point cut in the full year.
The Hungarian economy started to pick up in 2024, ending a longer and deeper recession than its regional peers saw in
2023, but just like in Europe, the recovery was uneven and fragile, rising by just 0.5% in full year 2024. The rise in real
wages helped consumption gradually pick up (it expanded by roughly 4% in 2024), and households’ precautionary savings
seemed to ease in the second half of the year. Despite the expanding consumption, the high exposure to the automotive
sector, the eroded room in fiscal policy, the falling exports, and a more than 10% plunge in investment pushed the
economy back into technical recession in the second and third quarters, before a recovery came in the fourth quarter. Net
exports’ contribution to growth was positive, but it did not stem from exports’ robust performance – it was only because
imports fell sharper than exports did. As a result of the government's stimulus measures, the housing market surged
together with households’ loan demand, while the corporate loan market’s rise was rather subdued. Labour market
tightness has clearly eased, employment slightly declined in the second half of the year, but the unemployment rate rose
in 2024.
Inflation slowed in Hungary, too, and briefly reached the 3% target in September, giving the MNB room to cut interest
rates to 6.5%, from 10.75% at the end of 2023. But inflation started to rise in October, and hit 4.6% in December, the
highest monthly rate in 2024. The escalation of the Middle East conflict and the rise in US yields forced the MNB to
pause its easing cycle. The EUR/HUF, which traded near 380 at the beginning of 2024, spent much of the second half-
year above the 400 mark.
After years of deficits of 7-8% of GDP, a fiscal adjustment came despite the unfavourable macroeconomic environment;
Hungary’s primary balance improved to close to zero in 2024, and the headline deficit fell to 4.8% of GDP, close to the
raised deficit target of 4.5%, but still far from the 3% Maastricht criterion. The reduction of government debt stalled in
2024, and the debt-to-GDP ratio rose to 73.9%-74%, up from 73.4% in 2023. Hungary’s external balance started to
improve rapidly after the energy price shock faded and domestic demand declined; the deficit swung from more than 8%
of GDP in 2022 to a slight surplus in 2023, before rising to 2.5% of GDP in 2024, and external debt started to slowly
decline.
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
415
NOTE 4:
MACRO-ENVIRONMENT, IMPACT OF ECONOMIC SITUATION ON THE BANK
[continued]
Summary of economic policy measures made and other relevant regulatory changes in the period under review
Windfall tax
Government decree No. 206/2023 (V.31.) published on 31 May 2023 outlined the details of the extra profit tax payable
by credit institutions in 2024. The basis of the tax is the 2022 profit before tax adjusted for several items. The tax rate is
13% for the part of the tax base not exceeding HUF 20 billion, and 30% for the amount above that. According to the
decree, if the average amount of Hungarian government bonds owned by the financial institution increases over a certain
period, the windfall tax payable by the credit institution can be reduced. The reduction cannot be more than 10% of the
increase in government bond holdings and cannot exceed 50% of the windfall tax payment obligation calculated without
the reduction.
The ruling was amended according to Government Decree No. 183/2024. (VII. 8.) as the windfall tax burden in 2024 can
be reduced in proportion to the growth of government bonds maturing after 2027 only if the total volume of government
bonds increases at least with the same amount. The reduction can be up to 10% of the growth in the notional of government
bonds, but not more than 50% of the windfall tax payment obligation.
In 2024 the gross amount of the windfall tax was HUF 13 billion in the case of the Hungarian Group members, from
which the increase in government bond holdings allowed for HUF 6.2 billion reduction, resulting in HUF 6.8 billion
windfall tax burden.
According to Government Decree No. 356/2024 (XI. 21.) published on 21 November 2024, in 2025 the windfall profit
tax burden payable by OTP Group’s Hungarian group members might be around HUF 53 billion (before corporate income
tax), assuming the full utilization of the reduction opportunity related to the increase in the stock of government securities.
Interest rate cap
Pursuant to Government Decree No. 522/2023. (XI. 30.):
•
The interest rate cap for the outstanding volume of certain residential mortgage loans was extended by six months,
until 30 June 2024.
•
The rate cap for the existing volume of certain MSE loans was extended until 1 April 2024, and it was terminated
that after.
On 20 June 2024, Government Decree No. 130/2024 (VI.20) enacted the extension of the interest rate cap on certain
housing loans, until 31 December 2024.
On 2 December 2024, Government Decree No. 374/2024 (XII.2) enacted the extension of the interest rate cap on certain
housing loans, until 30 June 2025.
Voluntary interest rate cap on newly granted loans
At the beginning of October 2023, the Ministry of Economic Development proposed that banks impose voluntary interest
rate caps on newly granted HUF-denominated working capital loans for businesses, and on residential housing loans. The
voluntary interest rate cap expired on 30 June 2024. OTP Bank participated in the initiative.
Between 1 April and 31 October 2025, as part of the government’s 'New Economic Policy Action Plan', based on the
individual decision of the participating banks, 5% interest rate cap will be available for under 35 years old, first-time
home buyers for newly granted green housing loans, with properties under 60 square meter and price lower than HUF 1.2
million per square meter. The rate cap will be applied in the first 5 years of the loan, and the product will be free of
disbursement and credit assessment fees.
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
416
NOTE 4:
MACRO-ENVIRONMENT, IMPACT OF ECONOMIC SITUATION ON THE BANK
[continued]
Summary of economic policy measures made and other relevant regulatory changes in the period under review
[continued]
Family support schemes and economic stimulus measures
The government extended childbirth pledge deadline until 1 July 2026, for all baby loan borrowers whose deadline was
or will be between 1 July 2024 and 30 June 2026, based on Government Decree No. 190/2024. (VII. 8.).
The government decrees of 388/2024 (XII. 11.) and 437/2024 (XII. 23.) have amended the terms and conditions for the
subsidized baby loan:
•
The interest-free feature of the loan may be regained if the first baby is born only after the fifth year, or if one of
the members of the former couple remarries after the first five years of the term and a child is born from the new
relationship. The penalty paid in a lump sum at the end of the fifth year will not be repaid to the family, but the
interest-free period will be restored, and thus the instalment will also be smaller. The couple having this child may
request a three-year payment moratorium.
•
If penalty imposed or interest subsidy repayment is obligated for violating any of the loan conditions, after paying
the penalty exemption can be requested even from interest rate increases, via individual application; i.e. in certain
cases, the loan may remain interest-free.
•
The eligibility age limit for wives increased from 30 the 35 years. However, the previous option to apply for such
loan for married couples where the wife is aged 35-41 and at least 12 weeks pregnant, ceased at the end of the
year.
On 5 April 2024, the government announced a new subsidized home renovation loan programme, which began on 1 July
2024. The loan, with maximum amount of HUF 7 million and up to 12 years term, is available in OTP Bank’s branches
that function as ‘MFB points’, for the purpose of energy efficiency improvement of family houses built before 1990.
From 1 November 2024, the client interest rate of Széchenyi Card Programme’s investment loan products for Hungarian
micro, small and medium-sized enterprises was lowered to fixed 3.5%, from the previous 5%.
Capital regulation
On 20 June 2024, the National Bank of Hungary raised the countercyclical capital buffer rate to 1%, effective from 1 July
2025. In its meeting of 27 June 2024, the central bank left the systemic risk capital buffer unchanged at 0%.
MREL minimum requirement: effective from 1 January 2025, the National Bank of Hungary imposed the below
additional capital requirements for OTP Group, on consolidated level:
•
1.01%-points in the case of the Common Equity Tier1 (CET1) capital, accordingly the minimum requirement
for the consolidated CET1 ratio is 5.51% (without regulatory capital buffers);
•
1.34%-points in the case of the Tier1 capital, accordingly the minimum requirement for the consolidated Tier1
ratio is 7.34% (without regulatory capital buffers);
•
1.79%-points in the case of the Total SREP Capital Requirement (TSCR), accordingly the minimum requirement
for the consolidated capital adequacy ratio is 9.79% (without regulatory capital buffers).
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
417
NOTE 4:
MACRO-ENVIRONMENT, IMPACT OF ECONOMIC SITUATION ON THE BANK
[continued]
The principles used in the preparation of the Separate Statement of Financial Position as at 31 December 2024 in
connection with the evaluation of Russian and Ukrainian exposures
Ukraine
In 2022 Russia launched a still ongoing war against Ukraine.
OTP Group’s Ukrainian operation incorporates the Ukrainian bank, as well as the leasing and factoring companies. The
country-consolidated Ukrainian total assets represented HUF 1,187 billion at the end of 2024 (2.7% of total consolidated
assets), while net loans comprised HUF 389 billion (1.7% of consolidated net loans) and shareholders’ equity amounted
to HUF 206 billion (4.0% of the consolidated total equity).
At the end of 2023 the gross intragroup funding towards the Ukrainian operation represented HUF 55 billion, while taking
into account the Ukrainian deposits placed with the Headquarters, i.e. the net group funding stood at HUF 14 billion
equivalent towards the Ukrainian operation.
In 2024 the Ukrainian operation posted a profit after tax of HUF 41.2 billion, slightly less than the HUF 44.9 billion in
2023.
Russia
The total assets of the Group’s Russian operation represented HUF 2,371 billion at the end of 2024 (5.5% of consolidated
total assets), while net loans comprised HUF 998 billion (4.3% of consolidated net loans) and shareholders’ equity HUF
299 billion (5.8% of consolidated total equity).
The Russian operation posted HUF 136.9 billion profit after tax in 2024, after the HUF 95.7 billion profit reached in full-
year 2023.
As the Russian subsidiary repaid its maturing intragroup loans in 4Q 2022, the gross intragroup funding towards the
Russian operation declined to zero and remained nil since then. At the end of 2024 the intragroup subordinated loan
exposure toward the Russian operation amounted to HUF 11 billion equivalent.
In 2024 the Russian Central Bank approved dividend payment by OTP’s Russian subsidiary several times with a total
amount of RUB 28.3 billion. With this amount RUB 41.8 billion dividend was paid since 3Q 2023.
In the case of Ukraine and Russia OTP management applies a „going concern” approach, however in Russia the
management is still considering all strategic options, bearing in mind that any future solution should be strictly within the
framework and in accordance with applicable local and international regulations.
If the Russian entity was deconsolidated and the outstanding gross intragroup exposures were written off as well, the
effect for the consolidated CET1 ratio would be 30 bps, whereas in the Ukraine the effect would be 8 bps.
Significant estimates affected by the Russian-Ukrainian conflict during the preparation of these Separate Financial
Statements
During the preparation of these Separate Financial Statements, the Bank identified the following estimates, which were
significantly affected by the Russian-Ukrainian conflict:
1) Evaluation of Russian sovereign exposures (government securities) and related reserves for expected credit losses at
OTP Bank (as parent company)
2) Evaluation of Ukrainian sovereign exposures (government securities) and related reserves for expected credit losses
at OTP Bank (as parent company)
3) Evaluation of derivative transactions denominated in Russian rubles
4) Evaluation of derivative transactions denominated in the Ukrainian hryvnia
5) Provisions for expected credit losses related to Russian and Ukrainian interbank claims and customer loans (following
direct exposure to the Russian and Ukrainian markets, non-Russian and Ukrainian bank exposures)
6) Evaluation of investments
Reference
Gross
value
Impairment
Securities at amortized cost
1
36,442
(26,299)
Securities at fair value through other comprehensive income
1
71,092
(51,293)
Other financial assets
6,311
(5,660)
Investments
6
462,646
(299,339)
TOTAL ASSETS
576,491
(382,591)
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
418
NOTE 4:
MACRO-ENVIRONMENT, IMPACT OF ECONOMIC SITUATION ON THE BANK
[continued]
The principles used in the preparation of the Separate Statement of Financial Position as at 31 December 2024 in
connection with the evaluation of Russian and Ukrainian exposures [continued]
During the evaluation of these assets, the Bank applied the evaluation principles detailed below, which evaluation contains
significant estimates on the part of the Management. The results of the estimates may vary significantly depending on the
development of the situation in the Russian-Ukrainian conflict.
References
1. Evaluation of Russian sovereign exposures and related reserves for expected credit losses - other exposures of
the group
Outside of Russia, the marketability of Russian government securities is significantly limited due to sanctions and capital
market participants turning away from Russian securities. The credit rating of the Russian state was withdrawn in 2022,
the Group classifies the Russian state as non-performing, and in accordance with this, it assigned the affected exposures
to the Stage 3 category. The Russian state not only recognizes its obligation and has the necessary financial reserves, but
would also be willing to pay, so the increased loss potential is caused by non-traditional credit risks. In the case of a
portfolio valued at fair value through other comprehensive income, the book value is determined based on the level 3
prices of IFRS13. Cash-flow estimation, current market benchmarks (provided by Bloomberg), liquidity and non-credit
risk considerations were taken into account in fair value calculation.
2. Valuation of Ukrainian sovereign exposures and related reserves for expected credit losses - other exposures of
the group
Ukrainian government securities are exclusively in the books of the Ukrainian subsidiary.
3. Valuation of Russian derivative transactions
In the case of futures contracts concluded with local partners on the Russian market, the evaluation is carried out using
yield curves available and observable on the local market. In the cases where one of the partners is not Russian, the
evaluation is done using yield curves available and observable on the international market.
4. Valuation of Ukrainian derivatives
The Treasury turnover of the Ukrainian bank is low, and a significant part of the derivative transactions are related to the
bank's risk management and concluded with the parent company. During the actual evaluation, the expected cash-flow is
discounted using yield curves observed based on current market benchmarks (published by the National Bank of Ukraine).
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
419
NOTE 4:
MACRO-ENVIRONMENT, IMPACT OF ECONOMIC SITUATION ON THE BANK
[continued]
The principles used in the preparation of the Separate Statement of Financial Position as at 31 December 2024 in
connection with the evaluation of Russian and Ukrainian exposures [continued]
References [continued]
5. Provisions for expected credit losses related to Russian and Ukrainian interbank claims and customer loans
(following direct exposure to the Russian and Ukrainian markets, non-Russian and Ukrainian bank exposures)
As part of the quarterly monitoring activity, the Bank has identified and analysed the secondary and tertiary negative
effects of the war in the corporate segment. Changes related to the meanwhile imposed sanctions – which should have
been taken into consideration at analysis - have been followed up. As part of the individual monitoring activity separate
monitoring methodology and assessment were prepared for exposures above HUF 250 million as follows:
i)
sectors vulnerable to the risk arising from changes of energy / interest / foreign exchange
ii) customers from sectors with high risks according to the loan policy, especially the hotel industry and real
estate utilisation industry
iii) municipalities, customers owned by municipalities
When technical or objective default occured due to sanctions the affected exposures were classified into Stage 3. In these
cases at least two scenarios were taken into consideration as the estimation of expected cash flows for impairment
calculation. At least one scenario represents that case when significant differences occur between the expected and the
contractual cash flows. Probabilities shall be allocated to represent the occurence of credit loss, even in that case when
most likely there is no need to recognise impairment loss.
Exposures in amount of HUF 10.3 billion as classified into Stage 3 had an amount of HUF 4.2 billion of expected credit
loss as at 31 December 2023. The concerning exposures in amount of HUF 9.9 billion had an amount of HUF 6.8 billion
as at 31 December 2024.
6. Evaluation of investments
The Bank has evaluated its investments in 3 countries concerning the Russian-Ukrainian conflict based on discounted
cash flows, and neither impairement loss nor reversal of impairment loss was recognised for the year ended 31 December
2024.
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
420
NOTE 4:
MACRO-ENVIRONMENT, IMPACT OF ECONOMIC SITUATION ON THE BANK
[continued]
Please see details in this note above under “Interest rate cap” where Interest rate cap is described.
Financial assets modified during the year ended 31 December 2024
Modification due to the prolongation of existing interest rate cap till 31 December 2024
in HUF million
Gross carrying amount before modification
44,974
Modification loss
(1,104)
Gross carrying amount after modification
43,870
Loss allowance
(763)
Net amortised cost after modification
43,107
Modification due to the prolongation of existing interest rate cap till 30 June 2025
in HUF million
Gross carrying amount before modification
40,881
Modification loss
(875)
Gross carrying amount after modification
40,006
Loss allowance
(536)
Net amortised cost after modification
39,470
Financial assets modified during the year ended 31 December 2023
Modification due to the prolongation of existing interest rate cap till 31 December 2023
in HUF million
Gross carrying amount before modification
179,970
Modification loss
(6,952)
Gross carrying amount after modification
173,018
Loss allowance
(9,376)
Net amortised cost after modification
163,642
Modification due to prolongation of existing interest rate cap till 30 June 2024 (in the case of SME loans till 1
April 2024)
in HUF million
Gross carrying amount before modification
124,456
Modification loss
(2,065)
Gross carrying amount after modification
122,391
Loss allowance
(7,938)
Net amortised cost after modification
114,453
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
421
NOTE 5:
CASH, AMOUNTS DUE FROM BANKS AND BALANCES WITH THE NATIONAL BANK
OF HUNGARY (in HUF mn)
31 December
2024
31 December
2023
Cash on hand:
In HUF
107,982
86,317
In foreign currency
17,784
15,412
125,766
101,729
Amounts due from banks and balances with National Bank of
Hungary:
Within one year:
In HUF
1,531,556
2,272,840
In foreign currency
419,970
334,058
1,951,526
2,606,898
Subtotal
2,077,292
2,708,627
Loss allowance
(2,113)
(395)
Subtotal
2,075,179
2,708,232
Average amount of compulsory reserve
1,163,343
1,143,307
Total
911,836
1,564,925
Rate of the compulsory reserve
10%
10%
The Bank shall deposit compulsory reserve in a determined percent of its liabilities at NBH. Liabilities considered in
compulsory reserve calculation are as follows:
a) deposits and loans,
b) debt instruments,
c) repo transactions.
The amount of the compulsory reserve is the multiplication of the daily average of the liabilities considered in the
compulsory reserve calculation and compulsory reserve rate, which are determined by the NBH in a specific decree. The
Bank is required to complete compulsory reserve requirements in average in the second month after the reserve calculation
period, requirements shall be completed once a month on the last calendar day. The Bank complies with the compulsory
reserve requirements by the deposit of the adequate amount of cash as the calculated compulsory reserve on the bank
account at NBH in monthly average.
An analysis of the change in the loss allowance on placement losses is as follows:
31 December
2024
31 December
2023
Balance as at 1 January
395
1,353
Loss allowance
3,445
3,588
Release of loss allowance
(1,702)
(4,399)
FX movement
(25)
(147)
Closing balance
2,113
395
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
422
NOTE 6:
PLACEMENTS WITH OTHER BANKS (in HUF mn)
31 December
2024
31 December
2023
Within one year:
In HUF
380,772
563,752
In foreign currency
173,037
134,346
553,809
698,098
Over one year
In HUF
1,564,539
1,196,419
In foreign currency
835,407
814,791
2,399,946
2,011,210
Total placements
2,953,755
2,709,308
Loss allowance on placement losses
(5,219)
(6,875)
2,948,536
2,702,433
An analysis of the change in the loss allowance on placement losses is as follows:
31 December
2024
31 December
2023
Balance as at 1 January
6,875
18,782
Loss allowance
5,074
8,178
Release of loss allowance
(7,050)
(19,727)
FX movement
320
(358)
Closing balance
5,219
6,875
Interest conditions of placements with other banks (%):
31 December
2024
31 December
2023
Placements with other banks in HUF
0%-25%
0%-25%
Placements with other banks in foreign currency
0%-9,68%
0%-11.6%
Average interest of placements with other banks
6.65%
7.55%
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
423
NOTE 7:
REPO RECEIVABLES (in HUF mn)
31 December
2024
31 December
2023
Within one year:
In HUF
234,659
202,025
In foreign currency
3,774
-
238,433
202,025
Total gross amount
238,433
202,025
Loss allowance on repo receivables
(354)
(367)
Total repo receivables
238,079
201,658
An analysis of the change in the loss allowance on repo receivables is as follows:
31 December
2024
31 December
2023
Balance as at 1 January
367
2,167
Loss allowance
2,255
11,755
Release of loss allowance
(2,268)
(13,555)
Closing balance
354
367
Interest conditions of repo receivables (%):
31 December
2024
31 December
2023
Repo receivables in HUF
6%-6,9%
7.49%-11.4%
Average interest of repo receivables denominated in HUF
7.48%
13.85%
Average interest of repo receivables denominated in foreign
currency
3.87%
3.86%
Securities as collaterals underlying repo receivable contracts is as follows:
As at 31 December 2024
Type
Currency
Notional
in HUF
mn
Fair value
in HUF mn
Hungarian government bonds
HUF
256,068
244,986
Hungarian government discounted Treasury Bills HUF
1,650
1,612
Foreign country government bonds
EUR
3,896
3,883
Total
261,614
250,481
As at 31 December 2023
Type
Currency
Notional
Fair value
Hungarian government bonds
HUF
233,408
219,270
Hungarian government discounted Treasury Bills HUF
1,439
1,384
Total
234,847
220,654
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
424
NOTE 8:
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (in HUF mn)
31 December
2024
31 December
2023
Held for trading securities:
Government bonds
57,498
22,352
Other non-interest bearing securities
377
320
Hungarian government discounted Treasury Bills
207
71
Corporate shares and investments
1,197
513
Mortgage bonds
117
111
Other securities
388,597
4,437
Subtotal
447,993
27,804
Securities mandatorily measured at fair value through profit
or loss
Shares in investment funds
30,878
31,124
Shares
1,304
1,808
Subtotal
32,182
32,932
Held for trading derivative financial instruments:
Foreign currency swaps
63,309
66,324
Interest rate swaps
57,406
65,434
CCIRS and mark-to-market CCIRS swaps
20,730
23,221
Other derivative transactions
29,616
41,820
Subtotal
171,061
196,799
Total
651,236
257,535
Interest conditions and the remaining maturities of securities held for trading are as follows:
31 December
2024
31 December
2023
Within one year:
variable interest
107
103
fixed interest
386,175
12,881
386,282
12,984
Over one year:
variable interest
3,648
975
fixed interest
56,489
13,012
60,137
13,987
Non-interest bearing securities
1,574
833
Total
447,993
27,804
Securities held for trading denominated in HUF
94%
28%
Securities held for trading denominated in foreign currency
6%
72%
Securities held for trading total
100%
100%
Government bonds denominated in HUF
63%
18%
Government bonds denominated in foreign currency
37%
82%
Government securities total
100%
100%
Interest rates on securities held for trading in HUF
1.9%-19.1%
1.9%-16.25%
Interest rates on securities held for trading in foreign currency
0%-8.9%
0%-7.63%
Average interest on securities held for trading
1.34%
11.58%
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
425
NOTE 8:
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (in HUF mn)
[continued]
Interest conditions and the remaining maturities of securities mandatorily measured at fair value through profit or loss are
as follows:
31 December
2024
31 December
2023
Non-interest bearing securities
32,182
32,932
Total
32,182
32,932
Securities mandatorily measured at fair value through profit or
loss denominated in HUF
78%
73%
Securities mandatorily measured at fair value through profit or
loss denominated in foreign currency
22%
27%
Securities mandatorily measured at fair value through profit
or loss total
100%
100%
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
426
NOTE 9:
SECURITIES AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME (in HUF
mn)
31 December
2024
31 December
2023
Securities at fair value through other comprehensive income
Government bonds
185,171
189,385
Mortgage bonds
326,950
300,569
Interest bearing treasury bills
86
236
Other securities
46,461
48,160
Listed securities
9,525
11,622
in foreign currency
9,525
11,622
Non-listed securities
36,936
36,538
in HUF
10,331
12,115
in foreign currency
26,605
24,423
Subtotal
558,668
538,350
Non-trading equity instruments
-non-listed securities
33,934
21,177
in HUF
528
528
in foreign currency
33,406
20,649
33,934
21,177
Securities at fair value through other comprehensive income
total
592,602
559,527
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
427
NOTE 9:
SECURITIES AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME (in HUF
mn) [continued]
Detailed information of the non-trading equity instruments to be measured at fair value through other comprehensive
income:
Name
Currency
31 December
2024
31 December
2023
Garantiqa
HUF
392
392
Hage / Közvil / Pénzügykut
HUF
136
136
OBS
EUR
16,625
14,318
VISA A Preferred
USD
10,312
6,331
VISA C Common
USD
6,469
-
Total
33,934
21,177
Interest conditions and the remaining maturities of FVOCI securities can be analysed as follows:
31 December
2024
31 December
2023
Within one year:
variable interest
196
30,130
fixed interest
91,521
13,235
91,717
43,365
Over one year:
variable interest
122,473
120,268
fixed interest
344,478
374,717
466,951
494,985
Non-interest bearing securities
33,934
21,177
Total
592,602
559,527
FVOCI securities denominated in HUF
78%
71%
FVOCI securities denominated in foreign currency
22%
29%
FVOCI securities total
100%
100%
Interest rates on FVOCI securities denominated in HUF
0.25%-11%
1.25%-13.8%
Interest rates on FVOCI securities denominated in foreign
currency
0%-12.75%
0.74%-16%
Average interest on FVOCI securities
5.44%
8.16%
Certain fixed-rate mortgage bonds and other securities are hedged against interest rate risk. (See Note 45.4.)
31 December
2024
31 December
2023
Net gain / (loss) reclassified from other comprehensive income to
statement of profit or loss
2,875
25,363
Fair value of the hedged securities:
Government bonds
144,218
180,220
Other bonds
4,002
4,031
148,220
184,251
During the year ended 31 December 2023 and 2024 the Bank didn’t sell any of equity instruments designated to measure
at fair value through other comprehensive income.
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
428
NOTE 10:
SECURITIES AT AMORTISED COST (in HUF mn)
31 December
2024
31 December
2023
Government bonds
2,904,452
2,396,803
Other bonds
345,418
315,532
Treasury bills
93,259
-
Mortgage bonds
29,927
24,738
Subtotal
3,373,056
2,737,073
Loss allowance
(38,911)
(26,225)
Total
3,334,145
2,710,848
Interest conditions and the remaining maturities of securities at amortised cost can be analysed as follows:
31 December
2024
31 December
2023
Within one year:
fixed interest
518,374
63,775
518,374
63,775
Over one year:
variable interest
24,824
4,845
fixed interest
2,829,858
2,668,453
2,854,682
2,673,298
Total
3,373,056
2,737,073
The distribution of the securities at amortised cost by currency (%):
31 December
2024
31 December
2023
Securities at amortised cost denominated in HUF
72%
72%
Securities at amortised cost denominated in foreign currency
28%
28%
Securities at amortised cost total
100%
100%
Interest rates on securities at amortised cost
0.1%-12.75%
0.1%-13.2%
Average interest on securities at amortised cost denominated in
HUF
4.62%
3.95%
An analysis of change in the loss allowance on securities at amortised cost:
31 December
2024
31 December
2023
Balance as at 1 January
26,225
35,850
Loss allowance
22,001
2,287
Release of loss allowance
(11,433)
(10,863)
FX movement
2,118
(1,049)
Closing balance
38,911
26,225
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
429
NOTE 11:
LOANS (in HUF mn)
Loans measured at fair value through profit or loss
31 December
2024
31 December
2023
Within one year
45,362
46,131
Over one year
953,048
888,717
Loans measured at fair value through profit or loss total
998,410
934,848
Loans measured at fair value through profit or loss are mandatorily measured at fair value through profit or loss.
Loans measured at amortised cost, net of allowance for loan losses
31 December
2024
31 December
2023
Within one year
2,415,594
2,245,979
Over one year
2,399,947
2,582,795
Loans at amortised cost gross total
4,815,541
4,828,774
Loss allowance on loan losses
(144,746)
(147,415)
Loans at amortised cost total
4,670,795
4,681,359
An analysis of the loan portfolio by currency (%):
31 December
2024
31 December
2023
In HUF
64%
61%
In foreign currency
36%
39%
Total
100%
100%
Interest rates of the loan portfolio mandatorily measured at fair value through profit or loss are as follows (%):
31 December
2024
31 December
2023
Loans denominated in HUF
3,1%-18,83%
3,1%-21,08%
Average interest on loans denominated in HUF
6.30%
5.96%
Interest rates of the loan portfolio measured at amortised cost are as follows (%):
31 December
2024
31 December
2023
Loans denominated in HUF
0%-42%
0%-43.11%
Loans denominated in foreign currency
0%-21.21%
0%-21.21%
Average interest on loans denominated in HUF
11.83%
11.32%
Average interest on loans denominated in foreign currency
5.71%
5.42%
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
430
NOTE 11:
LOANS (in HUF mn) [continued]
For an analysis of the loan portfolio by stages, countries and rating categories please see Note 36.1.
An analysis of the change in the loss allowance on loans at amortised cost is as follows:
31 December
2024
31 December
2023
Balance as at 1 January
147,415
174,880
Loss allowance
266,410
257,173
Release of loss allowance
(238,441)
(241,580)
from this: effect of change in parameters
used for loss allowance
(14,952)
(4,180)
Use of loss allowance
(25,572)
(35,043)
Partial write-off
(8,065)
(5,263)
FX movement
2,999
(2,752)
Closing balance
144,746
147,415
The Bank sells non-performing loans without recourse at estimated fair value to a wholly owned subsidiary, OTP
Factoring Ltd.
NOTE 12:
INVESTMENTS IN SUBSIDIARIES, ASSOCIATES, JOINT VENTURES AND OTHER
INVESTMENTS (in HUF mn)
31 December
2024
31 December
2023
Investments in subsidiaries:
Controlling interest
2,566,076
2,390,718
Other
27,646
29,349
Subtotal
2,593,722
2,420,067
Impairment loss
(424,691)
(418,115)
Total
2,169,031
2,001,952
Other investments contain certain securities accounted at cost. These are instruments for which there is no quoted market
price in an active market and whose fair value cannot be reliably measured.
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
431
NOTE 12:
INVESTMENTS IN SUBSIDIARIES, ASSOCIATES, JOINT VENTURES AND OTHER
INVESTMENTS (in HUF mn) [continued]
Significant subsidiaries
Investments in companies in which the Bank has a controlling interest (direct) are detailed below. All companies are
incorporated in Hungary unless indicated otherwise:
31 December 2024
31 December 2023
% Held
(direct/indirect)
Gross book
value
% Held
(direct/indirect)
Gross book
value
OTP Bank JSC (Ukraine)
100%
311,390
100%
311,390
OTP Luxembourg S.à r.l.
100%
534,873
100%
301,470
DSK Bank EAD (Bulgaria)
100%
280,722
100%
280,722
OTP banka Srbija akcionarsko drustvo
Novi Sad (Serbia)
100%
262,759
100%
262,759
OTP banka Hrvatska d.d. (Croatia)
100%
217,898
100%
204,243
OTP Mortgage Bank Ltd.
100%
199,294
100%
199,294
SKB Banka d.d. Ljubljana (Slovenia)
0%
-
100%
107,689
Ipoteka Bank (Uzbekistan)
80%
110,973
80%
110,015
JSC "OTP Bank" (Russia)
98%
74,337
98%
74,337
Crnogorska komercijalna banka a.d.
(Montenegro)
100%
72,784
100%
72,784
OOO AlyansReserv (Russia)
100%
50,074
100%
50,074
Air-Invest Llc.
100%
49,248
100%
49,248
OTP Holding Malta Ltd.
100%
32,359
100%
32,359
Balansz Private Open-end Investment
Fund
100%
86,795
100%
60,629
Bank Center No. 1. Ltd.
100%
43,955
100%
43,955
PortfoLion Green Venture Capital Fund
100%
33,571
100%
33,571
Other
205,044
196,179
Total
2,566,076
2,390,718
An analysis of the change in the impairment loss is as follows:
31 December
2024
31 December
2023
Balance as at 1 January
418,115
542,769
Impairment loss for the period
13,517
348
Reversal of impairment loss
(2,430)
(87,345)
Use of impairment loss
(4,511)
(37,657)
Closing balance
424,691
418,115
The Bank decided that the recoverable amount is determined based on fair value less cost of disposal. The Bank prepared
impairment tests of the subsidiaries based on two different net present value calculation methods that show the same
result; however they represent different economical logics. On one hand is the discount cash flow method (“DCF”) that
calculates the value of the subsidiaries by discounting their expected cash flow; on the other hand the economic value
added (“EVA”) method estimates the value of the subsidiaries from the initial invested capital and the present value of
the economic profit that the companies are expected to generate in the future. Applying the EVA method was more
practically than DCF method because it gives a more realistic picture about how the explicit period and the residual value
can contribute to the value of the company.
The Bank, in its strategic plan, has taken into consideration the effects of the present global economic situation, the
cautious recovery of economic situation and outlook, the associated risks and their possible effect on the financial sector
as well as the current and expected availability of wholesale funding.
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
432
NOTE 12:
INVESTMENTS IN SUBSIDIARIES, ASSOCIATES, JOINT VENTURES AND OTHER
INVESTMENTS (in HUF mn) [continued]
An analysis of the impairment loss by significant subsidiaries is as follows:
31 December
2024
31 December
2023
OTP Bank JSC (Ukraine)
280,763
280,763
OTP Mortgage Bank Ltd.
83,557
84,707
LLC Alliance Reserve (Russia)
15,801
15,801
Monicomp Ltd.
13,173
10,965
Air-Invest Ltd.
10,965
8,632
OTP Real Estate Ltd.
11,034
4,395
R.E. Four d.o.o. (Serbia)
3,763
3,763
JSC "OTP Bank" (Russia)
2,775
2,775
OTP Life Annuity Ltd.
-
2,281
Total
421,831
414,082
Dividend income from significant subsidiaries and shares held-for-trading and shares measured at fair value
through other comprehensive income is as follows:
31 December
2024
31 December
2023
DSK Bank EAD (Bulgaria)
112,908
48,658
JSC "OTP Bank" (Russia)
54,057
33,961
OTP Luxembourg S.à r.l.
45,686
21,131
LLC Alliance Reserve (Russia)
31,664
-
OTP banka dioničko društvo (Croatia)
29,687
28,574
OTP banka Srbija akcionarsko drustvo Novi Sad (Serbia)
26,822
30,873
Crnogorska komercijalna banka a.d. (Montenegro)
23,295
3,511
OTP Holding Malta Ltd. (Malta)
20,904
-
OTP banka d.d. (Slovenia)
12,288
-
OTP Bank S.A. (Moldova)
10,258
5,513
OTP Factoring Ltd.
6,000
70,000
Other
29,274
19,001
Subtotal
402,843
261,222
Dividend from shares held-for-trading
10,060
14,229
Dividend from securities mandatorily at fair value through profit
or loss
15
-
Dividend from shares fair value through other comprehensive
income
344
254
Total
413,262
275,705
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
433
NOTE 12:
INVESTMENTS IN SUBSIDIARIES, ASSOCIATES, JOINT VENTURES AND OTHER INVESTMENTS (in HUF mn) [continued]
Significant associates and joint ventures
The main figures of the Bank’s indirectly owned associates and joint ventures at cost as at 31 December 2024:
List of associated entities
(amounts in HUF million)
Carrying
amount
Shareholder's
equity
Share
capital
Profit
after tax
Voting
right
Country /
Headquarter
Activity
PortfoLion Digital Venture
Capital Fund I.
15,593
14,179
7,000
(7,479)
100.00%
Hungary /Budapest
Digital technology, solutions that strengthen the bank's innovation
capacity (e.g. big data, financial software, payment solutions,
blockchain etc.).
PortfoLion Regional Venture
Capital Fund II.
15,672
15,511
17,847
(472)
49.88%
Hungary /Budapest
Investment in any industries and sectors, due to which international
expansion of Hungarian enterprises can be realized.
PortfoLion Partner Venture
Capital Fund
30,661
70,262
60,421
5,031
30.56%
Hungary /Budapest
Financing of domestic or foreign takeover, capital increase or
merger in which the acquiring company is at least majority-
owned by Hungarians.
PortfoLion Digital Venture
Capital Fund II.
6,374
6,516
7,270
(687)
100.00%
Hungary /Budapest
IT, digital technology, fintech
PortfoLion Green Venture
Capital Fund
11
35,298
33,571
234
100.00%
Hungary /Budapest
Investing in companies engaged in agricultural activities, as well as
in food processing and agriculture-related areas.
Subtotal
68,311
OTP-DayOne Magvető Fund
648
2,947
1,271
23
22.00%
Hungary /Budapest
Trusts, funds and similar financial entities
D-ÉG Thermoset Ltd 'u.l.'
-
n.a.
1,045
n.a.
46.99%
Hungary /
Dunaújváros
Wholesale of hardware, plumbing and heating equipment and
supplies
Company for Cash Services AD
392
4,319
1,982
(333)
25.00%
Bulgaria / Sofia
Other financial service activities, except insurance and pension
funding
Bankart Procesiranje Placilnih
Instrumentov d.o.o.
7,219
11,403
658
1,182
43.06%
Ljubjana / Slovenia
Data processing, web hosting services
Subtotal
8,259
Total
76,570
There are no material investments in associates owned by equity funds below 50% voting right and without control.
The associated that are owned through venture capital funds are not detailed below neither for year 2024 nor for 2023, only the funds that own them are presented below. PortfoLion
funds are subsidiaries in the separate financial statements.
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
434
NOTE 12:
INVESTMENTS IN SUBSIDIARIES, ASSOCIATES, JOINT VENTURES AND
OTHER INVESTMENTS (in HUF mn) [continued]
Significant associates and joint ventures [continued]
The main figures of the Bank’s indirectly owned associates and joint ventures at cost as at 31 December 2023:
List of associated entities
(amounts in HUF million)
Carrying
amount
Shareholder's
equity
Share
capital
Profit
after tax
Voting
right
Country /
Headquarter
Activity
PortfoLion Digital Venture
Capital Fund I.
12,332
20,968
8,800
460
100.00%
Hungary /Budapest
Digital technology, solutions that strengthen the bank's innovation
capacity (e.g. big data, financial software, payment solutions,
blockchain etc.).
PortfoLion Regional Venture
Capital Fund II.
12,733
13,381
15,245
288
49.88%
Hungary /Budapest
Investment in any industries and sectors, due to which international
expansion of Hungarian enterprises can be realized.
PortfoLion Partner Venture
Capital Fund
27,201
64,269
60,421
119
30.56%
Hungary /Budapest
Financing of domestic or foreign takeover, capital increase or
merger in which the acquiring company is at least majority-
owned by Hungarians.
PortfoLion Digital Venture
Capital Fund II.
3,941
5,681
5,800
14
100.00%
Hungary /Budapest
IT, digital technology, fintech
PortfoLion Green Venture
Capital Fund
15
35,064
33,571
1,264
100.00%
Hungary /Budapest
Investing in companies engaged in agricultural activities, as well as
in food processing and agriculture-related areas.
Subtotal
56,222
OTP-DayOne Magvető Fund
280
2,954
1,271
308
22.00%
Hungary /Budapest
Trusts, funds and similar financial entities
D-ÉG Thermoset Ltd 'u.l.'
-
n.a.
1,045
n.a.
46.99%
Hungary /
Dunaújváros
Wholesale of hardware, plumbing and heating equipment and
supplies
Company for Cash Services AD
392
3,464
1,982
333
25.00%
Bulgaria / Sofia
Other financial service activities, except insurance and pension
funding
Bankart Procesiranje Placilnih
Instrumentov d.o.o.
7,219
9,265
658
1,182
43.06%
Ljubjana / Slovenia
Data processing, web hosting services
OTP Risk Fund I.
611
1,384
6,800
158
44.12%
Hungary /Budapest
Trusts, funds and similar financial entities
Mortgage Refinancing Company
of Uzbekistan
1,030
4,338
2,990
(615)
20.00%
Uzbekistan / Tashkent
Refinancing mortgage loans issued by banks and others credit
organizations.
Subtotal
9,532
Total
65,754
There are no material investments in associates owned by equity funds below 50% voting right and without control.
The associated that are owned through venture capital funds are not detailed below neither for year 2024 nor for 2023, only the funds that own them are presented below. PortfoLion
funds are subsidiaries in the separate financial statements.
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
435
NOTE 12:
INVESTMENTS IN SUBSIDIARIES, ASSOCIATES, JOINT VENTURES AND
OTHER INVESTMENTS (in HUF mn) [continued]
Significant events related to investments
The Metropolitan Court of Registration has registered a capital increase at Monicomp Ltd. The registered capital of
Monicomp Ltd. was increased to HUF 320,500,000 from HUF 226,500,000.
The Uzbek Court of Registration has registered a capital increase at JSCMB 'IPOTEKA BANK’. The registered capital
of JSCMB 'IPOTEKA BANK’ was increased to UZS 3,834,217,638,941 from UZS 2,989,584,338,941. As a consequence
of the capital increase the ownership ratio of OTP Bank Plc. increased to 79.58%.
The Metropolitan Court of Registration has registered a capital increase at OTP Real Estate Ltd. The registered capital of
OTP Real Estate Ltd. was increased to HUF 1,101,000,000 from HUF 1,100,000,000.
The Bank has concluded a share sale and purchase agreement to sell its directly and indirectly owned 100% shareholding
in OTP Bank Romania S.A. to Banca Transilvania S.A. (hereinafter referred to as: BT). OTP Group is also selling its
100% shareholdings in its other Romanian subsidiaries, OTP Leasing Romania IFN S.A. and OTP Asset Management
S.A.I. S.A. to BT under the transaction. The selling price is EUR 347.5 million. For further information about the financial
closing of the transaction please see Note 32.
Legal merger process of two Slovenian subsidiary, SKB Banka and Nova KBM, has ended on 22 August 2024. After that
operative merger process also has ended successfully during the period.
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
436
NOTE 13:
PROPERTY, EQUIPMENT AND INTANGIBLE ASSETS (in HUF mn)
For the year ended 31 December 2024
Intangible
assets
Property
Office
equipment and
vehicles
Vehicles Construction in
progress
Right of use
assets
Total
Cost
Balance as at 1
January
261,854
85,918
115,814
338
19,629
86,654
570,207
Additions
75,795
11,211
23,278
104
25,309
487
136,184
Disposals
(2,225)
(1,049)
(7,068)
-
(34,802)
(21)
(45,165)
Closing balance
335,424
96,080
132,024
442
10,136
87,120
661,226
Depreciation and Amortization
Balance as at 1
January
163,739
31,978
82,319
96
-
20,432
298,564
Charge for the year
34,024
4,630
15,297
58
-
9,542
63,551
Disposals
(243)
(644)
(6,824)
-
-
(1,810)
(9,521)
Closing balance
197,520
35,964
90,792
154
-
28,164
352,594
Impairment
Balance as at 1
January
-
-
-
-
-
-
-
Charge for the year
1,326
-
-
-
-
-
1,326
Disposals
(1,282)
-
-
-
-
-
(1,282)
Closing balance
44
-
-
-
-
-
44
Net book value
Balance as at 1
January
98,115
53,940
33,495
242
19,629
66,222
271,643
Closing balance
137,860
60,116
41,232
288
10,136
58,956
308,588
For the year ended 31 December 2023
Intangible
assets
Property
Office
equipment and
vehicles
Vehicles Construction in
progress
Right of use
assets
Total
Cost
Balance as at 1
January
213,085
78,595
112,924
197
15,650
59,349
479,800
Additions
55,533
10,550
15,662
200
30,718
68,060
180,723
Disposals
(6,764)
(3,227)
(12,772)
(59)
(26,739)
(40,755)
(90,316)
Closing balance
261,854
85,918
115,814
338
19,629
86,654
570,207
Depreciation and Amortization
Balance as at 1
January
143,605
30,148
82,577
77
-
19,467
275,874
Charge for the year
25,902
3,900
12,290
39
-
8,927
51,058
Disposals
(5,768)
(2,070)
(12,548)
(20)
-
(7,962)
(28,368)
Closing balance
163,739
31,978
82,319
96
-
20,432
298,564
Net book value
Balance as at 1
January
69,480
48,447
30,347
120
15,650
39,882
203,926
Closing balance
98,115
53,940
33,495
242
19,629
66,222
271,643
The Bank has no intangible assets with indefinite useful life.
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
437
NOTE 14:
INVESTMENT PROPERTIES (in HUF mn)
For the year ended 31 December 2024 and for the year ended 31 December 2023, respectively
31 December
2024
31 December
2023
Property
Cost
Balance as at 1 January
5,165
5,027
Additions result from subsequent expenditure
172
138
Closing balance
5,337
5,165
Depreciation and Amortization
Balance as at 1 January
962
820
Charge for the period
148
142
Closing balance
1,110
962
Net book value
Balance as at 1 January
4,203
4,207
Closing balance
4,227
4,203
According to the opinion of the Management there is no significant difference between the fair value and the carrying
value of these properties.
Income and Expenses
31 December
2024
31 December
2023
Rental income
9
9
Depreciation
149
138
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
438
NOTE 15:
FAIR VALUE OF DERIVATIVE FINANCIAL ASSETS DESIGNATED AS HEDGE
ACCOUNTING (in HUF mn)
Positive fair value of derivative financial assets designated as hedge accounting:
31 December
2024
31 December
2023
Interest rate swaps designated as fair value hedge
37,679
12,521
CCIRS designated as fair value hedge
13,903
10,173
Interest rate swaps designated as cash flow hedge
(8,452)
(1,066)
Total
43,130
21,628
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
439
NOTE 16:
OTHER ASSETS1 (in HUF mn)
31 December
2024
31 December
2023
Other financial assets
Receivables from OTP Employee Stock Ownership Program
(OTP ESOP)
145,966
133,347
Prepayments and accrued income
28,993
23,785
Receivables from investment services
43,346
29,597
Stock exchange deposit
27,239
19,630
Trade receivables
14,713
13,960
Receivables from card operations
16,586
51,938
Receivables from suppliers
6,057
9,367
Other
10,197
25,089
293,097
306,713
Loss allowance
(11,522)
(7,875)
Other financial assets total
281,575
298,838
Other non-financial assets
Prepayments and accrued income
53,030
42,574
Receivable related to Hungarian Government subsidies
12,562
15,996
Other
10,506
9,160
76,098
67,730
Provision for impairment on other assets
(578)
(607)
Other non-financial assets total
75,520
67,123
Total
357,095
365,961
An analysis of the movement in the loss allowance on other financial assets is as follows:
31 December
2024
31 December
2023
Balance as at 1 January
7,875
7,026
Charge for the period
10,616
6,686
Release of loss allowance
(6,132)
(4,479)
Use of loss allowance
(1,242)
(1,227)
FX movement
405
(131)
Closing balance
11,522
7,875
An analysis of the movement in the loss allowance on other non-financial assets is as follows:
31 December
2024
31 December
2023
Balance as at 1 January
607
699
Charge for the period
269
266
Release of provision
(329)
(336)
FX movement
31
(22)
Closing balance
578
607
1 Other assets are expected to be recovered or settled no more than twelve months after the reporting period.
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
440
NOTE 17:
AMOUNTS DUE TO BANKS AND DEPOSITS FROM THE NATIONAL BANK OF
HUNGARY AND OTHER BANKS (in HUF mn)
31 December
2024
31 December
2023
Within one year:
In HUF
495,497
328,641
In foreign currency
521,986
337,184
1,017,483
665,825
Over one year:
In HUF
381,129
615,167
In foreign currency
208,357
480,587
589,486
1,095,754
Subtotal
1,606,969
1,761,579
Total
1,606,969
1,761,579
Interest rates on amounts due to banks and deposits from the NBH and other banks are as follows (%):
31 December
2024
31 December
2023
Within one year:
In HUF
0%-9,23%
(2.4%)-8.75%
In foreign currency
-2,02%-7,18%
(2.31%)-4.2%
Over one year:
In HUF
-1,34%-6,49%
(1.7%)-11.4%
In foreign currency
-2%-4,35%
(2.02%)-7.18%
Average interest on amounts due to banks in HUF
4.89%
6.02%
Average interest on amounts due to banks in foreign currency
3.73%
3.55%
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
441
NOTE 18:
REPO LIABILITIES (in HUF mn)
31 December
2024
31 December
2023
Within one year:
In HUF
61,824
100,296
In foreign currency
129,990
101,862
191,814
202,158
Over one year:
In HUF
-
190,255
In foreign currency
35,818
51,281
35,818
241,536
Subtotal
227,632
443,694
Total
227,632
443,694
Interest rates on repo liabilities are as follows (%):
31 December
2024
31 December
2023
Within one year:
In HUF
(4.5%)-6.76%
9.25%-10.63%
In foreign currency
1.46%-5.92%
1.67%
Over one year:
In HUF
-
9.25%-10.63%
In foreign currency
3,97%-5,11%
1.67%-5.92%
Average interest on repo liabilities in HUF
8.06%
15.22%
Average interest on repo liabilities in foreign currency
3.60%
4.51%
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
442
NOTE 19:
DEPOSITS FROM CUSTOMERS (in HUF mn)
31 December
2024
31 December
2023
Within one year:
In HUF
8,608,098
7,747,906
In foreign currency
2,264,025
2,962,206
10,872,123
10,710,112
Over one year:
In HUF
24,104
24,213
24,104
24,213
Total
10,896,227
10,734,325
Deposit from customers includes the fair value changes on hedged deposits involved in portfolio hedge of interest rate
risk.
Interest rates on deposits from customers are as follows (%):
31 December
2024
31 December
2023
Within one year:
In HUF
0%-11.25%
0%-15.4%
In foreign currency
(0.85%)-36%
(0.36%)-11.77%
Over one year:
In HUF
0%-6.03%
0%-10.75%
In foreign currency
-
0%-9.73%
Average interest on deposits from customers in HUF
1.99%
3.75%
Average interest on deposits from customers in foreign currency
1.40%
1.36%
An analysis of deposits from customers by type, not including accrued interest, is as follows:
31 December 2024
31 December 2023
Retail deposits
5,024,279
46%
4,422,120
41%
Household deposits
5,024,279
46%
4,422,120
41%
Corporate deposits
5,871,948
54%
6,312,205
59%
Corporate deposits
5,032,072
46%
5,402,710
51%
Municipality deposits
839,876
8%
909,495
8%
Total
10,896,227 100%
10,734,325
100%
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
443
NOTE 20:
LIABILITIES FROM ISSUED SECURITIES (in HUF mn)
31 December
2024
31 December
2023
Within one year:
In HUF
83,693
161,217
In foreign currency
46,521
26,670
130,214
187,887
Over one year:
In HUF
12,226
43,025
In foreign currency
1,608,453
932,197
1,620,679
975,222
Total
1,750,893
1,163,109
Interest rates on liabilities from issued securities are as follows (%):
31 December
2024
31 December
2023
Issued securities denominated in HUF
5.5%-12%
0.6%-15%
Issued securities denominated in foreign currency
4.1%-8.1%
5.5%-8.1%
Average interest on issued securities denominated in HUF
9.85%
11.42%
Average interest on issued securities denominated in foreign
currency
6.10%
6.88%
Term Note Program in the value of HUF 800 billion for the year of 2023/2024
On 18 April 2023 the Bank initiated term note program in the value of HUF 800 billion with the intention of issuing
registered dematerialized bonds in public. The NBH approved on 7 August 2023 the prospectus of Term Note Program.
The prospectus is valid for 12 months following the disclosure.
Term Note Program in the value of HUF 800 billion for the year of 2024/2025
On 30 April 2024 the Bank initiated term note program in the value of HUF 800 billion with the intention of issuing
registered dematerialized bonds in public. The NBH approved on 19 July 2024 the prospectus of Term Note Program.
The prospectus is valid for 12 months following the disclosure. At the same time Term Note Program for the year
2023/2024 was closed, which was originally valid till 7 August 2024.
Notes issued in amount of EUR 600 million
The Bank have been issued notes (ISIN: XS2754491640 on 31 January 2024 as value date in the aggregate nominal
amount of EUR 600 million. The notes are rated ’Baa3’ by Moody’s Investor Services Cyprus Ltd. and ’BBB+’ by Scope
Ratings GmbH. The notes are listed on the Luxembourg Stock Exchange.
Notes issued in amount of EUR 700 million
The Bank have been issued notes (ISIN: XS2838495542) on 12 June 2024 as value date in the aggregate nominal amount
of EUR 700 million. The notes are rated ’BBB-’ by S&P Ratings Europe Limited and ’BBB+’ by Scope Ratings GmbH.
The notes are listed on the Luxembourg Stock Exchange.
Recall of green notes issued in amount of EUR 400 million
Notes (XS2499691330) have been redeemed in amount of EUR 400 million on 15 July 2024 and the principal amount,
together with accrued and unpaid interest was paid to the holders of the Notes.
Notes issued in amount of CNY 300 million
The Bank have been issued notes (ISIN: XS2871018136) on 31 July 2024 as value date in the aggregate nominal amount
of CNY 300 million. The notes are rated ’BBB+’ by Scope Ratings GmbH. The notes are listed on the Luxembourg Stock
Exchange.
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
444
NOTE 20:
LIABILITIES FROM ISSUED SECURITIES (in HUF mn) [continued]
Notes issued in amount of EUR 500 million
The Bank issued notes (ISIN: XS2917468618) on 16 October 2024 as value date in the aggregate nominal amount of
EUR 500 million. The notes are rated ’Baa3’ by Moody’s Investor Services Cyprus Ltd. and ’BBB+’ by Scope Ratings
GmbH. The notes are listed on the Luxembourg Stock Exchange.
Hedge accounting
Certain issued structured securities are hedged by the Bank with interest rate swaps (“IRS”) which exchange the fixed
and floating interest rate with the interest rate of the securities between the parties at a notional amount that equals the
nominal amount of the hedged securities. These are considered as fair value hedge relationships as they cover the interest
rate risk arising from the coupons of the hedged securities. OTP Bank does not intend to be exposed to the risk embedded
in the structured bonds, consequently as part of interest rate swap transaction the structured interest payments are swapped
to floating interest rate. This hedging relationship meets all of the following hedge effectiveness requirements:
•
there is an economic relationship between the hedged item and the hedging instrument
•
the effect of credit risk does not dominate the value changes that result from that economic relationship
•
the hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged item that
the Bank actually hedges and the quantity of the hedging instrument that the Bank actually uses to hedge that
quantity of hedged item
The cash-flows of the fixed rate securities issued by the Bank are exposed to the changes in the HUF/EUR foreign
exchange rate and the volatility of the quoted interest rates of EUR and HUF. The interest rate risk and foreign exchange
risk related to these securities are hedged with EUR and HUF IRS transactions, where the fixed interests were swapped
to payments linked to 3 month HUF BUBOR and EURIBOR, resulting in a decrease in the interest rate and foreign
exchange exposure of issued securities.
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
445
NOTE 20:
LIABILITIES FROM ISSUED SECURITIES (in HUF mn) [continued]
Issued securities denominated in foreign currency as at 31 December 2024
Name
Date of
issuance
Maturity Currency
Nominal
value in
FX million
Nominal
value in
HUF million
Amortised
cost in FX
million
Amortised
cost in HUF
million
Interest
conditions
(in % actual)
Hedged
1 XS2871018136
7/31/2024
7/31/2027
CNY
300
16,176
305
16,443 fixed
4.10
2 XS2560693181
12/1/2022
3/4/2026
EUR
648
265,938
689
282,387 fixed
7.35
3 XS2642536671
6/27/2023
6/27/2026
EUR
110
45,110
114
46,871 fixed
7.50
4 XS2698603326
10/5/2023
10/5/2027
EUR
649
266,321
674
276,203 fixed
6.13
hedged
5 XS2737630314 12/22/2023
6/22/2026
EUR
75
30,757
78
31,845 fixed
6.10
hedged
6 XS2754491640
1/31/2024
1/31/2029
EUR
598
245,420
634
260,169 fixed
5.00
hedged
7 XS2838495542
6/12/2024
6/12/2028
EUR
698
286,058
729
298,861 fixed
4.75
hedged
8 XS2917468618 10/16/2024 10/16/2030
EUR
499
204,680
504
206,807 fixed
4.25
hedged
9 XS2703264635 10/13/2023 10/13/2026
RON
170
14,011
173
14,279 variable 8.10
hedged
10 XS2536446649 29/09/2022 29/09/2026
USD
60
23,616
61
24,063 fixed
7.25
11 XS2626773381
5/25/2023
5/25/2027
USD
500
196,689
501
197,046 fixed
7.50
hedged
Subtotal issued securities in foreign currency
1,594,776
1,654,974
Issued securities denominated in foreign currency as at 31 December 2023
Name
Date of
issuance
Maturity Currency
Nominal
value in FX
million
Nominal
value in
HUF million
Amortised
cost in FX
million
Amortised
cost in HUF
million
Interest
conditions
(in % actual)
Hedged
1 XS2560693181
12/1/2022
3/4/2026
EUR
649
248,497
689
263,732 fixed
7.35
2 XS2698603326
10/5/2023
10/5/2027
EUR
650
248,725
674
258,006 fixed
6.13
hedged
3 XS2626773381
5/25/2023
5/25/2027
USD
500
173,152
499
173,011 fixed
7.50
hedged
4 XS2499691330 13/07/2022 13/07/2025
EUR
400
153,111
410
157,095 fixed
5.50
hedged
5 XS2642536671
6/27/2023
6/27/2026
EUR
110
42,106
114
43,745 fixed
7.50
6 XS2737630314 22/12/2023 22/06/2026
EUR
75
28,709
75
28,778 fixed
6.10
7 XS2536446649
9/29/2022
9/29/2026
USD
60
20,786
61
21,180 fixed
7.25
8 XS2703264635 10/13/2023 10/13/2026
RON
170
13,082
173
13,320 variable 8.10
Subtotal issued securities in foreign currency
928,168
958,867
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
446
NOTE 20:
LIABILITIES FROM ISSUED SECURITIES (in HUF mn) [continued]
Issued securities denominated in HUF as at 31 December 2024
Name
Date of
issuance
Maturity
Nominal
value in
HUF
million
Amortised
cost in HUF
million
Interest
conditions
Hedged
1
OTP_HUF_2026/1
12/22/2022
1/5/2026
10,228
12,674
fix
12.00
hedged
2
OTP_TBSZ_HUF_2028/1
10/13/2023
12/15/2028
155
156
fix
6.88
3
OTP_HUF_2026/2
12/15/2023
12/15/2026
620
622
fix
7.40
4
OTP_HUF_2025/3
1/12/2024
1/12/2025
1,919
2,060
fix
7.50
5
OTP_HUF_2025/4
2/2/2024
2/2/2025
2,155
2,289
fix
6.75
6
OTP_HUF_2025/5
3/1/2024
3/1/2025
5,957
6,284
fix
6.50
7
OTP_HUF_2025/6
3/28/2024
3/28/2025
5,559
5,837
fix
6.50
8
OTP_HUF_2025/7
4/26/2024
4/26/2025
8,190
8,528
fix
6.00
9
OTP_HUF_2025/8
5/24/2024
5/24/2025
5,860
6,075
fix
6.00
10
OTP_HUF_2025/9
6/7/2024
6/7/2025
5,756
5,955
fix
6.00
11
OTP_HUF_2025/10
7/5/2024
7/5/2025
11,675
12,024
fix
6.00
12
OTP_HUF_2025/11
8/2/2024
8/2/2025
6,698
6,868
fix
6.00
13
OTP_HUF_2025/12
8/30/2024
8/30/2025
4,532
4,618
fix
5.50
14
OTP_HUF_2025/13
9/27/2024
9/27/2025
5,162
5,239
fix
5.50
15
OTP_HUF_2025/14
10/31/2024
10/31/2025
5,826
5,883
fix
5.50
16
OTP_HUF_2025/15
11/29/2024
11/29/2025
3,243
3,260
fix
5.50
17
OTP_HUF_2025/16
12/18/2024
12/18/2025
7,324
7,343
fix
6.00
18
Other
204
204
Subtotal issued securities in HUF
91,063
95,919
Total
1,685,839
1,750,893
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
447
NOTE 20:
LIABILITIES FROM ISSUED SECURITIES (in HUF mn) [continued]
Issued securities denominated in HUF as at 31 December 2023
Name
Date of
issuance
Maturity
Nominal value
in HUF million
Amortised
cost in HUF
million
Interest
conditions
Hedged
1
OTP_HUF_2024/1
2/17/2023
2/17/2024
26,079
28,593
fix
11.00
2
OTP_HUF_2025/1
11/18/2022
11/18/2025
25,563
27,042
fix
15.00
hedged
3
OTP_HUF_2024/2
3/10/2023
3/10/2024
22,977
25,048
fix
11.00
4
OTP_HUF_2024/3
3/31/2023
3/31/2024
17,015
18,441
fix
11.00
5
OTP_HUF_2024/6
6/2/2023
6/2/2024
16,722
17,806
fix
11.00
6
OTP_HUF_2024/4
4/21/2023
4/21/2024
14,698
15,837
fix
11.00
7
OTP_HUF_2024/5
5/12/2023
5/12/2024
13,946
14,937
fix
11.00
8
OTP_HUF_2024/7
6/23/2023
6/23/2024
11,232
11,859
fix
10.50
9
OTP_HUF_2026/1
12/22/2022
1/5/2026
10,228
11,856
fix
12.00
hedged
10
OTP_HUF_2025/2
6/30/2023
6/30/2025
5,116
5,431
fix
12.00
11
OTP_HUF_2024/9
7/28/2023
7/28/2024
4,173
4,364
fix
10.50
12
OTP_HUF_2024/8
6/30/2023
6/30/2024
3,730
3,931
fix
10.50
13
OTP_HUF_2024/13
10/20/2023
10/20/2024
3,494
3,557
fix
8.75
14
OTP_HUF_2024/14
11/17/2023
11/17/2024
3,509
3,547
fix
8.50
15
OTP_HUF_2024/15
12/20/2023
12/20/2024
2,994
3,004
fix
8.00
16
OTP_HUF_2024/12
9/25/2023
9/25/2024
2,777
2,845
fix
9.00
17
OTP_HUF_2024/11
9/1/2023
9/1/2024
2,655
2,743
fix
9.75
18
OTP_HUF_2024/10
8/7/2023
8/7/2024
1,431
1,490
fix
10.00
19
OTP_HUF_2026/2
12/15/2023
12/15/2026
647
649
fix
7.40
20
OTPX2024B
10/10/2014
10/16/2024
295
339
indexed
0.70
hedged
21
OTPX2024A
6/18/2014
6/21/2024
241
283
indexed
1.30
hedged
22
OTPX2024C
12/15/2014
12/20/2024
242
275
indexed
0.60
hedged
23
OTP_TBSZ_HUF_2028/1
10/13/2023
12/15/2028
155
159
fix
12.00
Other
206
206
Subtotal issued securities in HUF
190,125
204,242
Total
1,118,293
1,163,109
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
448
NOTE 21:
FINANCIAL LIABILITIES DESIGNATED AS FAIR VALUE THROUGH PROFIT OR LOSS
(in HUF mn)
31 December
2024
31 December
2023
Within one year:
In HUF
1,709
1,816
1,709
1,816
Over one year:
In HUF
15,315
17,970
15,315
17,970
Total
17,024
19,786
Contractual amount outstanding
17,000
17,747
Interest rates on financial liabilities designated as fair value through profit or loss are as follows (%):
31 December
2024
31 December
2023
Within one year:
In HUF
4.33%-8.24%
4.97%-9.97%
Over one year:
In HUF
3.14%
4.83%
Average interest on amounts due to banks in HUF
7.30%
7.88%
Certain MFB refinanced loan receivables are categorised as fair value through profit or loss based on SPPI test. Related
refinancing loans at the liability side are categorised as fair value through profit or loss based on fair value option due to
accounting mismatch as provided by the IFRS 9 standard.
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
449
NOTE 22:
HELD FOR TRADING DERIVATIVE FINANCIAL LIABILITIES (in HUF mn)
Negative fair value of held for trading derivative financial liabilities by deal types:
31 December
2024
31 December
2023
Interest rate swaps
52,672
72,200
Foreign currency swaps
57,644
53,102
CCIRS and mark-to-market CCIRS
11,627
9,161
Other derivative contracts
22,556
49,102
Total
144,499
183,565
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
450
NOTE 23:
FAIR VALUE OF DERIVATIVE FINANCIAL LIABLITIES DESIGNATED AS HEDGE
ACCOUNTING (in HUF mn)
Fair value of derivative financial liabilities designated as hedge accounting is detailed as follows:
31 December
2024
31 December
2023
IRS designated as fair value hedge
18
7,875
CCIRS designated as fair value hedge
19,420
10,679
IRS designated as cash flow hedge
-
8,869
Total
19,438
27,423
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
451
NOTE 24:
OTHER LIABILITIES1 AND PROVISIONS (in HUF mn)
31 December
2024
31 December
2023
Other financial liabilities
Liabilities from investment services
149,317
50,321
Accrued expenses
26,341
27,673
Accounts payable
52,854
33,508
Liabilities due to short positions
47,157
19,107
Liabilities from customer's credit card payments
27,372
84,184
Other
34,575
28,526
Other financial liabilities total
337,616
243,319
Other non-financial liabilities
Technical accounts
74,168
25,321
Current income tax payable
21,843
13,770
Social contribution
10,522
8,475
Accrued expenses
3,337
2,940
Other
2,036
1,574
Other non-financial liabilities total
111,906
52,080
Other liabilities total
449,522
295,399
The provision on other liabilities, off-balance sheet commitments and contingent liabilities are detailed as follows:
31 December
2024
31 December
2023
Provision for losses on other off-balance sheet commitments and
contingent liabilities
19,054
16,092
Provisions in accordance with IFRS 9
19,054
16,092
Provision for litigation
283
1,931
Provision for retirement pension and severance pay
2,000
2,000
Provision on other liabilities
4,310
2,474
Provisions in accordance with IAS 37
6,593
6,405
Total
25,647
22,497
Movements in the provision for losses on commitments and contingent liabilities in accordance with IFRS 9 can be
summarized as follows:
31 December
2024
31 December
2023
Opening balance
16,092
23,632
Provision for the period
51,461
62,662
Release of provision for the period
(16,438)
(50,882)
Use of provision
(32,458)
(18,952)
FX revaluation
397
(368)
Closing balance
19,054
16,092
Movements in the provision for losses on commitments and contingent liabilities in accordance with IAS 37 can be
summarized as follows:
31 December
2024
31 December
2023
Opening balance
6,405
6,024
Provision for the period
4,958
11,563
Release of provision
(2,405)
(8,633)
Use of provision
(2,557)
(2,420)
FX revaluation
192
(129)
Closing balance
6,593
6,405
1 Other liabilities are expected to be recovered or settled no more than twelve months after the reporting period.
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
452
NOTE 25:
SUBORDINATED BONDS AND LOANS (in HUF mn)
31 December
2024
31 December
2023
Within one year
In HUF
1,898
1,886
In foreign currency
3,856
6,174
5,754
8,060
Over one year:
In HUF
13,256
11,133
In foreign currency
343,261
501,103
356,517
512,236
Total
362,271
520,296
Interest rates on subordinated bonds and loans are as follows (%):
31 December
2024
31 December
2023
Subordinated bonds and loans denominated in foreign currency
6.0%-8.8%
2.9%-8.8%
Average interest on subordinated bonds and loans denominated in
HUF
4.99%
5.51%
Average interest on subordinated bonds and loans denominated in
foreign currency
6.76%
6.04%
EUR 500 million Fixed Rate Reset Callable Subordinated bond recall (XS2022388586)
On 15 July 2024 Notes EUR 500 million Due 15 July 2029 have been redeemed and the principal amount, together with
accrued and unpaid interest was paid to the holders of the Notes.
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
453
NOTE 25:
SUBORDINATED BONDS AND LOANS (in HUF mn) [continued]
Subordinated loans and bonds are detailed as follows as at 31 December 2024:
Type
Name
Date of
issuance
Date of
maturity
Issue
price
Currency
Nominal
value in FX
million
Nominal
value in
HUF
million
Amortised
cost in Fx
million
Amortised
cost in
HUF
million
Interest conditions
Current
interest rate
Subordinated bond
XS2586007036
15/02/2023 15/05/2033
99.42%
USD
645
253,770
642
252,504 Fixed 8.75% (payable
annual)
8.750%
Subordinated bond
XS0274147296
07/11/2006
Perpetual
99.38%
EUR
229
93,717
231
94,612
Three-month EURIBOR +
3%, variable (payable
quarterly)
6.032%
Discount bond
HU0000362553
01/06/2023 31/05/2028
66.68%
HUF
1,959
1,959
1,485
1,485
N.a.
Discount bond
HU0000363908
31/05/2024 31/05/2029
72.11%
HUF
1,901
1,901
1,425
1,425
N.a.
Discount bond
HU0000360516
31/05/2021 31/05/2025
92.54%
HUF
1,216
1,216
1,206
1,206
N.a.
Discount bond
HU0000361605
31/03/2022 31/05/2027
72.13%
HUF
1,092
1,092
937
937
N.a.
Discount bond
HU0000360532
31/05/2021 31/05/2027
87.27%
HUF
795
795
752
752
N.a.
Discount bond
HU0000361597
31/03/2022 31/05/2026
76.86%
HUF
783
783
716
716
N.a.
Discount bond
HU0000360524
31/05/2021 31/05/2026
90.02%
HUF
707
707
686
686
N.a.
Discount bond
HU0000360540
31/05/2021 31/05/2028
84.31%
HUF
669
669
616
616
N.a.
Discount bond
HU0000359732
29/05/2020 31/05/2025
92.99%
HUF
592
592
589
589
N.a.
Discount bond
HU0000362561
01/06/2023 31/05/2029
63.21%
HUF
684
684
488
488
N.a.
Discount bond
HU0000362579
01/06/2023 31/05/2030
60.08%
HUF
719
719
485
485
N.a.
Discount bond
HU0000362587
01/06/2023 31/05/2031
56.64%
HUF
762
762
483
483
N.a.
Discount bond
HU0000362595
01/06/2023 31/05/2032
52.82%
HUF
817
817
483
483
N.a.
Discount bond
HU0000363916
31/05/2024 31/05/2030
67.44%
HUF
672
672
471
471
N.a.
Discount bond
HU0000363924
31/05/2024 31/05/2031
63.20%
HUF
717
717
471
471
N.a.
Discount bond
HU0000363932
31/05/2024 31/05/2032
59.16%
HUF
765
765
470
470
N.a.
Discount bond
HU0000363957
31/05/2024 31/05/2033
55.27%
HUF
818
818
470
470
N.a.
Discount bond
HU0000361613
31/03/2022 31/05/2028
67.89%
HUF
554
554
447
447
N.a.
Discount bond
HU0000361621
31/03/2022 31/05/2029
64.03%
HUF
554
554
421
421
N.a.
Discount bond
HU0000361639
31/03/2022 31/05/2030
60.38%
HUF
554
554
397
397
N.a.
Discount bond
HU0000359740
29/05/2020 31/05/2026
91.10%
HUF
392
392
384
384
N.a.
Discount bond
HU0000360557
31/05/2021 31/05/2029
81.23%
HUF
403
403
359
359
N.a.
Discount bond
HU0000361647
31/03/2022 31/05/2031
56.88%
HUF
384
384
258
258
N.a.
Discount bond
HU0000362603
01/06/2023 31/05/2033
49.02%
HUF
282
282
155
155
N.a.
Discount bond
HU0000363940
31/05/2024 31/05/2034
51.58%
HUF
283
283
152
152
N.a.
Discount bond
HU0000358932
30/05/2019 31/05/2025
83.86%
HUF
104
104
103
103
N.a.
Discount bond
HU0000359757
29/05/2020 31/05/2027
89.05%
HUF
95
95
91
91
N.a.
Discount bond
HU0000360565
31/05/2021 31/05/2030
78.09%
HUF
104
104
89
89
N.a.
Discount bond
HU0000361654
31/03/2022 31/05/2032
53.52%
HUF
105
105
66
66
N.a.
Total
366,969
362,271
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
454
NOTE 25:
SUBORDINATED BONDS AND LOANS (in HUF mn) [continued]
Subordinated loans and bonds are detailed as follows as at 31 December 2023:
Type
Name
Date of
issuance
Date of
maturity
Issue
price
Currency
Nominal
value in FX
million
Nominal
value in
HUF
million
Amortised
cost in Fx
million
Amortised
cost in
HUF
million
Interest conditions
Current
interest rate
Subordinated bond
XS0274147296
07/11/2006
Perpetual
99.38%
EUR
231
88,409
234
89,381
Three-month EURIBOR +
3%, variable (payable
quarterly)
6.966%
Subordinated bond
XS2022388586
15/07/2019 15/07/2029
99.74%
EUR
497
190,399
501
191,894 Fixed 2.875% (payable
annual)
2.875%
Subordinated bond
XS2586007036
15/02/2023 15/05/2033
99.42%
USD
650
225,104
653
226,001 Fixed 8.75% (payable
annual)
8.750%
Discount bond
HU0000358924
30/05/2019 31/05/2024
87.85%
HUF
426
426
421
421
N.a.
Discount bond
HU0000359724
29/05/2020 31/05/2024
94.79%
HUF
592
592
589
589
N.a.
Discount bond
HU0000360508
31/05/2021 31/05/2024
95.12%
HUF
883
883
876
876
N.a.
Discount bond
HU0000358932
30/05/2019 31/05/2025
83.86%
HUF
104
104
100
100
N.a.
Discount bond
HU0000359732
29/05/2020 31/05/2025
92.99%
HUF
592
592
580
580
N.a.
Discount bond
HU0000360516
31/05/2021 31/05/2025
92.54%
HUF
1,216
1,216
1,183
1,180
N.a.
Discount bond
HU0000359740
29/05/2020 31/05/2026
91.10%
HUF
392
392
378
378
N.a.
Discount bond
HU0000360524
31/05/2021 31/05/2026
90.02%
HUF
707
707
672
672
N.a.
Discount bond
HU0000361597
31/03/2022 31/05/2026
76.86%
HUF
783
783
672
672
N.a.
Discount bond
HU0000359757
29/05/2020 31/05/2027
89.05%
HUF
95
95
90
90
N.a.
Discount bond
HU0000360532
31/05/2021 31/05/2027
87.27%
HUF
795
795
735
735
N.a.
Discount bond
HU0000361605
31/03/2022 31/05/2027
72.13%
HUF
1,092
1,092
879
879
N.a.
Discount bond
HU0000360540
31/05/2021 31/05/2028
84.31%
HUF
669
669
601
601
N.a.
Discount bond
HU0000361613
31/03/2022 31/05/2028
67.89%
HUF
554
554
420
420
N.a.
Discount bond
HU0000362553
01/06/2023 31/05/2028
66.68%
HUF
1,959
1,959
1,369
1,369
N.a.
Discount bond
HU0000360557
31/05/2021 31/05/2029
81.23%
HUF
403
403
350
350
N.a.
Discount bond
HU0000361621
31/03/2022 31/05/2029
64.03%
HUF
554
554
396
396
N.a.
Discount bond
HU0000362561
01/06/2023 31/05/2029
63.21%
HUF
684
684
452
452
N.a.
Discount bond
HU0000360565
31/05/2021 31/05/2030
78.09%
HUF
104
104
87
87
N.a.
Discount bond
HU0000361639
31/03/2022 31/05/2030
60.38%
HUF
554
554
373
373
N.a.
Discount bond
HU0000362579
01/06/2023 31/05/2030
60.08%
HUF
719
719
451
451
N.a.
Discount bond
HU0000361647
31/03/2022 31/05/2031
56.88%
HUF
384
384
243
243
N.a.
Discount bond
HU0000362587
01/06/2023 31/05/2031
56.64%
HUF
762
762
450
450
N.a.
Discount bond
HU0000361654
31/03/2022 31/05/2032
53.52%
HUF
105
105
62
62
N.a.
Discount bond
HU0000362595
01/06/2023 31/05/2032
52.82%
HUF
817
817
450
450
N.a.
Discount bond
HU0000362603
01/06/2023 31/05/2033
49.02%
HUF
282
282
144
144
N.a.
Total
520,139
520,296
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
455
NOTE 26:
SHARE CAPITAL (in HUF mn)
31 December
2024
31 December
2023
Authorized, issued and fully paid:
Ordinary shares
28,000
28,000
The nominal value of the shares is HUF 100 per shares. All of the shares are ordinary shares representing the same rights
to the shareholders. Furthermore there are no restrictions on the distribution of dividends and the repayment of capital.
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
456
NOTE 27:
RETAINED EARNINGS AND RESERVES (in HUF mn)
Based on the instructions of Act C of 2000 on accounting (“Act on Accounting”) financial statements of the Bank are
prepared in accordance with IFRS as issued by the IASB as adopted by the EU.
In 2024 dividend of HUF 150,000 million was paid out to from the profit of the year 2023, which meant HUF 535.71
dividend per share payable to the shareholders. In 2025 dividend of HUF 270,000 million are expected to be proposed by
the Management from the profit of the year 2024, which means HUF 964.28 dividend per share payable to the
shareholders.
Based on paragraph 114/B of Act on Accounting Equity Correlation Table is prepared and disclosed as a part of the
explanatory notes for the reporting date by the Bank. Equity correlation table shall contain the opening and closing
balances of the shareholder’s equity in accordance with IFRS, furthermore deducted from this the opening and closing
balances of the specified equity elements. Equity correlation table shall contain also untied retained earnings available for
the payment of dividends, covering retained earnings from the last financial year for which accounts have been adopted
comprising net profit for the period of that financial year minus cumulative unrealized gains claimed in connection with
any increase in the fair value of investment properties, as provided in IAS 40 - Investment Property, reduced by the
cumulative income tax accounted for under IAS 12 - Income Taxes.
Share capital
Share capital is the portion of the Bank’s equity that has been obtained by the issue of shares in the corporation to a
shareholder, usually for cash.
Share-based payment reserve
Share-based payment reserve represents the increase in the equity due to the goods or services were received by the Bank
in an equity-settled share-based payment transaction, valued at the fair value of the goods or services received.
Retained earnings
Profit of previous years generated by the Bank that are not distributed to shareholders as dividends.
Put option reserve
OTP Bank Plc. and MOL Plc. entered into a share swap agreement in 16 April 2009, whereby OTP has changed
24,000,000 OTP ordinary shares for 5,010,501 „A series” MOL shares. The amended final maturity of the share swap
agreement is 11 July 2027, until which any party can initiate cash or physical settlement of the transaction.
Put option reserve represents the written put option over OTP ordinary shares were accounted as a deduction from equity
at the date of OTP-MOL share swap transaction.
Other comprehensive income
Other comprehensive income comprises items of income and expense (including reclassification adjustments) that are not
recognised in profit or loss as required or permitted by other IFRSs.
General reserve
The Bank shall place ten per cent of the after-tax profit of the year into general reserve prescribed by the Act CCXXXVII
of 2013 on Credit Institutions and Financial Enterprises. The Bank is allowed to use general reserves only to cover
operating losses arising from their activities.
Tied-up reserve
The tied-up reserve shall consist of sums tied up from the capital reserve and from the retained earnings.
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
457
NOTE 27:
RETAINED EARNINGS AND RESERVES (in HUF mn) [continued]
The equity correlation table of the Bank based on paragraph 114/B of Act on Accounting as at 31 December 2024:
31 December 2024
Closing balance
Share
Capital
Capital
reserve
Share-based
payment
reserve
Retained
earnings and
reserves
Option
reserve
Treasury
Shares
Revaluation
reserve
Tied-up
reserve
Net profit
for the year
Total
Components of Shareholder’s equity
in accordance with IFRS
28,000
52
56,813
2,894,922
(55,468)
(123,066)
-
-
-
2,801,253
Other comprehensive income
-
-
-
(9,806)
-
-
9,806
-
-
-
Option reserve
-
(55,468)
-
-
55,468
-
-
-
-
-
Treasury shares
-
(123,066)
-
-
-
123,066
-
-
-
-
Share based payments
-
56,813
(56,813)
-
-
-
-
-
-
-
Net profit for the year
-
-
-
(744,999)
-
-
-
-
744,999
-
General reserve and tied-up reserve
-
-
-
(267,436)
-
-
-
267,436
-
-
Components of Shareholder’s equity
in accordance with paragraph
114/B of Act on Accounting
28,000
(121,669)
-
1,872,681
-
-
9,806
267,436
744,999
2,801,253
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
458
The equity correlation table of the Bank based on paragraph 114/B of Act on Accounting as at 1 January 2024:
1 January 2024
Opening balance
Share
Capital
Capital
reserve
Share-based
payment
reserve
Retained
earnings and
reserves
Option
reserve
Treasury
Shares
Revaluation
reserve
Tied-up
reserve
Net profit
for the year
Total
Components of Shareholder’s
equity in accordance with
IFRS
28,000
52
52,402
2,279,773
(55,468)
(6,154)
-
-
-
2,298,605
Other comprehensive income
-
-
-
9,148
-
-
(9,148)
-
-
-
Option reserve
-
(55,468)
-
-
55,468
-
-
-
-
-
Treasury shares
-
(6,154)
-
-
-
6,154
-
-
-
-
Share based payments
-
52,402
(52,402)
-
-
-
-
-
-
-
Net profit for the year
-
-
-
(654,988)
-
-
-
-
654,988
-
General reserve
-
-
-
(192,937)
-
-
-
192,937
-
-
Components of Shareholder’s
equity in accordance with
paragraph 114/B of Act on
Accounting
28,000
(9,168)
-
1,440,996
-
-
(9,148)
192,937
654,988
2,298,605
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
459
NOTE 27:
RETAINED EARNINGS AND RESERVES (in HUF mn) [continued]
Calculated untied retained earnings in accordance with paragraph 114/B of Act on Accounting
31 December
2024
31 December
2023
Retained earnings
1,872,681
1,440,996
Net profit for the year
744,999
654,988
Untied retained earnings
2,617,680
2,095,984
Items of retained earnings and other reserves
31 December
2024
31 December
2023
Retained earnings
1,872,681
1,440,996
Capital reserve
52
52
Option reserve
(55,468)
(55,468)
Other reserves
267,436
192,937
Fair value of financial instruments measured at fair value through
other comprehensive income
13,180
(5,639)
Share-based payment reserve
56,813
52,402
Fair value of derivative financial instruments designated as cash-
flow hedge
(3,374)
(3,509)
Net profit for the period
744,999
654,988
Retained earnings and other reserves
2,896,319
2,276,759
Fair value adjustment of securities at fair value through other comprehensive income
31 December
2024
31 December
2023
Balance as at 1 January
(40,262)
(82,906)
Change of fair value correction
(18,559)
46,485
Deferred tax related to change of fair value correction
3,890
(3,841)
Closing balance
(54,931)
(40,262)
Expected credit loss on securities at fair value through other comprehensive income
31 December
2024
31 December
2023
Balance as at 1 January
24,345
29,161
Increase of loss allowance
29,399
3,401
Release of loss allowance
(4,839)
(6,704)
Deferred tax related to expected credit loss
(4,707)
-
Fx movement
3,391
(1,513)
Closing balance
47,589
24,345
Fair value changes of equity instruments as at fair value through other comprehensive income
31 December
2024
31 December
2023
Balance as at 1 January
10,278
10,022
Change of fair value correction
11,549
3,307
Deferred tax related to change of fair value correction
(1,305)
(374)
Transfer to retained earnings
-
(2,677)
Closing balance
20,522
10,278
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
460
NOTE 28:
TREASURY SHARES (in HUF mn)
31 December
2024
31 December
2023
Nominal value (ordinary shares)
705
57
Carrying value at acquisition cost
123,066
6,154
The changes in the carrying value of treasury shares are due to repurchase and sale transactions on market authorised by
the General Assembly.
Change in number of shares:
31 December
2024
31 December
2023
Number of shares as at 1 January
571,246
352,344
Additions
8,775,919
3,948,338
Disposals
(2,301,642)
(3,729,436)
Number of shares at the end of the period
7,045,523
571,246
Change in carrying value:
31 December
2024
31 December
2023
Balance as at 1 January
6,154
2,724
Additions
153,105
39,818
Disposals
(36,193)
(36,388)
Closing Balance
123,066
6,154
31 December
2024
31 December
2023
Face value of treasury shares held by OTP Group members
1,197
1,210
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
461
NOTE 29:
INTEREST INCOME AND EXPENSES (in HUF mn)
Year ended 31
December 2024
Year ended 31
December 2023
Interest income accounted for using the effective interest rate
method from / on
Loans at amortised cost
437,745
457,472
FVOCI securities
30,311
50,838
Securities at amortised cost
216,762
129,054
Placements with other banks
179,241
206,280
Financial liabilities
214
398
Amounts due from banks and balances with National Bank of
Hungary
161,598
345,696
Repo receivables
14,663
37,435
Subtotal
1,040,534
1,227,173
Income similar to interest income
Loans mandatorily measured at fair value through profit or loss
62,663
51,132
Swap and forward deals related to Placements with other banks
478,199
600,959
Swap and forward deals related to Loans at amortised cost
35,034
125,151
Swap and forward deals related to FVOCI securities
9,714
18,655
Investment properties
9
9
Subtotal
585,619
795,906
Interest income total
1,626,153
2,023,079
Interest expense due to / from / on
Amounts due to banks and deposits from the National Bank of
Hungary and other banks
583,183
641,908
Deposits from customers
314,695
608,340
Leasing liabilities
3,147
2,314
Liabilities from issued securities
103,579
64,774
Subordinated bonds and loans
30,163
29,893
Investment properties (depreciation)
149
138
Financial assets
2,139
6,857
Repo liabilities
70,496
202,137
Interest expense total
1,107,551
1,556,361
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
462
NOTE 30:
RISK COST (in HUF mn)
Year ended 31
December 2024
Year ended 31
December 2023
Loss allowance of loans at amortised cost
Loss allowance
260,589
249,194
Release of loss allowance
(240,388)
(243,652)
20,201
5,542
Loss allowance of sight deposits and placements with other
banks
Loss allowance
8,519
11,767
Release of loss allowance
(8,752)
(24,125)
(233)
(12,358)
Loss allowance of placements with other banks
Loss allowance
2,256
11,755
Release of loss allowance
(2,269)
(13,555)
(13)
(1,800)
Loss allowance of FVOCI debt instruments
Loss allowance
29,399
3,401
Release of loss allowance
(4,839)
(6,704)
24,560
(3,303)
Loss allowance of securities at amortised cost
Loss allowance
22,001
2,287
Release of loss allowance
(11,433)
(10,863)
10,568
(8,576)
Provision on loan commitments and financial guarantees
Provision for the period
51,461
62,662
Release of provision
(48,896)
(69,834)
2,565
(7,172)
Change in the fair value attributable to changes in the credit
risk of loans mandatorily measured at fair value through
profit of loss
(4,193)
980
Risk cost total
53,455
(26,687)
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
463
NOTE 31:
NET PROFIT FROM FEES AND COMMISSIONS (in HUF mn)
Income from fees and commissions:
Year ended 31
December 2024
Year ended 31
December 2023
Fees and commissions related to lending
13,782
12,040
Deposit and account maintenance fees and commissions
194,155
162,872
Fees and commission related to the issued bank cards
147,749
137,162
Fees and commissions related to security trading
48,143
33,899
Fx margin
22,928
21,828
Fees and commissions paid by OTP Mortgage Bank Ltd.
12,564
8,379
Net insurance fee income
15,701
13,558
Other
13,544
13,147
Fees and commissions from contracts with customers
454,784
390,845
Total Income from fees and commissions:
468,566
402,885
Contract balances
Year ended 31
December 2024
Year ended 31
December 2023
Receivables, which are included in ‘other assets’
26,960
24,012
Loss allowance
(542)
(616)
Fee and commission expense
Year ended 31
December 2024
Year ended 31
December 2023
Other fees and commissions related to issued bank cards
76,040
63,941
Insurance fees
901
715
Fees and commissions related to lending
5,856
5,320
Fees and commissions related to security trading
2,153
2,497
Fees and commissions relating to deposits
3,387
2,850
Trust activities related to securities
2,763
2,324
Postal fees
241
223
Money market transaction fees and commissions
211
205
Other
665
680
Total
92,217
78,755
Net profit from fees and commissions
376,349
324,130
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
464
NOTE 32:
GAINS AND LOSSES BY TRANSACTIONS (in HUF mn)
Year ended 31
December 2024
Year ended 31
December 2023
Losses arising from derecognition of financial assets
measured at amortised cost
Gain from loans
785
2,760
Loss from loans
(2,309)
(2,716)
Gain from securities
-
152
Loss from securities
(7,871)
(19,552)
Other
(461)
(351)
Total
(9,856)
(19,707)
Additional information to Gains or losses from operating income:
Year ended 31
December 2024
Year ended 31
December 2023
Foreign exchange losses
Loss from foreign exchange
(5,500)
(6,116)
Margin gains
4,332
8,157
Margin losses
(5,717)
(14,310)
Total
(6,885)
(12,269)
Year ended 31
December 2024
Year ended 31
December 2023
Net results on derivative instruments and hedge relationships
Gains on FX spot, swap and option deals
50,660
59,675
Losses from FX spot, swap and option deals
(46,055)
(52,428)
Fees received related to option deals
5,593
6,569
Fees paid related to option deals
(5,372)
(6,554)
Gains on commodity deals
72,543
87,062
Losses from commodity deals
(71,944)
(83,504)
Gains on futures transactions
439
212
Losses from futures transactions
(695)
(230)
Losses from credit valuation adjustment related to FX spot, swap
and option deals held for trading
(11,234)
2,232
Losses from credit valuation adjustment related to commodity
deals held for trading
2
21
Total
(6,063)
13,055
Year ended 31
December 2024
Year ended 31
December 2023
Gains on financial instruments at fair value
through profit or loss
Gains on securities mandatorily measured at fair value
through profit or loss
(314)
2,570
Gains on loans mandatorily measured at fair value
through profit or loss
55,604
100,436
Losses on loans mandatorily measured at fair value
through profit or loss
(29,153)
(7,196)
Gains on financial liabilities designated at fair value
through profit or loss
2,236
766
Losses on financial liabilities designated at fair value
through profit or loss
(996)
(5,308)
Total
27,377
91,268
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
465
NOTE 32:
GAINS AND LOSSES BY TRANSACTIONS (in HUF mn) [continued]
Additional information to Gains or losses from operating income: [continued]
Year ended 31
December 2024
Year ended 31
December 2023
Gains on securities, net
Interest income from held for trading securities
3,183
1,168
Gains on held for trading securities
7,948
14,529
Losses on held for trading securities
(4,051)
(6,588)
Gains on FVOCI securities
855
999
Losses on FVOCI securities
-
(489)
Gains on derecognition of investments in subsidiaries
112,076
1,322
Losses on derecognition of investments in subsidiaries
(836)
-
Gains/losses from other securities
1,688
(3,868)
Total
120,863
7,073
Year ended 31
December 2024
Year ended 31
December 2023
Dividend income
Distribution from investments in subsidiaries
402,843
261,222
Distribution from held for trading securities
10,075
14,229
Distribution from FVOCI equity instruments
344
254
Total
413,262
275,705
Total gains and losses from operating income (without other
operating income)
548,554
374,832
For the year ended 31 December 2024 gains and losses attributable to the hedged risk on the hedged item and on the
hedging instruments and also ineffectiveness in the case of fair value hedge on amortised cost line items as follows
Hedged
items
Hedging
instrument
Hedge
ineffectiveness
Fair value hedge
(28,937)
38,549
9,612
For the year ended 31 December 2023 gains and losses attributable to the hedged risk on the hedged item and on the
hedging instruments and also ineffectiveness in the case of fair value hedge on amortised cost line items as follows
Hedged
items
Hedging
instrument
Hedge
ineffectiveness
Fair value hedge
(15,433)
2,855
(12,578)
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
466
NOTE 33:
OTHER OPERATING INCOME AND EXPENSES AND OTHER ADMINISTRATIVE
EXPENSES (in HUF mn)
Other operating income
Year ended 31
December 2024
Year ended 31
December 2023
Other operating income from OTP Employee Stock Ownership
Program (OTP ESOP)
9,676
4,739
Intermediary and other services
2,937
2,547
Gains on IT services provided to subsidiaries
1,996
1,155
Derecognition of financial liabilities at amortised cost
1,957
581
Income from lease of tangible assets
1,292
1,223
Non-repayable assets received
1,009
423
Gains related to ATM maintenance activities
430
436
Income from written off receivables
318
257
Gains on sale of tangible assets
(19)
1,225
(Losses) / Gains on issued securities
(3,063)
135
Repayment of extraordinary payments made to NDIF in previous
years
-
10,738
Other
1,847
2,725
Total
18,380
26,184
Other operating expenses
Year ended 31
December 2024
Year ended 31
December 2023
Release of loss allowance/(Loss allowance) on investments in
subsidiaries
(7,427)
87,609
Release of provision for off-balance sheet commitments and
contingent liabilities
4
(471)
Non-repayable assets contributed
(1,826)
(1,056)
Release of loss allowance on other assets
(5,514)
(3,576)
Financial support for sport association and organization of public
utility
(14,490)
(11,893)
Other
(3,660)
(3,790)
Total
(37,072)
63,590
Other administrative expenses:
Year ended 31
December 2024
Year ended 31
December 2023
Personnel expenses:
Wages
146,771
141,650
Taxes related to personnel expenses
21,333
20,172
Other personnel expenses
32,164
33,582
Subtotal
200,268
195,404
Depreciation and amortization
63,551
50,814
Other administrative expenses:
Taxes, other than income tax
136,276
139,629
Services
92,583
86,272
Fees payable to authorities and other fees
16,269
25,384
Administration expenses, including rental fees
8,485
7,813
Professional fees
16,347
11,382
Advertising
14,168
11,438
Subtotal
284,128
281,918
Total
547,947
528,136
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
467
NOTE 34:
INCOME TAX (in HUF mn)
The Bank is presently liable for income tax at a rate of 9% of taxable income, local taxes at a rate of 2.3% of taxable
revenue.
A breakdown of the income tax expense is:
31 December
2024
31 December
2023
Current tax expense
66,563
39,174
Deferred tax (benefit)/expense
(6)
31,119
Total
66,557
70,293
A reconciliation of the deferred tax liability is as follows:
31 December
2024
31 December
2023
Balance as at 1 January
408
35,742
Deferred tax (expense)/ benefit
6
(31,119)
Tax effect of fair value adjustment of FVOCI securities
(2,121)
(4,215)
Closing balance
(1,707)
408
A breakdown of the deferred tax liability is as follows:
31 December
2024
31 December
2023
Provision for untaken leave
450
399
Provision for termination benefits and jubilee
1,428
1,325
Deferred tax asset
1,878
1,724
Fair value adjustment of held for trading and securities at fair value
through other comprehensive income
(2,171)
(55)
Difference in depreciation and amortization
(1,414)
(1,261)
Deferred tax liabilities
(3,585)
(1,316)
Net deferred tax assets/(liabilities)
(1,707)
408
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
468
NOTE 34:
INCOME TAX (in HUF mn) [continued]
A reconciliation of the income tax (income) / expense is as follows:
31 December
2024
31 December
2023
Profit before income tax
811,556
725,281
Income tax at statutory tax rate (9%)
73,040
65,275
Income tax adjustments due to permanent differences are as
follows:
Share-based payment
397
296
Deferred use of tax allowance
(4)
69
Dividend income
(46,393)
(24,449)
Use of tax allowance in the current year
(375)
777
Amounts unenforceable by tax law
153
23
Change due to accounting policy (Visa)
(111)
1,068
Correction due to local taxes classified as income taxes
16,051
7,196
Local taxes
24,443
21,545
Other
(644)
(1,507)
Income tax
66,557
70,293
Effective tax rate
8.2%
9.7%
31 December
2024
31 December
2023
Current tax liabilities
(23,591)
(14,393)
Net tax liabilities
(23,591)
(14,393)
Global minimum tax
The global minimum tax legislation has been enacted in certain jurisdictions the OTP Group operates in, mainly in the
EU Member States. OTP Group is in scope of the enacted global minimum tax legislation. The legislation has been in
effect for the Group’s financial year beginning 1 January 2024 and introduced a minimum rate of effective taxation of
15%. The global minimum tax legislation has been adopted in Hungary in Act No. LXXXIV of 2023 on the top-up taxes
ensuring a global minimum level of taxation and the amendment of related acts.
From an accounting perspective, it is unclear if the global minimum tax rules create additional temporary differences,
whether to remeasure deferred taxes for the global minimum tax rules and which tax rate to use to measure deferred taxes.
In response to this uncertainty, IAS 12 ‘Income taxes’ has been amended to introduce a mandatory temporary exception
to the requirements of IAS 12. Under the mandatory temporary exception, a company does not recognize or disclose
information about deferred tax assets and liabilities related to the global minimum tax rules. The Bank applied the
temporary exception for the year-ended 31 December 2024.
Based on the status of the global minimum tax legislation, if top-up taxes arose in the jurisdictions which had not
introduced the global minimum tax rules in their domestic legislation, OTP Bank Plc., being an ultimate parent entity,
would be obliged to pay the top-up taxes in respect of such jurisdictions. As for Hungary, the Hungarian global minimum
tax legislation provides for various options as to who is obliged to pay the Hungarian top-up (i.e., the Hungarian Group
entities based on certain allocation ratios or OTP Bank Plc.). OTP group chose the option where OTP Bank Plc pays the
Hungarian top-up tax. This decision may be revisited every year per the Hungarian global minimum legislation.
The global minimum tax legislation had been subject to several significant changes since their first publication and
changes are still expected. Based on the most recent information available regarding the financial performance of the
group entities and the prevailing interpretation of the global minimum tax legislation, the calculated amount of taxes
imposed under the global minimum tax legislation payable by OTP Bank Plc. is HUF 708.2 million in 2024. The amount
of taxes under the global minimum tax legislation is included in the income tax expense recognized in the statement of
profit or loss in 2024.
.
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
469
NOTE 35:
LEASE (in HUF mn)
The Bank as a lessee:
Amounts recognised in profit and loss
31 December
2024
31 December
2023
Interest expense on lease liabilities
3,147
2,314
Expense relating to short-term leases
2,097
2,065
Expense relating to leases of low value assets
9
-
Expense relating to variable lease payments not included in the
measurement of lease liabilities
1,865
1,662
Leasing liabilities by maturities:
31 December
2024
31 December
2023
Within one year
9,046
7,595
Over one year
55,334
60,687
Total
64,380
68,282
An analysis of movement in the carrying amount of right-of-use assets by category is as follows:
Gross carrying amount
Right-of-use of
real estate
Right-of-use
of machinery
and
equipment
Total
Balance as at 1 January 2023
57,362
1,987
59,349
Additions due to new contracts
26,426
3,012
29,438
Derecognition due to matured contracts
(7,957)
(218)
(8,175)
Change due to revaluation and modification
4,293
1,749
6,042
Balance as at 31 December 2023
80,124
6,530
86,654
Additions due to new contracts
488
-
488
Derecognition due to matured contracts
(2,129)
-
(2,129)
Change due to revaluation and modification
1,823
284
2,107
Balance as at 31 December 2024
80,306
6,814
87,120
Depreciation
Balance as at 1 January 2023
19,380
87
19,467
Depreciation charge
7,991
936
8,927
Derecognition due to matured contracts
(7,943)
(19)
(7,962)
Balance as at 31 December 2023
19,428
1,004
20,432
Depreciation charge
8,278
1,525
9,803
Derecognition due to matured contracts
(2,071)
-
(2,071)
Balance as at 31 December 2024
25,635
2,529
28,164
Net carrying amount
Balance as at 31 December 2023
60,696
5,526
66,222
Balance as at 31 December 2024
54,671
4,285
58,956
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
470
NOTE 36:
FINANCIAL RISK MANAGEMENT (in HUF mn)
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity
instrument of another entity.
Financial instruments may result in certain risks to the Bank. The most significant risks the Bank faces include:
36.1.
Credit risk
The Bank takes on exposure to credit risk which is the risk that a counter-party will be unable to pay amounts in full when
due. The Bank structures the levels of credit risk it undertakes by placing limits on the amount of risk accepted in relation
to one borrower, or banks of borrowers, and to geographical areas and loan types. Such risks are monitored on a periodical
basis and subject to an annual or more frequent review. The exposure to any borrower including banks and brokers is
further restricted by sublimit covering on- and off-balance sheet exposures and daily delivery risk limits in relation to
trading items such as forward foreign exchange contracts. Actual exposures against limits are monitored daily.
Exposure to credit risk is managed through regular analysis of the ability of borrowers and potential borrowers to meet
interest and capital repayment obligations and by changing these lending limits when appropriate. Exposure to credit risk
is partly managed obtaining collateral, corporate and personal guarantees.
36.1.1. Financial instruments by stages
Defining the expected credit loss on individual and collective basis
On individual basis:
Individually assessed are the non-retail or micro- and small enterprise exposure of significant amount on a stand-alone
basis:
•
exposure in stage 3,
•
exposure in workout management
•
purchased or originated credit-impaired instruments which are in accordance with the conditions mentioned
above
The calculation of impairment must be prepared and approved by the risk management functional areas. The calculation,
all relevant factors (amortised cost, original and current EIR, contracted and expected cash flows (from business and/or
collateral) for the individual periods of the entire lifecycle, other essential information enforced during the valuation) and
the criteria thereof (including the factors underlying the classification as stage 3) must be documented individually.
The expected credit loss of the exposure equals the difference of the receivable's AC (gross book value) on the valuation
date and the present value of the receivable's expected cash flows discounted to the valuation date by the exposure's
original effective interest rate (EIR) (calculated at the initial recognition, or in the case of variable rate, recalculated due
to the last interest rate change). The estimation of the expected future cash flows should be forward looking, it must also
contain the effects of the possible change of macroeconomic outlook.
At least two scenarios must be used for the estimation of the expected cash flow. At least one scenarios should anticipate
that realised cash flows will be significantly different from the contractual cash flows. Probability weights must be
allocated to the individual scenarios. The estimation must reflect the probability of the occurrence and non-occurrence of
the credit loss, even if the most probable result is the non-occurrence of the loss.
On collective basis:
The following exposures are subject to collective assessment:
•
retail exposure irrespective of the amount,
•
micro and small enterprise exposures irrespective of the amount,
•
all other exposure which are insignificant on a stand-alone basis and not part of the workout management,
•
exposure which are not in stage 3, significant on a stand-alone basis,
•
purchased or originated credit-impaired instruments which are in accordance with the conditions mentioned
above.
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
471
NOTE 36:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
36.1.
Credit risk [continued]
36.1.1. Financial instruments by stages [continued]
In the collective impairment methodology credit risk and the change of credit risk can be correctly captured by
understanding the risk characteristics of the portfolio. In order to achieve this the main risk drivers shall be identified and
used to form homogeneous segments having similar risk characteristics. The segmentation is expected to stay stable from
month to month however a regular (at least yearly) revision of the segmentation process should be set up to capture the
change of risk characteristics. The segmentation must be performed separately for each parameter, since in each case
different factors may have relevance.
The Bank's Headquarters Group Reserve Committee stipulates the guidelines related to the collective impairment
methodology at group level. In addition, it has right of agreement in respect of the risk parameters (PD -probability of
default, LGD - loss given default, EAD – exposure at default) and segmentation criteria proposed by the group members.
The review of the parameters must be performed at least annually and the results should be approved by the Group Reserve
Committee. Local Risk Managements is responsible for parameter estimations and updates, macroeconomic scenarios are
calculated by OTP Bank Headquarters for each subsidiary and each parameter. Based on the consensus proposal of Local
Risk Management and OTP Bank Headquarters, the Group Reserve Committee decides on the modification of parameters
(all parameters for impairment calculation).
The impairment parameters should be backtested at least annually.
The expected loss calculation should be forward looking, including forecasts of future economic conditions. This may be
achieved by applying 3-5 different macroeconomic scenarios, which may be integrated in the PD, LGD and EAD
parameters.
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
472
NOTE 36:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
36.1.
Credit risk [continued]
36.1.1. Financial instruments by stages [continued]
Gross carrying amount and accumulated loss allowance of financial assets at amortized cost and fair value through other comprehensive income by IFRS 9 stages as at 31
December 2024:
Carrying
amount/
Exposure
Gross carrying amount / Notional amount
Loss allowance
Write-off
Stage 1
Stage 2 Stage 3
Purchased or
originated credit
impaired
Total
Stage 1 Stage 2 Stage 3
Purchased or
originated credit
impaired
Total
Cash, amounts due from banks and
balances with the National Bank of
Hungary
2,075,179
2,044,628
32,664
-
-
2,077,292
1,851
262
-
-
2,113
-
Placements with other banks
2,948,536
2,940,967
11,653
1,135
-
2,953,755
2,751
1,333
1,135
-
5,219
-
Repo receivables
238,079
238,433
-
-
-
238,433
354
-
-
-
354
-
Retail consumer loans
659,121
522,785
168,325
18,904
-
710,014
7,808 31,027
12,058
-
50,893
-
Mortgage loans
45,849
36,171
4,950
3,796
1,684
46,601
20
91
534
107
752
-
Municipal loans
102,852
103,765
852
-
-
104,617
1,547
218
-
-
1,765
-
Corporate loans
3,862,973
3,161,499
699,698
84,646
8,466
3,954,309
16,204 41,927
32,813
392
91,336
28,741
Loans at amortised cost
4,670,795
3,824,220
873,825 107,346
10,150
4,815,541
25,579 73,263
45,405
499
144,746
28,741
FVOCI debt instruments
558,668
537,145
-
21,523
-
558,668
1,003
-
51,293
-
52,296
-
Securities at amortised cost
3,334,145
3,330,049
5,516
37,491
-
3,373,056
11,057
505
27,349
-
38,911
-
Other financial assets
69,128
67,972
951
6,976
8
75,907
237
307
6,229
6
6,779
-
Total as at 31 December 2024
13,894,530
12,983,414
924,609 174,471
10,158
14,092,652
42,832 75,670 131,411
505
250,418
28,741
Loan commitments
2,525,121
2,391,305
139,251
6,434
-
2,536,990
6,854
4,594
421
-
11,869
-
Financial guarantees
1,897,269
1,803,492
92,134
8,092
-
1,903,718
3,176
1,061
2,212
-
6,449
-
Factoring loan commitments
381,312
364,434
13,286
4,291
-
382,011
479
43
177
-
699
-
Bill of credit
5,144
5,181
-
-
-
5,181
37
-
-
-
37
-
Loan commitments and financial
guarantees total
4,808,846
4,564,412
244,671
18,817
-
4,827,900
10,546
5,698
2,810
-
19,054
-
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
473
NOTE 36:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
36.1.
Credit risk [continued]
36.1.1. Financial instruments by stages [continued]
Gross carrying amount and accumulated loss allowance of financial assets at amortized cost and fair value through other comprehensive income by IFRS 9 stages as at 31
December 2023:
Carrying
amount/
Exposure
Gross carrying amount / Notional amount
Loss allowance
Write-off
Stage 1
Stage 2 Stage 3
Purchased or
originated credit
impaired
Total
Stage 1 Stage 2 Stage 3
Purchased or
originated credit
impaired
Total
Cash, amounts due from banks and
balances with the National Bank of
Hungary
2,708,232
2,701,675
6,952
-
-
2,708,627
267
128
-
-
395
-
Placements with other banks
2,702,433
2,697,572
9,421
2,315
-
2,709,308
3,465
1,095
2,315
-
6,875
-
Repo receivables
201,658
202,025
-
-
-
202,025
367
-
-
-
367
-
Retail consumer loans
572,912
488,231
128,101
19,811
1
636,144
15,471
33,192
14,568
1
63,232
-
Mortgage loans
53,996
41,172
7,232
4,823
1,988
55,215
38
189
813
179
1,219
-
Municipal loans
102,003
103,152
320
-
-
103,472
1,417
52
-
-
1,469
-
Corporate loans
3,952,448
3,213,155
746,233
65,434
9,121
4,033,943
16,783
36,390
27,544
778
81,495
22,637
Loans at amortised cost
4,681,359
3,845,710
881,886
90,068
11,110
4,828,774
33,709
69,823
42,925
958
147,415
22,637
FVOCI debt instruments
538,350
507,477
-
30,873
-
538,350
1,425
-
22,920
-
24,345
-
Securities at amortised cost
2,710,848
2,696,310
5,961
34,802
-
2,737,073
13,350
273
12,602
-
26,225
-
Other financial assets
115,499
114,982
792
7,560
15
123,349
1,442
3,039
3,357
12
7,850
-
Total as at 31 December 2023
13,658,379
12,765,751
905,012 165,618
11,125
13,847,506
54,025
74,358
84,119
970
213,472
22,637
Loan commitments
1,976,476
1,854,533
130,879
2,127
-
1,987,539
6,153
4,206
704
-
11,063
-
Financial guarantees
1,995,500
1,946,951
46,977
5,819
-
1,999,747
2,020
412
1,815
-
4,247
-
Factoring loan commitments
365,440
348,659
12,386
5,136
-
366,181
482
53
206
-
741
-
Bill of credit
8,586
8,626
-
-
-
8,626
40
-
-
-
40
-
Loan commitments and financial
guarantees total
4,346,002
4,158,769
190,242
13,082
-
4,362,093
8,695
4,671
2,725
-
16,091
-
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
474
NOTE 36:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
36.1.
Credit risk [continued]
36.1.2. Financial instruments under simplified approach by day-past-due categories
As at 31 December 2024
Without delay < 30 days
31 - 60
days
61 - 90
days
> 91 days
Closing
balance
Expected credit loss rate
0.62%
2.17%
14.39%
20.10%
18.30%
2.18%
Gross value
195,603
3,133
278
5,195
12,981
217,190
Loss allowance
(1,215)
(68)
(40)
(1,044)
(2,376)
(4,743)
Net carrying value
194,388
3,065
238
4,151
10,605
212,447
As at 31 December 2023
Without delay < 30 days
31 - 60
days
61 - 90
days
> 91 days
Closing
balance
Expected credit loss rate
0.72%
0.69%
5.17%
9.39%
21.06%
2.02%
Gross value
161,963
8,459
968
309
11,307
183,006
Loss allowance
(1,173)
(58)
(50)
(29)
(2,381)
(3,691)
Net carrying value
160,790
8,401
918
280
8,926
179,315
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
475
NOTE 36:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
36.1.
Credit risk [continued]
36.1.3. Changes in the Gross carrying amount and in the Loss allowance of financial assets at amortised cost and
fair value through other comprehensive income by IFRS 9 stages
Movement of gross carrying amount of loans at amortised cost
Stage 1
Stage 2
Stage 3
POCI
Total
Gross amount as at 1
January 2023
4,176,383
664,187
146,353
12,997
4,999,920
Transfer to Stage 1
125,054
(105,061)
(19,993)
-
-
Transfer to Stage 2
(448,120)
461,067
(12,947)
-
-
Transfer to Stage 3
(24,935)
(29,379)
54,314
-
-
New financial assets
originated or purchased
2,227,406
200,034
28,678
1,163
2,457,281
Financial assets derecognised
(other than write-offs)
(2,203,558)
(306,780)
(100,045)
(2,970)
(2,613,353)
Write-offs
(61)
(578)
(5,338)
(80)
(6,057)
Modification loss
(6,459)
(1,604)
(954)
-
(9,017)
Gross amount as at 31
December 2023
3,845,710
881,886
90,068
11,110
4,828,774
Transfer to Stage 1
207,208
(206,065)
(1,143)
-
-
Transfer to Stage 2
(298,847)
304,330
(5,483)
-
-
Transfer to Stage 3
(19,401)
(50,105)
69,506
-
-
New financial assets
originated or purchased
2,055,367
211,096
23,084
887
2,290,434
Financial assets derecognised
(other than write-offs)
(1,964,151)
(266,323)
(59,192)
(1,411)
(2,291,077)
Write-offs
(59)
(748)
(9,348)
(436)
(10,591)
Modification loss
(1,607)
(246)
(146)
-
(1,999)
Gross amount as at 31
December 2024
3,824,220
873,825
107,346
10,150
4,815,541
Movement of loss allowance of loans at amortised cost
Stage 1
Stage 2
Stage 3
POCI
Total
Loss allowance as at 1 January 2023
38,364
57,051
77,773
1,692
174,880
Transfer to Stage 1
21,673
(9,755)
(11,918)
-
-
Transfer to Stage 2
(5,037)
12,425
(7,388)
-
-
Transfer to Stage 3
(497)
(3,906)
4,403
-
-
Net remeasurement of loss allowance
(21,553)
13,435
1,920
(701)
(6,899)
New financial assets originated or purchased
14,620
8,468
4,717
14
27,819
Financial assets derecognised (other than
write-offs)
(13,800)
(7,317)
(26,425)
(47)
(47,589)
Unwind of discount
-
-
5,181
80
5,261
Write-offs
(61)
(578)
(5,338)
(80)
(6,057)
Loss allowance as at 31 December 2023
33,709
69,823
42,925
958
147,415
Transfer to Stage 1
13,671
(13,257)
(414)
-
-
Transfer to Stage 2
(5,585)
8,191
(2,606)
-
-
Transfer to Stage 3
(679)
(4,925)
5,604
-
-
Net remeasurement of loss allowance
(18,250)
16,198
14,550
(4)
12,494
New financial assets originated or purchased
12,785
8,225
3,944
-
24,954
Financial assets derecognised (other than
write-offs)
(10,013)
(10,244)
(12,744)
(38)
(33,039)
Unwind of discount
-
-
3,494
19
3,513
Write-offs
(59)
(748)
(9,348)
(436)
(10,591)
Loss allowance as at 31 December 2024
25,579
73,263
45,405
499
144,746
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
476
NOTE 36:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
36.1.
Credit risk [continued]
36.1.3. Changes in the Gross carrying amount and in the Loss allowance of financial assets at amortised cost and
fair value through other comprehensive income by IFRS 9 stages [continued]
Movement of gross carrying amount of loan commitments and financial guarantees
Stage 1
Stage 2
Stage 3
Total
Gross amount as at 1 January 2023
3,933,817
141,464
36,499
4,111,780
Transfer to Stage 1
60,083
(58,858)
(1,225)
-
Transfer to Stage 2
(158,404)
159,071
(667)
-
Transfer to Stage 3
(9,460)
(2,028)
11,488
-
New financial assets originated or
purchased
1,195,950
64,940
1,451
1,262,341
Financial assets derecognised (other than
write-offs)
(863,217)
(114,347)
(34,464)
(1,012,028)
Gross amount as at 31 December 2023
4,158,769
190,242
13,082
4,362,093
Transfer to Stage 1
77,066
(76,623)
(443)
-
Transfer to Stage 2
(126,264)
126,793
(529)
-
Transfer to Stage 3
(4,040)
(8,337)
12,377
-
New financial assets originated or
purchased
1,450,771
86,641
2,874
1,540,286
Financial assets derecognised (other than
write-offs)
(991,890)
(74,045)
(8,544)
(1,074,479)
Gross amount as at 31 December 2024
4,564,412
244,671
18,817
4,827,900
Movement of loss allowance of loan commitments and financial guarantees
Stage 1
Stage 2
Stage 3
Total
Loss allowance as at 1 January 2023
16,642
4,473
2,517
23,632
Transfer to Stage 1
2,410
(1,888)
(522)
-
Transfer to Stage 2
(787)
1,022
(235)
-
Transfer to Stage 3
(26)
(242)
268
-
Net remeasurement of loss allowance
(10,123)
1,584
1,663
(6,876)
New financial assets originated or
purchased
2,985
514
212
3,711
Decrease
(2,406)
(792)
(1,178)
(4,376)
Loss allowance as at 31 December 2023
8,695
4,671
2,725
16,091
Transfer to Stage 1
2,223
(2,156)
(67)
-
Transfer to Stage 2
(565)
641
(76)
-
Transfer to Stage 3
(12)
(167)
179
-
Net remeasurement of loss allowance
(3,935)
1,864
240
(1,831)
New financial assets originated or
purchased
6,100
1,244
456
7,800
Decrease
(1,960)
(399)
(647)
(3,006)
Loss allowance as at 31 December 2024
10,546
5,698
2,810
19,054
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
477
NOTE 36:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
36.1.
Credit risk [continued]
36.1.3. Changes in the Gross carrying amount and in the Loss allowance of financial assets at amortised cost and
fair value through other comprehensive income by IFRS 9 stages [continued]
Movement of gross carrying amount of cash, amounts due from banks and balances with the National Bank of
Hungary
Stage 1
Stage 2
Total
Gross amount as at 1 January 2023
1,062,246
31,305
1,093,551
New financial assets originated or purchased
14,858,652
137
14,858,789
Financial assets derecognised (other than write-
offs)
(13,219,223)
(24,490)
(13,243,713)
Gross amount as at 31 December 2023
2,701,675
6,952
2,708,627
New financial assets originated or purchased
1,991,832
26,196
2,018,028
Financial assets derecognised (other than write-offs)
(2,648,879)
(484)
(2,649,363)
Gross amount as at 31 December 2024
2,044,628
32,664
2,077,292
Movement of loss allowance of cash, amounts due from banks and balances with the National Bank of Hungary
Stage 1
Stage 2
Total
Loss allowance as at 1 January 2023
481
872
1,353
Net remeasurement of loss allowance
46
(744)
(698)
New financial assets originated or purchased
30
-
30
Financial assets derecognised (other than write-offs)
(290)
-
(290)
Loss allowance as at 31 December 2023
267
128
395
Net remeasurement of loss allowance
(197)
134
(63)
New financial assets originated or purchased
1,808
-
1,808
Financial assets derecognised (other than write-offs)
(27)
-
(27)
Loss allowance as at 31 December 2024
1,851
262
2,113
Movement of gross carrying amount of placements with other banks
Stage 1
Stage 2
Stage 3
Total
Gross amount as at 1 January 2023
2,906,852
10,247
1,512
2,918,611
New financial assets originated or purchased
1,441,924
9,987
887
1,452,798
Financial assets derecognised (other than write-
offs)
(1,651,204)
(10,813)
(84)
(1,662,101)
Gross amount as at 31 December 2023
2,697,572
9,421
2,315
2,709,308
Transfer to Stage 2
-
887
(887)
-
New financial assets originated or purchased
1,165,384
1,990
-
1,167,374
Financial assets derecognised (other than write-
offs)
(921,989)
(645)
(293)
(922,927)
Gross amount as at 31 December 2024
2,940,967
11,653
1,135
2,953,755
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
478
NOTE 36:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
36.1.
Credit risk [continued]
36.1.3. Changes in the Gross carrying amount and in the Loss allowance of financial assets at amortised cost and
fair value through other comprehensive income by IFRS 9 stages [continued]
Movement of loss allowance of placements with other banks
Stage 1
Stage 2
Stage 3
Total
Loss allowance as at 1 January 2023
16,037
1,233
1,512
18,782
Net remeasurement of loss allowance
(9,159)
3
(84)
(9,240)
New financial assets originated or purchased
1,418
1,091
887
3,396
Financial assets derecognised (other than write-offs)
(4,831)
(1,232)
-
(6,063)
Loss allowance as at 31 December 2023
3,465
1,095
2,315
6,875
Transfer to Stage 2
-
887
(887)
-
Net remeasurement of loss allowance
(725)
(649)
(293)
(1,667)
New financial assets originated or purchased
864
-
-
864
Financial assets derecognised (other than write-offs)
(853)
-
-
(853)
Loss allowance as at 31 December 2024
2,751
1,333
1,135
5,219
Movement of gross carrying amount of repo receivables
Stage 1
Gross amount as at 1 January 2023
248,696
New financial assets originated or purchased
1,808,640
Financial assets derecognised (other than write-offs)
(1,855,311)
Gross amount as at 31 December 2023
202,025
New financial assets originated or purchased
1,065,205
Financial assets derecognised (other than write-offs)
(1,028,797)
Gross amount as at 31 December 2024
238,433
Movement of loss allowance of repo receivables
Stage 1
Loss allowance as at 1 January 2023
2,167
New financial assets originated or purchased
367
Financial assets derecognised (other than write-offs)
(2,167)
Loss allowance as at 31 December 2023
367
New financial assets originated or purchased
2,255
Financial assets derecognised (other than write-offs)
(2,268)
Loss allowance as at 31 December 2024
354
Movement of gross carrying amount of securities at amortised cost
Stage 1
Stage 2
Stage 3
Total
Gross amount as at 1 January 2023
3,273,240
6,713
38,270
3,318,223
Transfer to Stage 1
1,403
-1,403
-
-
Transfer to Stage 2
-1,203
1,203
-
-
New financial assets originated or
purchased
199,101
2
-
199,103
Financial assets derecognised (other than
write-offs)
-776,231
-554
-3,468
-780,253
Gross amount as at 31 December 2023
2,696,310
5,961
34,802
2,737,073
New financial assets originated or
purchased
925,394
-
3,809
929,203
Financial assets derecognised (other than
write-offs)
-291,655
-445
-1,120
-293,220
Gross amount as at 31 December 2024
3,330,049
5,516
37,491
3,373,056
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
479
NOTE 36:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
36.1.
Credit risk [continued]
36.1.3. Changes in the Gross carrying amount and in the Loss allowance of financial assets at amortised cost and
fair value through other comprehensive income by IFRS 9 stages [continued]
Movement of loss allowance of securities at amortised cost
Stage 1
Stage 2
Stage 3
Total
Loss allowance as at 1 January 2023
21,746
300
13,804
35,850
Net remeasurement of loss allowance
(5,424)
(27)
(1,202)
(6,653)
New financial assets originated or purchased
163
-
-
163
Financial assets derecognised (other than
write-offs)
(3,135)
-
-
(3,135)
Loss allowance as at 31 December 2023
13,350
273
12,602
26,225
Net remeasurement of loss allowance
(3,307)
232
14,792
11,717
New financial assets originated or purchased
1,420
-
1,050
2,470
Financial assets derecognised (other than
write-offs)
(406)
-
(1,095)
(1,501)
Loss allowance as at 31 December 2024
11,057
505
27,349
38,911
Movement of gross carrying amount of FVOCI debt instruments
Stage 1
Stage 3
Total
Gross amount as at 1 January 2023
751,838
27,415
779,253
New financial assets originated or purchased
164,182
3,479
167,661
Financial assets derecognised (other than
write-offs)
(408,543)
(21)
(408,564)
Gross amount as at 31 December 2023
507,477
30,873
538,350
New financial assets originated or purchased
151,534
27
151,561
Financial assets derecognised (other than write-
offs)
(121,866)
-9,377
(131,243)
Gross amount as at 31 December 2024
537,145
21,523
558,668
Movement of loss allowance of FVOCI debt instruments
Stage 1
Stage 3
Total
Loss allowance as at 1 January 2023
4,762
24,399
29,161
Net remeasurement of loss allowance
(1,741)
(1,479)
(3,220)
New financial assets originated or purchased
172
-
172
Financial assets derecognised (other than write-offs)
(1,768)
-
(1,768)
Loss allowance as at 31 December 2023
1,425
22,920
24,345
Net remeasurement of loss allowance
(404)
28,373
27,969
New financial assets originated or purchased
98
-
98
Financial assets derecognised (other than write-offs)
(116)
-
(116)
Loss allowance as at 31 December 2024
1,003
51,293
52,296
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
480
NOTE 36:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
36.1.
Credit risk [continued]
36.1.4. Loan portfolio by internal ratings
As at 31 December 2024
Gross carrying amount
Internal rating grade
Stage1
Stage2
Stage3
POCI
Total
High grade (1-4)
2,178,673
149,572
-
300
2,328,545
Medium grade (5-7)
1,593,671
535,102
-
8,894
2,137,667
Low grade (8-9)
51,876
189,151
-
275
241,302
Non performing
-
-
107,346
681
108,027
Total
3,824,220
873,825
107,346
10,150
4,815,541
Accumulated loss allowance
Internal rating grade
Stage1
Stage2
Stage3
POCI
Total
High grade (1-4)
7,914
7,804
-
1
15,719
Medium grade (5-7)
15,382
42,146
-
382
57,910
Low grade (8-9)
2,283
23,313
-
3
25,599
Non performing
-
-
45,405
113
45,518
Total
25,579
73,263
45,405
499
144,746
As at 31 December 2023
Gross carrying amount
Internal rating grade
Stage1
Stage2
Stage3
POCI
Total
High grade (1-4)
1,748,019
155,527
-
275
1,903,821
Medium grade (5-7)
2,030,681
572,339
-
9,136
2,612,156
Low grade (8-9)
67,010
154,020
-
195
221,225
Non performing
-
-
90,068
1,504
91,572
Total
3,845,710
881,886
90,068
11,110
4,828,774
-
-
-
-
Accumulated loss allowance
Internal rating grade
Stage1
Stage2
Stage3
POCI
Total
High grade (1-4)
9,485
8,791
-
3
18,279
Medium grade (5-7)
19,488
39,153
-
462
59,103
Low grade (8-9)
4,736
21,879
-
6
26,621
Non performing
-
-
42,925
487
43,412
Total
33,709
69,823
42,925
958
147,415
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
481
NOTE 36:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
36.1.
Credit risk [continued]
36.1.5. Loan portfolio by countries
An analysis of carrying amount of the non-qualified and qualified gross loan portfolio by country is as follows:
31 December 2024
31 December 2023
Country
Gross loan and
placements with
other banks
portfolio
Loss
allowance
Gross loan and
placements with
other banks
portfolio
Loss
allowance
Hungary
5,918,775
(123,772)
5,406,144
(126,770)
Malta
488,110
(260)
647,521
(1,220)
Bulgaria
470,979
(5,192)
351,368
(3,123)
Serbia
295,129
(8,132)
243,010
(3,697)
Croatia
257,233
(432)
195,198
(433)
Romania
86,305
(1,572)
149,356
(3,206)
Slovakia
69,201
(406)
38,922
(891)
France
66,514
(59)
123,582
(84)
Ukraine
54,760
(401)
83,328
(1,579)
Germany
53,597
(220)
53,926
(152)
Other
247,126
(9,873)
447,752
(13,502)
Loans, placements with other banks
and repo receivables at amortised
cost total
8,007,729
(150,319)
7,740,107
(154,657)
Hungary
998,388
-
934,824
-
Other
22
-
24
-
Loans at fair value total
998,410
-
934,848
-
Loans, placements with other banks
and repo receivables total
9,006,139
(150,319)
8,674,955
(154,657)
36.1.6. Loan portfolio classification by economic activities
Loans at amortised cost by economic
activities
31 December 2024
31 December 2023
Gross amount
Loss
allowance
Gross amount
Loss
allowance
Retail
751,980
50,950
758,426
66,372
Agriculture, forestry and fishing
227,377
5,330
215,325
5,649
Manufacturing, mining and quarrying
and other industry
543,565
20,407
492,620
14,746
Construction
238,030
10,016
202,542
8,896
Wholesale and retail trade, transportation
and storage accommodation and
food service activities
737,154
17,837
733,631
17,259
Information and communication
49,521
1,127
24,086
618
Financial and insurance activities
938,462
4,703
1,215,215
7,965
Real estate activities
522,669
16,852
503,510
17,113
Professional, scientific, technical,
administration
264,107
5,020
242,818
4,106
Public administration, defence,
education, human health and social
work activities
124,419
2,112
119,196
1,704
Other services
418,257
10,392
321,405
2,987
Total
4,815,541
144,746
4,828,774
147,415
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
482
NOTE 36:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
36.1.
Credit risk [continued]
36.1.7. Collaterals
The collateral value held by the Bank by collateral types is as follows (total collateral value). The collaterals cover loans
as well as off-balance sheet exposures.
Types of collateral
31 December
2024
31 December
2023
Mortgages
2,186,450
1,977,401
Guarantees and warranties
2,078,055
1,961,382
Deposit
281,685
214,085
from this: Cash
96,455
94,486
Securities
185,230
119,599
Other
91
147
Total
4,546,281
4,153,015
The collateral value held by the Bank by collateral types is as follows (to the extent of the exposures). The collaterals
cover loans as well as off-balance sheet exposures.
Types of collateral
31 December
2024
31 December
2023
Mortgage
1,587,521
1,523,976
Guarantees and warranties
1,847,223
1,662,645
Deposit
134,425
145,591
from this: Cash
80,359
89,211
Securities
54,066
56,380
Other
91
90
Total
3,569,260
3,332,302
The coverage level of loan portfolio to the extent of the exposures increased from 44,21% to 45,94% as at 31 December
2024, while the coverage to the total collateral value decreased from 55,09% to 58,52%.
The collateral value (total collateral value) held by the Bank related to impaired loan portfolio (Stage 3 and POCI loans)
is as follows:
For the year ended 31 December 2024
Gross carrying
amount
Loss
allowance
Carrying
amount
Collateral
value
Retail consumer loans
18,904
(12,058)
6,846
4,655
Mortgage loans
5,480
(641)
4,839
24,668
Corporate loans
93,112
(33,205)
59,907
122,681
Total
117,496
(45,904)
71,592
152,004
For the year ended 31 December 2023
Gross carrying
amount
Loss
allowance
Carrying
amount
Collateral
value
Retail consumer loans
19,812
(14,569)
5,243
644
Mortgage loans
6,811
(992)
5,819
33,515
Corporate loans
74,555
(28,322)
46,233
82,595
Total
101,178
(43,883)
57,295
116,754
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
483
NOTE 36:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
36.1.
Credit risk [continued]
36.1.7. Collaterals [continued]
Maximum exposure to credit risk as at 31 December 2024
Maximum
exposure
to credit
risk
Fair value of collateral
Net
exposure
Coverage
ECL
Cash
Securities
Guarantees
Property
Other
Offsetting
arrangements
Surplus
Collateral
total
Cash, amounts due from banks and
balances with the National Bank of
Hungary
2,075,179
-
-
-
-
-
-
-
-
2,075,179
0%
2,113
Placements with other banks
2,948,536
-
-
106,264
-
-
-
(3,386)
102,878
2,845,658
3%
5,219
Repo receivables
238,079
-
250,481
-
-
-
-
(14,172)
236,309
1,770
99%
354
Retail consumer loans
659,121
2
459
969
11,848
-
-
(8,677)
4,601
654,520
1%
50,893
Mortgage loans
45,849
-
-
2,179
357,694
-
-
(314,082)
45,791
58
100%
752
Municipal loans
102,852
3
-
8,170
10,295
-
-
(6,412)
12,056
90,796
12%
1,765
Corporate loans
6,769,406
38,644
215,778
953,328
3,034,451
14
- (2,056,891)
2,185,324
4,584,082
32%
103,904
Loans at amortised cost
7,577,228
38,649
216,237
964,646
3,414,288
14
- (2,386,062)
2,247,772
5,329,456
30%
157,314
Securities at amortised cost
3,334,145
-
-
-
-
-
-
-
-
3,334,145
0%
38,911
Financial assets at amortised cost total
16,173,167
38,649
466,718
1,070,910
3,414,288
14
- (2,403,620)
2,586,959
13,586,208
16%
203,911
Derivative financial assets
214,191
74,570
-
-
-
-
54,939
-
129,509
84,682
60%
-
Held-for-trading financial assets1
446,012
-
-
-
-
-
-
-
-
446,012
0%
-
Loans mandatorily measured at fair
value through profit or loss
998,410
-
-
897,781
-
-
-
(38,979)
858,802
139,608
86%
-
Financial assets at fair value through
profit or loss total
1,659,397
74,570
-
897,781
-
-
54,939
(38,979)
988,311
671,086
60%
-
FVOCI debt instruments
558,668
-
-
-
-
-
-
-
-
558,668
0%
52,296
FVOCI debt instruments total
558,668
-
-
-
-
-
-
-
-
558,668
0%
52,296
Financial assets total
18,391,232 113,219
466,718
1,968,691
3,414,288
14
54,939 (2,442,599)
3,575,270
14,815,962
19%
256,207
Financial guarantees
1,897,269
43,147
1,534
42,925
184,743
-
-
(61,814)
210,535
1,686,734
11%
6,449
Accreditive
5,144
-
-
-
395
-
-
-
395
4,749
8%
37
Off-balance sheet items total
1,902,413
43,147
1,534
42,925
185,138
-
-
(61,814)
210,930
1,691,483
11%
6,486
Total
20,293,645 156,366
468,252
2,011,616
3,599,426
14
54,939 (2,504,413)
3,786,200
16,507,445
19%
262,693
1 Excluding held-for-trading equity instruments
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
484
NOTE 36:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
36.1.
Credit risk [continued]
36.1.7. Collaterals [continued]
Maximum exposure to credit risk as at 31 December 2023
Maximum
exposure
to credit
risk
Fair value of collateral
Net
exposure
Coverage
ECL
Cash
Securities
Guarantees
Property
Other
Offsetting
arrangements
Surplus
Collateral
total
Cash, amounts due from banks and
balances with the National Bank of
Hungary
2,708,232
-
-
-
-
-
-
-
-
2,708,232
0%
395
Placements with other banks
2,702,433
-
-
-
-
-
-
-
-
2,702,433
0%
6,875
Repo receivables
201,658
-
220,654
-
-
-
-
(21,868)
198,786
2,872
99%
367
Retail consumer loans
572,912
1,621
204
1,941
16,620
-
-
(7,128)
13,258
559,654
2%
63,232
Mortgage loans
53,996
-
-
2,515
386,730
-
-
(335,249)
53,996
-
100%
1,219
Municipal loans
102,003
1
-
9,191
11,913
-
-
(5,990)
15,115
86,888
15%
1,469
Corporate loans
6,294,364
42,390
255,404
903,666
2,599,109
242
- (1,704,294)
2,096,517
4,197,847
33%
93,299
Loans at amortised cost
7,023,275
44,012
255,608
917,313
3,014,372
242
- (2,052,661)
2,178,886
4,844,389
31%
159,219
Securities at amortised cost
2,710,848
-
-
-
-
-
-
-
-
2,710,848
0%
26,225
Financial assets at amortised cost total
15,346,446
44,012
476,262
917,313
3,014,372
242
- (2,074,529)
2,377,672
12,968,774
15%
193,081
Derivative financial assets
218,427
60,721
-
-
-
-
76,853
-
137,574
80,853
63%
-
Held-for-trading financial assets1
25,996
-
-
-
-
-
-
-
-
25,996
0%
-
Loans mandatorily measured at fair
value through profit or loss
934,848
-
-
865,054
-
-
-
(44,555)
820,499
114,349
88%
-
Financial assets at fair value through
profit or loss total
1,180,566
60,721
-
865,054
-
-
76,853
(44,555)
958,073
222,493
81%
-
FVOCI debt instruments
538,350
-
-
-
-
-
-
-
-
538,350
0%
24,345
FVOCI debt instruments total
538,350
-
-
-
-
-
-
-
-
538,350
0%
24,345
Financial assets total
17,065,362 104,733
476,262
1,782,367
3,014,372
242
76,853 (2,119,084)
3,335,745
13,729,617
20%
217,426
Financial guarantees
1,995,500
47,241
1,801
19,442
157,085
-
-
(44,554)
181,015
1,814,485
9%
4,247
Accreditive
8,586
-
-
-
-
-
-
-
-
8,586
0%
40
Off-balance sheet items total
2,004,086
47,241
1,801
19,442
157,085
-
-
(44,554)
181,015
1,823,071
9%
4,287
Total
19,069,448 151,974
478,063
1,801,809
3,171,457
242
76,853 (2,163,638)
3,516,760
15,552,688
18%
221,713
1 Excluding held-for-trading equity instruments
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
485
NOTE 36:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
36.1.
Credit risk [continued]
36.1.7. Collaterals
Returns from realization of collaterals taken into possession by types of collateral
Types of collateral
31 December
2024
31 December
2023
Real estate
128
178
Guarantee
33,402
25,509
Bail
31
-
Other
140
80
Proceeds from enforcement of collaterals
33,701
25,767
36.1.8. Restructured loans
31 December 2024
31 December 2023
Gross
portfolio
Loss
allowance
Gross
portfolio
Loss
allowance
Consumer loans
17,632
(8,727)
12,757
(7,064)
Mortgage loans
1,528
(25)
1,829
(65)
Corporate loans
64,551
(4,857)
103,897
(5,312)
SME loans
13,605
(892)
21,555
(1,508)
Municipal loans
81
(2)
75
(1)
Total
97,398
(14,503)
140,114
(13,949)
Restructured portfolio definition
The forborne definition used by the Bank is based on EU 2015/227 regulation.
Restructuring (forbearance) is a modification of the contract – initiated by either the client or the bank – that provides a
concession or allowance towards the client in respect to the client’s current or future financial difficulties. The table of
restructured loans contains exposures classified as performing forborne. An exposure is considered performing forborne
if the conditions of the non-performing status are not met at the time of the restructuring, or the exposure fulfilled the
requirements of the minimum one-year cure period as non-performing forborne.
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
486
NOTE 36:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
36.1.
Credit risk [continued]
36.1.9. Financial instruments by rating categories1
Held-for-trading securities as at As at 31 December 2024
A1
A2
A3
Aa2
Aa3
Aaa
Ba1
Ba2
Ba3
Baa1
Baa2
Baa3
N/A
Total
Government bonds
-
2,499
950
-
3,025
2,327
-
1,648
1,707
-
41,843
3,499
-
57,498
Other bonds
-
-
173
-
-
-
1,183
-
-
-
4,287
472
382,482
388,597
Investment fund units
-
-
-
-
-
-
-
-
-
-
-
-
377
377
Hungarian government discounted Treasury Bills
-
-
-
-
-
-
-
-
-
-
207
-
-
207
Shares
17
42
52
12
11
-
145
-
5
22
56
54
781
1,197
Mortgage bonds
93
-
-
-
-
-
-
-
-
-
-
15
9
117
Total
110
2,541
1,175
12
3,036
2,327
1,328
1,648
1,712
22
46,393
4,040
383,649
447,993
Held-for-trading securities as at 31 December 2023
A1
A2
A3
Aa2
Aa3
Aaa
B1
Ba1
Ba2
Ba3
Baa1
Baa2
Baa3
N/A
Total
Government bonds
-
532
-
23
-
27
625
-
540
-
-
19,695
910
-
22,352
Other bonds
-
-
-
-
-
-
-
-
-
-
-
2,212
40
2,185
4,437
Investment fund units
-
-
-
-
-
-
-
-
-
-
-
-
-
320
320
Hungarian government discounted Treasury
Bills
-
-
-
-
-
-
-
-
-
-
-
71
-
-
71
Shares
-
56
33
23
52
-
-
39
-
4
17
20
2
267
513
Mortgage bonds
-
-
-
-
-
-
-
-
-
-
-
-
16
95
111
Total
-
588
33
46
52
27
625
39
540
4
17
21,998
968
2,867
27,804
Securities mandatorily measured at fair value through profit or loss as at As at 31 December 2024
N/A
Investment fund units
30,878
Mortgage bonds
1,304
Total
32,182
1 Moody’s ratings
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
487
NOTE 36:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
36.1.
Credit risk [continued]
36.1.9. Financial instruments by rating categories1
Securities mandatorily measured at fair value through profit or loss as at 31 December 2023
N/A
Investment fund units
31,124
Shares
1,808
Total
32,932
FVOCI securities as at 31 December 2024
A1
A3
Ba1
Ba2
Baa1
Baa2
Baa3
N/A
WR
Total
Government bonds
-
14,385
-
7,020
5,156
134,199
2,888
-
21,523
185,171
Mortgage bonds
11,751
-
-
-
-
-
306,276
8,923
-
326,950
Other bonds
-
-
4,170
26,605
-
-
-
15,686
-
46,461
Hungarian Treasury Bills
-
-
-
-
-
86
-
-
-
86
Non-treading equity instruments
-
-
-
-
-
-
-
33,934
-
33,934
Total
11,751
14,385
4,170
33,625
5,156
134,285
309,164
58,543
21,523
592,602
FVOCI securities as at 31 December 2023
Government bonds
A1
Ba1
Ba2
Baa1
Baa2
Baa3
N/A
WR
Total
Mortgage bonds
660
-
6,259
4,082
144,857
2,654
-
30,873
189,385
Other bonds
59,793
3,840
-
-
-
231,895
8,881
-
300,569
Hungarian Treasury Bills
-
-
24,424
-
-
-
19,896
-
48,160
Non-treading equity instruments
-
-
-
-
235
-
1
-
236
Total
-
-
-
-
-
-
21,177
-
21,177
Government bonds
60,453
3,840
30,683
4,082
145,092
234,549
49,955
30,873
559,527
1 Moody’s ratings
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
488
NOTE 36:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
36.1.
Credit risk [continued]
36.1.9. Financial instruments by rating categories1
Securities at amortised cost as at 31 December 2024
A1
A2
A3
Aaa
Ba1
Ba2
Baa1
Baa2
Baa3
N/A
WR
Total
Treasury bills
-
-
-
-
-
-
-
92,894
-
-
-
92,894
Government bonds
-
35,427
46,825
295,652
-
21,021
54,874
2,274,318
130,361
-
10,143
2,868,621
Corporate bonds
1,998
10,090
8,620
-
-
-
12,285
4,099
9,385
296,249
-
342,726
Mortgage bonds
18,057
-
-
-
-
-
-
-
-
11,847
-
29,904
Total
20,055
45,517
55,445
295,652
-
21,021
67,159
2,371,311
139,746
308,096
10,143
3,334,145
Securities at amortised cost as at 31 December 2023
A1
A2
A3
Aaa
Ba1
Ba2
Baa1
Baa2
Baa3
N/A
WR
Total
Government bonds
1,196
33,032
36,307
260,116
-
19,695
50,205
1,911,133
39,052
1
22,175
2,372,912
Corporate bonds
1,847
8,983
8,039
-
1,912
-
11,444
3,822
28,324
248,857
-
313,228
Mortgage bonds
13,020
-
-
-
-
-
-
-
-
11,688
-
24,708
Total
16,063
42,015
44,346
260,116
1,912
19,695
61,649
1,914,955
67,376
260,546
22,175
2,710,848
1 Moody’s ratings
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
489
NOTE 36:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
36.1.
Credit risk [continued]
36.1.10. Securities (held for trading, mandatorily FVTPL, FVOCI and amortised cost) in a country breakdown
Country
31 December 2024
31 December 2023
Gross
carrying
amount
Loss
allowance
Gross
carrying
amount
Loss
allowance
Hungary
2,447,818
(11,107)
1,975,451
(12,904)
United States of America
419,981
(491)
370,997
(672)
Luxembourg
281,855
(7,572)
265,082
(3,968)
Spain
57,143
(53)
53,209
(82)
Russia
27,199
(19,367)
24,978
(8,533)
Portugal
17,497
(10)
16,284
(21)
Poland
8,624
(4)
-
-
Other
112,939
(307)
31,072
(45)
Securities at amortised cost total
3,373,056
(38,911)
2,737,073
(26,225)
Hungary
460,282
-
395,183
-
Luxembourg
56,504
-
93,077
-
Other
41,882
-
50,090
-
FVOCI debt instruments total
558,668
-
538,350
-
United States of America
16,781
-
6,332
-
Austria
16,625
-
14,317
-
Other
528
-
528
-
Non-trading equity instruments designated to
measure at fair value through other
comprehensive income
33,934
-
21,177
-
Hungary
420,179
-
8,849
-
Luxembourg
17,159
-
10,167
-
United States of America
3,305
-
7,633
-
Other
7,350
-
1,155
-
Held for trading securities total
447,993
-
27,804
-
Hungary
24,961
-
23,916
-
Luxembourg
4,629
-
6,058
-
United States of America
1,304
-
1,808
-
Portugal
1,288
-
1,150
-
Securities mandatorily measured at fair value
through profit or loss
32,182
-
32,932
-
Securities total
4,445,833
(38,911)
3,357,336
(26,225)
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
490
NOTE 36:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
36.2.
Maturity analysis of assets and liabilities and liquidity risk
Liquidity risk is a measure of the extent to which the Bank may be required to raise funds to meet its commitments
associated with financial instruments. The Bank maintains its liquidity profiles in accordance with regulations laid down
by the NBH.
The essential aspect of the liquidity risk management strategy is to identify all relevant systemic and idiosyncratic sources
of liquidity risk and to measure the probability and severity of such events. During liquidity risk management the Bank
considers the effect of liquidity risk events caused by reasons arising in the bank business line (deposit withdrawal), the
national economy (exchange rate shock, yield curve shock) and the global financial system (capital market shock).
In line with the Bank’s risk management policy liquidity risks are measured and managed on multiply hierarchy levels
and applying integrated unified VaR based methodology. The basic requirement is that the Bank must keep high quality
liquidity reserves by means it can fulfil all liabilities when they fall due without material additional costs.
The liquidity reserves can be divided into two parts. There are separate decentralized liquid asset portfolios at subsidiary
level and a centralized flexible liquidity pool at Group level. The reserves at subsidiary levels are held to cover the relevant
shocks of the subsidiaries which may arise in local currencies (deposit withdrawal, local capital market shock, unexpected
business expansion), while the centralized liquidity pool is held to cover the OTP Bank’s separate shocks (deposit-, yield
curve- and exchange rate shocks) and all group member’s potential shocks that may arise in foreign currencies (deposit
withdrawal, capital market shock).
The recalculation of shocks is made at least quarterly while the recalibration of shock measurement models and review
of the risk management methodology is an annual process. The monitoring of liquidity reserves for both centralized and
decentralized liquid asset portfolio has been built into the daily reporting process.
Due to the balance sheet adjustment process (deleveraging) experienced in the last few years, the liquidity reserves of the
Bank increased significantly while the liquidity risk exposure has decreased considerably. Currently the (over)coverage
of risk liquidity risk exposure by high quality liquid assets is at all-time record highs. There were no material changes in
the liquidity risk management process for the year ended 31 December 2024.
The following tables provide an analysis of assets and liabilities about the non-discounted cash flow into relevant maturity
groupings based on the remaining period from the balance sheet date to the contractual maturity date. It is presented under
the most prudent consideration of maturity dates where options or repayment schedules allow for early repayment
possibilities.
The contractual amounts disclosed in the maturity analyses are the contractual undiscounted cash flows like gross finance
lease obligations (before deducting finance charges); prices specified in forward agreements to purchase financial assets
for cash; net amounts for pay-floating/receive-fixed interest rate swaps for which net cash flows are exchanged;
contractual amounts to be exchanged in a derivative financial instrument for which gross cash flows are exchanged; gross
loan commitments.
Such undiscounted cash flows differ from the amount included in the statement of financial position because the amount
in that statement is based on discounted cash flows. When the amount payable is not fixed, the amount disclosed is
determined by reference to the conditions existing at the end of the reporting period. For example, when the amount
payable varies with changes in an index, the amount disclosed may be based on the level of the index at the end of the
period.
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
491
NOTE 36:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
36.2.
Maturity analysis of assets and liabilities and liquidity risk [continued]
As at 31 December 2024
Within 3
months
Within one
year and
over 3
months
Within 5
years and
over one
year
Over 5
years
Without
maturity
Total
Cash, amounts due from banks and balances with
the National Bank of Hungary
2,077,292
-
-
-
-
2,077,292
Placements with other banks
332,486
221,323
1,634,750
765,327
-
2,953,886
Repo receivables
238,433
-
-
-
-
238,433
Financial assets at fair value through profit or
loss
385,377
2,569
40,290
21,158
20,242
469,636
Securities at fair value through other
comprehensive income
5,868
93,245
454,446
74,995
136,399
764,953
Securities at amortised cost
59,149
493,039
1,644,569
1,307,052
-
3,503,809
Loans at amortised cost
1,183,589
1,262,281
1,571,525
915,146
-
4,932,541
Loans mandatorily measured at fair value
through profit or loss
21,066
24,296
146,723
734,780
-
926,865
Investment properties
-
-
-
-
4,227
4,227
Investments in subsidiaries, associates and other
investments
-
-
-
-
2,593,722
2,593,722
Other financial assets
291,864
1,235
-
-
-
293,099
TOTAL ASSETS
4,595,124
2,097,988
5,492,303
3,818,458
2,754,590
18,758,463
Amounts due to banks and deposits from the
National Bank of Hungary and other banks
585,712
435,876
525,485
87,541
-
1,634,614
Deposits from customers
10,761,785
106,036
20,732
3,371
-
10,891,924
Repo liabilities
132,122
59,692
35,818
-
-
227,632
Liabilities from issued securities
65,947
64,267
1,401,099
204,680
-
1,735,993
Subordinated bonds and loans
3,856
1,912
10,586
354,468
-
370,822
Financial liabilities at fair value through profit or
loss
650
1,059
5,130
10,160
-
16,999
Leasing liabilities
2,114
6,932
25,351
29,983
-
64,380
Other financial liabilities
331,151
22,240
3,705
-
-
357,096
TOTAL LIABILITIES
11,883,337
698,014
2,027,906
690,203
-
15,299,460
NET POSITION
(7,288,213)
1,399,974
3,464,397
3,128,255
2,754,590
3,459,003
Receivables from derivative financial
instruments classified as held for trading
6,463,067
1,621,571
823,267
287,608
-
9,195,513
Liabilities from derivative financial instruments
classified as held for trading
(6,433,805)
(1,627,283)
(806,626)
(286,507)
-
(9,154,221)
Net position of derivative financial
instruments classified as held for trading
29,262
(5,712)
16,641
1,101
-
41,292
Receivables from derivative financial
instruments designated as hedge accounting
38,609
236,429
855,933
15,508
-
1,146,479
Liabilities from derivative financial instruments
designated as hedge accounting
(30,267)
(240,753)
(813,727)
(9,922)
-
(1,094,669)
Net position of derivative financial
instruments designated as hedging
accounting
8,342
(4,324)
42,206
5,586
-
51,810
Net position of derivative financial
instruments total
37,604
(10,036)
58,847
6,687
-
93,102
Commitments to extend credit
2,536,990
-
-
-
-
2,536,990
Confirmed letters of credit
5,181
-
-
-
-
5,181
Factoring loan commitment
382,011
-
-
-
-
382,011
Bank guarantees
122,813
253,973
502,016
1,024,916
-
1,903,718
Off-balance sheet commitments
3,046,995
253,973
502,016
1,024,916
-
4,827,900
Analysis for net position of assets and liabilities are calculated in accordance with IFRS 7, therefore certain financial
instruments are presented in the earliest period in which the Bank could be required to pay. On-demand deposits are
presented in the earliest (within 3 month) period category, however based on Management’s discretion the Bank has
appropriate liquidity reserves as maintenance and management of liquidity risk.
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
492
NOTE 36:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
36.2.
Maturity analysis of assets and liabilities and liquidity risk [continued]
As at 31 December 2023
Within 3
months
Within one
year and
over 3
months
Within 5
years and
over one
year
Over 5
years
Without
maturity
Total
Cash, amounts due from banks and balances
with the National Bank of Hungary
2,708,628
-
-
-
-
2,708,628
Placements with other banks
577,692
120,424
1,294,775
716,538
-
2,709,429
Repo receivables
202,024
-
-
-
-
202,024
Financial assets at fair value through profit or
loss
12,055
1,142
10,053
3,754
19,341
46,345
Securities at fair value through other
comprehensive income
5,891
43,109
310,370
231,586
111,159
702,115
Securities at amortised cost
31,807
61,118
1,730,399
974,048
-
2,797,372
Loans at amortised cost
1,187,849
1,084,559
1,632,019
1,049,524
-
4,953,951
Loans mandatorily measured at fair value
through profit or loss
22,541
23,591
144,052
706,726
-
896,910
Investment properties
-
-
-
-
4,203
4,203
Investments in subsidiaries, associates and
other investments
-
-
-
-
2,001,951
2,001,951
Other financial assets
304,197
2,517
-
-
-
306,714
TOTAL ASSETS
5,052,684
1,336,460
5,121,668
3,682,176
2,136,654
17,329,642
Amounts due to banks and deposits from the
National Bank of Hungary and other
banks
517,908
147,923
846,764
283,882
-
1,796,477
Deposits from customers
10,578,532
131,343
15,091
9,274
-
10,734,240
Repo liabilities
196,811
5,347
241,536
-
-
443,694
Liabilities from issued securities
105,747
82,140
969,875
-
-
1,157,762
Subordinated bonds and loans
6,174
1,901
8,956
509,277
-
526,308
Financial liabilities at fair value through profit
or loss
740
1,077
5,387
11,318
-
18,522
Leasing liabilities
1,794
5,716
41,884
18,888
-
68,282
Other financial liabilities
239,293
22,807
1,578
-
-
263,678
TOTAL LIABILITIES
11,646,999
398,254
2,131,071
832,639
-
15,008,963
NET POSITION
(6,594,315)
938,206
2,990,597
2,849,537
2,136,654
2,320,679
Receivables from derivative financial
instruments classified as held for trading
8,329,035
1,398,729
972,506
250,098
-
10,950,368
Liabilities from derivative financial
instruments classified as held for trading
(8,172,061)
(1,388,901)
(1,008,090)
(247,029)
-
(10,816,081)
Net position of derivative financial
instruments classified as held for
trading
156,974
9,828
(35,584)
3,069
-
134,287
Receivables from derivative financial
instruments designated as hedge
accounting
86,989
283,374
759,903
211,105
-
1,341,371
Liabilities from derivative financial
instruments designated as hedge
accounting
(84,445)
(297,109)
(1,810,394)
(204,953)
-
(2,396,901)
Net position of derivative financial
instruments designated as hedging
accounting
2,544
(13,735)
(1,050,491)
6,152
-
(1,055,530)
Net position of derivative financial
instruments total
159,518
(3,907)
(1,086,075)
9,221
-
(921,243)
Commitments to extend credit
1,987,539
-
-
-
-
1,987,539
Confirmed letters of credit
8,626
-
-
-
-
8,626
Factoring loan commitment
366,181
-
-
-
-
366,181
Bank guarantees
268,861
210,113
265,867
1,254,906
-
1,999,747
Off-balance sheet commitments
2,631,207
210,113
265,867
1,254,906
-
4,362,093
Analysis for net position of assets and liabilities are calculated in accordance with IFRS 7, therefore certain financial
instruments are presented in the earliest period in which the Bank could be required to pay. On-demand deposits are
presented in the earliest (within 3 month) period category, however based on Management’s discretion the Bank has
appropriate liquidity reserves as maintenance and management of liquidity risk.
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
493
NOTE 36:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
36.3.
Net foreign currency position and foreign currency risk
As at 31 December 2024
USD
EUR
CHF
Others
Total
Assets
615,111
3,860,200
9,286
154,291
4,638,888
Liabilities
(926,271)
(4,157,697)
(56,168) (107,943)
(5,248,079)
Derivative financial instruments
299,572
(144,966)
45,953 (20,521)
180,038
Net position
(11,588)
(442,463)
(929)
25,827
(429,153)
As at 31 December 2023
USD
EUR
CHF
Others
Total
Assets
648,226
3,613,710
7,769
232,728
4,502,433
Liabilities
(956,648)
(4,373,571)
(62,142) (92,143)
(5,484,504)
Derivative financial instruments
299,135
433,387
54,576 (137,542)
649,556
Net position
(9,287)
(326,474)
203
3,043
(332,515)
The table above provides an analysis of the Bank’s main foreign currency exposures. The remaining foreign currencies
are shown within ‘Others’. The Bank monitors its foreign exchange position for compliance with the regulatory
requirements of the NBH and its own limit system established in respect of limits on open positions. The measurement
of the Bank’s open its currency position involves monitoring the VaR limit on the foreign exchange exposure of the Bank.
In the table Derivative financial instruments are stated at fair value.
36.4.
Interest rate risk management
Interest rate risk is the risk that the value of a financial instrument will fluctuate due to changes in market interest rates.
The length of time for which the rate of interest is fixed on a financial instrument, therefore, indicates to what extent it is
exposed to interest rate risk.
The majority of the Bank's interest bearing assets and liabilities are structured to match either short-term assets and short-
term liabilities, or long-term assets and liabilities with repricing opportunities within one year, or long-term assets and
corresponding liabilities where repricing is performed simultaneously.
In addition, the significant spread existing between the different types of interest bearing assets and liabilities enables the
Bank to benefit from a high level of flexibility in adjusting for its interest rate matching and interest rate risk exposure.
The following table presents the interest repricing dates of the Bank. Variable yield assets and liabilities have been
reported in accordance with their next repricing date. Fixed income assets and liabilities have been reported in accordance
with their maturity.
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
494
NOTE 36:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
36.4.
Interest rate risk management [continued]
31 December 2024
within 1 month
within 3 months over 1
month
within 1 year over 3
months
within 2 years over 1 year
over 2 years
Non-interest -bearing
Total
Total
ASSETS
HUF
foreign
currency
HUF
foreign
currency
HUF
foreign
currency
HUF
foreign
currency
HUF
foreign
currency
HUF
foreign
currency
HUF
foreign
currency
Cash, amounts due from
banks and balances
with the National
Bank of Hungary
1,407,734
416,395
-
-
-
-
-
-
-
-
230,897
20,153
1,638,631
436,548
2,075,179
fixed interest
1,405,635
416,395
-
-
-
-
-
-
-
-
-
-
1,405,635
416,395
1,822,030
variable interest
2,099
-
-
-
-
-
-
-
-
-
-
-
2,099
-
2,099
non-interest-bearing
-
-
-
-
-
-
-
-
-
-
230,897
20,153
230,897
20,153
251,050
Placements with other
banks
89,742
104,551
158,341
609,588
169,387
198,935
245,624
9,029
1,225,033
80,234
55,054
3,018
1,943,181
1,005,355
2,948,536
fixed interest
200
36,666
38,098
24,981
155,282
22,569
245,624
9,029
1,225,033
80,234
-
-
1,664,237
173,479
1,837,716
variable interest
89,542
67,885
120,243
584,607
14,105
176,366
-
-
-
-
-
-
223,890
828,858
1,052,748
non-interest-bearing
-
-
-
-
-
-
-
-
-
-
55,054
3,018
55,054
3,018
58,072
Repo receivables
234,309
3,771
-
-
-
-
-
-
-
-
-
-
234,309
3,771
238,080
fixed interest
234,309
3,771
-
-
-
-
-
-
-
-
-
-
234,309
3,771
238,080
Securities held for
trading
380,609
3,456
1,149
1,009
1,618
2,089
525
7,158
35,045
13,761
451
1,123
419,397
28,596
447,993
fixed interest
378,916
3,456
214
1,009
491
2,089
525
7,158
35,045
13,761
-
-
415,191
27,473
442,664
variable interest
1,693
-
935
-
1,127
-
-
-
-
-
-
-
3,755
-
3,755
non-interest-bearing
-
-
-
-
-
-
-
-
-
-
451
1,123
451
1,123
1,574
Securities mandatorily
measured at fair
value through profit
or loss
-
-
-
-
-
-
-
-
-
-
24,961
7,221
24,961
7,221
32,182
non-interest-bearing
-
-
-
-
-
-
-
-
-
-
24,961
7,221
24,961
7,221
32,182
Securities at fair value
through other
comprehensive
income
122,439
-
281
-
76,093
15,376
79,629
8,298
181,840
74,712
528
33,406
460,810
131,792
592,602
fixed interest
15
-
36
-
76,093
15,376
79,629
8,298
181,840
74,712
-
-
337,613
98,386
435,999
variable interest
122,424
-
245
-
-
-
-
-
-
-
-
-
122,669
-
122,669
non-interest-bearing
-
-
-
-
-
-
-
-
-
-
528
33,406
528
33,406
33,934
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
495
NOTE 36:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
36.4.
Interest rate risk management [continued]
31 December 2024
within 1 month
within 3 months over 1
month
within 1 year over 3
months
within 2 years over 1 year
over 2 years
Non-interest -bearing
Total
Total
ASSETS [continued]
HUF
foreign
currency
HUF
foreign
currency
HUF
foreign
currency
HUF
foreign
currency
HUF
foreign
currency
HUF
foreign
currency
HUF
foreign
currency
Loans measured at
amortised cost
878,480
380,102
418,368
1,323,434
86,376
144,892
129,410
49,920
965,842
114,664
131,572
47,735
2,610,048
2,060,747
4,670,795
fixed interest
32,282
4,609
56,265
15,038
65,824
12,080
128,772
49,920
960,350
114,664
-
-
1,243,493
196,311
1,439,804
variable interest
846,198
375,493
362,103
1,308,396
20,552
132,812
638
-
5,492
-
-
-
1,234,983
1,816,701
3,051,684
non-interest-bearing
-
-
-
-
-
-
-
-
-
-
131,572
47,735
131,572
47,735
179,307
Loans mandatorily
measured at fair value
through profit or loss
38,722
-
56,500
-
240,663
-
206,321
-
456,204
-
-
-
998,410
-
998,410
variable interest
38,722
-
56,500
-
240,663
-
206,321
-
456,204
-
-
-
998,410
-
998,410
Securities at amortised
cost
10,044
-
10,042
24,453
447,692
42,579
716,262
173,664
1,233,518
675,891
-
-
2,417,558
916,587
3,334,145
fixed interest
-
-
-
20,330
447,692
42,579
716,262
173,664
1,233,518
675,891
-
-
2,397,472
912,464
3,309,936
variable interest
10,044
-
10,042
4,123
-
-
-
-
-
-
-
-
20,086
4,123
24,209
Other financial assets
-
-
-
-
-
-
-
-
-
-
236,098
45,477
236,098
45,477
281,575
non-interest-bearing
-
-
-
-
-
-
-
-
-
-
236,098
45,477
236,098
45,477
281,575
Derivative financial
instruments
1,085,665
1,135,028
1,081,525
1,050,642
997,364
609,274
188,848
32,356
330,884
309,251
947,223
209,523
4,631,509
3,346,074
7,977,583
fixed interest
1,024,077
1,072,109
854,189
542,593
650,215
443,101
188,848
32,356
328,417
309,251
-
-
3,045,746
2,399,410
5,445,156
variable interest
61,588
62,919
227,336
508,049
347,149
166,173
-
-
2,467
-
-
-
638,540
737,141
1,375,681
non-interest-bearing
-
-
-
-
-
-
-
-
-
-
947,223
209,523
947,223
209,523
1,156,746
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
496
NOTE 36:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
36.4.
Interest rate risk management [continued]
31 December 2024
within 1 month
within 3 months over 1
month
within 1 year over 3
months
within 2 years over 1
year
over 2 years
Non-interest -
bearing
Total
Total
Total
LIABILITIES
HUF
foreign
currency
HUF
foreign
currency
HUF
foreign
currency
HUF
foreign
currency
HUF
foreign
currency
HUF
foreign
currency
HUF
foreign
currency
Amounts due to banks and deposits
with the National Bank of
Hungary and other banks
196,884
262,803
60,667
66,242 165,524
229,647
62,030
115,666
361,509
53,701 30,012
2,284
876,626
730,343
1,606,969
fixed interest
153,679
38,185
60,667
15,023 165,524
229,647
62,030
115,666
361,509
53,701
-
-
803,409
452,222
1,255,631
variable interest
43,205
224,618
-
51,219
-
-
-
-
-
-
-
-
43,205
275,837
319,042
non-interest-bearing
-
-
-
-
-
-
-
-
-
- 30,012
2,284
30,012
2,284
32,296
Financial liabilities designated to
measure at fair value through
profit or loss
17,008
-
-
-
-
-
16
-
-
-
-
-
17,024
-
17,024
fixed interest
-
-
-
-
-
-
16
-
-
-
-
-
16
-
16
variable interest
17,008
-
-
-
-
-
-
-
-
-
-
-
17,008
-
17,008
Repo liabilities
23,721
108,402
-
-
38,102
21,446
-
20,135
-
15,825
-
-
61,823
165,808
227,631
fixed interest
23,721
108,402
-
-
38,102
21,446
-
20,135
-
15,825
-
-
61,823
165,808
227,631
Deposits from customers156
8,382,934
2,168,862 138,060
45,305
59,802
32,275
2
-
275
- 51,129
17,583
8,632,202
2,264,025
10,896,227
fixed interest
1,085,763
276,631 138,060
45,305
59,802
32,275
2
-
275
-
-
-
1,283,902
354,211
1,638,113
variable interest
7,297,171
1,892,231
-
-
-
-
-
-
-
-
-
-
7,297,171
1,892,231
9,189,402
non-interest-bearing
-
-
-
-
-
-
-
-
-
- 51,129
17,583
51,129
17,583
68,712
Liabilities from issued securities
2,262
-
14,410
-
65,794
14,279
13,297
385,166
156
1,255,529
-
-
95,919
1,654,974
1,750,893
fixed interest
2,262
-
14,410
-
65,794
-
13,297
385,166
156
1,255,529
-
-
95,919
1,640,695
1,736,614
variable interest
-
-
-
-
-
14,279
-
-
-
-
-
-
-
14,279
14,279
Subordinated bonds and loans
-
-
-
94,613
1,898
-
1,786
-
11,470
252,504
-
-
15,154
347,117
362,271
fixed interest
-
-
-
-
1,898
-
1,786
-
11,470
252,504
-
-
15,154
252,504
267,658
variable interest
-
-
-
94,613
-
-
-
-
-
-
-
-
-
94,613
94,613
Leasing liabilities
327
462
655
926
2,624
4,051
4,921
5,219
17,597
27,597
-
-
26,124
38,255
64,379
fixed interest
197
71
395
144
1,732
695
3,783
1,721
11,361
5,355
-
-
17,468
7,986
25,454
variable interest
130
391
260
782
892
3,356
1,138
3,498
6,236
22,242
-
-
8,656
30,269
38,925
Other financial liabilities
-
-
-
-
-
-
-
-
-
- 162,741
174,875
162,741
174,875
337,616
non-interest-bearing
-
-
-
-
-
-
-
-
-
- 162,741
174,875
162,741
174,875
337,616
Derivative financial instruments
724,563
1,541,5541,474,763
635,972 1,239,772
520,771
149,761
42,129
234,831
213,649 573,389
576,175
4,397,079
3,530,250
7,927,329
fixed interest
601,606
1,497,513 878,673
490,054 771,817
329,905
149,585
42,129
234,831
213,649
-
-
2,636,512
2,573,250
5,209,762
variable interest
122,957
44,041 596,090
145,918 467,955
190,866
176
-
-
-
-
-
1,187,178
380,825
1,568,003
non-interest-bearing
-
-
-
-
-
-
-
-
-
- 573,389
576,175
573,389
576,175
1,149,564
NET POSITION
(5,099,955)
(2,038,780)
37,651
2,166,068 445,677
190,676 1,334,806
(287,890)
3,802,528
(550,292) 809,513
(403,261)
1,330,220
(923,479)
406,741
156 Deposit from customers includes the fair value changes on hedged deposits involved in portfolio hedge of interest rate risk.
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
497
NOTE 36:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
36.4. Interest rate risk management [continued]
31 December 2023
within 1 month
within 3 months over 1
month
within 1 year over 3
months
within 2 years over 1
year
over 2 years
Non-interest -bearing
Total
Total
ASSETS
HUF
foreign
currency
HUF
foreign
currency
HUF
foreign
currency
HUF
foreign
currency
HUF
foreign
currency
HUF
foreign
currency
HUF
foreign
currency
Cash, amounts due from
banks and balances
with the National
Bank of Hungary
2,180,950
332,909
-
-
-
-
-
-
-
-
178,193
16,180 2,359,143
349,089
2,708,232
fixed interest
13,951
332,909
-
-
-
-
-
-
-
-
-
-
13,951
332,909
346,860
variable interest
2,166,999
-
-
-
-
-
-
-
-
-
-
- 2,166,999
-
2,166,999
non-interest-bearing
-
-
-
-
-
-
-
-
-
-
178,193
16,180
178,193
16,180
194,373
Placements with other
banks
338,152
78,034
123,031
624,268
43,151
143,091
147,777
9,564 1,036,999
73,162
68,897
16,306 1,758,007
944,425
2,702,432
fixed interest
11,436
4,556
63,267
1,928
29,036
15,785
147,777
9,564 1,036,999
73,162
-
- 1,288,515
104,995
1,393,510
variable interest
326,716
73,478
59,764
622,340
14,115
127,306
-
-
-
-
-
-
400,595
823,124
1,223,719
non-interest-bearing
-
-
-
-
-
-
-
-
-
-
68,897
16,306
68,897
16,306
85,203
Repo receivables
201,658
-
-
-
-
-
-
-
-
-
-
-
201,658
-
201,658
fixed interest
129,541
-
-
-
-
-
-
-
-
-
-
-
129,541
-
129,541
variable interest
72,117
-
-
-
-
-
-
-
-
-
-
-
72,117
-
72,117
Securities held for trading
225
5,515
625
6,253
1,240
95
2,293
844
3,112
6,769
217
616
7,712
20,092
27,804
fixed interest
-
5,515
71
6,253
948
95
2,287
844
3,112
6,769
-
-
6,418
19,476
25,894
variable interest
225
-
554
-
292
-
6
-
-
-
-
-
1,077
-
1,077
non-interest-bearing
-
-
-
-
-
-
-
-
-
-
217
616
217
616
833
Securities mandatorily
measured at fair
value through profit
or loss
-
-
-
-
-
-
-
-
-
-
23,917
9,015
23,917
9,015
32,932
non-interest-bearing
-
-
-
-
-
-
-
-
-
-
23,917
9,015
23,917
9,015
32,932
Securities at fair value
through other
comprehensive
income
150,415
-
46
351
9,781
3,040
78,451
16,710
156,490
123,066
528
20,649
395,711
163,816
559,527
fixed interest
19
-
44
351
9,781
3,040
78,451
16,710
156,490
123,066
-
-
244,785
143,167
387,952
variable interest
150,396
-
2
-
-
-
-
-
-
-
-
-
150,398
-
150,398
non-interest-bearing
-
-
-
-
-
-
-
-
-
-
528
20,649
528
20,649
21,177
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
498
NOTE 36:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
36.4.
Interest rate risk management [continued]
31 December 2023
within 1 month
within 3 months over 1
month
within 1 year over 3
months
within 2 years over 1 year
over 2 years
Non-interest -bearing
Total
Total
ASSETS [continued]
HUF
foreign
currency
HUF
foreign
currency
HUF
foreign
currency
HUF
foreign
currency
HUF
foreign
currency
HUF
foreign
currency
HUF
foreign
currency
Loans measured at
amortised cost
768,234
493,557
327,609
1,390,931
71,453
110,398
216,734
23,518
988,290
132,552
116,716
41,367
2,489,036
2,192,323
4,681,359
fixed interest
26,634
1,520
14,684
304
62,798
4,198
215,943
23,518
981,880
132,552
-
-
1,301,939
162,092
1,464,031
variable interest
741,600
492,037
312,925
1,390,627
8,655
106,200
791
-
6,410
-
-
-
1,070,381
1,988,864
3,059,245
non-interest-bearing
-
-
-
-
-
-
-
-
-
-
116,716
41,367
116,716
41,367
158,083
Loans mandatorily
measured at fair
value through profit
or loss
21,569
-
19
-
181,484
-
221,779
-
509,997
-
-
-
934,848
-
934,848
variable interest
21,569
-
19
-
181,484
-
221,779
-
509,997
-
-
-
934,848
-
934,848
Securities at amortised
cost
517
2,137
-
4,623
60,738
-
415,720
31,462
1,478,085
717,567
-
-
1,955,060
755,789
2,710,849
fixed interest
517
2,137
-
-
60,738
-
415,720
31,462
1,478,085
717,567
-
-
1,955,060
751,166
2,706,226
variable interest
-
-
-
4,623
-
-
-
-
-
-
-
-
-
4,623
4,623
Other financial assets
-
-
-
-
-
-
-
-
-
-
233,545
64,940
233,545
64,940
298,485
non-interest-bearing
-
-
-
-
-
-
-
-
-
-
233,545
64,940
233,545
64,940
298,485
Derivative financial
instruments
751,222
2,070,427
961,287
1,413,811
481,235
724,587
54,251
107,615
297,986
230,493
581,836
165,708
3,127,817
4,712,641
7,840,458
fixed interest
643,342
2,008,291
364,434
1,025,182
321,153
444,680
54,251
107,375
297,986
228,099
-
-
1,681,166
3,813,627
5,494,793
variable interest
107,880
62,136
596,853
388,629
160,082
279,907
-
240
-
2,394
-
-
864,815
733,306
1,598,121
non-interest-bearing
-
-
-
-
-
-
-
-
-
-
581,836
165,708
581,836
165,708
747,544
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
499
NOTE 36:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
36.4.
Interest rate risk management [continued]
31 December 2023
within 1 month
within 3 months over 1
month
within 1 year over 3
months
within 2 years over 1
year
over 2 years
Non-interest -bearing
Total
Total
LIABILITIES
HUF
foreign
currency
HUF
foreign
currency
HUF
foreign
currency
HUF
foreign
currency
HUF
foreign
currency
HUF
foreign
currency
HUF
foreign
currency
Amounts due to banks
and deposits with the
National Bank of
Hungary and other
banks
211,121
241,637
15,233
125,710
30,529
78,404
223,700
301,093
431,599
60,060
31,626
10,867
943,808
817,771
1,761,579
fixed interest
170,042
11,432
15,232
268
30,481
78,399
223,700
301,093
431,599
60,060
-
-
871,054
451,252
1,322,306
variable interest
41,079
230,205
1
125,442
48
5
-
-
-
-
-
-
41,128
355,652
396,780
non-interest-bearing
-
-
-
-
-
-
-
-
-
-
31,626
10,867
31,626
10,867
42,493
Financial liabilities
designated to
measure at fair value
through profit or loss
19,761
-
-
-
-
-
-
-
25
-
-
-
19,786
-
19,786
fixed interest
-
-
-
-
-
-
-
-
25
-
-
-
25
-
25
variable interest
19,761
-
-
-
-
-
-
-
-
-
-
-
19,761
-
19,761
Repo liabilities
95,146
101,665
-
-
-
-
195,405
19,825
-
31,653
-
-
290,551
153,143
443,694
fixed interest
24,572
101,665
-
-
-
-
195,405
19,825
-
31,653
-
-
219,977
153,143
373,120
variable interest
70,574
-
-
-
-
-
-
-
-
-
-
-
70,574
-
70,574
Deposits from
customers157
7,520,231
2,875,160
156,216
34,561
75,793
37,149
-
-
7
-
19,872
15,336
7,772,119 2,962,206 10,734,325
fixed interest
1,068,482
935,571
156,216
34,561
75,793
37,149
-
-
7
-
-
-
1,300,498 1,007,281
2,307,779
variable interest
6,451,749
1,939,589
-
-
-
-
-
-
-
-
-
-
6,451,749 1,939,589
8,391,338
non-interest-bearing
-
-
-
-
-
-
-
-
-
-
19,872
15,336
19,872
15,336
35,208
Liabilities from issued
securities
545
-
72,641
-
85,919
13,320
32,473
157,095
12,664
788,452
-
-
204,242
958,867
1,163,109
fixed interest
206
-
72,083
-
85,919
-
32,473
157,095
12,664
788,452
-
-
203,345
945,547
1,148,892
variable interest
339
-
558
-
-
13,320
-
-
-
-
-
-
897
13,320
14,217
Subordinated bonds and
loans
-
-
-
89,381
1,886
191,894
1,863
-
9,270
226,002
-
-
13,019
507,277
520,296
fixed interest
-
-
-
-
1,886
-
1,863
-
9,270
226,002
-
-
13,019
226,002
239,021
variable interest
-
-
-
89,381
-
191,894
-
-
-
-
-
-
-
281,275
281,275
Leasing liabilities
240
275
545
704
2,477
3,484
6,579
8,424
21,198
24,356
-
-
31,039
37,243
68,282
fixed interest
186
108
378
219
1,725
1,001
4,695
2,410
12,574
863
-
-
19,558
4,601
24,159
variable interest
54
167
167
485
752
2,483
1,884
6,014
8,624
23,493
-
-
11,481
32,642
44,123
Other financial liabilities
-
-
-
-
-
-
-
-
-
-
71,790
170,431
71,790
170,431
242,221
non-interest-bearing
-
-
-
-
-
-
-
-
-
-
71,790
170,431
71,790
170,431
242,221
Derivative financial
instruments
1,858,423
981,110
524,302
1,863,222
442,891
872,793
59,172
111,527
197,826
167,354
491,972
262,427
3,574,586 4,258,433
7,833,019
fixed interest
1,809,109
846,948
373,167
1,019,044
226,755
499,824
59,172
111,527
197,826
167,354
-
-
2,666,029 2,644,697
5,310,726
variable interest
49,314
134,162
151,135
844,178
216,136
372,969
-
-
-
-
-
-
416,585 1,351,309
1,767,894
non-interest-bearing
-
-
-
-
-
-
-
-
-
-
491,972
262,427
491,972
262,427
754,399
NET POSITION
(5,292,525)
(1,217,268)
643,680
1,326,659
209,587
(215,833)
617,813
(408,251) 3,798,370
(14,268)
588,589
(124,280)
565,514 (653,241)
(87,727)
157 Deposit from customers includes the fair value changes on hedged deposits involved in portfolio hedge of interest rate risk.
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
500
NOTE 36:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
36.5.
Market risk
The Bank takes on exposure to market risks. Market risks arise from open positions in interest rate, currency and equity
products, all of which are exposed to general and specific market movements. The Bank applies a Value-at-Risk ("VaR")
methodology to estimate the market risk of positions held and the maximum losses expected, based upon a number of
assumptions for various changes in market conditions. The Management Board sets limits on the value of risk that may
be accepted, which is monitored on a daily basis. (Analysis of liquidity risk, foreign currency risk and interest rate risk is
detailed in Notes 36.2, 36.3 and 36.4 respectively.)
36.5.1. Market risk sensitivity analysis
The VaR risk measure estimates the potential loss in pre-tax profit over a given holding period for a specified confidence
level. The VaR methodology is a statistically defined, probability-based approach that takes into account market
volatilities as well as risk diversification by recognizing offsetting positions and correlations between products and
markets. Risks can be measured consistently across all markets and products, and risk measures can be aggregated to
arrive at a single risk number. The one-day 99% VaR number used by the Group reflects the 99% probability that the
daily loss will not exceed the reported VaR.
VaR methodologies are employed to calculate daily risk numbers include the historical and variance-covariance approach.
The diversification effect has not been validated among the various market risk types when capital calculation happens.
In addition to these two methodologies, Monte Carlo simulations are applied to the various portfolios on a monthly basis
to determine potential future exposure.
The VaR of the trading portfolio can be summarized as follows (in HUF mn):
Historical VaR (99%, one-day) by risk type
Average
2024
2023
Foreign exchange
7,650
11,181
Interest rate
298
489
Equity instruments
11
18
Total VaR exposure
7,960
11,688
The table above shows the VaR figures by asset classes. Since processes driving the value of the major asset classes are
not independent (for example the depreciation of HUF against the EUR mostly coincide with the increase of the yields of
Hungarian Government Bonds), a diversification impact emerges, so the overall VaR is less than the sum of the VaR of
each individual asset class.
While VaR captures the OTP’s daily exposure to currency and interest rate risk, sensitivity analysis evaluates the impact
of a reasonably possible change in interest or foreign currency rates over a year. The longer time frame of sensitivity
analysis complements VaR and helps the OTP to assess its market risk exposures. Details of sensitivity analysis for
foreign currency risk are set out in Note 36.5.2., for interest rate risk in Note 36.5.3., and for equity price sensitivity
analysis in Note 36.5.4.
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
501
NOTE 36:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
36.5.
Market risk [continued]
36.5.2. Foreign currency sensitivity analysis
The following table shows the result of the foreign currency sensitivity analysis. The Group uses VaR calculation with 1
day holding period and a 99% confidence level. The VaR methodology is a statistically defined, probability-based
approach that takes into account market volatilities as well as risk diversification by recognizing offsetting positions and
correlations between products and markets. The daily loss will not exceed the reported VaR number with 99% of
probability.
Probability
Effects to the P&L in 3 months period
2024
2023
In HUF million
In HUF million
1%
(3,981)
(8,943)
5%
(2,442)
(4,784)
25%
(977)
(1,332)
50%
(93)
360
25%
850
1,790
5%
2,211
4,527
1%
2,920
6,321
Notes:
(1) Historical VaR simulation is based on the empirical distribution of the historical exchange rate movements between
30 December 2023 and 31 December 2024.
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
502
NOTE 36:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
36.5.
Market risk [continued]
36.5.3. Interest rate sensitivity analysis
The sensitivity analyses below have been determined based on the exposure to interest rates for both derivatives and non-
derivative instruments at the balance sheet date. The analysis is prepared assuming the amount of assets and liabilities
outstanding at the balance sheet date was outstanding for the whole year. The analysis was prepared by assuming only
adverse interest rate changes. The main assumptions were as follows:
● Floating rate assets and liabilities were repriced to the modelled benchmark yields at the repricing dates assuming
the unchanged margin compared to the last repricing.
● Fixed rate assets and liabilities were repriced at the contractual maturity date.
● As for liabilities with discretionary repricing feature by the Bank were assumed to be repriced with two-weeks
delay, assuming no change in the margin compared to the last repricing date.
● Deposits with an interest rate lower than 0.3% even at high market rates were assumed to be unchanged for the
whole period.
The sensitivity of interest income to changes in BUBOR was analysed by assuming two interest rate path scenarios:
(1) (1) HUF base rate and BUBOR increases gradually by 35 bps over the next year (probable scenario)
(2) (2) HUF base rate and BUBOR increases gradually by 100 bps over the next year (alternative scenario)
The net interest income in a one year period after 1 January 2025 would change by HUF -467 million (probable scenario)
and HUF +1321million (alternative scenario) as a result of these simulation. Besides this effect there would be capital
gains/losses of HUF +26 million (for probable scenario) and HUF -55 million (for alternative scenario) on the government
bond portfolio held for hedging (economic).
The net interest income in a one year period after 1 January 2024 would be decreased by HUF 6.355 million (probable
scenario) and increased by HUF 999 million (alternative scenario) as a result of these simulation. Besides the effect is
further increased by capital gains HUF +429 million (for probable scenario), HUF -104 million (for alternative scenario)
as at 31 December 2024 on the government bond portfolio held for hedging (economic).
Furthermore, the effects of an instant 10bps parallel shift of the HUF, EUR and USD yield-curves on net interest income
over a one-year period and on the market value of the hedge government bond portfolio booked against capital was
analysed. The results can be summarized as follows (in HUF million):
Description
2024
2023
Effects to the
net interest
income (one-
year period)
Effects to
shareholder’s
equity
(Price change
of FVOCI
government
bonds)
Effects to
the net
interest
income (one-
year period)
Effects to
shareholder’s
equity
(Price change
of FVOCI
government
bonds)
HUF (0.1%) parallel shift
(327)
7
(426)
14
HUF 0.1% parallel shift
323
(7)
425
(14)
EUR (0.1%) parallel shift
928
-
1,065
-
EUR 0.1% parallel shift
(1,347)
-
(1,564)
-
USD (0.1%) parallel shift
446
-
500
-
USD 0.1% parallel shift
(453)
-
(517)
-
Total
(430)
-
(517)
-
36.5.4. Equity price sensitivity analysis
The following table shows the effect of the equity price sensitivity. The Bank uses VaR calculation with 1 day holding
period and a 99% confidence level. The VaR methodology is a statistically defined, probability-based approach that takes
into account market volatilities as well as risk diversification by recognizing offsetting positions and correlations between
products and markets. The daily loss will not exceed the reported VaR number with 99% of probability.
The stress test assumes the largest price movement of the last year and calculates with it as the adverse direction. These
scenarios show the loss of the portfolio when all prices change with the maximum amount of the last year.
Description
2024
2023
VaR (99%, one day, million HUF)
9
10
Stress test (million HUF)
(53)
(103)
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
503
NOTE 36:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
36.6
Capital management
Capital management
The primary objective of the capital management of the Bank is to ensure the prudent operation, the entire compliance
with the prescriptions of the regulator for a persistent business operation and maximising the shareholder value,
accompanied by an optimal financing structure.
The capital management of the Bank includes the management and evaluation of the shareholders` equity available for
hedging risks, other types of funds to be recorded in the equity and all material risks to be covered by the capital.
The basis of the capital management of the Bank in the short run is the continuous monitoring of its capital position, in
the long run the strategic and the business planning, which includes the monitoring and forecast of the capital position of
the Bank.
The Bank maintains the capital adequacy required by the regulatory bodies and the planned risk taking mainly by means
of ensuring and developing its profitability. In the case the planned risk level of the Bank exceeded its Core and
Supplementary capital, the Bank ensures the prudent operation by occasional measures. A further tool in the capital
management of the Bank is the dividend policy, and the transactions performed with the treasury shares.
Capital adequacy158
The Capital Requirements Directive package (CRDIV/CRR) transposes the global standards on banking regulation
(commonly known as the Basel III agreement) into the EU legal framework. The rules are applied from 1 January 2014.
They set stronger prudential requirements for institutions, requiring them to keep sufficient capital reserves and liquidity.
This framework makes institutions in the EU more solid and strengthens their capacity to adequately manage the risks
linked to their activities, and absorb any losses they may incur in doing business.
The Bank has entirely complied with the regulatory capital requirements in 2024 as well as in 2023.
The Bank’s capital adequacy calculation is in line with IFRS and based on Basel III as at 31 December 2024 and 31
December 2023. The Bank uses the standard method for determining the regulatory capital requirements of the credit risk
and market risk while in the case of the operational risk the Advanced Measurement Approach (AMA).
158 The dividend amount planned to pay out / paid out is deducted from reserves.
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
504
NOTE 36:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
36.6
Capital management
Capital adequacy ratio for the year ended 31 December 2024 and 31 December 2023 is as follows:
31 December
2024
31 December
2023
Basel III
Basel III
Core capital (Tier 1)
2,519,969
2,186,422
Primary core capital (CET1)
2,519,969
2,186,422
Supplementary capital (Tier 2)
345,063
500,555
Regulatory capital
2,865,032
2,686,977
Credit risk capital requirement
724,495
719,575
Market risk capital requirement
28,374
27,799
Operational risk capital requirement
29,872
30,324
Total eligible regulatory capital
782,741
777,698
Surplus capital
2,082,291
1,909,279
CET 1 ratio
25.76%
22.49%
Capital adequacy ratio
29.28%
27.64%
Basel III:
Common equity Tier 1 capital (CET1):
Issued capital, Capital reserve, useable part of Tied-up reserve, General reserve, Profit reserve, Profit for the year,
Treasury shares, Intangible assets, deductions due to investments, adjustments due to temporary disposals
Tier 2 capital:
Subsidiary loan capital, Subordinated loan capital, deductions due to repurchased loan capital and Subordinated loan
capital issued by the OTP Bank, adjustments due to temporary disposals.
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
505
NOTE 37:
TRANSFER OF FINANCIAL INSTRUMENTS (in HUF mn)
Financial assets transferred but not derecognised
31 December 2024
31 December 2023
Carrying amount
Transferred
assets
Associated
liabilities
Transferred
assets
Associated
liabilities
Financial assets at fair value through
other comprehensive income
Debt securities
7,020
5,754
77,030
75,812
Total
7,020
5,754
77,030
75,812
Financial assets at amortised cost
Debt securities
241,037
221,877
408,632
367,883
Total
241,037
221,877
408,632
367,883
Total
248,057
227,631
485,662
443,695
As at 31 December 2024 and 31 December 2023, the Bank had obligation from repurchase agreements about HUF 228
billion and HUF 444 billion respectively. Securities sold temporarily under repurchase agreements will continue to be
recognized in the Statement of Financial Position of the Bank in the appropriate securities category. The related liability
is measured at amortized cost in the Statement of Financial Position as “Repo liabilities’. Under these repurchase
agreements only Hungarian and foreign government bonds were transferred.
NOTE 38:
OFF-BALANCE SHEET ITEMS (in HUF mn)
In the normal course of business, the Bank becomes a party to various financial transactions that are not reflected on the
statement of financial position and are referred to as off-balance sheet financial instruments. The following represents
notional amounts of these off-balance sheet financial instruments, unless stated otherwise.
Contingent liabilities and commitments
31 December
2024
31 December
2023
Loan commitments
2,536,990
1,987,539
Guarantees arising from banking activities
1,903,718
1,999,747
from this: Payment undertaking liabilities (related to issue of
mortgage bonds) of OTP Mortgage Bank
1,004,209
1,177,213
Factoring loan commitments
382,011
366,181
Confirmed letters of credit
5,181
8,626
Contingent liabilities and commitments total in accordance
with IFRS 9
4,827,900
4,362,093
Legal disputes (disputed value)
4,825
4,586
Contingent liabilities related to payments from shares in venture
capital fund
18,006
20,803
Indemnity related to sale of OTP Bank Romania
54,255
-
Other
91
19
Contingent liabilities and commitments total in accordance
with IAS 37
77,177
25,408
Total
4,905,077
4,387,501
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
506
NOTE 38:
OFF-BALANCE SHEET ITEMS (in HUF mn) [continued]
Legal disputes
At the balance sheet date the Bank was involved in various claims and legal proceedings of a nature considered normal
to its business. The level of these claims and legal proceedings corresponds to the level of claims and legal proceedings
in previous years.
The Bank believes that the various asserted claims and litigations in which it is involved will not materially affect its
financial position, future operating results or cash flows, although no assurance can be given with respect to the ultimate
outcome of any such claim or litigation.
Provision due to legal disputes was HUF 283 million and HUF 1931 million as at 31 December 2024 and 31 December
2023, respectively. (See Note 24.)
Commitments to extend credit, guarantees and letter of credit
The primary purpose of these instruments is to ensure that funds are available to a customer as required. Guarantees and
standby letters of credit, which represent irrevocable assurances that the Bank will make payments in the event that a
customer cannot meet its obligations to third parties, carry the same credit risk as loans.
Documentary and commercial letters of credit, which are written undertakings by the Bank on behalf of a customer
authorising a third party to draw drafts on the Bank up to a stipulated amount under specific terms and conditions, are
collateralised by the underlying shipments of goods to which they relate and therefore carry less risk than a direct
borrowing.
Commitments to extend credit represent unused portions of authorisations to extend credit in the form of loans, guarantees
or letters of credit. With respect to credit risk on commitments to extend credit, the Bank is potentially exposed to loss in
an amount equal to the total unused commitments. However, the likely amount of loss is less than the total unused
commitments since most commitments to extend credit are contingent upon customers maintaining specific credit
standards.
Guarantees, irrevocable letters of credit and undrawn loan commitments are subject to similar credit risk monitoring and
credit policies as utilised in the extension of loans. The Management of the Bank believes the market risk associated with
guarantees, irrevocable letters of credit and undrawn loan commitments are minimal.
Guarantees, payment undertakings arising from banking activities
Payment undertaking is a promise by the Bank to assume responsibility for the debt obligation of a borrower if that
borrower defaults until a determined amount and until a determined date, in the case of fulfilling conditions, without
checking the underlying transactions. The guarantee’s liability is joint and primary with the principal, in the case of
payment undertaking, while the Bank assumes the obligation derived from guarantee independently by the conditions
established by the Bank. A guarantee is most typically required when the ability of the primary obligor or principal to
perform its obligations under a contract is in question, or when there is some public or private interest which requires
protection from the consequences of the principal's default or delinquency.
Contingent liabilities related to OTP Mortgage Bank Ltd.
Under a syndication agreement with its wholly owned subsidiary, OTP Mortgage Bank Ltd., the Bank had guaranteed, in
return for an annual fee, to purchase all mortgage loans held by OTP Mortgage Bank Ltd. that become non-performing.
According to the arrangement the repurchase guarantee was cancelled and OTP Bank Plc. gives bail to the loans originated
or purchased by the Bank.
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
507
NOTE 39:
SHARE-BASED PAYMENT AND EMPLOYEE BENEFIT (in HUF mn)
Previously approved option program required a modification thanks to the introduction of the Bank Group Policy on
Payments accepted in resolution of Annual General Meeting regarding to the amendment of CRD III. Directives and Act
on Credit Institutions and Financial Enterprises.
Key management personnel affected by the Bank Group Policy receive compensation based on performance assessment
generally in the form of cash bonus and equity shares in a ratio of 50-50%. Assignment is based on OTP shares,
furthermore performance based payments are deferred in accordance with the rules of Credit Institutions Act.
OTP Bank ensures the share-based payment part for the management personnel of OTP Group members.
During implementation of the Remuneration Policy of the Group it became apparent that in the case of certain foreign
subsidiaries it is not possible to ensure the originally determined share-based payment because of legal reasons –
incompatible with relevant EU-directives –, therefore a decision was made to cancel the share-based payment in affected
countries, and virtual share based payment – cash payment fixed to share price - was made from 2017. In the case of
foreign subsidiaries virtual share based payment was made uniformly from 2021 (in the case of payments related to 2021).
The quantity of usable shares for individuals calculated for settlement of share-based payment shall be determined as the
ratio of the amount of share-based payment and share price determined by Supervisory Board.
The value of the share-based payment at the performance assessment is determined within 10 days by Supervisory Board
based on the average of the three previous trade day’s middle rate of OTP Bank’s equity shares fixed on the Budapest
Stock Exchange.
At the same time the conditions of discounted share-based payment are determined, and share-based payment shall contain
maximum HUF 6,000 discount at the assessment date, and earnings for the shares at the payment date is maximum HUF
12,000.
Employee benefits are all forms of consideration given by an entity in exchange for service rendered by employees or for
the termination of employment. IAS 19 Employee Benefits shall be applied in accounting for all employee benefits, except
those to which IFRS 2 Share-based Payment applies.
Short-term employee benefits are employee benefits (other than termination benefits) that are expected to be settled
wholly before twelve months after the end of the annual reporting period in which the employees render the related
service. Post-employment benefits are employee benefits (other than termination and short-term employee benefits) that
are payable after the completion of employment. Post-employment benefit plans are formal or informal arrangements
under which an entity provides post-employment benefits for one or more employees. Post-employment benefit plans are
classified as either defined contribution plans or defined benefit plans, depending on the economic substance of the plan
as derived from its principal terms and conditions.
Termination benefits are employee benefits provided in exchange for the termination of an employee’s employment as a
result of either: an entity’s decision to terminate an employee’s employment before the normal retirement date or an
employee’s decision to accept an offer of benefits in exchange for the termination of employment. Other long-term
employee benefits are all employee benefits other than short-term employee benefits, postemployment benefits and
termination benefits.
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
508
NOTE 39:
SHARE-BASED PAYMENT AND EMPLOYEE BENEFIT (in HUF mn) [continued]
The parameters for the share-based payment relating to ongoing years 2018-2023 for periods of each year as follows:
Year
Share purchasing at a
discounted price
Price of
remuneration
exchanged to
share
Share purchasing at a
discounted price
Price of
remuneration
exchanged to
share
Share purchasing at a
discounted price
Price of
remuneration
exchanged to
share
Exercise
price
Maximum
earnings per
share
Exercise
price
Maximum
earnings per
share
Exercise
price
Maximum
earnings per
share
HUF per share
for the year 2018
for the year 2019
for the year 2020
2019
10,413
4,000
12,413
-
-
-
-
-
-
2020
10,413
4,000
12,413
9,553
4,000
11,553
-
-
-
2021
10,413
4,000
12,413
9,553
4,000
11,553
12,644
9,000
16,644
2022
10,913
4,000
12,413
9,553
4,000
11,553
12,644
8,000
16,644
2023
10,913
4,000
12,413
9,553
4,000
11,553
13,644
8,000
16,644
2024
10,913
4,000
12,413
9,553
4,000
11,553
13,644
8,000
16,644
2025
10,913
4,000
12,413
9,553
4,000
11,553
13,644
8,000
16,644
2026
-
-
-
9,553
4,000
11,553
13,644
8,000
16,644
2027
-
-
-
-
-
-
13,644
8,000
16,644
Year
Share purchasing at
a discounted price
Price of
remuneration
exchanged to
share
Share purchasing at
a discounted price
Price of
remuneration
exchanged to
share
Share purchasing at a
discounted price
Price of
remuneration
exchanged to
share
Exercise
price
Maximum
earnings
per share
Exercise
price
Maximum
earnings
per share
Exercise
price
Maximum
earnings
per share
HUF per share
for the year 2021
for the year 2022
for the year 2023
2022
5,912
6,000
8,912
-
-
-
-
-
-
2023
6,912
7,000
8,912
7,773
6,000
10,773
-
-
-
2024
6,912
8,000
8,912
8,773
7,000
10,773
14,486
12,000
17,486
2025
6,912
9,000
8,912
8,773
8,000
10,773
15,486
12,000
17,486
2026
6,912
10,000
8,912
8,773
9,000
10,773
16,486
12,000
17,486
2027
6,912
10,000
8,912
8,773
10,000
10,773
16,486
12,000
17,486
2028
6,912
10,000
8,912
8,773
10,000
10,773
16,486
12,000
17,486
2029
-
-
-
8,773
10,000
10,773
16,486
12,000
17,486
2030
-
-
-
-
-
-
16,486
12,000
17,486
Relevant factors considered during measurement of fair value related to share-based payment as follows:
Year
Reference
price
Assumed
volatility
Risk-free interest rate (HUF)
1Y
2Y
3Y
4Y
5Y
6Y
7Y
2017
9,200
21.3%
0.1%
0.5%
0.7%
1.0%
1.3%
1.3%
1.3%
2018
10,064
26.0%
0.2%
0.6%
1.0%
1.3%
1.6%
1.9%
2.1%
2019
12,413
19.2%
0.2%
0.7%
0.9%
1.1%
1.3%
1.4%
1.6%
2020
11,553
33.6%
0.6%
0.4%
0.5%
0.6%
0.8%
0.9%
1.0%
2021
16,644
28.6%
1.0%
1.6%
1.8%
1.9%
2.0%
2.1%
2.1%
2022
8,912
42.6%
7.1%
7.9%
7.6%
7.3%
7.1%
7.0%
6.9%
2023
10,773
33.3%
13.2%
9.2%
8.2%
7.7%
7.3%
7.1%
6.9%
2024
17,486
22.1%
6.2%
5.8%
5.8%
5.9%
5.9%
6.0%
6.0%
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
509
NOTE 39:
SHARE-BASED PAYMENT AND EMPLOYEE BENEFIT (in HUF mn) [continued]
Relevant factors considered during measurement of fair value related to share-based payment as follows: [continued]
Year
Expected dividends (HUF/Share)
Pricing
model
1Y
2Y
3Y
4Y
5Y
6Y
7Y
2017
219
219
252
290
334
384
442
Binomial
2018
219
219
219
219
219
219
219
Binomial
2019
252
290
333
383
440
507
583
Binomial
2020
219
252
290
333
383
440
507
Binomial
2021
371
321
357
393
432
475
523
Binomial
2022
452
497
547
601
661
728
800
Binomial
2023
300
330
363
399
439
483
531
Binomial
2024
714
786
864
951 1,046 1,150 1,265
Binomial
Based on parameters accepted by Supervisory Board, relating to the year 2018 effective pieces are follows
As at 31 December 2024:
Approved
pieces of shares
Exercised until
31 December
2024
Weighted
average share
price at the
date of exercise
(in HUF)
Expired
pieces
Exercisable at 31
December 2024
Share-purchasing period started in 2019
82,854
82,854
13,843
-
-
Remuneration exchanged to share
provided in 2019
17,017
17,017
11,829
-
-
Share-purchasing period starting in 2020
150,230
150,230
14,294
-
-
Remuneration exchanged to share
applying in 2020
33,024
33,024
11,897
-
-
Share-purchasing period starting in 2021
73,799
73,799
16,314
-
-
Remuneration exchanged to share
applying in 2021
14,618
14,618
16,468
-
-
Share-purchasing period starting in 2022
86,456
77,425
14,605
9,031
-
Remuneration exchanged to share
applying in 2022
13,858
13,858
8,529
-
-
Share-purchasing period starting in 2023
45,155
45,155
14,736
-
-
Remuneration exchanged to share
applying in 2023
3,217
3,217
11,820
-
-
Remuneration exchanged to share
applying in 2024
864
864
17,888
-
-
Remuneration exchanged to share
applying in 2025
-
-
-
-
432
Based on parameters accepted by Supervisory Board, relating to the year 2019 effective pieces are follows
As at 31 December 2024:
Approved
pieces of shares
Exercised until
31 December
2024
Weighted
average share
price at the
date of exercise
(in HUF)
Expired
pieces
Exercisable at 31
December 2024
Share-purchasing period started in 2020
91,403
91,403
12,218
-
-
Remuneration exchanged to share
provided in 2020
22,806
22,806
11,897
-
-
Share-purchasing period starting in 2021
201,273
201,273
16,298
-
-
Remuneration exchanged to share
applying in 2021
30,834
30,834
17,618
-
-
Share-purchasing period starting in 2022
107,760
101,897
13,771
5,863
-
Remuneration exchanged to share
applying in 2022
10,564
10,564
8,529
-
-
Share-purchasing period starting in 2023
126,749
123,676
14,336
3,073
-
Remuneration exchanged to share
applying in 2023
13,427
13,427
11,674
-
-
Share-purchasing period starting in 2024
31,262
31,262
17,618
-
-
Remuneration exchanged to share
applying in 2024
6,183
6,183
17,540
-
-
Remuneration exchanged to share
applying in 2025
-
-
-
-
1,000
Remuneration exchanged to share
applying in 2026
-
-
-
-
500
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
510
NOTE 39:
SHARE-BASED PAYMENT AND EMPLOYEE BENEFIT (in HUF mn) [continued]
Based on parameters accepted by Supervisory Board, relating to the year 2020 effective pieces are follows
As at 31 December 2024:
Approved
pieces of shares
Exercised until
31 December
2024
Weighted
average share
price at the
date of exercise
(in HUF)
Expired
pieces
Exercisable at 31
December 2024
Share-purchasing period started in 2021
41,098
14,142
17,997
26,956
-
Remuneration exchanged to share
provided in 2021
17,881
17,881
17,498
-
-
Share-purchasing period starting in 2022
83,688
76,928
17,629
6,760
-
Remuneration exchanged to share
applying in 2022
15,232
15,111
8,529
121
-
Share-purchasing period starting in 2023
47,275
45,755
19,805
1,520
-
Remuneration exchanged to share
applying in 2023
8,562
8,562
11,659
-
-
Share-purchasing period starting in 2024
49,974
38,371
20,867
-
11,603
Remuneration exchanged to share
applying in 2024
11,837
11,837
17,613
-
-
Share-purchasing period starting in 2025
-
-
-
-
13,080
Remuneration exchanged to share
applying in 2025
-
-
-
-
3,443
Remuneration exchanged to share
applying in 2026
-
-
-
-
680
Remuneration exchanged to share
applying in 2027
-
-
-
-
680
Based on parameters accepted by Supervisory Board, relating to the year 2021 effective pieces are follows
As at 31 December 2024:
Approved
pieces of shares
Exercised until
31 December
2024
Weighted
average share
price at the
date of exercise
(in HUF)
Expired
pieces
Exercisable at 31
December 2024
Share-purchasing period started in 2022
60,018
59,776
10,122
242
-
Remuneration exchanged to share
provided in 2022
11,028
11,028
8,691
-
-
Share-purchasing period starting in 2023
117,276
117,276
13,672
-
-
Remuneration exchanged to share
applying in 2023
10,824
10,824
11,534
-
-
Share-purchasing period starting in 2024
50,402
49,201
17,848
-
1,201
Remuneration exchanged to share
applying in 2024
4,807
4,807
17,399
-
-
Share-purchasing period starting in 2025
-
-
-
-
54,262
Remuneration exchanged to share
applying in 2025
-
-
-
-
4,942
Share-purchasing period starting in 2026
-
-
-
-
58,155
Remuneration exchanged to share
applying in 2026
-
-
-
-
4,942
Share-purchasing period starting in 2027
-
-
-
-
25,305
Remuneration exchanged to share
applying in 2027
-
-
-
-
631
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
511
NOTE 39:
SHARE-BASED PAYMENT AND EMPLOYEE BENEFIT (in HUF mn) [continued]
Based on parameters accepted by Supervisory Board, relating to the year 2022 effective pieces are follows
As at 31 December 2024:
Approved
pieces of shares
Exercised until
31 December
2024
Weighted
average share
price at the
date of exercise
(in HUF)
Expired
pieces
Exercisable at 31
December 2024
Share-purchasing period started in 2023
57,412
57,364
13,484
48
-
Remuneration exchanged to share
provided in 2023
8,726
8,590
11,629
136
-
Share-purchasing period starting in 2024
103,159
102,651
17,684
-
508
Remuneration exchanged to share
applying in 2024
3,769
3,769
17,399
-
-
Share-purchasing period starting in 2025
-
-
-
-
42,814
Remuneration exchanged to share
applying in 2025
-
-
-
-
3,993
Share-purchasing period starting in 2026
-
-
-
-
43,714
Remuneration exchanged to share
applying in 2026
-
-
-
-
3,993
Share-purchasing period starting in 2027
-
-
-
-
44,701
Remuneration exchanged to share
applying in 2027
-
-
-
-
3,993
Share-purchasing period starting in 2028
-
-
-
-
19,756
Based on parameters accepted by Supervisory Board, relating to the year 2023 effective pieces are follows
As at 31 December 2024:
Approved
pieces of shares
Exercised until
31 December
2024
Weighted
average share
price at the
date of exercise
(in HUF)
Expired
pieces
Exercisable at 31
December 2024
Share-purchasing period starting in 2024
164,371
96,566
20,731
1,124
66,681
Remuneration exchanged to share
applying in 2024
6,745
6,745
17,402
-
-
Share-purchasing period starting in 2025
-
-
-
-
166,280
Remuneration exchanged to share
applying in 2025
-
-
-
-
6,091
Share-purchasing period starting in 2026
-
-
-
-
71,160
Remuneration exchanged to share
applying in 2026
-
-
-
-
2,960
Share-purchasing period starting in 2027
-
-
-
-
81,415
Remuneration exchanged to share
applying in 2027
-
-
-
-
2,960
Share-purchasing period starting in 2028
-
-
-
-
87,315
Remuneration exchanged to share
applying in 2028
-
-
-
-
2,960
Share-purchasing period starting in 2029
-
-
-
-
39,324
Effective pieces relating to the periods starting in 2025-2029 settled during valuation of performance of year 2020-2023,
can be modified based on risk assessment and personal changes.
In connection with the share-based compensation for Board of Directors and connecting compensation, shares given as a
part of payments detailed above and for the year 2024 based on performance assessment accounted as equity-settled share
based transactions HUF 4,411 million was recognized as expense for the year ended 31 December 2024.
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
512
NOTE 40:
RELATED PARTY TRANSACTIONS (in HUF mn)
Outstanding balances and transactions with related parties are summarized below in aggregate:
Statement of financial position
31 December 2024
31 December 2023
Associated
companies and
other
companies
Other
related
parties
Associated
companies and
other
companies
Other
related
parties
Cash, amounts due from banks and
balances with the National Bank of
Hungary
38,696
-
11,568
-
Placements with other banks
2,696,016
-
2,202,179
-
Repo receivables
98,652
-
183,394
-
Held for trading securities
33
-
16
-
Held for trading derivative financial
instruments:
39,210
-
43,808
-
Financial assets at fair value through
other comprehensive income
306,412
-
273,400
-
Securities at amortised cost
-
614
-
609
Loans at amortised cost
779,287
52,607
979,319
56,353
Loans mandatorily measured at fair
value through profit or loss
-
36
-
42
Right of use assets
23,159
-
25,972
-
Derivative financial assets designated as
hedge accounting relationships
1,695
-
1,345
-
Other assets
167,927
155
173,687
280
Total Assets
4,151,087
53,412
3,894,688
57,284
Amounts due to banks and deposits from
the National Bank of Hungary and
other banks
(892,432)
-
(998,512)
-
Repo liabilities
(95,509)
-
(317,457)
-
Deposits from customers
(296,116)
(24,271)
(300,557)
(78,840)
Leasing liabilities
(24,590)
-
(26,948)
-
Liabilities from issued securities
(15,154)
-
(13,019)
-
Derivative financial liabilities designated
as held for trading
(26,420)
-
(24,137)
-
Derivative financial liabilities designated
as hedge accounting relationships
(15,141)
-
(898)
-
Other liabilities
(13,154)
(27)
(14,681)
-
Total Liabilities
(1,378,516)
(24,298)
(1,696,209)
(78,840)
Off balance sheet items
Guarantees
(1,168,778)
(6,965)
(1,324,353)
(10,209)
Loan commitments
(53,202)
(47,627)
(59,569)
(49,294)
Factoring loan commitments
(960)
(6,045)
(1,094)
(2,977)
Letter of credit
(86)
-
-
-
Total
(1,223,026)
(60,637)
(1,385,016)
(62,480)
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
513
NOTE 40:
RELATED PARTY TRANSACTIONS (in HUF mn) [continued]
Outstanding balances and transactions with related parties are summarized below in aggregate: [continued]
Statement of Profit or Loss
Year ended 31
December 2024
Year ended 31
December 2023
Interest Income
351,675
419,368
Interest Expense
(225,063)
(291,054)
Risk cost
2,665
20,067
(Losses)/Gains arising from derecognition of financial assets
measured at amortised cost
45
968
Income from fees and commissions
53,296
35,577
Expenses from fees and commissions
(1,954)
(3,599)
Other administrative expenses
(12,461)
(11,778)
Related party transactions with key management
The compensation of key management, such as the members of the Board of Directors, the members of the Supervisory
Board and the employees involved in the decision-making process in accordance with the compensation categories
defined in IAS 24 Related Party Disclosures, is summarised below:
31 December
2024
31 December
2023
Short-term employee benefits
4,123
3,379
Share-based payment
3,351
1,732
Long-term employee benefits (on the basis of IAS 19)
355
320
Total
7,829
5,431
31 December
2024
31 December
2023
oans provided to companies owned by the Management (in the
normal course of business)
52,607
56,353
ommitments to extend credit and bank guarantees
60,637
62,480
An analysis of payment to Executives related to their activity in Board of Directors and Supervisory Board is as
follows (in HUF mn):
31 December
2024
31 December
2023
Members of Board of Directors
2,107
1,283
Members of Supervisory Board
253
225
Total
2,360
1,508
In the normal course of business, OTP Bank enters into other transactions with its subsidiaries, the amounts and volumes
of which are not significant to these financial statements taken as a whole.
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
514
NOTE 41:
TRUST ACTIVITIES (in HUF mn)
The Bank acts as a trustee for certain loans granted by companies or employers to their employees, mainly for housing
purposes. The ultimate risk for these loans rests with the party advancing the funds. As these loans and related funds are
not considered to be assets or liabilities of the Bank, they have been excluded from the accompanying separate statement
of financial position.
31 December
2024
31 December
2023
Loans managed by the Bank as a trustee
25,691
26,851
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
515
NOTE 42:
CONCENTRATION OF ASSETS AND LIABILITIES
31 December
2024
31 December
2023
In the percentage of the total assets
Receivables from, or securities issued by the Hungarian
Government or the NBH
25.61%
27.39%
Securities issued by the OTP Mortgage Bank Ltd.
1.67%
1.54%
Loans at amortised cost
6.55%
5.29%
There were no other significant concentrations of the assets or liabilities of the Bank as at 31 December 2023 or 31
December 2022.
OTP Bank continuously provides the Authority with reports on the extent of dependency on large depositors as well as
the exposure of the largest 50 depositors towards OTP Bank. Further to this obligatory reporting to the Authority. OTP
Bank pays particular attention on the exposure of its largest partners and cares for maintaining a closer relationship with
these partners in order to secure the stability of the level of deposits.
The organisational unit of OTP Bank in charge of partner-risk management analyses the largest partners on a constant
basis and sets limits on OTP Bank’s and the Group’s exposure separately partner-by-partner. If necessary, it modifies
partner-limits in due course thereby reducing the room for manoeuvring of the Treasury and other business areas.
The Bank’s internal regulation (Limit-management regulation) controls risk management which related to exposures of
clients. Bank makes a difference between clients or clients who are economically connected with each other, partners,
partners operating in the same geographical region or in the same economic sector, exposures from customers. Limit-
management regulation includes a specific range provisions system used by Bank to control risk exposures. This
regulation has to be used by the Bank for its business (lending) risk-taking activity in both the retail and corporate sector.
To specify credit risk limits, the Bank strives their clients get an acceptable margin of risk based on their financial
situation. In the Bank limit system a lower level decision-making delegation has to be provided.
If an OTP group member takes risk against a client or group of clients (either inside the local economy or outside), the
client will be qualified as a group level risk and these limits will be specified at group level.
The validity period of this policy is 12 months. The limit shall be reviewed prior to the expiry date but at least once a year
based on the relevant information required to limit calculations.
The maximum credit exposure to any client or counterparty among Loans at amortised cost was HUF 1,205 billion and
HUF 813 billion as at 31 December 2024 and 31 December 2023 respectively, before taking into account collateral or
other credit enhancements.
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
516
NOTE 43:
EARNINGS PER SHARE
Earnings per share attributable to the Bank’s ordinary shares are determined by dividing Net profit for the year attributable
to ordinary shareholders, after the deduction of declared preference dividends, by the weighted average number of
ordinary shares outstanding during the year. Dilutive potential ordinary shares are deemed to have been converted into
ordinary shares.
31 December
2024
31 December
2023
Net profit for the year attributable to ordinary shareholders (in HUF
744,999
654,988
Weighted average number of ordinary shares outstanding during the
for calculating basic EPS (number of share)
276,764,
279,485,
Basic Earnings per share (in HUF)
2,692
2,344
Separate net profit for the year attributable to ordinary shareholder
HUF mn)
744,999
654,988
Modified weighted average number of ordinary shares outstan
during the year for calculating diluted EPS (number of share)
276,769,
279,490,
Diluted Earnings per share (in HUF)
2,692
2,344
31 December
2024
31 December
2023
Weighted average number of ordinary shares
280,000,
280,000,0
Average number of Treasury shares
(3,235,
(514,089)
Weighted average number of ordinary shares outstanding du
the year for calculating basic EPS
276,764,
279,485,9
Dilutive effect of options issued in accordance with the Remunera
Policy / Management Option Program and convertible into ordi
shares
5,205
4,620
The modified weighted average number of ordinary sh
outstanding during the year for calculating diluted EPS
276,769,
279,490,5
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
517
NOTE 44:
NET GAIN OR LOSS REALISED ON FINANCIAL INSTRUMENTS (in HUF mn)
Year ended 31 December 2024
Net interest
income and
expense
Net non-interest
gain and loss
Loss
allowance
Other
comprehensive
income
Financial assets measured at amortised cost
Cash, amounts due from banks and balances
with the National Bank of Hungary
159,459
-
-
-
Placements with other banks
179,241
-
(233)
-
Repo receivables
14,663
-
(13)
-
Loans
437,745
16,730
20,201
-
Securities at amortised cost
216,762
(7,871)
10,568
-
Financial assets measured at amortised cost
total
1,007,870
8,859
30,523
-
Financial assets measured at fair value
Securities held for trading
3,183
3,585
-
-
Securities at fair value through other
comprehensive income
30,311
855
24,560
9,751
Equity instruments at fair value through other
comprehensive income
-
344
-
11,547
Loans mandatorily measured at fair value
through profit or loss
62,663
28,685
(4,193)
-
Financial assets measured at fair value
total
96,157
33,469
20,367
21,298
Financial liabilities measured at amortised
cost
Amounts due to banks and deposits from the
National Bank of Hungary and other banks
(100,605)
-
-
-
Repo liabilities
(70,496)
-
-
-
Deposits from customers
(205,751)
262,477
-
-
Leasing liabilities
(3,147)
-
-
-
Liabilities from issued securities
(94,253)
-
-
-
Subordinated bonds and loans
(30,163)
-
-
-
Financial liabilities measured at amortised
cost total
(504,415)
262,477
-
-
Financial liabilities designated to measure
at fair value through profit or loss
(1,344)
1,240
-
-
Derivative financial instruments
(76,343)
(6,063)
-
-
Total
521,925
299,982
50,890
21,298
Current year change of derivative financial assets and liabilities held-for-trading and designated as hedge
accounting by types of results in the profit or loss for the year ended 31 December 2024
Held-for-
trading
Hedge
accounting
Balance as at 1 January
13,234
(5,795)
Change in current period
on interest income/interest expense
16,505
10,138
on net results on derivative instruments and hedge relationships
(98,566)
44,666
on revaluation difference
71,775
-
Realized result on closed deals /matured deals
23,614
(25,317)
Closing balance
26,562
23,692
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
518
NOTE 44:
NET GAIN OR LOSS REALISED ON FINANCIAL INSTRUMENTS
(in HUF mn) [continued]
Year ended 31 December 2023
Net interest
income and
expense
Net non-interest
gain and loss
Loss
allowance
Other
comprehensive
income
Financial assets measured at amortised cost
Cash, amounts due from banks and balances
with the National Bank of Hungary
338,840
-
-
-
Placements with other banks
206,280
-
(12,358)
-
Repo receivables
37,435
-
(1,800)
-
Loans
457,471
12,668
5,542
-
Securities at amortised cost
129,054
(19,400)
(8,576)
-
Financial assets measured at amortised cost
total
1,169,080
(6,732)
(17,192)
-
Financial assets measured at fair value
Securities held for trading
1,168
10,511
-
-
Securities at fair value through other
comprehensive income
50,838
510
(3,303)
37,917
Equity instruments at fair value through other
comprehensive income
-
254
-
3,308
Loans mandatorily measured at fair value
through profit or loss
51,132
95,711
980
-
Financial assets measured at fair value total
103,138
106,986
(2,323)
41,225
Financial liabilities measured at amortised
cost
Amounts due to banks and deposits from the
National Bank of Hungary and other banks
(94,942)
-
-
-
Repo liabilities
(202,137)
-
-
-
Deposits from customers
(336,118)
233,243
-
-
Leasing liabilities
(2,314)
-
-
-
Liabilities from issued securities
(58,495)
-
-
-
Subordinated bonds and loans
(29,893)
-
-
-
Financial liabilities measured at amortised
cost total
(723,899)
233,243
-
-
Financial liabilities designated to measure at
fair value through profit or loss
(1,433)
(4,542)
-
-
Derivative financial instruments
(78,871)
13,055
-
-
Total
468,015
342,010
(19,515)
41,225
Current year change of derivative financial assets and liabilities held-for-trading and designated as hedge
accounting by types of results in the profit or loss for the year ended 31 December 2023
Held-for-
trading
Hedge
accounting
Balance as at 1 January
(68,682)
(3,403)
Change in current period
on interest income/interest expense
88,973
(1,161)
on net results on derivative instruments and hedge relationships
4,524
(27,167)
on revaluation difference
(4,263)
15,273
Realized result on closed deals /matured deals
(7,318)
10,663
Closing balance
13,234
(5,795)
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
519
NOTE 45:
FAIR VALUE OF FINANCIAL INSTRUMENTS (in HUF mn)
In determining the fair value of a financial asset or liability the Bank in the case of instruments that are quoted on an
active market uses the market price. In most cases market price is not publicly available so the Bank has to make
assumptions or use valuation techniques to determine the fair value of a financial instrument. See Note 45. d) for more
information about fair value classes applied for financial assets and liabilities measured at fair value in these financial
statements.
To provide a reliable estimate of the fair value of those financial instrument that are originally measured at amortised
cost, the Bank used the discounted cash flow analysis (loans, placements with other banks, amounts due to banks, deposits
from customers). The fair value of issued securities and subordinated bonds is based on quoted prices (e,g, Reuters), Cash
and amounts due from banks and balances with the National Bank of Hungary represent amounts available immediately
thus the fair value equals to the cost.
The assumptions used when calculating the fair value of financial assets and liabilities when using valuation technique
are the following:
•
the discount rates are the risk free rates related to the denomination currency adjusted by the appropriate risk
premium as of the end of the reporting period,
•
the contractual cash flows are considered for the performing loans and for the non-performing loans, the
amortised cost less impairment is considered as fair value,
•
the future cash flows for floating interest rate instruments are estimated from the yield curves as of the end of
the reporting period,
•
the fair value of the deposit which can be due in demand cannot be lower than the amount payable on demand.
For classes of assets and liabilities not measured at fair value in the statement of financial position, the income approach
was used to convert future cash flows to a single current amount. Fair value of current assets is equal to carrying amount,
fair value of liabilities from issued securities and other bond-type classes of assets and liabilities not measured at fair
value measured based on Reuters market rates and, fair value of other classes not measured at fair value of the statement
of financial position are measured using the discounted cash flow method. Fair value of loans, net of allowance for loan
losses measured using discount rate adjustment technique, the discount rate is derived from observed rates of return for
comparable assets or liabilities that are traded in the market.
Methods and significant assumptions used to determine fair value of the different classes of financial instruments:
-
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
-
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability
either directly or indirectly;
-
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
Use of modified yield curve
During the year ended 31 December 2024 and 2023 yield curves derived from Hungarian government bonds (“ÁKK
curve”) have become distorted due to certain market events, which means that real liquidity has concentrated on certain
part of the yield curve. Therefore a modified yield curve - which is not observable on the market - has been used at the
concerning fair value calculations. This yield curve is based on the relevant yield curve points of the original ÁKK curve.
Based on Management’s discretion fair value calculated with modified yield curves can represent the perspective of
market participants reliable at current market conditions.
For the year ended 31 December 2024 and 2023 modified yield curve was used for calculating fair value in the case of
subsidised personal loans represented in “Loans mandatorily measured at fair value through profit or loss” line.
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
520
NOTE 45:
FAIR VALUE OF FINANCIAL INSTRUMENTS (in HUF mn) [continued]
45.1.
Fair value of financial assets and liabilities at amortised cost
31 December 2024
31 December 2023
Carrying
amount
Fair value
Level 1
Level 2
Level 3
Carrying
amount
Fair value
Level 1
Level 2
Level 3
Cash, amounts due from banks and balances
with the National Bank of Hungary
2,075,179
2,075,179
2,075,179
-
-
2,708,232
2,708,232
2,708,232
-
-
Placements with other banks
2,948,536
3,134,255
1,288,299
1,845,956
-
2,702,433
2,933,781
1,509,113
1,424,668
-
Repo receivables
238,079
238,425
-
238,425
-
201,658
201,742
-
201,742
-
Securities at amortised cost
3,334,145
3,150,646
2,886,069
254,595
9,982
2,710,848
2,494,227
2,236,994
238,837
18,396
Loans at amortised cost
4,670,795
4,790,988
-
-
4,790,988
4,681,359
4,824,169
-
- 4,824,169
Other financial assets
281,575
281,575
-
-
281,575
298,838
298,838
-
-
298,838
Total assets measured at amortised cost
13,548,309
13,671,068
6,249,547
2,338,976
5,082,545
13,303,368 13,460,989
6,454,339
1,865,247 5,141,403
Amounts due to banks, deposits from the
National Bank of Hungary and other banks
1,606,969
1,569,047
599,597
969,450
-
1,761,579
1,709,710
609,288
1,100,422
-
Repo liabilities
227,632
233,891
-
233,891
-
443,694
457,508
-
457,508
-
Deposits from customers
10,896,227
10,897,287
-
10,897,287
-
10,734,325 10,741,597
- 10,741,597
-
Leasing liabilities
64,380
66,790
-
-
66,790
68,282
68,328
-
-
68,328
Liabilities from issued securities
1,750,893
1,788,620
1,788,620
-
-
1,163,109
1,201,901
1,201,901
-
-
Subordinated bonds and loans
362,271
365,170
365,170
-
-
520,296
421,030
421,030
-
-
Other financial liabilities
337,616
337,616
-
-
337,616
243,319
243,319
-
-
243,319
Total liabilities measured at amortised
cost
15,245,988
15,258,421
2,753,387
12,100,628
404,406
14,934,604 14,843,393
2,232,219 12,299,527
311,647
Deposit from customers includes the fair value changes on hedged deposits involved in portfolio hedge of interest rate risk.
1)
45.2.
Derivative financial instruments
OTP Bank regularly enters into hedging transactions in order to decrease its financial risks. However some economically hedging transaction do not meet the criteria to account for
hedge accounting, therefore these transactions were accounted as derivatives held for trading. Net investment hedge in foreign operations is not applicable in separate financial
statements.
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
521
NOTE 45:
FAIR VALUE OF FINANCIAL INSTRUMENTS (in HUF mn) [continued]
45.2.
Derivative financial instruments [continued]
The assessment of the hedge effectiveness (both for fair value hedges and cash flow hedges) to determine the economic relationship between the hedged item and the hedging instrument
is accomplished with prospective scenario analysis via different rate shift scenarios of the relevant risk factor(s) of the hedged risk component(s). The fair value change of the hedged
item and the hedging instrument is compared in the different scenarios. Economic relationship is justified if the change of the fair value of the hedged item and the hedging instrument
are in the opposite direction and the absolute changes are similar amounts. The hedge ratio is determined as the ratio of the notional of the hedged item and the notional of the hedging
instrument. The sources of hedge ineffectiveness are the not hedged risk components (e.g. change of cross currency basis spreads in the case of interest rate risk hedges), slight
differences in maturity dates and interest payment dates in the case of fair value hedges, and differences between the carrying amount of the hedged item and the carrying amount of
the hedging instrument in the case of FX hedges (e.g. caused by interest rate risk components in the fair value of the hedging instrument).
Fair value of derivative financial instruments1
The Bank has the following held for trading derivatives and derivatives designated as hedge accounting:
31 December 2024
31 December 2023
Before netting
Netting
After netting
Before netting
Netting
After netting
Assets
Liabilities
Assets
Liabilities
Assets
Liabilities
Assets
Liabilities
Held for trading derivative financial instruments
Interest rate derivatives
Interest rate swaps
104,130
(88,266)
89,523
14,607
1,257
130,230
(113,742)
110,939
19,291
(2,803)
Cross currency interest rate swaps
10,472
(10,558)
-
10,472
(10,558)
8,644
(6,532)
-
8,644
(6,532)
OTC options
462
(462)
-
462
(462)
818
(818)
-
818
(818)
Forward rate agreement
219
(172)
219
-
47
-
(214)
-
-
(214)
Total interest rate derivatives (OTC derivatives)
115,283
(99,458)
89,742
25,541
(9,716)
139,692
(121,306)
110,939
28,753
(10,367)
From this: Interest rate derivatives cleared by NBH
906
-
-
906
-
1,132
-
-
1,132
-
Foreign exchange derivatives
Foreign exchange swaps
53,620
(48,969)
-
53,620
(48,969)
54,528
(32,818)
-
54,528
(32,818)
Foreign exchange forward
15,736
(8,440)
-
15,736
(8,440)
6,551
(10,129)
-
6,551
(10,129)
OTC options
1,433
(825)
-
1,433
(825)
1,016
(871)
-
1,016
(871)
Foreign exchange spot conversion
179
(266)
-
179
(266)
347
(303)
-
347
(303)
Total foreign exchange derivatives (OTC derivatives)
70,968
(58,500)
-
70,968
(58,500)
62,442
(44,121)
-
62,442
(44,121)
1 Certain derivative financial assets and liabilities are offset and the net amount is presented in accordance with IAS 32 in the Statement of Financial Position. The Bank has the ability and the intention
to settle those instruments on a net basis, which are settled through the same clearing house.
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
522
NOTE 45:
FAIR VALUE OF FINANCIAL INSTRUMENTS (in HUF mn) [continued]
45.2. Derivative financial instruments [continued]1
Fair value of derivative financial instruments [continued]
31 December 2024
31 December 2023
Before netting
Netting
After netting
Before netting
Netting
After netting
Assets
Liabilities
Assets
Liabilities
Assets
Liabilities
Assets
Liabilities
Equity stock and index derivatives
Commodity Swaps
10,475
(10,616)
-
10,475
(10,616)
32,402
(32,490)
-
32,402
(32,490)
Equity swaps
-
(1,194)
-
-
(1,194)
126
(3,826)
-
126
(3,826)
OTC derivatives
10,475
(11,810)
-
10,475
(11,810)
32,528
(36,316)
-
32,528
(36,316)
Exchange traded futures and options
1,331
(728)
-
1,331
(728)
433
(451)
-
433
(451)
Total equity stock and index derivatives
11,806
(12,538)
-
11,806
(12,538)
32,961
(36,767)
-
32,961
(36,767)
Derivatives held for risk management not designated in hedges
Interest rate swaps
71,779
(82,909)
28,980
42,799
(53,929)
68,380
(91,634)
22,237
46,143
(69,397)
Foreign exchange swaps
9,689
(8,675)
-
9,689
(8,675)
11,796
(20,284)
-
11,796
(20,284)
Forward
-
(72)
-
-
(72)
127
-
-
127
-
Cross currency interest rate swaps
10,258
(1,069)
-
10,258
(1,069)
14,577
(2,629)
-
14,577
(2,629)
Total derivatives held for risk management not designated in
hedges
91,726
(92,725)
28,980
62,746
(63,745)
94,880
(114,547)
22,237
72,643
(92,310)
From this: Total derivatives cleared by NBH held for risk management
28,788
-
-
28,788
-
33,042
-
-
33,042
-
Total Held for trading derivative financial instruments
289,783
(263,221)
118,722
171,061
(144,499)
329,975
(316,741)
133,176
196,799
(183,565)
Derivative financial instruments designated as hedge accounting
relationships
Derivatives designated in cash flow hedges
Interest rate swaps
1
(8,453)
8,453
(8,452)
-
-
(9,935)
1,066
(1,066)
(8,869)
Total derivatives designated in cash flow hedges
1
(8,453)
8,453
(8,452)
-
-
(9,935)
1,066
(1,066)
(8,869)
Derivatives designated in fair value hedges
Interest rate swaps
53,401
(19,975)
19,957
33,444
(18)
37,651
(33,054)
25,130
12,521
(7,924)
Cross currency interest rate swaps
13,903
(19,420)
-
13,903
(19,420)
10,173
(10,679)
-
10,173
(10,679)
Total derivatives designated in fair value microhedges
67,304
(39,395)
19,957
47,347
(19,438)
47,824
(43,733)
25,130
22,694
(18,603)
Interest rate swaps
4,235
-
-
4,235
-
168
(119)
168
-
49
Total derivatives designated in fair value macrohedges
4,235
-
-
4,235
-
168
(119)
168
-
49
From this: Total derivatives cleared by NBH held for hedging
-
(1,764)
-
-
(1,764)
-
(5,485)
-
-
(5,485)
Total derivatives held for risk management (OTC derivatives)
71,540
(47,848)
28,410
43,130
(19,438)
47,992
(53,787)
26,364
21,628
(27,423)
1 Certain derivative financial assets and liabilities are offset and the net amount is presented in accordance with IAS 32 in the Statement of Financial Position. The Bank has the ability and the intention
to settle those instruments on a net basis, which are settled through the same clearing house.
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
523
NOTE 45:
FAIR VALUE OF FINANCIAL INSTRUMENTS (in HUF mn) [continued]
45.2. Derivative financial instruments [continued]1
Fair value of derivative financial instruments [continued]
Financial assets subject to offsetting, netting arrangement as at 31 December 2024
Offsetting recognised on the balance sheet
Netting potential not recognised
on the balance sheet
Assets not
subject to netting
arrangements
Total assets
Maximum
exposure to
risk
Gross
assets
before
offset
Offsetting
with
gross
liabilities
Net assets recognised
on the statement of
financial position
Financial
liabilities
Collateral
received
Assets after
consideration
of netting
potential
Assets recognised
on the statement
of financial
position
Recognised in
the statement of
financial
position
After
consideration
of netting
potential
Derivative financial
instruments
315,026 (147,132)
167,894 (54,939)
(74,570)
38,385
46,297
214,191
84,682
Financial liabilities subject to offsetting, netting arrangement as at 31 December 2024
Offsetting recognised on the balance sheet
Netting potential not recognised
on the balance sheet
Assets not
subject to netting
arrangements
Total
liabilities
Maximum
exposure to
risk
Gross
liabilities
before
offset
Offsetting
with
gross
assets
Net liabilities
recognised on the
statement of financial
position
Financial
assets
Collateral
pledged
Liabilities
after
consideration
of netting
potential
Liabilities
recognised on the
statement of
financial position
Recognised in
the statement of
financial
position
After
consideration
of netting
potential
Derivative financial
instruments
297,744 (147,132)
150,612 (54,939)
(60,586)
35,087
13,325
163,937
48,412
1 Certain derivative financial assets and liabilities are offset and the net amount is presented in accordance with IAS 32 in the Statement of Financial Position. The Bank has the ability and the intention
to settle those instruments on a net basis, which are settled through the same clearing house.
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
524
NOTE 45:
FAIR VALUE OF FINANCIAL INSTRUMENTS (in HUF mn) [continued]
45.2. Derivative financial instruments [continued]1
Fair value of derivative financial instruments [continued]
Financial assets subject to offsetting, netting arrangement as at 31 December 2023
Offsetting recognised on the balance sheet
Netting potential not recognised
on the balance sheet
Assets not
subject to netting
arrangements
Total assets
Maximum
exposure to
risk
Gross
assets
before
offset
Offsetting
with
gross
liabilities
Net assets recognised
on the statement of
financial position
Financial
liabilities
Collateral
received
Assets after
consideration
of netting
potential
Assets recognised
on the statement
of financial
position
Recognised in
the statement of
financial
position
After
consideration
of netting
potential
Derivative financial
instruments
324,446 (158,844)
165,602 (60,721)
(76,853)
28,028
52,825
218,427
80,853
Financial liabilities subject to offsetting, netting arrangement as at 31 December 2023
Offsetting recognised on the balance sheet
Netting potential not recognised
on the balance sheet
Assets not
subject to netting
arrangements
Total
liabilities
Maximum
exposure to
risk
Gross
liabilities
before
offset
Offsetting
with
gross
assets
Net liabilities
recognised on the
statement of financial
position
Financial
assets
Collateral
pledged
Liabilities
after
consideration
of netting
potential
Liabilities
recognised on the
statement of
financial position
Recognised in
the statement of
financial
position
After
consideration
of netting
potential
Derivative financial
instruments
347,414 (158,844)
188,570 (60,721) (103,563)
24,286
22,418
210,988
46,704
1 Certain derivative financial assets and liabilities are offset and the net amount is presented in accordance with IAS 32 in the Statement of Financial Position. The Bank has the ability and the intention
to settle those instruments on a net basis, which are settled through the same clearing house.
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
525
NOTE 45:
FAIR VALUE OF FINANCIAL INSTRUMENTS (in HUF mn) [continued]
45.3.
Hedge accounting
Interest rate risk management is centralized at OTP Bank. Interest rate risk exposures in major currencies are managed at
HQ on consolidated level. Although risk exposures in local currencies are managed at subsidiary level, the respective
decisions are subject to HQ approval. Interest rate risk is measured by simulating NII and EVE under different stress and
plan scenarios, the established risk limits are described in „OTP Bank’s Group-Level Regulations on the Management of
Liquidity Risk and Interest Rate Risk of Banking Book”. The interest rate risk management activity aims to stabilize NII
within the approved risk limits.
The risk management objective of these hedge relationships is to mitigate the risk of clean fair value (i.e. excluding
accrued interest) change of MIRS loans due to the change of interest rate reference indexes (BUBOR, EURIBOR, LIBOR,
etc.) of the respective currency.
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
526
NOTE 45:
FAIR VALUE OF FINANCIAL INSTRUMENTS (in HUF mn) [continued]
45.3. Hedge accounting [continued]
Amount, timing and uncertainty of future cash flows - hedging instruments as at 31 December 2024 (amounts in million currency)
Type of hedge
Type of risk
Type of instrument
Within one
month
Within three
months and over
one month
Within one year
and over three
months
Within five years
and over one year
More than five
years
Total
Fair Value Hedge
Interest rate risk
Interest rate swap
HUF
Notional
(10,000)
(3,000)
22,342
283,607
26,800
319,749
Average Interest Rate (%)
12.20%
1.20%
71.37%
4.21%
1.39%
EUR
Notional
-
-
(75)
(2,390)
-
(2,465)
Average Interest Rate (%)
-
-
3.26%
3.05%
-
USD
Notional
-
-
-
(1,106)
47
(1,059)
Average Interest Rate (%)
-
-
-
3.65%
4.18%
JPY
Notional
-
-
4,500
-
-
4,500
Average Interest Rate (%)
-
-
0.22%
-
-
Fair Value Hedge
FX & IR risk
Cross currency interest rate swap
EUR/HUF
Notional
-
1
2
6
9
18
Average Interest Rate (%)
-
(1.69%)
(1.69%)
(1.76%)
(1.82%)
Average FX Rate
-
310.04
310.04
308.93
307.71
Fair Value Hedge
FX risk
Cross currency interest rate swap
EUR/HUF
Notional
-
-
191
1,474
-
1,665
Average FX Rate
-
426.83
379.97
383.10
-
RON/HUF
Notional
-
175
450
425
-
1,050
Average FX Rate
-
79.76
80.30
75.17
-
JPY/HUF
Notional
-
-
4,500
-
-
4,500
Average FX Rate
-
-
2.43
-
-
Cash flow Hedge
Interest rate risk
Interest rate swap
HUF
Notional
-
-
-
28,027
-
28,027
Average Interest Rate
-
-
-
2.46
-
Fair Value Hedge -
Macro
Interest rate risk
Interest rate swap
EUR
Notional
-
-
(170)
(680)
(170)
(1,020)
Average Interest Rate
-
-
2.93
2.57
2.51
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
527
NOTE 45:
FAIR VALUE OF FINANCIAL INSTRUMENTS (in HUF mn) [continued]
45.3. Hedge accounting [continued]
Amount, timing and uncertainty of future cash flows - hedging instruments as at 31 December 2023 (amounts in million currency)
Type of hedge
Type of risk
Type of instrument
Within one
month
Within three
months and over
one month
Within one year
and over three
months
Within five years
and over one year
More than five
years
Total
Fair Value Hedge
Interest rate risk
Interest rate swap
HUF
Notional
-
-
(24,975)
102,049
28,300
105,374
Average Interest Rate (%)
-
-
15.66%
15.25%
1.38%
EUR
Notional
-
-
-
-590
-
-590
Average Interest Rate (%)
-
-
-
3.92%
-
USD
Notional
-
-
-
-1,106
47
-1,059
Average Interest Rate (%)
-
-
-
3.65%
4.18%
JPY
Notional
-
-
-
4,500
-
4,500
Average Interest Rate (%)
-
-
-
0.22%
-
Fair Value Hedge
FX & IR risk
Cross currency interest rate swap
EUR/HUF
Notional
-
1
2
8
10
21
Average Interest Rate (%)
-
(1.69%)
(1.68%)
(1.73%)
(1.82%)
Average FX Rate
-
310.02
310.10
309.36
307.71
Fair Value Hedge
FX risk
Cross currency interest rate swap
EUR/HUF
Notional
-
175
250
1,167
500
2,092
Average FX Rate
-
356.12
359.11
383.36
381.11
RON/HUF
Notional
-
-
575
1,250
-
1,825
Average FX Rate
-
-
73.75
74.94
-
JPY/HUF
Notional
-
-
-
4,500
-
4,500
Average FX Rate
-
-
-
2.43
-
USD/HUF
Notional
-
-
143
-
-
143
Average FX Rate
-
-
357.16
-
-
Fair Value Hedge
Other
Interest rate swap
HUF
Notional
-
-
778
-
-
778
Cash flow Hedge
Interest rate risk
Interest rate swap
HUF
Notional
-
-
-
28,027
-
28,027
Average Interest Rate
-
-
-
2.46
-
Fair Value Hedge - Macro
Interest rate risk
Interest rate swap
EUR
Notional
-
-
(60)
(240)
(120)
(420)
Average Interest Rate
-
-
3.54
2.61
2.42
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
528
NOTE 45:
FAIR VALUE OF FINANCIAL INSTRUMENTS (in HUF mn) [continued]
45.3. Hedge accounting [continued]
Derivative financial instruments designated as hedge accounting as follows:
Type of instrument
Type of risk
Nominal amount
of the hedging
instrument
Carrying amount of the hedging instrument for the
year ended 31 December 2024
Line item in the statement of financial
position where the hedging instrument is
located
Changes in fair value used for calculating
hedge ineffectiveness for the year ended 31
December 2024
Before netting
Netting
After netting
Assets Liabilities
Assets Liabilities
Fair value hedge - micro
Interest rate swap
Interest rate risk
2,177,310
53,401
(19,974)
19,957
33,444
(17)
Derivative assets (liabilities) held for risk
management
(1,193)
Cross-currency swap FX & IR risk
5,265
-
(1,764)
-
-
(1,764)
Derivative assets (liabilities) held for risk
management
(859)
Cross-currency swap FX risk
776,876
13,903
(17,657)
-
13,903
(17,657)
Derivative assets (liabilities) held for risk
management
11,104
Cash flow hedge
Interest rate swap
Interest rate risk
66,899
1
(8,453)
8,453
(8,452)
-
Derivative assets (liabilities) held for risk
management
(40)
Fair value hedge - macro
Interest rate swap
Interest rate risk
418,292
4,235
-
-
4,235
-
Derivative assets (liabilities) held for risk
management
(30)
31 December 2024
Type of risk
Carrying amount of the hedged item
Accumulated amount of fair value hedge
adjustments on the hedged item included in the
carrying amount of the hedged item
Line item in the statement of financial position
in which the hedged item is included
Assets
Liabilities
Assets
Liabilities
Fair value hedge - micro
- Loans
Interest rate risk
29,439
-
(3,049)
-
Loans
- Loans
Interest rate risk
-
144,441
-
(3,618)
Amounts due to banks and deposits from the
National Bank of Hungary and other banks
- Government bonds
Interest rate risk
354,572
-
(1,428)
-
Securities at amortised cost
- Government bonds
Interest rate risk
150,531
-
(17,620)
-
Securities at fair value through other
comprehensive income
- Other securities
Interest rate risk
4,101
-
(99)
-
Securities at fair value through other
comprehensive income
- Other securities
Interest rate risk
-
1,242,277
-
17,930
Liabilities from issued securities
- Other securities
Interest rate risk
-
249,936
-
(3,474)
Subordinated debts
- Loans
FX & IR risk
3,499
-
36
-
Loans
- Loans
FX risk
678,845
-
-
-
Loans
- Government bonds
FX risk
11,307
-
-
-
Securities at fair value through other
comprehensive income
- Government bonds
FX risk
86,541
-
-
-
Securities at amortised cost
- Other securities
FX risk
-
14,053
-
-
Liabilities from issued securities
Fair value hedge - micro total
1,318,835
1,650,707
(22,160)
10,838
Fair value hedge - macro
- Customer deposits
-
414,492
-
4,303
Customer deposits
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
529
NOTE 45:
FAIR VALUE OF FINANCIAL INSTRUMENTS (in HUF mn) [continued]
45.3. Hedge accounting [continued]
Derivative financial instruments designated as hedge accounting as follows:
Type of instrument
Type of risk
Nominal amount
of the hedging
instrument
Carrying amount of the hedging instrument for the
year ended 31 December 2023
Line item in the statement of financial
position where the hedging instrument is
located
Changes in fair value used for calculating
hedge ineffectiveness for the year ended 31
December 2023
Before netting
Netting
After netting
Assets Liabilities
Assets Liabilities
Fair value hedge
Interest rate swap
Interest rate risk
1,167,195
37,543
(33,055)
25,130
12,413
(7,925)
Derivative assets (liabilities) held for risk
management
648
Cross-currency swap FX & IR risk
6,394
-
(1,418)
-
-
(1,418)
Derivative assets (liabilities) held for risk
management
(893)
Cross-currency swap FX risk
997,565
10,173
(9,260)
-
10,173
(9,260)
Derivative assets (liabilities) held for risk
management
6,699
Interest rate swap
Other
778
108
-
-
108
-
Derivative assets (liabilities) held for risk
management
1
Cash flow hedge
Interest rate swap
Interest rate risk
66,899
-
(9,935)
1,066
(1,066)
(8,869)
Derivative assets (liabilities) held for risk
management
(84)
Fair value hedge - macro
Interest rate swap
Interest rate risk
160,768
168
(119)
168
-
49
Derivative assets (liabilities) held for risk
management
32)
31 December 2023
Type of risk
Carrying amount of the hedged item
Accumulated amount of fair value hedge
adjustments on the hedged item included in the
carrying amount of the hedged item
Line item in the statement of financial
position in which the hedged item is included
Assets
Liabilities
Assets
Liabilities
Fair value hedges
- Loans
Interest rate risk
26,839
-
(3,178)
-
Loans
- Loans
Interest rate risk
-
143,857
-
(11,249)
Amounts due to banks and deposits from the
National Bank of Hungary and other banks
- Government bonds
Interest rate risk
164,229
-
7,808
-
Securities at amortised cost
- Government bonds
Interest rate risk
148,843
-
20,391
-
Securities at fair value through other
comprehensive income
- Other securities
Interest rate risk
3,828
-
203
-
Securities at fair value through other
comprehensive income
- Other securities
Interest rate risk
-
457,027
-
6,539
Liabilities from issued securities
- Other securities
Interest rate risk
-
219,989
-
(157)
Subordinated debts
- Loans
FX & IR risk
3,266
-
(96)
-
Loans
- Loans
FX risk
949,447
-
-
-
Loans
- Government bonds
FX risk
10,986
-
-
-
Securities at amortised cost
- Government bonds
FX risk
49,378
-
-
-
Securities at fair value through other
comprehensive income
- Other securities
Other risk
-
897
-
(39)
Liabilities from issued securities
Fair value hedges - micro total
1,356,816
821,770
25,128
(4,906)
Fair value hedges - macro
- Customer deposits
Other risk
-
157,543
-
84
Customer deposits
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
530
NOTE 45:
FAIR VALUE OF FINANCIAL INSTRUMENTS (in HUF mn) [continued]
45.3. Hedge accounting [continued]
For the year ended 31 December 2024 OCI related to cash flow hedges as follows:
Type of risk
Carrying amount of
the hedged item
Cash flow hedge reserve
for the year ended 31
December 2024
Line item in the statement of
financial position in which the
hedged item is included
Assets
Liabilities
Interest rate risk
28,027
-
3,374 Loans at amortised cost
For the year ended 31 December 2023 OCI related to cash flow hedges as follows:
Type of risk
Carrying amount of
the hedged item
Cash flow hedge reserve
for the year ended 31
December 2023
Line item in the statement of
financial position in which the
hedged item is included
Assets
Liabilities
Interest rate risk
28,027
-
3,509 Loans at amortised cost
For the year ended 31 December 2024 change in basis swap spread recognised in OCI related to fair value hedges as
follows:
Type of risk
Carrying amount of
the hedged item
Items recognised in
other comprehensive
income 2024
Change in the items
recognized in other
comprehensive income
2024
Line item in the
statement of financial
position in which the
hedged item is included
Assets
Liabilities
FX risk
678,846
-
11
(217) Loans at amortised cost
FX risk
11,308
-
(51)
10 FVOCI debt securities
FX risk
86,541
-
549
549
Securities at amortised
cost
FX risk
-
14,053
16
16
Liabilities from issued
securities
776,695
14,053
525
358
For the year ended 31 December 2023 change in basis swap spread recognised in OCI related to fair value hedges as
follows:
Type of risk
Carrying amount of
the hedged item
Items recognised in
other comprehensive
income 2023
Change in the items
recognized in other
comprehensive income
2023
Line item in the
statement of financial
position in which the
hedged item is included
Assets
Liabilities
FX risk
949,447
-
167
530 Loans at amortised cost
FX risk
10,986
-
(69)
- FVOCI debt securities
960,433
-
98
530
Change in the fair value of the hedging instrument related to cash flow hedge
31 December 2024
Type of
instrument
Type of risk
Change in the value of
the hedging instrument
recognised in cash flow
hedge reserve
Hedge ineffectiveness
recognised in profit or
loss
Line item in profit or loss that
includes hedge ineffectiveness
Interest rate
swap
Interest rate
risk
(135)
(40)
Interest Income from Placements with
other banks, net of allowance for
placement losses
31 December 2023
Type of
instrument
Type of risk
Change in the value of
the hedging instrument
recognised in cash flow
hedge reserve
Hedge ineffectiveness
recognised in profit or
loss
Line item in profit or loss that
includes hedge ineffectiveness
Interest rate
swap
Interest rate
risk
(5,701)
(85)
Interest Income from Placements with
other banks, net of allowance for
placement losses
For the year ended 31 December 2023 and 2024 there were no reclassification from cash flow hedge reserve to profit or
loss due to termination of hedging relationship.
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
531
NOTE 45:
FAIR VALUE OF FINANCIAL INSTRUMENTS (in HUF mn) [continued]
45.4.
Fair value classes
Methods and significant assumptions used to determine fair value of the different classes of financial instruments:
-
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
-
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability
either directly or indirectly, Fair value measurements – in relation with instruments measured not at fair
value – are categorized in level 2;
-
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
The following table shows an analysis of financial instruments recorded at fair value by level of the fair value hierarchy:
31 December 2024
Total
Level 1
Level 2
Level 3
Loans mandatorily at fair value through profit or loss
998,410
-
-
998,410
Financial assets at fair value through profit or loss
651,236
87,226
556,789
7,221
from this: securities held for trading
447,993
60,934
387,059
-
from this: positive FVA of derivative financial
instruments designated as held for trading
171,061
1,331
169,730
-
from this: securities mandatorily measured at fair value
through profit or loss
32,182
24,961
-
7,221
Equity instruments at fair value through other
comprehensive income
33,934
33,934
-
-
Securities at fair value through other comprehensive
income
558,668
199,323
337,822
21,523
Positive fair value of derivative financial instruments
designated as hedge accounting
43,130
-
43,130
-
Financial assets measured at fair value total
2,285,378
320,483
937,741
1,027,154
Financial liabilities at fair value through profit or loss
17,024
-
-
17,024
Negative fair value of derivative financial instruments
classified as held for trading
144,499
728
142,577
1,194
Short position
47,157
47,157
-
-
Negative fair value of derivative financial instruments
designated as hedge accounting
19,438
-
19,438
-
Financial liabilities measured at fair value total
228,118
47,885
162,015
18,218
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
532
NOTE 45:
FAIR VALUE OF FINANCIAL INSTRUMENTS (in HUF mn) [continued]
45.4. Fair value classes [continued]
As at 31 December 2023
Total
Level 1
Level 2
Level 3
Loans mandatorily at fair value through profit or loss
934,848
-
-
934,848
Financial assets at fair value through profit or loss
257,535
44,106
204,414
9,015
from this: securities held for trading
27,804
19,756
8,048
-
from this: positive FVA of derivative financial
instruments designated as held for trading
196,799
433
196,366
-
from this: securities mandatorily measured at fair value
through profit or loss
32,932
23,917
-
9,015
Equity instruments at fair value through other
comprehensive income
21,177
21,177
-
-
Securities at fair value through other comprehensive
income
538,350
229,331
278,146
30,873
Positive fair value of derivative financial instruments
designated as hedge accounting
21,628
-
21,628
-
Financial assets measured at fair value total
1,773,538
294,614
504,188
974,736
Financial liabilities at fair value through profit or loss
19,786
-
-
19,786
Negative fair value of derivative financial instruments
classified as held for trading
183,565
451
179,414
3,700
Short position
19,107
19,107
-
-
Negative fair value of derivative financial instruments
designated as hedge accounting
27,423
-
27,423
-
Financial liabilities measured at fair value total
249,881
19,558
206,837
23,486
The fair value of investment properties is presented in Note 14 and they are categorized in level 3.
The fair value of investment in subsidiaries is presented in Note 12 and they are categorized in level 3.
Asset held for sale is valued at fair value less cost to sell, that is in this case equal to the sales price and would be classified
as Level 3 fair value.
Valuation techniques and sensitivity analysis on Level 2 instruments
The fair value of Level 2 instruments is calculated by discounting their expected interest and capital cash flows.
Discounting is done with the respective swap curve of each currency.
Valuation techniques and sensitivity analysis on Level 3 instruments
Sensitivity analysis is performed on products with significant unobservable inputs (Level 3) to generate a range of
reasonably possible alternative valuations. The sensitivity methodologies applied take account of the nature of the
valuation techniques used, as well as the availability and reliability of observable proxy and historical date and the impact
of using alternative models.
The calculation is based on range or spread data of reliable reference source or a scenario based on relevant market
analysis alongside the impact of using alternative models. Sensitivities are calculated without reflecting the impact of any
diversification in the portfolio.
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
533
NOTE 45:
FAIR VALUE OF FINANCIAL INSTRUMENTS (in HUF mn) [continued]
45.4 Fair value classes [continued]
Unobservable inputs used in measuring fair value
Class of financial instrument
Type of financial
instrument
Valuation technique
Significant unobservable input
Range of estimates for
unobservable input
Financial assets at fair value through profit
or loss
VISA C shares
Market approach combined with
expert judgement
Discount applied due to illiquidity and
litigation
+/-12%
Loans mandatorily at fair value through
profit or loss
MFB refinancing
loans
Discounted cash flow model
Probability of default
+/- 20%
Loans mandatorily at fair value through
profit or loss
Subsidised
personal loans
Discounted cash flow model
Probability of default
+/- 20%
Loans mandatorily at fair value through
profit or loss
Subsidised
personal loans
Discounted cash flow model
Operational costs
+/- 20%
Loans mandatorily at fair value through
profit or loss
Subsidised
personal loans
Discounted cash flow model
Demography
Change in the cash flow
estimation +/- 5%
Securities at fair value through other
comprehensive income
FVOCI debt
securities
Market approach combined with
expert judgement
Credit risk
+/-15%
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
534
NOTE 45:
FAIR VALUE OF FINANCIAL INSTRUMENTS (in HUF mn) [continued]
45.4 Fair value classes [continued]
The effect of unobservable inputs on fair value measurement
Although the Bank believes that its estimates of fair value are appropriate, the use of different methodologies or assumptions could lead to different measurements of fair value. For
fair value measurements in Level 3 changing the assumptions used to reasonably possible alternative assumptions would have the following effects.
31 December 2024
Class of financial instrument Unobservable
inputs
Carrying
amount
Fair values
Effect on profit and loss
Favourable Unfavourable Favourable Unfavourable
VISA C shares
Financial assets at fair value
through profit or loss
Illiquidity
1,304
1,460
1,147
156
(156)
MFB refinancing loans
Loans mandatorily at fair
value through profit or loss
Probability of
default
15,094
15,663
14,525
569
(569)
Subsidised personal loans Loans mandatorily at fair
value through profit or loss
Probability of
default
980,378
980,991
979,766
613
(612)
Subsidised personal loans Loans mandatorily at fair
value through profit or loss
Operational
costs
980,378
987,263
973,579
6,885
(6,799)
Subsidised personal loans Loans mandatorily at fair
value through profit or loss
Demography
980,378
981,238
979,693
860
(685)
Russian government
bonds
Securities at fair value through
other comprehensive income
Probability of
default
21,523
31,903
11,143
10,380
(10,380)
31 December 2023
Class of financial instrument Unobservable
inputs
Carrying
amount
Fair values
Effect on profit and loss
Favourable Unfavourable Favourable Unfavourable
VISA C shares
Financial assets at fair value
through profit or loss
Illiquidity
1,808
2,024
1,590
217
(217)
MFB refinancing loans
Loans mandatorily at fair
value through profit or loss
Probability of
default
19,154
19,499
18,809
345
(345)
Subsidised personal loans Loans mandatorily at fair
value through profit or loss
Probability of
default
911,190
913,292
909,097
2,102
(2,093)
Subsidised personal loans Loans mandatorily at fair
value through profit or loss
Operational
costs
911,190
916,712
905,728
5,522
(5,462)
Subsidised personal loans Loans mandatorily at fair
value through profit or loss
Demography
911,190
911,939
910,577
749
(613)
Russian government
bonds
Securities at fair value through
other comprehensive income
Probability of
default
30,873
37,051
24,695
6,178
(6,178)
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
535
NOTE 45:
FAIR VALUE OF FINANCIAL INSTRUMENTS (in HUF mn) [continued]
45.4 Fair value classes [continued]
The effect of unobservable inputs on fair value measurement [continued]
The favourable and unfavourable effects of using reasonably possible alternative assumptions for the valuation of Visa C
shares have been calculated by modifying the discount rate used for the valuation by +/-12% as being the best estimates
of the management as at 31 December 2024 and 31 December 2023 respectively.
In the case of MFB refinancing loans and subsidised personal loans the Bank calculated the favourable and unfavourable
effects of using reasonably possible alternative assumptions by modifying the rates of probability of default by +/- 20%
as one of the most significant unobservable input.
In the case of subsidised personal loans operational cost and factors related to demography are considered as unobservable
inputs to the applied fair value calculation model in addition to credit risk.
The Bank calculated the favourable and unfavourable effects of using reasonably possible alternative assumptions by
modifying the rates of operational costs by +/- 20% as one of the most significant unobservable input.
In the case of subsidised personal loans cash flow estimation are based on assumption related to the future number of
childbirths performed by the debtors both in the current and the comparative period. According to the assumptions used
in comparative period 15% of the debtors will not fulfil the conditions of the subsidy determined by the government after
5 years (“breach of conditions”), thereby debtors will be obliged to pay back advanced interest subsidy given in advance.
Furthermore, in this case subsidised loans are converted to loans provided based on market conditions. Loans are prepaid
by the government as part of the subsidy after the second and the third childbirth following the signatory of the loan
contract. The Bank calculated the favourable and unfavourable effects of using reasonably possible alternative
assumptions by modifying the demographical assumption of breach of conditions by +/- 5% as one of the most significant
unobservable input in the cash flow estimation.
Since 2022 the Bank used a new and more complex model for cash flow calculations of the subsidised personal loans.
The new model uses more scenarios compared to the previous one. These scenarios based on the above mentioned events
(first second and third child births after signatory and breach of conditions) and also the event of divorce. The model uses
public statistical information to estimate the outcome of these possible future events. The Bank calculated the favourable
and unfavourable effects of using reasonably possible alternative assumptions by modifying the demographical
assumption of future child births by +/-5% as one of the most significant unobservable input in the cash flow estimation.
The favourable and unfavourable effects of using reasonably possible alternative assumptions for the valuation of FVOCI
debt securities have been calculated by modifying the credit risk rate used for the valuation by +/-15% as being the best
estimates of the management as at 31 December 2024 and 31 December 2023 respectively.
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
536
NOTE 45:
FAIR VALUE OF FINANCIAL INSTRUMENTS (in HUF mn) [continued]
45.4 Fair value classes [continued]
The effect of unobservable inputs on fair value measurement [continued]
Reconciliation of the opening and closing balances of Level 3 instruments for the year ended 31 December 2024
Opening
balance
Change in FVA
due to credit
risk
Change in FVA
due to market
factors
Purchases/
Disbursement
Settlement/
Sales
Closing balance
Loans mandatorily measured at fair value through profit or loss
934,848
4,193
26,449
100,081
(67,161)
998,410
Securities mandatorily measured at fair value through profit or
loss
9,015
-
(1,794)
-
-
7,221
Derivative financial instruments designated as held for trading
(3,700)
-
2,506
-
-
(1,194)
Securities at fair value through other comprehensive income
30,873
2,568
(11,918)
-
-
21,523
Financial liabilities at fair value through profit or loss
(19,786)
-
1,240
-
1,522
(17,024)
Total
951,250
6,761
16,483
100,081
(65,639)
1,008,936
Reconciliation of the opening and closing balances of Level 3 instruments for the year ended 31 December 2023
Opening
balance
Change in
FVA due to
credit risk
Change in
FVA due to
market factors
Purchases/
Disbursement
Settlement/
Sales
Closing
balance
Loans mandatorily measured at fair value through profit or loss
793,242
(980)
93,257
103,725
(54,396)
934,848
Securities mandatorily measured at fair value through profit or loss
9,374
-
(359)
-
-
9,015
Derivative financial instruments designated as held for trading
(650)
-
(3,050)
-
-
(3,700)
Securities at fair value through other comprehensive income
27,415
1,423
2,035
-
-
30,873
Financial liabilities at fair value through profit or loss
(16,576)
-
(4,542)
-
1,332
(19,786)
Total
812,805
443
87,341
103,725
(53,064)
951,250
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
537
NOTE 46:
ASSETS CLASSIFIED AS HELD-FOR-SALE (in HUF mn)
The Bank has concluded a share sale and purchase agreement to sell its directly and indirectly owned 100% shareholding
in OTP Bank Romania S.A. to Banca Transilvania S.A. (hereinafter referred to as: BT). OTP Group is also selling its
100%shareholdings in its other Romanian subsidiaries, OTP Leasing Romania IFN S.A. and OTP Asset Management
S.A.I. S.A. to BT under the transaction.
The total selling price is EUR 347.5 million from which EUR 335 million is related to OTP Bank Romania S.A. Therefore
impairment gain was recorded in amount of HUF 41 billion in the Separate Statement of Profit or Loss related to
investment of OTP Bank Romania S.A., after that the carrying amount was reclassified to „Non-current asset held for
sale” in the Separate Statement of Financial Position.
On 30 July 2024 the financial closure of the sale of the Romanian bank was completed.
NOTE 47:
SIGNIFICANT EVENTS DURING THE YEAR ENDED 31 DECEMBER 2024
1) Capital increase at Monicomp Ltd.
See details about the event in Note 12.
2) Capital increase at JSCMB 'IPOTEKA BANK’
See details about the event in Note 12.
3) Capital increase at OTP Real Estate Ltd.
See details about the event in Note 12.
4) OTP Bank is selling its Romanian operations
See details about the event in Note 12.
5) Capital increase at OTP Real Estate Ltd.
See details about the event in Note 12.
6) Significant regulatory changes in Hungary
About the prolongation of deadline of interest rate cap, amending the previously laid down methodology of windfall tax
calculation, family support schemes and economic stimulus measures and capital regulation please see details in Note 4.
7) Merger of the Slovenian entities
See details about the event in Note 12.
8) EUR 600 million bond issuance
See details about the event in Note 20.
9) EUR 700 million Green Senior Preferred bond issuance
See details about the event in Note 20.
10) EUR 400 million Green bond recall
See details about the event in Note 20.
11) EUR 500 million Subordinated bond recall
See details about the event in Note 25.
12) CNY 300 million bond issuance
See details about the event in Note 20.
13) EUR 500 million bond issuance
See details about the event in Note 20.
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
538
NOTE 47:
SIGNIFICANT EVENTS DURING THE YEAR ENDED 31 DECEMBER 2024 [continued]
14) Risk relating to the Russian-Ukrainian armed conflict
In 2022 Russia launched a still ongoing war against Ukraine. Many countries, as well as the European Union imposed
sanctions due to the armed conflict on Russia and Russian businesses and citizens. Russia responded to these sanctions
with similar measures.
The war and the international sanctions influence the business and economic activities significantly all around the world.
There are a number of factors associated with the Russian-Ukrainian war and the international sanctions as well as their
impact on global economies that could have a material adverse effect on (among other things) the profitability, capital
and liquidity of financial institutions such as the OTP Group.
The war and the international sanctions cause significant economic damage to the affected parties and in addition they
cause disruptions in the global economic processes, and they have negative impact – inter alia – on energy and grain
markets, the global transport routes and international trade as well as on tourism.
OTP Group continues to monitor the situation closely. The OTP Group's ability to conduct business may be adversely
affected by disruptions and restrictions to its infrastructure, business processes and technology services. This may cause
significant customer detriment, costs to reimburse losses incurred by the OTP Group’s customers, and reputational
damage.
Furthermore, the OTP Group relies on models to support a broad range of business and risk management activities,
including informing business decisions and strategies, measuring and limiting risk, valuing exposures, conducting stress
testing and assessing capital adequacy. Models are, by their nature, imperfect and incomplete representations of reality
because they rely on assumptions and inputs, and as such assumptions may later potentially prove to be incorrect, this can
affect the accuracy of their outputs. This may be exacerbated when dealing with unprecedented scenarios, such as the
Russian-Ukrainian war and the international sanctions, due to the lack of reliable historical reference points and data.
Any and all such events mentioned above could have a material adverse effect on the OTP Group’s business, financial
condition, results of operations, prospects, liquidity, capital position and credit ratings, as well as on the OTP Group’s
customers, employees and suppliers.
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
539
NOTE 48:
SIGNIFICANT EVENTS AFTER THE REPORTING PERIOD
Summary of economic policy measures made and other relevant regulatory changes as post-balance sheet events
Hungary
• On 13 January 2025 OTP Bank’s share buyback program approved by the central bank on 22 August 2024 reached
its maximum available amount of HUF 60 billion.
• On 24 January 2025 the Bank got another approval from the Hungarian National Bank to repurchase own shares in
the amount of HUF 60 billion. The available amount was exhausted on 10 February 2025.
• From 13 January 2025 the consolidated MREL requirement is determined at 18.60% of the total risk exposure amount
(RWA) and 6.02% of the total exposure measure (TEM) of the Resolution Group. The consolidated MREL
requirement of OTP Bank applicable until this date was 18.94% and 5.78%. OTP Bank’s Resolution Group consists
of entities included in the prudential scope of consolidation of OTP Bank without the Slovenian OTP banka d.d. and
its subsidiaries. Pursuant to the CRD OTP Bank has to meet the combined buffer requirement in addition to its MREL
TREA requirement as institutions shall not use CET1 capital that is maintained to meet the combined buffer
requirement to meet the risk-based component of the MREL requirement. This principle is applicable to the MREL
TREA subordination requirement as well.
• On 30 January 2025 Tier 2 notes have been issued in the aggregate nominal amount of USD 750 million. The notes
carry an annual coupon of 7.3% due semi-annually. The tenor was 10.5NC5.5, i.e. in the period between five and five
and a half years the bonds can be redeemed on any day. The notes were listed on the Luxembourg Stock Exchange.
• On 7 February 2025 the EUR 500 million Fixed to Floating Rate Perpetual Subordinated Notes have been redeemed
and the principal amount, together with accrued and unpaid interest was paid to the holders of the Notes.
• On 17 February 2025 OTP Bank announced the redemption of its €650,000,000 7.350 per cent. Senior Preferred
Fixed-to-Floating Callable Notes due 2026 with the optional redemption date of 4 March 2025.
• As of end of February 2025, the banking sector related key initiatives of the 'New Economic Policy Action Plan'
launched by government decree 1311/2024 (X. 21.), are as follows (based on the communication of the Government
and submitted bills):
o
From 1 January 2025, minimum wage increased by 9%. For 2026 and 2027 further 13% and 14% hikes have
been agreed as part of the three-year wage agreement, assuming that economic growth and inflation will be in
line with the expectations.
o
From 2 January 2025 the Workers’ Loan Program is available at Hungarian banks. The loan is designed for
young people aged 17-25 who are not eligible for student loans and who are employed in Hungary for at least
20 hours a week, or entrepreneurs who have an average income and undertake to work or run a business in
Hungary for a minimum of five years. The maximum amount of the interest-free, free use, state-guaranteed loan
facility is HUF 4 million, with a term of 10 years. The scheme also provides support for childbearing, with
repayments suspended for two years following the birth of the first and second child, and half of the current debt
waived for the second child and the full debt waived after the third one.
o
From 1 January 2025, in the case of green loans the loan-to-value limit was increased to 90%, furthermore the
payment-to-income limit was increased to 60% regardless of the income.
o
On 1 January 2025, the home renovation program was reintroduced to support families in towns with less than
5,000 residents, covering up to 50% of labour- and material costs with a cap of HUF 3 million. Those who have
already availed themselves of the 2021-2022 home renovation subsidy are only eligible to utilize the new subsidy
up to the amount of the HUF 3 million that remains unused at that time. From 1 February 2025, a state subsidized
home renovation mortgage loan with a client interest rate of 3% and with up to HUF 6 million loan amount is
available to finance investment costs.
o
In 2025, voluntary pension fund savings can be used free of tax for housing loan repayments, repayment of
secured loans, and modernization or renovation of existing homes. The total amount of voluntary pension savings
could be utilized, but only up to the balance available as of 30 September 2024.
IFRS (SEPARATE)
INTEGRATED ANNUAL REPORT 2024
540
NOTE 48:
SIGNIFICANT EVENTS AFTER THE REPORTING PERIOD [continued]
o
From 1 January 2025, monthly HUF 150,000 fringe benefit can be paid to the employees under the age of 35 in
order to support housing expenses (home rental or loan instalment) above the current preferential upper limit of
HUF 450,000 per year.
o
Half of the accumulated amount on SZÉP Cards can be used for home renovation in 2025.
o
Between 1 April and 31 October 2025, based on the individual decision of the participating banks, 5% interest
rate cap will be available for under 35 years old, first-time home buyers for newly granted green housing loans,
with properties under 60 square meter and price lower than HUF 1.2 million per square meter. The rate cap will
be applied in the first 5 years of the loan, the product has neither disbursement nor credit assessment fees.
o
From 6 January 2025, as part of the Demján Sándor program, export stimulating loan and leasing structures are
available in the total sum of HUF 400 billion, partly refinanced by EXIM Hungary. Some of the products are
also available for enterprises planning to start export activities in the future.
o
The interest rate of certain products under the Széchenyi Card Program MAX+ scheme was significantly reduced
for contracts concluded after 1 March 2025: the interest rate on investment loans (Agricultural Investment Loan,
Investment Loan) and the leasing scheme was reduced to 3%, while the interest rate on the Széchenyi Card
Overdraft MAX+ (including the Tourism Card) and the Liquidity Loan was reduced to 4.5%. The uniform 0.5
pp reduction in client interest rates was facilitated by the burden sharing of KAVOSZ Ltd. (0.1 pp) and the
banking sector (0.4 pp). The investment loans with the exceptionally favourable interest rate of the “GREEN”
sub-structure are an exception to this, which are still available to businesses with a rate of 1.5%.
• Changes in the economic policy leadership:
o
As of 31 December 2024, pursuant to Act LXXXVI of 2024, the Ministry of Finance ceased to exist by merging
into the Ministry of National Economy. Minister Márton Nagy remained in office unchanged as head of the
Ministry of National Economy.
o
As of 4 March 2025, the President of the Republic appointed Mihály Varga, the former Minister of Finance, to
head the National Bank of Hungary.
• Based on preliminary data published by the Central Statistical Office on 30 January 2025, the performance of the
Hungarian economy increased by 0.5% q-o-q and 0.4% y-o-y in the fourth quarter. With this, the annual growth in
2024 was 0.6%. The average inflation in 2024 was 3.7%.
• The Financial Stability Council of the Hungarian National Bank announced an extension to the central bank's green
capital requirement relief programs for credit institutions. The deadline for these programs was extended by one year,
until the end of December 2026. The decision on whether to grant further annual extensions will be made based on a
professional indicator system. Additionally, from 31 January 2025, the range of exposures that can be included in the
discount program was further expanded.
On 19 March 2024 the Management of OTP Bank has decided to purchase SZÉP card branch – the whole stock of
contracts and the related cash - from OTP Funds Servicing and Consulting Ltd. from 1 January 2025, which was approved
by NBH by decision H-EN-I-444/2024. The price of the transferred contracts was in amount of HUF 23.1 billion, and the
transfer was completed on 1 of January 2025. The purchase price was transferred on 31 January 2025.
An event, that occurred in January 2025 regarding an item reported in the Bank’s books as a receivable from lending
activities, was identified by the Bank as a post-balance sheet event. The Bank believes that the event has no retrospective
effect for 2024 concerning stage classification, therefore the Bank did not change the stage 2 classification of the affected
receivable as of 31 December 2024. However, given that the Bank obtained additional information regarding the
circumstances that previously justified the stage 2 classification, the Bank recognized an additional HUF 4.8 billion
impairment loss for the receivable in the stage 2 category for 2024.
INTEGRATED ANNUAL REPORT 2024
541
CONSOLIDATED FINANCIAL STATEMENTS IN ACCORDANCE WITH IFRS (2024)
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
542
OTP BANK PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2024
(in HUF mn)
Note
31/12/2024
31/12/2023
Cash, amounts due from banks and balances with the National Banks
5.
6,079,012
7,125,049
Placements with other banks
6.
1,891,901
1,566,998
Repo receivables
7.
331,837
223,884
Financial assets at fair value through profit or loss
8.
743,400
288,885
Securities at fair value through other comprehensive income
9.
1,705,553
1,601,461
Securities at amortized cost
10.
7,447,177
5,249,272
Loans at amortized cost
11.
20,290,381
17,676,533
Loans mandatorily at fair value through profit or loss
11.
1,559,781
1,400,485
Finance lease receivables
36.
1,511,477
1,289,712
Associates and other investments
12.
124,523
96,110
Property and equipment
13.
581,240
523,124
Intangible assets and goodwill
13.
356,564
291,358
Right-of-use assets
36.
79,830
74,698
Investment properties
14.
88,240
53,381
Derivative financial assets designated as hedge accounting
15.
50,381
41,967
Deferred tax assets
35.
56,583
55,691
Current income tax receivables
35.
7,060
7,773
Other assets
16.
514,188
509,430
Assets classified as held for sale
50.
-
1,533,333
TOTAL ASSETS
43,419,128
39,609,144
Amounts due to banks, the National Governments,
deposits from the National Banks and other banks
17.
2,022,191
1,940,862
Repo liabilities
18.
132,137
126,237
Financial liabilities designated at fair value through profit or loss
19.
72,490
70,707
Deposits from customers
20.
31,658,189
28,332,271
Fair value changes of the hedged items
in portfolio hedge of interest rate risk
20.
8,209
160
Liabilities from issued securities
21.
2,593,124
2,095,548
Derivative financial liabilities held for trading
22.
114,089
140,488
Derivative financial liabilities designated as hedge accounting
23.
14,605
63,899
Leasing liabilities
36.
82,109
76,313
Deferred tax liabilities
35.
32,637
28,663
Current income tax payable
35.
76,787
69,948
Provisions
24.
131,637
121,119
Other liabilities
24.
991,552
745,820
Subordinated bonds and loans
25.
369,359
562,396
Liabilities directly associated with assets classified as held for sale
50.
-
1,139,920
TOTAL LIABILITIES
38,299,115
35,514,351
Share capital
26.
28,000
28,000
Retained earnings and reserves
27.
5,327,652
4,179,322
Treasury shares
28.
(245,319)
(120,489)
Total equity attributable to the parent
5,110,333
4,086,833
Total equity attributable to non-controlling interest
29.
9,680
7,960
TOTAL SHAREHOLDERS' EQUITY
5,120,013
4,094,793
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
43,419,128
39,609,144
Budapest, 19 March 2025
Dr. Sándor Csányi
László Wolf
Chairman and Chief Executive Officer
Deputy Chief Executive Officer
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
543
OTP BANK PLC
CONSOLIDATED STATEMENT OF PROFIT OR LOSS FOR THE
YEAR ENDED 31 DECEMBER 2024
(in HUF mn)
Note
Year ended
31 December
2024
Year ended
31 December
2023
CONTINUING OPERATIONS
Interest income calculated using the effective interest method
30.
2,542,138
2,314,677
Income similar to interest income
30.
539,984
633,587
Interest income and income similar to interest income
3,082,122
2,948,264
Interest expense
(1,336,782)
(1,561,558)
NET INTEREST INCOME
1,745,340
1,386,706
Loss allowance on loans, placements, amounts due from banks
and on repo receivables
31.
(72,385)
(109,223)
Change in the fair value attributable to changes in the credit risk of
loans mandatorily measured at fair value through profit of loss
31.
5,504
(91)
(Loss allowance) / Release of loss allowance on securities
at fair value through other comprehensive income and
on securities at amortized cost
31.
(39,907)
8,831
(Provision) / Release of provision for commitments and guarantees given
31.
(2,371)
19,870
Release of impairment of assets subject to
operating lease and of investment properties
31.
17
1,332
Risk cost total
(109,142)
(79,281)
NET INTEREST INCOME AFTER RISK COST
1,636,198
1,307,425
Loss from derecognition
of financial assets at amortized cost
33.
(14,409)
(17,182)
Modification loss
4.
(13,193)
(38,141)
Income from fees and commissions
32.
1,045,987
861,309
Expense from fees and commissions
32.
(203,332)
(169,316)
Net profit from fees and commissions
842,655
691,993
Foreign exchange result, net
33.
(12,048)
13,827
Gain on securities, net
33.
10,326
7,283
Fair value adjustment on financial instruments
measured at fair value through profit or loss
33.
27,374
94,613
Net results on derivative instruments and hedge relationships
33.
12,004
(12,760)
Profit from associates
8., 9.
12,970
14,766
Other operating income
34.
147,895
324,266
Other operating expenses
34.
(127,174)
(110,570)
Net operating income
71,347
331,425
Personnel expenses
34.
(550,175)
(478,696)
Depreciation and amortization
13.
(134,293)
(111,996)
Other general expenses
34.
(528,306)
(483,645)
Other administrative expenses
(1,212,774)
(1,074,337)
PROFIT BEFORE INCOME TAX
1,309,824
1,201,183
Income tax expense
35.
(253,440)
(189,478)
PROFIT AFTER INCOME TAX FOR THE PERIOD
FROM CONTINUING OPERATIONS
1,056,384
1,011,705
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
544
OTP BANK PLC
CONSOLIDATED STATEMENT OF PROFIT OR LOSS FOR THE YEAR
ENDED 31 DECEMBER 2024 [continued]
(in HUF mn)
Note
Year ended
31 December
2024
Year ended
31 December
2023
PROFIT AFTER INCOME TAX FOR THE PERIOD
FROM CONTINUING OPERATIONS
1,056,384
1,011,705
DISCOUNTINUED OPERATIONS
Net Gain / (Loss) from discontinued operations
50.
19,756
(21,246)
PROFIT AFTER INCOME TAX FROM CONTINUING AND
DISCOUNTINUED OPERATION
1,076,140
990,459
From this, attributable to:
Non-controlling interest
29.
4,227
1,801
Owners of the company
1,071,913
988,658
Earnings per share (in HUF)
From continuing operations
Basic
46.
3,977
3,774
Diluted
46.
3,976
3,772
From continuing and discontinued operations
Basic
46.
4,052
3,695
Diluted
46.
4,050
3,693
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
545
OTP BANK PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE
YEAR ENDED 31 DECEMBER 2024
(in HUF mn)
Note
Year ended
31 December
2024
Year ended
31 December
2023
PROFIT AFTER INCOME TAX FOR THE YEAR
1,076,140
990,459
Items that may be reclassified
subsequently to profit or loss:
Fair value adjustment of securities at fair value
through other comprehensive income
27.
37,528
89,734
Deferred tax related to fair value adjustment of securities
at fair value through other comprehensive income
27.
(4,181)
(12,779)
Net investment hedge in foreign operations
27.
(27,310)
(2,707)
Foreign currency translation difference
27.
195,152
(200,928)
Items that will not be reclassified
subsequently to profit or loss:
Fair value changes of equity instruments at fair value
through other comprehensive income
27.
16,519
2,411
Deferred tax related to equity instruments at
fair value through other comprehensive income
27.
(2,115)
(947)
Change of actuarial gain related to
employee benefits
27.
(949)
(392)
Deferred tax related to change of actuarial gain related to
employee benefits
27.
26
(8)
Other comprehensive income
214,670
(125,616)
TOTAL COMPREHENSIVE INCOME
1,290,810
864,843
From this, attributable to:
Non-controlling interest
4,713
1,129
Owners of the company
1,286,097
863,714
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
546
OTP BANK PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2024
(in HUF mn)
Note
Share
capital
Capital
reserve
Retained earnings
and other reserves1
Treasury
shares
Total equity
attributable to
shareholders
Non-controlling
interest
Total
equity
Balance as at 1 January 2024
28,000
52
4,179,270
(120,489)
4,086,833
7,960
4,094,793
Profit after income tax for the period
-
-
1,071,913
-
1,071,913
4,227
1,076,140
Other Comprehensive Income
-
-
214,184
-
214,184
486
214,670
Total comprehensive income
-
-
1,286,097
-
1,286,097
4,713
1,290,810
Purchasing of non-controlling interest
-
-
-
-
-
(350)
(350)
Dividend paid to non-controlling interest
-
-
-
-
-
(2,643)
(2,643)
Share-based payment
40.
-
-
4,411
-
4,411
-
4,411
Paid dividends for years 2023
27.
-
-
(150,000)
-
(150,000)
-
(150,000)
Adjustment related to share-based payment
-
-
6,928
-
6,928
-
6,928
Other transfer
-
-
177
-
177
-
177
Sale of Treasury shares
28.
-
-
-
28,275
28,275
-
28,275
Treasury shares - loss on sale
28.
-
-
717
-
717
-
717
Treasury shares - acquisition
28.
-
-
-
(153,105)
(153,105)
-
(153,105)
Balance as at 31 December 2024
28,000
52
5,327,600
(245,319)
5,110,333
9,680
5,120,013
Note
Share
capital
Capital
reserve
Retained earnings
and other reserves1
Treasury
shares
Total equity
attributable to
shareholders
Non-controlling
interest
Total
equity
Balance as at 1 January 2023
28,000
52
3,395,163
(106,862)
3,316,353
5,959
3,322,312
Profit after income tax for the period
-
-
988,658
-
988,658
1,801
990,459
Other Comprehensive Income
-
-
(124,944)
-
(124,944)
(672)
(125,616)
Total comprehensive income
-
-
863,714
-
863,714
1,129
864,843
Purchasing of non-controlling interest
-
-
-
-
-
(159)
(159)
Increase due to business combination
-
-
-
-
-
3,149
3,149
Dividend paid to non-controlling interest
29.
-
-
-
-
-
(2,118)
(2,118)
Share-based payment
40.
-
-
3,292
-
3,292
-
3,292
Paid dividends for year 2022
27.
-
-
(84,000)
-
(84,000)
-
(84,000)
Adjustment related to share-based payment
-
-
3,836
-
3,836
-
3,836
Sale of Treasury shares
28.
-
-
-
26,191
26,191
-
26,191
Treasury shares - loss on sale
28.
-
-
(2,735)
-
(2,735)
-
(2,735)
Treasury shares - acquisition
28.
-
-
-
(39,818)
(39,818)
-
(39,818)
Balance as at 31 December 2023
28,000
52
4,179,270
(120,489)
4,086,833
7,960
4,094,793
1 See details in Note 27
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
547
OTP BANK PLC
CONSOLIDATED STATEMENT OF CASH-FLOWS FOR THE YEAR
ENDED 31 DECEMBER 2024
(in HUF mn)
OPERATING ACTIVITIES
Note
Year ended
31 December
2024
Year ended
31 December
2023
Profit after income tax for the period
(attributable to the owners of the company)
1,071,913
988,658
Net accrued interest
(14,406)
4,360
Dividend income
27.
(12,970)
(14,787)
Depreciation and amortization
13.
140,720
123,327
Loss allowance / (Release of loss allowance) on securities
9.,10.
39,907
(9,066)
Loss allowance on loans and placements,
amounts due from banks and on repo receivables
5-7., 11.
84,816
116,002
Loss allowance on investments
12.
957
22
Release of loss allowance on investment properties
14.
(23)
(1,362)
Impairment on tangible and intangible assets
13.
7,335
5,824
Loss allowance on other assets
16.
13,166
11,120
Provision / (Release of provision) on off-balance sheet
commitments and contingent liabilities
24.
7,439
(10,052)
Share-based payment
40.
4,411
3,292
Unrealized gains on fair value change of financial
instrument at fair value through profit or loss
33.
(34,047)
(89,577)
Non-realized foreign exchange (gain) / loss
33.
(59,696)
6,945
(Gain) / Loss from sale of tangible and intangible assets
13.
(2,757)
595
Unrealized gains on fair value change of
derivative financial instruments
33.
(85,178)
(81,451)
Negative goodwill
42.
-
(198,361)
Gain on discontinued operations
50
(19,756)
-
Net changes in assets and liabilities in operating activities
Net (increase) / decrease in securities
at fair value through profit or loss
8.
(463,443)
120,890
Net increase in compulsory reserves
at the National Banks
5.
(140,326)
(797,695)
Increase in placement with other banks,
before loss allowance for placements
6.
(446,637)
(326,379)
Net increase in loans at amortized cost before
loss allowance for loans and in loans at fair value
11.
(2,082,949)
(28,934)
Net (increase) / decrease in other assets
before loss allowance
16.
(97,341)
95,512
Net increase / (decrease) in amounts due to banks,
the National Governments, deposits from the National
Banks and other banks and repo liabilities
17., 18.
147,032
(205,101)
Net increase in financial liabilities designated
at fair value through profit or loss
19.
3,100
11,974
Net increase in deposits from customers
20.
2,459,297
846,428
Cash payments for the interest portion of the lease liability
36.
(3,557)
(3,099)
Net increase in other liabilities
24.
333,844
40,695
Income tax paid
35.
(94,574)
(152,201)
Net Cash Provided by Operating Activities
756,277
457,579
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
548
OTP BANK PLC
CONSOLIDATED STATEMENT OF CASH-FLOWS FOR THE YEAR
ENDED 31 DECEMBER 2024
(in HUF mn)
[continued]
Note
Year ended
31 December
2024
Year ended
31 December
2023
INVESTING ACTIVITIES
Purchase of securities at fair value
through other comprehensive income
9.
(733,477)
(871,512)
Proceeds from sale of securities at fair value
through other comprehensive income
9.
678,896
1,176,467
Purchase of investments
12.
(29,212)
(13,910)
Proceeds from sale of investments
12.
51
-
Dividends received
27.
13,016
15,642
Purchase of securities at amortized cost
10.
(141,884,521)
(1,037,889)
Redemption of securities at amortized cost
10.
139,854,176
1,329,137
Purchase of property, equipment and intangible assets
13.
(304,156)
(300,002)
Proceeds from disposals of property,
equipment and intangible assets
13.
68,971
139,155
Purchase of investment properties
14.
(32,106)
(10,363)
Proceeds from sale of investment properties
14.
1,097
14,782
Net change in cash and cash equivalents
from discontinued operation
50
(142,975)
-
Net cash paid for acquisition
42.
-
577,464
Net Cash (Used in) / Provided by Investing Activities
(2,510,240)
1,018,971
FINANCING ACTIVITIES
Cash received from issuance of securities
21.
1,058,432
1,090,039
Cash used for redemption of issued securities
21.
(456,930)
(172,413)
Cash payments for the principal portion of the lease liability
36.
(12,462)
(32,567)
Cash received from issuance of subordinated bonds and loans
25.
-
290,159
Cash used for redemption of subordinated bonds and loans
25.
(148,502)
(49,445)
Sale of Treasury shares
28.
28,991
23,456
Purchase of Treasury shares
28.
(153,105)
(39,818)
Dividends paid
27.
(143,038)
(80,159)
Net Cash Provided by Financing Activities
173,386
1,029,252
TOTAL NET CASH (USED IN) / PROVIDED BY
(1,580,577)
2,505,802
Cash and cash equivalents
at the beginning of the period
5.
4,859,342
2,597,688
Foreign currency translation
194,627
(200,253)
Net change in cash and cash equivalent
(1,580,577)
2,505,802
Adjustment due to discontinued operation
43,895
(43,895)
Cash and cash equivalents
at the end of the period
5.
3,517,287
4,859,342
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
549
NOTE 1:
ORGANIZATION AND BASIS OF CONSOLIDATED FINANCIAL STATEMENTS
1.1.
General information
OTP Bank Plc (the “Bank” or “OTP Bank”) was established on 31 December 1990, when the previously State-
owned company was transformed into a limited liability company. The Bank’s registered office address is 16,
Nador Street, Budapest 1051, Hungary.
Due to Hungarian legislation audit services are a statutory requirement for OTP Bank. Disclosure information
about the auditor: Ernst & Young Audit Ltd. (001165), 1132 Budapest Váci Street 20. Registered under 01-09-
267553 by Budapest-Capital Regional Court, as registry court. Statutory registered auditor: Zsolt Kónya,
registration number: 007383.
These Consolidated Financial Statements were approved by the Board of Directors and authorised for issue on 19
March 2025. The Bank’s owners have the power to amend the Consolidated Financial Statements after issue if
applicable.
In 1995, the shares of the Bank were introduced on the Budapest and the Luxembourg Stock Exchanges and were
also traded on the SEAQ board on the London Stock Exchange and on PORTAL in the USA.
The structure of the Share capital by shareholders (%):
31/12/2024
31/12/2023
Domestic and foreign private and
institutional investors
96.77%
99.25%
Employees
0.51%
0.48%
Treasury shares
2.52%
0.20%
Other
0.20%
0.07%
Total
100.00%
100.00%
The Bank’s Registered Capital consists of 280.000.010 pieces of ordinary shares with the nominal value of HUF
100 each, representing the same rights to the shareholders.
The Bank and its subsidiaries (“Entities of the Group“, together the “Group” or “OTP Group”) provide a full range
of commercial banking services through a wide network of 1,251 branches in the following countries Hungary,
Bulgaria, Serbia, Croatia, Russia, Ukraine, Albania, Montenegro, Moldova, Slovenia and Uzbekistan, as well as
provides other services in the Netherlands and Malta.
The number of the active employees without long-term breaks, and with part-time employees taken into account
proportionately, and the average number of active employees on monthly basis at the Group (with employed
agents):
31/12/2024
31/12/2023
The number of employees at the Group
40,317
41,547
The average number of employees at the Group
40,807
40,237
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
550
NOTE 1:
ORGANIZATION AND BASIS OF CONSOLIDATED FINANCIAL STATEMENTS
[continued]
1.2.
Basis of Accounting
These Consolidated Financial Statements were prepared based on the assumptions of the Management that the
Bank will remain in business for the foreseeable future and that the Bank will not be forced to halt operations and
liquidate its assets in the near term at what may be very low fire-sale prices.
The Entities of the Group maintain their accounting records and prepare their statutory accounts in accordance
with the commercial, banking and fiscal regulations prevailing in Hungary and in case of foreign subsidiaries in
accordance with the commercial, banking and fiscal regulations of the country in which they are domiciled.
The Bank’s functional currency is the Hungarian Forint (“HUF”). It is also presentation currency for the Group.
The financial statements of the subsidiaries used during the preparation of Consolidated Financial Statements of
the Group have the same reporting period – starting from 1 January ending as at 31 December – like the reporting
period of the Group.
Due to the fact that the Bank is listed on international and national stock exchanges, the Bank is obliged to present
its financial statements in accordance with International Accounting Standards (“IAS”) as adopted by the European
Union (the “EU”).
Certain adjustments have been made to the Entities’ statutory accounts in order to present the Consolidated
Financial Statements of the Group in accordance with all standards and interpretations approved by the
International Accounting Standards Board (“IASB”).
These Consolidated Financial Statements have been prepared in accordance with IFRS as adopted by the EU.
The accompanying Notes to these Consolidated Financial Statements form an integral part of these Consolidated
Financial Statements prepared in accordance with IAS as adopted by EU.
1.2.1. The effect of adopting new and revised International Financial Reporting Standards effective from
1 January 2024
The following amendments to the existing standards and new interpretation issued by the International Accounting
Standards Board (IASB) and adopted by the EU are effective for the current reporting period:
• Amendments to IAS 1 “Presentation of Financial Statements” - Classification of Liabilities as Current
or Non-Current The amendments are effective for annual reporting periods beginning on or after January
1, 2024, and are applied retrospectively.
o The objective of the amendments is to clarify the principles in IAS 1 for the classification of liabilities
as either current or non-current. The amendments clarify the meaning of a right to defer settlement, the
requirement for this right to exist at the end of the reporting period, that management intent does not
affect current or non-current classification, that options by the counterparty that could result in
settlement by the transfer of the entity’s own equity instruments do not affect current or non-current
classification. Also, the amendments specify that only covenants with which an entity must comply on
or before the reporting date will affect a liability’s classification. Additional disclosures are also required
for non-current liabilities arising from loan arrangements that are subject to covenants to be complied
with within twelve months after the reporting period.
•
Amendments to IFRS 16 “Leases” – Lease Liability in a Sale and Leaseback The amendments are
effective for annual reporting periods beginning on or after January 1, 2024.
o The amendments are intended to improve the requirements that a seller-lessee uses in measuring the
lease liability arising in a sale and leaseback transaction in IFRS 16, while it does not change the
accounting for leases unrelated to sale and leaseback transactions. In particular, the seller-lessee
determines ‘lease payments’ or ‘revised lease payments’ in such a way that the seller-lessee would not
recognize any amount of the gain or loss that relates to the right of use it retains. Applying these
requirements does not prevent the seller-lessee from recognizing, in profit or loss, any gain or loss
relating to the partial or full termination of a lease. The amendments apply retrospectively to sale and
leaseback transactions the entered into after the date of initial application, being the beginning of the
annual reporting period in which an entity first applied IFRS 16.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
551
NOTE 1:
ORGANIZATION AND BASIS OF CONSOLIDATED FINANCIAL STATEMENTS
[continued]
1.2.
Basis of Accounting [continued]
1.2.1. The effect of adopting new and revised International Financial Reporting Standards effective from
1 January 2024 [continued]
•
IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments Disclosures - Supplier Finance
Arrangements (Amendments) - The amendments are effective for annual reporting periods beginning on or
after January 1, 2024.
o The amendments supplement requirements already in IFRS and require an entity to disclose the terms
and conditions of supplier finance arrangements. Additionally, entities are required to disclose at the
beginning and end of reporting period the carrying amounts of supplier finance arrangement financial
liabilities and the line items in which those liabilities are presented as well as the carrying amounts of
financial liabilities and line items, for which the finance providers have already settled the corresponding
trade payables. Entities should also disclose the type and effect of non-cash changes in the carrying
amounts of supplier finance arrangement financial liabilities, which prevent the carrying amounts of the
financial liabilities from being comparable. Furthermore, the amendments require an entity to disclose at
the beginning and end of the reporting period the range of payment due dates for financial liabilities owed
to the finance providers and for comparable trade payables that are not part of those arrangements.
The adoption of these amendments to the existing standards has not led to any material changes in these
Consolidated Financial Statements.
1.2.2. New and revised Standards and Interpretations issued by IASB and adopted by the EU but not yet
effective
•
Amendments to IAS 21 “The Effects of Changes in Foreign Exchange Rates” – Lack of
Exchangeability The amendments are effective for annual reporting periods beginning on or after January 1,
2025, with earlier application permitted.
o
The amendments specify how an entity should assess whether a currency is exchangeable and how it
should determine a spot exchange rate when exchangeability is lacking. A currency is considered to be
exchangeable into another currency when an entity is able to obtain the other currency within a time
frame that allows for a normal administrative delay and through a market or exchange mechanism in
which an exchange transaction would create enforceable rights and obligations. If a currency is not
exchangeable into another currency, an entity is required to estimate the spot exchange rate at the
measurement date. An entity’s objective in estimating the spot exchange rate is to reflect the rate at
which an orderly exchange transaction would take place at the measurement date between market
participants under prevailing economic conditions. The amendments note that an entity can use an
observable exchange rate without adjustment or another estimation technique.
1.2.3. Standards and Interpretations issued by IASB, but not yet adopted by the EU
At present, IFRS as adopted by the EU do not significantly differ from regulations adopted by the International
Accounting Standards Board (IASB) except for the following new standards, amendments to the existing standards
and new interpretation, which were not endorsed for use in EU as at the date of publication of these Consolidated
Financial Statements:
•
IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures - Classification and
Measurement of Financial Instruments (Amendments) - The amendments are effective for annual
reporting periods beginning on or after January 1, 2026. Early adoption of amendments related to the
classification of financial assets and the related disclosures is permitted, with the option to apply the other
amendments at a later date.
o The amendments clarify that a financial liability is derecognised on the ‘settlement date’, when the
obligation is discharged, cancelled, expired, or otherwise qualifies for derecognition. They introduce an
accounting policy option to derecognise liabilities settled via electronic payment systems before the
settlement date, subject to specific conditions. They also provide guidance on assessing the contractual
cash flow characteristics of financial assets with environmental, social, and governance (ESG)-linked
features or other similar contingent features. Additionally, they clarify the treatment of non-recourse
assets and contractually linked instruments and require additional disclosures under IFRS 7 for financial
assets and liabilities with contingent event references (including ESG-linked) and equity instruments
classified at fair value through other comprehensive income.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
552
NOTE 1:
ORGANIZATION AND BASIS OF CONSOLIDATED FINANCIAL STATEMENTS
[continued]
1.2.
Basis of Accounting [continued]
1.2.3. Standards and Interpretations issued by IASB, but not yet adopted by the EU [continued]
•
IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures - Contracts Referencing
Nature-dependent Electricity (Amendments) - The amendments are effective for annual reporting periods
beginning on or after January 1, 2026, with earlier application permitted.
o The amendments include clarifying the application of the 'own-use' requirements, permitting hedge
accounting if contracts in scope of the amendments are used as hedging instruments, and introduce new
disclosure requirements to enable investors to understand the impact of these contracts on a company's
financial performance and cash flows. The clarifications regarding the 'own-use' requirements must be
applied retrospectively, but the guidance permitting hedge accounting have to be applied prospectively to
new hedging relationships designated on or after the date of initial application.
•
IFRS 18 Presentation and Disclosure in Financial Statements - IFRS 18 is effective for reporting periods
beginning on or after January 1, 2027, with earlier application permitted. Retrospective application is required
in both annual and interim financial statements.
• IFRS 18 introduces new requirements on presentation within the statement of profit or loss. It requires an
entity to classify all income and expenses within its statement of profit or loss into one of the five
categories: operating; investing; financing; income taxes; and discontinued operations. These categories
are complemented by the requirements to present subtotals and totals for ‘operating profit or loss’, ‘profit
or loss before financing and income taxes’ and ‘profit or loss’. It also requires disclosure of management-
defined performance measures and includes new requirements for aggregation and disaggregation of
financial information based on the identified ‘roles’ of the primary financial statements and the notes. In
addition, there are consequential amendments to other accounting standards.
•
IFRS 19 Subsidiaries without Public Accountability: Disclosures - IFRS 19 is effective for reporting
periods beginning on or after January 1, 2027, with early application permitted.
• IFRS 19 permits subsidiaries without public accountability to use reduced disclosure requirements if their
parent company (either ultimate or intermediate) prepares publicly available consolidated financial
statements in compliance with IFRS accounting standards. These subsidiaries must still apply the
recognition, measurement and presentation requirements in other IFRS accounting standards. Unless
otherwise specified, eligible entities that elect to apply IFRS 19 will not need to apply the disclosure
requirements in other IFRS accounting standards.
•
Annual Improvements to IFRS Accounting Standards – Volume 11 - An entity shall apply those
amendments for annual reporting periods beginning on or after January 1, 2026.
o The IASB’s annual improvements process deals with non-urgent, but necessary, clarifications and
amendments to IFRS. In July 2024, the IASB issued Annual Improvements to IFRS Accounting Standards
— Volume 11. The Annual Improvements to IFRS Accounting Standards - Volume 11, includes
amendments to IFRS 1, IFRS 7, IFRS 9, IFRS 10, and IAS 7. These amendments aim to clarify wording,
correct minor unintended consequences, oversights, or conflicts between requirements in the standards.
•
Amendment in IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates
and Joint Ventures: Sale or Contribution of Assets between an Investor and its Associate or Joint
Venture - In December 2015 the IASB postponed the effective date of this amendment indefinitely pending
the outcome of its research project on the equity method of accounting.
o The amendments address an acknowledged inconsistency between the requirements in IFRS 10 and those
in IAS 28, in dealing with the sale or contribution of assets between an investor and its associate or joint
venture. The main consequence of the amendments is that a full gain or loss is recognized when a
transaction involves a business (whether it is housed in a subsidiary or not). A partial gain or loss is
recognized when a transaction involves assets that do not constitute a business, even if these assets are
housed in a subsidiary.
The Group anticipates that the adoption of these new standards, amendments to the existing Standards and new
interpretations will have no significant impact on the Consolidated Financial Statements of the Group in the period
of initial application.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
553
NOTE 2:
SUMMARY OF MATERIAL ACCOUNTING POLICIES
Material accounting policies applied in the preparation of the accompanying Consolidated Financial Statements
are summarized below:
2.1.
Basis of Presentation
These Consolidated Financial Statements have been prepared under the historical cost convention with the
exception of certain financial instruments, which are recorded at fair value. Revenues and expenses are recorded
in the period in which they are earned or incurred. The Group does not offset assets and liabilities or income and
expenses unless it is required or permitted by an IFRS standard.
During the preparation of Consolidated Financial Statements assets and liabilities, income and expenses are
presented separately, except in certain cases, when one of the IFRS standards prescribes net presenting related to
certain items (see note 2.5.5. below).
The presentation of Consolidated Financial Statements in conformity with IFRS as adopted by the EU requires the
Management of the Group to make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and their
reported amounts of revenues and expenses during the reporting period. Actual results could differ from those
estimates.
Future changes in economic conditions, business strategies, regulatory requirements, accounting rules and other
factors could result in a change in estimates that could have a material impact on future financial statements.
2.2.
Foreign currency translation
In preparing the financial statements of each individual group entity, transactions in currencies other than the
entity's functional currencies are translated into functional currencies at the rates of exchange prevailing at the
dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies
are retranslated at the exchange rates quoted by the National Bank of Hungary (“NBH”), or if there is no official
rate, at exchange rates quoted by OTP Bank as at the date of the Consolidated Financial Statements.
Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates
prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of
historical cost in a foreign currency are not retranslated.
Exchange differences on monetary items are recognized in profit or loss in the period in which they arise except
for:
- exchange differences on foreign currency borrowings relating to assets under construction for future
productive use, which are included in the cost of those assets when they are regarded as an adjustment to
interest costs on those foreign currency borrowings;
- exchange differences on transactions entered into in order to hedge certain foreign currency risks (see note
2.5.4. below for hedging accounting policies); and
- exchange differences on monetary items receivable from or payable to a foreign operation for which
settlement is neither planned nor likely to occur (therefore forming part of the net investment in the foreign
operation), which are recognized initially in Other Comprehensive Income and reclassified from equity to
profit or loss on repayment of the monetary items.
For the purposes of presenting Consolidated Financial Statements, the assets and liabilities of the Group's foreign
operations are translated into HUF using exchange rates prevailing at the end of each reporting period. Income and
expense items are translated at the average exchange rates for the period, unless exchange rates fluctuate
significantly during that period, in which case the exchange rates at the dates of the transactions are used. Exchange
differences arising, if any, are recognized in Other Comprehensive Income and accumulated in equity (attributed
to non-controlling interests as appropriate).
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
554
NOTE 2:
SUMMARY OF MATERIAL ACCOUNTING POLICIES [continued]
2.2.
Foreign currency translation [continued]
On the disposal of a foreign operation (i.e. a disposal of the Group's entire interest in a foreign operation, or a
disposal involving loss of control over a subsidiary that includes a foreign operation, a disposal involving loss of
joint control over a jointly controlled entity that includes a foreign operation, or a disposal involving loss of
significant influence over an associate that includes a foreign operation), all of the exchange differences
accumulated in equity in respect of that operation attributable to the owners of the Group are reclassified to profit
or loss.
In addition, in relation to a partial disposal of a subsidiary that does not result in the Group losing control over the
subsidiary, the proportionate share of accumulated exchange differences are re-attributed to non-controlling
interests and are not recognized in profit or loss.
Goodwill and fair value adjustments on identifiable assets and liabilities acquired arising on the acquisition of a
foreign operation are treated as assets and liabilities of the foreign operation and translated at the rate of exchange
prevailing at the end of each reporting period. Exchange differences arising are recognized in Other
Comprehensive Income and accumulated in equity.
2.3.
Principles of consolidation
As the ultimate parent, OTP Bank is preparing Consolidated Financial Statements of the Group.
These Consolidated Financial Statements combine the assets, liabilities, equity, income, expenses and cash flows
of the Bank and of those subsidiaries of the Bank in which the Bank exercises control.
All intra-group transactions are consolidated fully on a line-by-line basis while under equity method other
consolidation rules are applied. Determination of the entities which are involved into the consolidation procedures
based on the determination of the Group’s Control over another entity. Control exists when the Bank has power
over the investee, is able to use this power and is exposed or has right to variable returns. Consolidation of a
subsidiary should begin from the date when the Group obtains control and cease when the Group loses control.
Therefore, income and expenses of a subsidiary should be included in the Consolidated Financial Statements from
the date the Group gains control of the subsidiary until the date when the Group ceases to have control of the
subsidiary.
The list of the major fully consolidated subsidiaries, the percentage of issued capital owned by the Bank and the
description of their activities is provided in Note 43.
2.4.
Accounting for acquisitions
Business combinations are accounted for using the acquisition method. Any goodwill arising on acquisition is
recognized in the Consolidated Statement of Financial Position and accounted for as indicated below.
The acquisition date is the date on which the acquirer effectively obtains control over the acquiree. Before this
date, it should be presented as Advance for investments within Other assets.
Goodwill, which represents the residual cost of the acquisition after obtaining the control over the acquiree in the
fair value of the identifiable assets acquired and liabilities assumed is held as an intangible asset and recorded at
cost less any accumulated impairment losses in the Consolidated Financial Statements. The Group tests goodwill
for impairment by comparing its recoverable amount with its carrying amount, and recognising any excess of the
carrying amount over the recoverable amount an impairment loss. The recoverable amount of goodwill is the
higher of its fair value less costs of disposal and its value in use.
If the Group loses control of a subsidiary, derecognizes the assets (including any goodwill) and liabilities of the
subsidiary at their carrying amounts at the date when control is lost and recognizes any difference as a gain or loss
on the sale attributable to the parent in the Consolidated Statement of Profit or Loss on Net income from
discontinued operations.
Goodwill acquired in a business combination is tested for impairment annually or more frequently if events or
changes in circumstances indicate. The goodwill is allocated to the cash-generating units that are expected to
benefit from the synergies of the combinations.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
555
NOTE 2:
SUMMARY OF MATERIAL ACCOUNTING POLICIES [continued]
2.4.
Accounting for acquisition [continued]
The Group calculates the fair value of identified assets and liabilities assumed on discounted cash-flow model.
The 3 year period explicit cash-flow model serves as a basis for the impairment test by which the Group defines
the impairment need on goodwill based on the strategic factors and financial data of its cash-generating units.
The Group, in its strategic plan, has taken into consideration the effects of the present global economic situation,
the present economic growth and outlook, the associated risks and their possible effect on the financial sector as
well as the current and expected availability of wholesale funding.
Negative goodwill (gain from bargain purchase), when the interest of the acquirer in the net fair value of the
acquired identifiable net assets exceeds the cost of the business combination, is recognized immediately in the
Consolidated Statement of Profit or Loss as “Other income”.
The Group measures non-controlling interests that are present ownership interests and entitle their holders to a
proportionate share of the subsidiaries’ net assets in the event of liquidation at cost and are disclosed among equity.
In case of equity investments measured at fair value through profit or loss in line with IFRS 9, non-controlling
interests are measured at fair value to avoid any accounting mismatch. These types of non-controlling interests are
disclosed as financial liabilities designated at fair value through profit or loss.
2.5.
Financial assets
2.5.1. Business model and SPPI test
A business model refers to how the Group manages its financial instruments in order to generate cash flows. It is
determined at a level that reflects how groups of financial instruments are managed rather than at an instrument
level.
The financial assets held by the Group are classified into three categories depending on the business model within
the financial assets are managed.
• Business model whose objective is to hold financial assets in order to collect contractual cash flows. Some
sales can be consistent with hold to collect business model and the Group assesses the nature, frequency
and significance of any sales occurring. The Group does not consider the sale frequent when at least six
months have elapsed between sales. The significant sales are those when the sales exceed 2% of the total
hold to collect portfolio. Within this business model the Group manages mainly loans and advances and
long-term securities and other financial assets.
• Business model whose objective is achieved by both collecting contractual cash flows and selling financial
assets. Within this business model the Group only manages securities.
• Business model whose objective is to achieve gains in a short-term period. Within this business model the
Group manages securities and derivative financial instrument.
If cash flows are realised in a way that is different from the expectations at the date that the Bank/Group assessed
the business model, that does not give rise to a prior error in the Group’s financial statements nor does it change
the classification of the remaining financial assets held in that business model.
When, and only when the Group changes its business model for managing financial assets it reclassifies all affected
assets. Such changes are determined by the Group’s senior management as a result of external or internal changes
and must be significant to the Group’s operations and demonstrable to external parties. The Group shall not
reclassify any financial liability.
Classification of a financial asset is based on the characteristics of its contractual cash flows if the financial asset
is held within a business model whose objective is to hold assets to collect contractual cash flows or within a
business model whose objective is achieved by both collecting contractual cash flows and selling financial assets.
The Group should determine whether the asset’s contractual cash flows are solely payments of principal and
interest on the principal amount outstanding (SPPI test). Contractual cash flows that are solely payments of
principal and interest on the principal amount outstanding are consistent with a basic lending arrangement.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
556
NOTE 2:
SUMMARY OF MATERIAL ACCOUNTING POLICIES [continued]
2.5.
Financial assets [continued]
2.5.1.
Business model and SPPI test [continued]
Contractual terms that introduce exposure to risks or volatility in the contractual cash flows that is unrelated to a
basic lending arrangement, such as exposure to changes in equity prices or commodity prices, do not give rise to
contractual cash flows that are solely payments of principal and interest on the principal amount outstanding. The
Group assesses whether contractual cash flows are solely payments of principal and interest on the principal
amount outstanding for the currency in which the financial asset is denominated.
The time value of money is the element of interest that provides consideration for only the passage of time.
However, in some cases, the time value of money element may be modified. In such cases, the Group assesses the
modification to determine whether the contractual cash flows represent solely payments of principal and interest
on the principal amount outstanding.
When assessing a modified time value of money element, the objective is to determine how different the
undiscounted contractual cash flows could be from undiscounted cash flows that would arise if the time value of
money element was not modified (the benchmark cash flows). The benchmark instrument can be an actual or a
hypothetical financial asset. If the undiscounted contractual cash flows significantly – above 2% – differ from the
undiscounted benchmark cash flows, the financial asset should be subsequently measured at fair value through
profit or loss.
2.5.2. Securities at amortized cost
The Group measures at amortized cost those securities which are held for contractual cash collecting purposes,
and contractual terms of these securities give rise to cash flows that are solely payment of principal and interest
on the principal amount outstanding. The Group initially recognizes these securities at fair value. Securities at
amortized cost are subsequently measured using the effective interest (“EIR”) method and are subject to
impairment. The amortisation of any discount or premium on the acquisition of a security at amortized cost is part
of the amortized cost and is recognized as interest income so that the revenue recognized in each period represents
a constant yield on the investment. Securities at amortized cost are accounted for on a trade date basis.
Such securities comprise mainly securities issued by the Hungarian and foreign Governments, corporate bonds,
mortgage bonds, interest-bearing and discounted treasury bills.
2.5.3. Financial assets at fair value through profit or loss
2.5.3.1. Securities held for trading
Investments in securities are accounted for on a trade date basis and are initially measured at fair value. Securities
held for trading are measured at subsequent reporting dates at fair value, so unrealized gains and losses on held for
trading securities are recognized in profit or loss and included in the Consolidated Statement of Profit or Loss for
the period. The Group holds held for trading securities within the business model to obtain short-term gains,
consequently realized and unrealized gains and losses are recognized in the net operating income, while interest
income is recognized in income similar to interest income.
Such securities consist of equity instruments, shares in investment funds, Hungarian and foreign government
bonds, corporate bonds, discounted treasury bills, mortgage bonds and other securities.
2.5.3.2. Financial assets designated as fair value through profit or loss
The Group may - at initial recognition - irrevocably designate a financial asset as measured at fair value through
profit or loss that would otherwise be measured at fair value through other comprehensive income or at amortized
cost.
The Group uses fair value designation if the classification eliminates or significantly reduces a measurement or
recognition inconsistency that would otherwise arise from measuring assets or liabilities or recognising the gains
and losses on them on different bases (‘accounting mismatch’).
The use of the fair value designation is based only on direct decision of the management of the Group. The Group
currently doesn’t apply this method.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
557
NOTE 2:
SUMMARY OF MATERIAL ACCOUNTING POLICIES [continued]
2.5.
Financial assets [continued]
2.5.3. Financial assets at fair value through profit or loss [continued]
2.5.3.3. Derivative financial instruments
In the normal course of business, the Group is a party to contracts for derivative financial instruments, which
represent a low initial investment compared to the notional value of the contract and their value depends on value
of underlying asset and are settled in the future. The derivative financial instruments used include interest rate
forward or swap agreements and currency forward or swap agreements and options. These financial instruments
are used by the Group both for trading purposes and to hedge interest rate risk and currency exposures associated
with its transactions in the financial markets (it is the so-called economic hedge, accounting hedge is described
later).
Derivative financial instruments are accounted for on a trade date basis and are initially measured at fair value and
at subsequent reporting dates also at fair value. Fair values are obtained from quoted market prices, discounted
cash-flow models and option pricing models as appropriate. The Group adopts a multi curve valuation approach
for calculating the net present value of future cash-flows – based on different curves used for determining forward
rates and used for discounting purposes. It shows the best estimation of such derivative deals that are collateralised
as the Group has almost all of its open derivative transactions collateralised.
Changes in the fair value of derivative financial instruments that do not qualify for hedge accounting are recognized
in profit or loss and are included in the Consolidated Statement of Profit or Loss for the period. Each derivative
deal is determined as asset when fair value is positive and as liability when fair value is negative.
Certain derivative transactions, while providing effective economic hedges under the risk management policy of
the Group, do not qualify for hedge accounting under the specific rules of IFRS 9 and are therefore treated as
derivatives held for trading with fair value gains and losses charged directly to the Consolidated Statement of
Profit or Loss.
Foreign currency contracts
Foreign currency contracts are agreements to exchange specific amounts of currencies at a specified rate of
exchange, at a spot date (settlement occurs two days after the trade date) or at a forward date (settlement occurs
more than two days after the trade date). The notional amount of these forward contracts does not represent the
actual market or credit risk associated with these contracts.
Foreign currency contracts are used by the Group for risk management and trading purposes. The risk management
foreign currency contracts of the Group were used to hedge the exchange rate fluctuations of loans and deposits to
credit institutions denominated in foreign currency.
Foreign exchange swaps and interest rate swaps
The Group enters into foreign exchange swap and interest rate swap (“IRS”) transactions. The swap transaction is
an agreement concerning the swap of certain financial instruments, which usually consists of spot and one or more
forward contracts.
IRS transactions oblige two parties to exchange one or more payments calculated with reference to fixed or
periodically reset rates of interest applied to a specific notional principal amount (the base of the interest
calculation). Notional principal is the amount upon which interest rates are applied to determine the payment
streams under IRS transactions. Such notional principal amounts often are used to express the volume of these
transactions but are not actually exchanged between the counterparties.
IRS transactions are used by the Group for risk management and trading purposes.
Cross-currency interest rate swaps
The Group enters into cross-currency interest rate swap (CCIRS) transactions which have special attributes, i.e.
the parties exchange the notional amount at the beginning and also at the maturity of the transaction. A special
type of these deals is the mark-to-market CCIRS agreements. For these kind of transactions the parties – in
accordance with the foreign exchange prices – revalue the notional amount during lifetime of the transaction.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
558
NOTE 2:
SUMMARY OF MATERIAL ACCOUNTING POLICIES [continued]
2.5.
Financial assets [continued]
2.5.3. Financial assets at fair value through profit or loss [continued]
2.5.3.3. Derivative financial instruments [continued]
Equity and commodity swaps
Equity swaps obligate two parties to exchange more payments calculated with reference to periodically reset rates
of interest and performance of indices. A specific notional principal amount is the base of the interest calculation.
The payment of index return is calculated on the basis of current market price compared to the previous market
price. In case of commodity swaps payments are calculated on the basis of the strike price of a predefined
commodity compared to its average market price in a period.
Forward rate agreements (FRA)
A forward rate agreement is an agreement to settle amounts at a specified future date based on the difference
between an interest rate index and an agreed upon fixed rate. Market risk arises from changes in the market value
of contractual positions caused by movements in interest rates.
The Group limits its exposure to market risk by entering into generally matching or offsetting positions and by
establishing and monitoring limits on unmatched positions. Credit risk is managed through approval procedures
that establish specific limits for individual counterparties. The Group’s forward rate agreements were transacted
for management of interest rate exposures and have been accounted for at mark-to-market fair value.
Foreign exchange options
A foreign exchange option is a derivative financial instrument that gives the owner the right to exchange money
denominated in one currency into another currency at a pre-agreed exchange rate at a specified future date. The
transaction, for a fee, guarantees a worst-case exchange rate for the futures purchase of one currency for another.
These options protect against unfavourable currency movements while preserving the ability to participate in
favourable movements.
2.5.4. Hedge accounting
The Group implemented hedge accounting rules for micro hedge transactions prescribed by IFRS 9 in 2018.
The Group elected – as an accounting policy choice permitted under IFRS 9 – to apply IAS 39 hedge accounting
rules for portfolio (macro) hedge transactions.
For further details please see Note 48.3
2.5.4.1. Derivative financial instruments designated as fair value hedge
Micro hedge transactions
The Group elected to apply IFRS 9 for the micro hedge transactions.
Changes in the fair value of derivatives that are designated and qualify as hedging instruments in fair value hedges
and that prove to be highly effective in relation to the hedged risk, are recorded in the Consolidated Statement of
Profit or Loss along with the corresponding change in fair value of the hedged asset or liability that is attributable
to the specific hedged risk. Changes in the fair value of hedging instrument in fair value hedges is charged directly
to the Consolidated Statement of Profit or Loss.
The conditions of hedge accounting applied by the Group are the following: formally designated as hedge
relationship, proper hedge documentation is prepared, effectiveness test is performed and based on it the hedge is
qualified as effective. In the case of a financial instrument measured at amortised cost the Group recognises the
hedging gain or loss on the hedged item as the modification of its carrying amount and it is recognised in profit or
loss. These adjustments of the carrying amount are amortised to the profit or loss using the effective interest rate
method. The Group starts the amortisation when the hedged item is no longer adjusted by the hedging gains or
losses. If the hedged item is derecognised, the Group recognises the unamortised fair value in profit or loss
immediately. For fair value hedges inefficiencies and the net revaluation of hedged and hedging item are
recognized in the Net results on derivative instruments and hedge relationships.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
559
NOTE 2:
SUMMARY OF MATERIAL ACCOUNTING POLICIES [continued]
2.5.
Financial assets [continued]
2.5.4. Hedge accounting [continued]
2.5.4.1. Derivative financial instruments designated as fair value hedge [continued]
Macro (portfolio) hedge transactions
The Group elected, as a policy choice permitted under IFRS 9, to continue to apply hedge accounting in accordance
with IAS 39 in the case of macro hedge transactions.
The Group applies macro fair value hedging to its core part sight deposit to mitigate the interest rate risk arising
from the interest rate mismatch of assets with floating behaviour and the fixed rate nature of the deposit. The nature
of the hedged risk is interest rate risk arising from the fixed nature and the term structure of the interest rate risk
characteristics of the hedged core sight deposits.
The hedging instruments are fixed-to-floater interest rate swaps measured at fair value through profit or loss
designated in a proportion defined as the declared hedging ratio.
The hedging gain or loss is recognized in accordance with IAS39 89 and 90.
The gain or loss on the hedging instrument is recognized in profit or loss, the fair value adjustment attributable to
the hedged risk is presented on a separate line in the consolidated statement of financial position.
The assessment of hedge effectiveness is measured on a monthly basis. The hedging relationship is considered
appropriate if the difference of fair value change of the hedging instrument and the hedged item is between the
80% -125% range in case of all or all but one valid stress scenarios.
The aggregated fair value changes on the hedged assets are recognised on the Derivative financial asset / liability
designated as hedge accounting in the Consolidated Statement of financial position.
2.5.4.2. Derivative financial instruments designated as cash-flow hedge
The Group elected to apply IFRS 9 for the micro hedge transactions.
Changes in the fair value of derivatives that are designated and qualify as hedging instrument in cash-flow hedges
and that prove to be highly effective in relation to the hedged risk are recognized in their effective portion as
reserve in Other Comprehensive Income. The ineffective element of the changes in fair value of hedging
instrument is charged directly to the Consolidated Statement of Profit or Loss.
The Group terminates the hedge relationship if the hedging instrument expires or is sold, terminated or exercised,
or the hedge no longer meets the criteria for hedge accounting. In the case of cash-flow hedges – in line with the
standard - hedge accounting is still applied by the Group as long as the underlying asset is derecognized or
terminated. When the Group discontinues hedge accounting to a cash-flow hedge the amount in the cash flow
hedge reserve is reclassified to the profit or loss if the hedged future cash flows are no longer expected to occur.
If the hedged future cash flows are still expected to occur, the amount remains in the cashflow hedge reserve and
reclassified to the profit and loss only when the future cash flows occur.
2.5.4.3. Net investment hedge in foreign operations
The Group elected to apply IFRS 9 for the net investment hedge transactions.
Hedges of a net investment in a foreign operation, including a hedge of a monetary item that is accounted for as
part of the net investment, shall be accounted for similarly to cash flow hedges.
On the disposal of a foreign operation, the cumulative value of any gains and losses recognized in Other
Comprehensive Income is transferred to the Consolidated Statement of Profit or Loss.
For the purposes of presenting Consolidated Financial Statements, the assets and liabilities of the Group's foreign
operations are translated into HUF using exchange rates prevailing at the end of each reporting period. Income and
expense items are translated at the average exchange rates for the period, unless exchange rates fluctuate
significantly during that period, in which case the exchange rates at the dates of the transactions are used. Exchange
differences arising, if any, are recognized in Other Comprehensive Income and accumulated in equity. The Group
does not intend to take foreign currency risks from open foreign currency position therefore the Group uses net
investment hedge in foreign operations to hedge the foreign currency risk arising from the net assets of subsidiaries
with EUR functional currency.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
560
NOTE 2:
SUMMARY OF MATERIAL ACCOUNTING POLICIES [continued]
2.5.
Financial assets [continued]
2.5.5.
Offsetting
Financial assets and liabilities are offset and the net amount is reported in the Consolidated Statement of Financial
Position when the Group has a legally enforceable right to set off the recognized amounts and the transactions are
intended to be reported in the Consolidated Statement of Financial Position on a net basis. In case of the derivative
financial instruments the Group applies offsetting and net presentation in the Consolidated Statement of Financial
Position when the Group has the right and the ability to settle these assets and liabilities on a net basis.
2.5.6.
Embedded derivatives
Sometimes, a derivative may be a component of a combined or hybrid contract that includes a host contract and a
derivative (the embedded derivative) affecting cash-flows or otherwise modifying the characteristics of the host
instrument. An embedded derivative must be separated from the host instrument and accounted for as a separate
derivative if, and only if:
• The economic characteristics and risks of the embedded derivative are not closely related to the economic
characteristics and risks of the host contract;
• A separate financial instrument with the same terms as the embedded derivative would meet the definition
of a derivative as a stand-alone instrument; and
• The host instrument is not measured at fair value or is measured at fair value but changes in fair value are
recognized in Other Comprehensive Income.
As long as a hybrid contract contains a host that is a financial asset the general accounting rules for classification,
recognition and measurement of financial assets are applicable for the whole contract and no embedded derivative
is separated.
Derivatives that are required to be separated are measured at fair value at initial recognition and subsequently. If
the Group is unable to measure the embedded derivative separately either at acquisition or at the end of a
subsequent financial reporting period, the Group shall designate the entire hybrid contract as at fair value through
profit or loss. The Group shall assess whether an embedded derivative is required to be separated from the host
contract and accounted for as a derivative when the Bank first becomes a party to the contract.
The separation rules for embedded derivatives are only relevant for financial liabilities.
2.5.7. Securities at fair value through other comprehensive income
Securities at fair value through other comprehensive income are held within a business model whose objective is
achieved by both collecting of contractual cash flows and selling securities. Furthermore, the contractual terms of
these securities give rise on specified dates to cash flows that are solely payment of principal and interest on the
principal amount outstanding.
Debt instruments
Investments in debt securities are accounted for on a trade date basis and are initially measured at fair value.
Securities at fair value through other comprehensive income are measured at subsequent reporting dates at fair
value. Unrealized gains and losses on securities at fair value through other comprehensive income are recognized
directly in Other Comprehensive Income, except for interest and foreign exchange gains/losses on monetary items,
unless such financial asset at fair value through other comprehensive income is part of an effective hedge. Such
gains and losses are reported when realized in Consolidated Statement of Profit or Loss for the applicable period.
For debt securities at fair value through other comprehensive income the loss allowance is calculated based on
expected credit loss model. The expected credit loss is accounted for against Other Comprehensive Income.
Securities at fair value through other comprehensive income are remeasured at fair value based on quoted prices
or amounts derived from cash-flow models. In circumstances where the quoted market prices are not readily
available, the fair value of debt securities is estimated using the present value of future cash-flows and the fair
value of any unquoted equity instruments are calculated using the EPS ratio.
Such securities consist of Hungarian and foreign government bonds, corporate bonds, mortgage bonds, interest-
bearing Treasury bills, securities issued by the NBH and other securities.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
561
NOTE 2:
SUMMARY OF MATERIAL ACCOUNTING POLICIES [continued]
2.5.
Financial assets [continued]
2.5.7.
Securities at fair value through other comprehensive income [continued]
Fair value through other comprehensive income option for equity instruments
The Group has elected to present in the Statement of Other Comprehensive Income changes of fair value of those
equity instruments which are neither held for trading nor recognized as contingent consideration under IFRS 3.
In some cases, the Group made an irrevocable election at initial recognition for certain equity instruments to
present subsequent changes in fair value of these securities in the consolidated other comprehensive income instead
of in profit or loss.
The use of the “fair value through other comprehensive income” option is based only on direct decision of
management of the Group.
2.5.8.
Loans, placements with other banks, repo receivables and loss allowance for loan and placements
and repo receivable losses
The Group measures at amortized cost those Loans and placements with other banks and repo receivables, which
are held to collect contractual cash flows, and contractual terms of these assets give rise on specified dates to cash
flows that are solely payments of principal and interest on the principal amount outstanding. These loans are
recognized as Loans at amortized cost in the Consolidated Statement of Financial Position. The Group recognizes
those financial assets which are not held for trading and do not give rise to contractual cash flows that are solely
payments of principal and interest on the principal amount outstanding as loans measured at fair value through
profit or loss. These loans are recognized as Loans mandatorily at fair value through profit or loss in the
Consolidated Statement of Financial Position.
Those Loans and placements with other banks and repo receivables that are accounted at amortized cost, stated at
the principal amounts outstanding (including accrued interest), net of allowance for loan or placement losses,
respectively.
In case of the above mentioned financial assets measured at amortised cost transaction fees and charges adjust the
carrying amount at initial recognition and are included in effective interest calculation. In case of loans at fair value
through profit or loss fees and charges are recognised when incurred in the Consolidated Statement of Profit or
Loss.
Loans and placements with other banks and repo receivables are derecognized when the contractual rights to the
cash-flows expire or they are transferred. When a financial asset is derecognized the difference of the carrying
amount and the consideration received is recognized in the profit or loss in case of financial assets at amortised
cost the gains or losses from derecognition are presented in “Gains/losses from derecognition of financial assets
at amortised cost” line while in case of loans at fair value through profit or loss the gains or losses from
derecognition are presented in “Net operating income”.
Change in the fair value of loans at fair value through profit or loss is broken down into two components and
presented in the Consolidated Statement of Profit or Loss as follows:
•
Portion of the change in fair value arising from changes in credit risk are presented within “Risk cost” as
“Change in the fair value attributable to changes in the credit risk of loans mandatorily measured at fair
value through profit of loss”.
•
The remaining component of the change is presented in fair value within “Net operating income” as “Fair
value adjustment on financial instruments measured at fair value through profit or loss”.
Initially financial assets shall be recognized at fair value which is usually equal to transaction value in case of
loans and placements. However, when the amounts are not equal, the initial fair value difference should be
recognized.
If the fair value of financial assets is based on a valuation technique using only inputs observable in market
transactions, the Group recognizes the initial fair value difference in the Consolidated Statement of Profit or Loss.
When the fair value of financial assets is based on models for which inputs are not observable, the difference
between the transaction price and the fair value is deferred and only recognized in profit or loss when the
instrument is derecognized or the inputs became observable.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
562
NOTE 2:
SUMMARY OF MATERIAL ACCOUNTING POLICIES [continued]
2.5.
Financial assets [continued]
2.5.8. Loans, placements with other banks, repo receivables and loss allowance for loan and placements
and repo receivable losses [continued]
Initial fair value of loans lent at interest below market conditions is lower than their transaction price, the
subsequent measurement of these loans is under IFRS 9.
The Group recognizes a loss allowance for expected credit losses on a financial asset at each reporting date. The
loss allowance for a financial asset equals to 12-month expected credit loss or equals to the lifetime expected credit
losses. The maximum period over which expected credit losses shall be measured is the maximum contractual
period over which the Group is exposed to credit risk.
If the credit risk on a financial asset has not increased significantly since initial recognition then 12-month expected
credit losses, otherwise (in case of significant credit risk increase) lifetime expected credit losses should be
calculated. The expected credit loss is the present value of the difference between the contractual cash flows that
are due to the Group under the contract and the cash flows that the Group expects to receive.
When the contractual cash flows of a financial asset are modified and the modification does not result in the
derecognition of the financial asset the Group recalculates the gross carrying amount of the financial asset by
discounting the expected future cash flows with the original effective interest rate of the asset. The difference
between the carrying amount and the present value of the expected cash flows is recognized as a modification gain
or loss in the profit or loss. Interest and amortized cost are accounted using effective interest rate method.
Write-offs are generally recorded after all reasonable restructuring or collection activities have taken place and the
possibility of further recovery is considered to be remote. The loan is written off against the related account “Gain
/ (Loss) from derecognition of financial assets at amortized cost” in the Consolidated Statement of Profit or Loss.
The Group applies partial or full write-off for loans based on the definitions and prescriptions of financial
instruments in accordance with IFRS 9. If the Group has no reasonable expectations regarding a financial asset
(loan) to be recovered, it will be written off partially or fully at the time of emergence.
The gross amount and loss allowance of the loans shall be written off in the same amount to the estimated
maximum recovery amount while the net carrying value remains unchanged. Subsequent recoveries for loans
previously written-off partially or fully, which may have been derecognized from the books with no reasonable
expectations for the recovery will be booked in the Consolidated Statement of Profit or Loss on “Income from
recoveries of written-off, but legally existing loan” line in Risk cost.
2.5.9. Modified assets
If the net present value of the contracted cash flows changes due to the modification of the contractual terms and
it is not qualified as derecognition, modification gain or loss should be calculated and accounted for in the
Consolidated Statement of Profit or Loss. Modification gain or loss is accounted in cases like restructuring – as
defined in guidelines of the Group – prolongation, renewal with unchanged terms, renewal with shorter terms and
prescribing capital repayment rate, if it doesn’t exist or has not been earlier.
The changes of net present value should be calculated on portfolio level in case of retail exposures. Each retail
contract is restructured based on restructuring frameworks. The Group has to evaluate these frameworks (and not
individual contracts). The changes of net present value should be calculated individually on contract level in case
of corporate portfolio.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
563
NOTE 2:
SUMMARY OF MATERIAL ACCOUNTING POLICIES [continued]
2.5.
Financial assets [continued]
2.5.9.
Modified assets [continued]
Among the possible contract amendments, the Group considers as a derecognition and a new recognition the
followings:
- merging several debts into a single debt, or one single debt splitting into several tranches,
- change of currency,
- change in counterparty,
- failing SPPI test after modification,
- interest rate change (fixed to floating or floating to fixed),
when the discounted present value – discounted at the original effective interest rate – of the cash flows under
the new terms is at least 10 per cent different from the discounted present value of the remaining cash flows.
In case of derecognition and new recognition of a financial asset, the unamortized fees of the derecognized asset
should be presented as Income similar to interest income. The newly recognized financial asset is initially
measured at fair value and is placed in stage 1 if the derecognized financial asset was in stage 1 or stage 2 portfolio.
The newly recognized financial asset will be purchased or originated credit impaired financial asset (“POCI”) if
the derecognized financial asset was in stage 3 portfolio or it was POCI.
The modification gain or loss shall be calculated at each contract amendments unless they are handled as a
derecognition and new recognition. In case of modification the Group recalculates the gross carrying amount of
the financial asset. To do this, the new contractual cash flows should be discounted using the financial asset’s
original effective interest rate (or credit-adjusted effective interest rate for POCI financial asset). Any costs or fees
incurred adjust the carrying amount of the modified financial asset are amortized over the remaining term of the
modified financial asset.
2.5.10. Purchased or originated credit impaired financial assets
Purchased or originated financial assets are credit-impaired on initial recognition. A financial asset is credit-
impaired when one or more events that have a detrimental impact on the estimated future cash flows of that
financial asset have occurred.
A purchased credit-impaired asset is likely to be acquired at a deep discount. In unusual circumstances, it may be
possible that an entity originates a credit-impaired asset, for example, following a substantial modification of a
distressed financial asset that resulted in the derecognition of the original financial asset.
In the case of POCI financial assets, interest income is always recognized by applying the credit-adjusted effective
interest rate.
For POCI financial assets, in subsequent reporting periods an entity is required to recognize:
-
the cumulative changes in lifetime expected credit losses since initial recognition as a loss allowance,
-
the impairment gain or loss which is the amount of any change in lifetime expected credit losses.
An impairment gain is recognized (with the parallel increase of the net amortized cost of receivable) if due
to the favourable changes after initial recognition the lifetime expected credit loss estimation is becoming
lower than the original estimated credit losses at initial recognition.
The POCI qualification remains from initial recognition to derecognition in the Group’s books.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
564
NOTE 2:
SUMMARY OF MATERIAL ACCOUNTING POLICIES [continued]
2.6.
Loss allowance
A loss allowance for loans and placements with other banks and repo receivables is recognized by the Group based on
the expected credit loss model in accordance with IFRS 9. Based on the three-stage model the recognized loss allowance
equals to 12-month expected credit loss from the initial recognition. On financial assets with significantly increased credit
risk or credit impaired financial assets (based on objective evidence) the recognized loss allowance is the lifetime expected
credit loss.
In the case of purchased or originated credit impaired financial assets, a loss allowance is recognized in the amount of the
lifetime expected credit loss since initial recognition. The impairment gain in the Consolidated Statement of Profit or Loss
is recognized if lifetime expected credit loss for purchased or originated credit impaired financial assets at measurement
date is less than the estimated credit loss at initial recognition.
A loss allowance for loans and placements with other banks and repo receivables represents the Management’s assessment
for potential losses in relation to these activities.
The default occurs when either or both of the following events have taken place:
• objective criterion meaning that the credit obligation of the client is overdue exceeding the materiality threshold
for more than 90 consecutive days (90+ default DPD), or the obligor has breached the limit of the overdraft with
an amount exceeding the materiality threshold for more than 90 consecutive days (90+ default DPD), or
• probability criterion meaning the probability that the obligor will be unable to pay its credit obligations in full
(UTP= Unlikely to Pay). The following conditions indicate the occurrence of the probability criterion: specific
credit risk adjustment, sell of credit obligation with significant loss, distressed restructuring, termination of the
contract on the initiative of the Bank, Bankruptcy, liquidation, personal bankruptcy, forced deleted status.
Previously described conditions should result in default status mandatorily. Moreover, during the individual expert-based
assessment the client’s default status shall be established if in the specific case the default can be justified on subjective
basis. The default status should be terminated if in the last 3 months no other default criterion exists and the condition
(either probability criterion or objective criterion) that resulted in the default status ceased at least 3 months ago.
The expected loss calculation should be forward looking. Available forward-looking information has to be included in
the parameter estimation by using different scenarios, including forecasts of future economic conditions. The
determination of probability-weighted forward-looking scenarios are based on the OTP Group’ macro model. In general,
there are two crisis scenarios (4-5), and three non-crisis scenarios (1-3) but the calculation of impairment should be based
on at least two scenarios in the OTP Group. The macro conditioning is performed by Vasicek-model, which captures the
relationship between point-in-time (PiT) and through-the-cycle (TTC) PD.
The Vasicek PD transformation can also be used to estimate the PIT PDs of the buckets. The required parameters (such
as correlation coefficient and macro condition parameter) can be derived from the OTP’s macro model.
In the collective provisioning methodology credit risk and the change of credit risk can be correctly captured by
understanding the risk characteristics of the portfolio. At portfolio segmentation, setting the segments is a key element of
the provisioning calculation and requires the extensive knowledge of the portfolio. The segmentation is expected to stay
stable from month to month. The segmentation must be performed separately for each parameter, since in each case
different factors may have relevance.
The estimation of one-year and lifetime probability of default (PD) of collectively assessed exposures is performed via
transition matrices. The assets should be allocated to groups representing similar credit risk based on major credit risk
characteristics and their capability to fulfil contractual obligations. The mandatory variables of the group level assessment
procedure are payment delay, deal/client rating, the restructured flag, the default status and product type. Further
segmentation is advisable in case significant differences are observed in probability of default. Transition matrices should
be determined for each portfolio segment separately. The Group model handles healing (from default) rate in the PD
parameter, thus the calculated probabilities should be reduced by this rate.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
565
NOTE 2:
SUMMARY OF MATERIAL ACCOUNTING POLICIES [continued]
2.6.
Loss allowance [continued]
Two different methods are applied in OTP Group for LGD parameter calculation: Retail mortgage loans and non-retail
portfolios (MSE and Wholesale) that are significantly secured by mortgage: modified LGD methodology based on the
Asset Quality Review (AQR) – the primary source of the recovery the collateral itself but cash recovery is also taken into
account. The calculation is performed for each exposure individually based on the estimated parameters (main parameters:
FSR – foreclosure success rate, SR – sales ratio, TTS – time to sale, C – cost, REC – cash recovery) and the actual value
of collaterals (e.g. property, guarantee, surety, bail).
For Consumer loans and car finance: recovery based LGD methodology estimated from historical recoveries. The LGD
calculation should not be automatically identified with historic actual data. The direction and degree of the shift in the
factors impacting the LGD, also considering the macroeconomic effects, in addition to the anticipated developments in
those, must always be analysed. The LGD – just like the PD – is not independent of the business cycles either; typically
it increases in parallel with the economic downturn.
Loss allowance for loan and placements are determined at a level that provides coverage for individually identified credit
losses. For loans for which it is not possible to determine the amount of the individually identified credit loss in the
absence of objective evidence, a collective impairment loss is recognized. With this, the Group reduces the carrying
amount of financial asset portfolios with similar credit risk characteristics to the amount expected to be recovered based
on historical loss experience.
At subsequent measurement the Group recognizes an impairment gain or loss through “Impairment gain on POCI loans”
in the Consolidated Statement of Profit or Loss as part of “Risk cost” line as an amount of expected credit losses or
reversal which is required to adjust the loss allowance at the reporting date to the amount that is required to be recognized
in accordance with IFRS 9. If the reason for the impairment no longer exist the impairment is released in the Consolidated
Statement of Profit or Loss for the current period.
If a financial asset, for which previously there were no indicators of significant increase in credit risk (i.e. classified in
Stage 1) is subsequently classified in Stage 2 or Stage 3 then loss allowance is adjusted to lifetime expected credit loss.
If a financial asset, which was previously classified in Stage 2 or Stage 3 is subsequently classified in Stage 1 then the
loss allowance is adjusted to the level of 12 month expected credit loss.
Classification into risk classes
According to the requirements of the IFRS9 the Group classifies the financial assets measured at amortized cost, at fair
value through other comprehensive income and loan commitments and financial guarantees into the following stages:
• Stage 1 – performing financial instruments without significant increase in credit risk since initial recognition
• Stage 2 – performing financial instruments with significant increase in credit risk since initial recognition but
not credit-impaired
• Stage 3 – non-performing, credit-impaired financial instruments
• POCI – purchased or originated credit impaired
In the case of trade receivables the Group applies the simplified approach and calculates only lifetime expected credit
loss. The simplified approach is the following:
- for the past 3 years the average annual balance of receivables under simplified approach is calculated,
- the written-off receivables under simplified approach are determined in the past 3 years,
- historical losses are adjusted to reflect information about current conditions and reasonable forecasts of future
economic conditions,
- the loss allowance ratio is the sum of the written-off amounts divided by the sum of the average balances,
- the loss allowance is multiplied by the end-of-year balance, it is the actual loss allowance on these receivables,
- loss allowance should be recalculated annually.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
566
NOTE 2:
SUMMARY OF MATERIAL ACCOUNTING POLICIES [continued]
2.6.
Loss allowance [continued]
Classification into risk classes [continued]
The Group assumes that the credit risk on a financial instrument has not increased significantly since initial recognition
if the financial asset is determined to have low credit risk at the reporting date. This might occur if the financial asset has
a low risk of default, the borrower has a strong capacity to meet its contractual cash flow obligations in the near term and
adverse changes in economic and business conditions in the longer term may, but will not necessarily, reduce the ability
of the borrower to fulfil its contractual cash flow obligations. The Group considers sovereign exposures as having low
credit risk.
Stage 1: financial instruments for which the events and conditions specified in respect of Stage 2 and Stage 3 do not exist
on the reporting date.
A client or loan must be qualified as default if one or both the following two conditions occur:
• The client delays more than 90 days. This is considered a hard trigger.
• There is reasonable probability that the client will not pay all of its obligation. This condition is examined on the
basis of probability criteria of default.
The subject of default qualification is that exposure (on-balance and off-balance) which originates credit risk (so
originated from loan commitments, risk-taking contracts).
A financial instrument shows significant increase in credit risk, and is allocated to Stage 2, if in respect of which any of
the following triggers exist on the reporting date, without fulfilling any of the conditions for the allocation to the non-
performing stage (stage 3):
• the payment delay exceeds 30 days,
• it is classified as performing forborne,
• based on individual decision, its currency suffered a significant "shock" since the disbursement of the loan,
• the transaction/client rating exceeds a predefined value or falls into a determined range, or compared to the historic
value it deteriorates to a predefined degree,
• in the case retail mortgage loans, the loan-to-value ratio exceeds a predefined rate,
• default on another loan of the retail client, if no cross-default exists,
• monitoring classification of corporate and municipal clients above different thresholds defined on group
- financial difficulties at the debtor (capital adequacy, liquidity, deterioration of the instrument quality),
- significant decrease of the liquidity or the activity on the active market of the financial instrument can be
observed,
- the rating of the client reflects high risk, but it is better than the default one,
- significantly decrease in the value of the recovery from which the debtor would disburse the loan,
- clients under liquidation.
A financial instrument is non-performing and it is allocated to Stage 3 when any of the following events or conditions
exists on the reporting date:
• default (based on the group level default definition),
• classified as non-performing forborne (based on the group level forborne definition),
• the monitoring classification of corporate and municipal clients above different thresholds defined on group level
(including but not limited to):
-
breaching of contracts,
-
significant financial difficulties of the debtor (like capital adequacy, liquidity, deterioration of the instrument
quality),
-
bankruptcy, liquidation, debt settlement processes against debtor,
-
forced strike-off started against debtor,
-
termination of loan contract by the Bank,
-
occurrence of fraud event,
-
termination of the active market of the financial instrument.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
567
NOTE 2:
SUMMARY OF MATERIAL ACCOUNTING POLICIES [continued]
2.6.
Loss allowance [continued]
Classification into risk classes [continued]
If the exposure is no longer considered as credit impaired, the Group allocates this exposure to Stage 2.
When loss allowance is calculated at exposures categorized into stages the following process is needed by stages:
• Stage 1 (performing): loss allowance at an amount equal to 12-month expected credit loss should be recognized,
• Stage 2 (significant increase in credit risk): loss allowance at an amount equal to lifetime expected credit loss
should be recognized,
• Stage 3 (non-performing): loss allowance at an amount equal to lifetime expected credit loss should be
recognized.
For lifetime expected credit losses, an entity shall estimate the risk of a default occurring on the financial instrument
during its expected life. 12-month expected credit losses are a portion of the lifetime expected credit losses and represent
the lifetime cash shortfalls that will result if a default occurs in the 12 months after the reporting date (or a shorter period
if the expected life of a financial instrument is less than 12 months), weighted by the probability of that default occurring.
An entity shall measure expected credit losses of a financial instrument in a way that reflects:
-
an unbiased and probability-weighted amount that is determined by evaluating a range of possible outcomes
-
the time value of money and
-
reasonable and supportable information that is available without undue cost or effort at the reporting date about
past events, current conditions and forecasts of future economic conditions.
2.7.
Sale and repurchase agreements, security lending
Where debt or equity securities are sold under a commitment to repurchase them at a pre-determined price, they remain
on the Consolidated Statement of Financial Position and the consideration received is recorded on Repo liabilities.
Conversely, debt or equity securities purchased under a commitment to resell are not recognized in the Consolidated
Statement of Financial Position and the consideration paid is recorded either in Placements with other banks or Deposits
from customers. Interest is accrued based on the effective interest method evenly over the life of the repurchase agreement.
In the case of security lending transactions, the Group does not recognize or derecognize the securities because believes
that the transferor retains substantially all the risks and rewards of the ownership of the securities. Only a financial liability
or financial receivable is recognized for the consideration amount.
2.8.
Associates and other investments
The control is established when the Group has the right and exposure over the variable positive yield of the investee but
the same time put up with the consequences of the negative returns and the Group by its decisions is able to influence the
extent of the yields.
The Group primarily considering the following factors in the process of determining the existing of the control:
- investigation of the decision-making mechanism of the entity,
- authority of the Board of Directors, Supervisory Board and General meeting based on the deed of association,
- existence of investments with preferential voting rights.
If the control can’t be obviously determined, then it should be supposed that the control does not exist.
Significant influence is presumed by the Group to exist – unless the contrary case is proven – when the Group holds 20%
or more of the voting power of an investee but does not have a control.
The Group considers a subsidiary significant when it is a financial institution or when the subsidiary contributes to the
Groups’ total balance sheet with higher amount. The Bank considers the subsidiaries as cash generating units.
Companies where the Bank has the ability to exercise significant influence are accounted for using the equity method.
Subsidiaries and associated companies that were not accounted for using the equity method and other investments where
the Bank does not hold a significant interest are recorded according to IFRS 9. When an investment in an associate is held
indirectly through an entity that is a venture capital fund, the Group elects to measure these investments in the associate
at fair value through profit or loss in accordance with IFRS 9.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
568
NOTE 2:
SUMMARY OF MATERIAL ACCOUNTING POLICIES [continued]
2.8.
Associates and other investments [continued]
Under the equity method, the investment is initially recognized at cost, and the carrying amount is adjusted subsequently
for:
-
the Group’s share of the post-acquisition profits or losses of the investee, which are recognized in the Group’s
Consolidated Statement of Profit or Loss; and
-
the distributions received from the investee, which reduce the carrying amount of the investment.
The Group’s share of the profits or losses of the investee, or other changes in the investee’s equity, is determined on the
basis of its proportionate ownership interest. The Group recognizes its share of the investee’s income and losses based on
the percentage of the equity interest owned by the Group.
Gains and losses on the sale of investments are determined based on the specific identification of the cost of each
investment.
2.9.
Property and equipment, Intangible assets
Property and equipment and Intangible assets are measured at cost, less accumulated depreciation and amortization and
impairment, if any.
Internally generated intangibles, excluding capitalized development costs, are not capitalized – the related expenditures
are accounted as cost in the period in which they are incurred. Development costs are capitalized only when the technical
and commercial feasibility of the asset has been clearly demonstrated, the Group has the intent and ability to complete
the intangible asset and either use it or sell it and be able to demonstrate how the asset will generate future economic
benefits. Amortization of these type of assets begins when development is completed, and the asset is available for use.
During the period of development, the asset is tested for impairment annually.
The Group lists mainly self-developed software among internally generated intangible assets.
The depreciable amount (book value less residual value) of the non-current assets must be allocated over the useful lives.
Depreciation and amortization are computed usually by using the straight-line method over the estimated useful lives of
the assets based on the following annual percentages:
Depreciation and amortization on Property and equipment and Intangible assets commence on the day such assets are
ready to use.
At each balance sheet date, the Group reviews the carrying value of its Property and equipment and Intangible assets to
determine if there is any indication that those assets have suffered an impairment loss. If any such indication exists, the
recoverable amount of the asset is estimated to determine the extent (if any) of the impairment loss.
Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable
amount of the cash-generating unit to which the asset belongs.
Where the carrying value of Property and equipment and Intangible assets is greater than the estimated recoverable
amount, it is impaired immediately to the estimated recoverable amount.
The Group may conclude contracts for purchasing property, equipment and intangible assets, where the purchase price is
settled in foreign currency. By entering into such agreements, firm commitment in foreign currency due on a specified
future date arises at the Group.
Reducing the foreign currency risk caused by firm commitment, forward foreign currency contracts may be concluded to
ensure the amount payable in foreign currency on a specified future date on one hand and to eliminate the foreign currency
risk arising until settlement date of the contract on the other hand.
In the case of an effective hedge the realized profit or loss of the hedging instrument is stated as the part of the cost of the
hedged asset as it has arisen until recognizing the asset.
Annual
percentages
Useful life
period (years)
Intangible assets
Software
8.3% - 100.0%
1 – 12
Property right
14.3% - 100.0%
1 – 7
Property
1.0% - 33.3%
3 – 100
Machinery and office equipment
2.0% - 100.0%
1 – 50
Vehicle
2.9% - 50.0%
2 – 34
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
569
NOTE 2:
SUMMARY OF MATERIAL ACCOUNTING POLICIES [continued]
2.10. Inventories
Inventories are measured at the lower of cost and net realisable value. The cost of inventories comprises all costs of
purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition.
The Group uses generally FIFO formulas to the measurement of inventories.
Inventories are derecognized when they are sold, unusable or destroyed. When inventories are sold, the carrying amount
of those inventories are recognized as an expense in the period in which the related revenue is recognized.
Repossessed assets are classified as inventories. The Group's policy is to sell repossessed assets and not to use them for
its internal operations.
2.11. Government grants and government assistance
The Group recognise government grants only when there is a reasonable assurance that the grant will be received, and all
attached conditions will be complied with.
The Group presents grants relating to assets as deferred income in the Consolidated Statement of Financial Position,
which is recognized in profit or loss on a systematic basis over the useful life of the asset.
Grants related to an expense item are recorded as another operating income in those periods when the related costs were
recognized.
2.12. Financial liabilities
The financial liabilities are presented within these lines in the Consolidated Financial Statements:
-
Amount due to banks, the National Governments, deposits from the National Banks and other banks
-
Repo liabilities
-
Financial liabilities designated at fair value through profit or loss
-
Deposits from customers
-
Liabilities from issued securities
-
Derivative financial liabilities held for trading
-
Derivative financial liabilities designated as hedge accounting
-
Other financial liabilities
At initial recognition, the Group measures financial liabilities at fair value plus or minus – in the case of a financial
liability not at fair value through profit or loss – transaction costs that are directly attributable to the acquisition or issue
of the financial liability.
Usually, the initial fair value of financial liabilities equals to transaction value. However, when the amounts are not equal,
the initial fair value difference should be recognized.
If the fair value of financial liabilities is based on a valuation technique using only inputs observable in market
transactions, the Group recognizes the initial fair value difference in the Consolidated Statement of Profit or Loss.
When the fair value of financial liabilities is based on models for which inputs are not observable, the difference between
the transaction price and the fair value is deferred and only recognized in profit or loss when the instrument is
derecognized or the inputs became observable.
Financial liabilities at fair value through profit or loss are either financial liabilities held for trading or they are designated
upon initial recognition as at fair value through profit or loss.
In connection to the derivative financial liabilities measured at fair value through profit or loss, the Group presents the
amount of change in their fair value originated from the changes of market conditions and business environment.
The Group designated some financial liabilities upon initial recognition to measure at fair value through profit or loss.
This classification eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise
arise from measuring assets or liabilities or recognising the gains and losses on them on different bases (“accounting
mismatch”). The changes in fair value of these liabilities are recognized in profit or loss, except the fair value changes
attributable to credit risk which are recognized among other comprehensive income.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
570
NOTE 2:
SUMMARY OF MATERIAL ACCOUNTING POLICIES [continued]
2.12. Financial liabilities [continued]
In the case of financial liabilities measured at amortized cost fees and commissions related to the origination of the
financial liability are recognized through profit or loss during the maturity of the instrument using effective interest
method. In certain cases, the Group repurchases a part of financial liabilities (mainly issued securities or subordinated
bonds) and the difference between the carrying amount of the financial liability and the amount paid for it is recognized
in the net profit or loss for the period and included in other operating income.
2.13. Leases
The Group as a lessor
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of
ownership to the lessee. All other leases are classified as operating leases. Lease classification is made at the inception
date and is reassessed only if there is a lease modification.
Finance leases
At the commencement date, a lessor derecognizes the assets held under a finance lease in the Consolidated Statement of
Financial Position and present them as a receivable at an amount equal to the net investment in the lease. The lessor shall
use the interest rate implicit in the lease to measure the net investment in the lease. Direct costs such as commissions are
included in the initial measurement of the finance lease receivables.
The Group as a lessor recognizes finance income over the lease term, based on a pattern reflecting a constant periodic
rate of return on the Group’s net investment in the lease. The Group applies the lease payments relating to the period
against the gross investment in the lease to reduce both the principal and the unearned finance income.
The Group applies the derecognition and impairment requirements in IFRS 9 to the net investment in the lease (for more
details, see Note 2.6.).
Operating leases
The Group as a lessor recognizes lease payments from operating leases as income on either a straight-line basis or another
systematic basis. Costs, including depreciation, incurred in earning the lease income are recognized as an expense.
Initial direct costs incurred in obtaining an operating lease are added to the carrying amount of the underlying asset and
recognized as an expense over the lease term on the same basis as the lease income.
The depreciation policy for depreciable underlying assets subject to operating leases is consistent with the Group’s normal
depreciation policy for similar assets. The Group accounts for a modification to an operating lease as a new lease from
the effective date of the modification, considering any prepaid or accrued lease payments relating to the original lease as
part of the lease payments for the new lease.
The Group as a lessee
The Group recognizes a right-of-use asset and a lease liability at the commencement of the lease term except for short-
term leases and leases, where the underlying asset is of low value (less than USD 5,000). For these leases, the Group
recognizes the lease payments as an expense on either a straight-line basis over the lease term or another systematic basis
if that basis is more representative of the pattern of the lessee’s benefit.
Deferred tax implication if the Group is lessee: At the inception of the lease, there is no net lease asset or liability, no tax
base and, therefore, no temporary difference. Subsequently, as depreciation on the right-of-use asset initially exceeds the
rate at which the debt reduces, a net liability arises resulting in a deductible temporary difference on which a deferred tax
asset should be recognized if recoverable. Assuming that the lease liability is not repaid in advance, the total discounted
cash outflows should equal the total rental payments deductible for income tax purposes.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
571
NOTE 2:
SUMMARY OF MATERIAL ACCOUNTING POLICIES [continued]
2.13. Leases [continued]
Right-of-use asset
The right-of-use assets are presented separately in the Consolidated Statement of Financial Position and initially measured
at cost, subsequently the Group applies the cost model and these assets are depreciated on a straight line basis from the
commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. If the
lease transfers ownership of the underlying asset to the Group by the end of the lease term or if the cost of the right-of-
use asset reflects that the Group will exercise a purchase option, the right-of-use asset are depreciated from the
commencement date to the end of the useful life of the underlying asset.
Lease liability
At the commencement date, the lease liability is measured at the present value of the lease payments that are not paid at
that date discounted by using the rate implicit in the lease, or if this cannot be determined, by using the incremental
borrowing rate of the Group.Variable lease payments that do not depend on an index or a rate but e.g. on revenues or
usage are recognized as an expense. The Group always separates the non-lease components of the lease contracts and
accounts them as an expense. Lease payments must be included in the measurement of the lease liability without value
added taxes. Non-deductible VAT is recognized as other expense.
The lease liability is remeasured in the event of a reassessment of the lease liability or lease modification
2.14. Investment properties
Investment properties of the Group are land, buildings, part of buildings which held (as the owner or as the lessee under
a finance lease) to earn rentals or for capital appreciation or both, rather than for use in the production or supply of services
or for administrative purposes or sale in the ordinary course of business. The Group measures the investment properties
at cost less accumulated depreciation and impairment, if any.
The depreciable amount (book value less residual value) of the investment properties must be allocated over their useful
lives. The depreciation and amortization are computed using the straight-line method over the estimated useful lives of
the assets.
The Group discloses the fair value of the investment properties in Note 14 established mainly by external experts.
2.15. Share capital
Share capital is the capital determined in the Articles of Association and registered by the Budapest-Capital Regional
Court. Share capital is the capital the Bank raised by issuing common stocks at the date the shares were issued. The
amount of share capital has not changed over the current period.
2.16. Treasury shares
Treasury shares are shares which are purchased on the stock exchange and the over-the-counter market by the Bank and
its subsidiaries and are presented in the Consolidated Statement of Financial Position at cost as a deduction from
Consolidated Shareholders’ Equity.
Gains and losses on the sale of treasury shares are credited or charged directly to shareholder’s equity.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
572
NOTE 2:
SUMMARY OF MATERIAL ACCOUNTING POLICIES [continued]
2.17. Non-current assets held-for-sale and discontinued operations
A discontinued operation is a component of an entity that either has been disposed of or is classified as held-for-sale.
Hereinafter non-current assets classified as held-for-sale, disposal group and discontinued operations are referred to as
assets in accordance with IFRS 5.
The Group classifies assets under IFRS 5 if their carrying amount will be recovered principally through a sale transaction
rather than through continuing use. The Group does not account for an asset under IFRS 5 that has been temporarily taken
out of use as if it had been abandoned.
The Group measures an asset under IFRS 5 at the lower of its carrying amount and fair value less costs to sell. When the
sale is expected to occur beyond one year, the Group measures the costs to sell at their present value.
Any increase in the present value of the costs to sell that arises from the passage of time shall be presented in profit or
loss. Immediately before the initial classification of the asset under IFRS 5, the carrying amounts of the asset (or all the
assets and liabilities in the group) are measured in accordance with applicable IFRS.
The Group does not depreciate (or amortize) an asset under IFRS 5 while it is classified as asset in accordance with IFRS
5. Interest and other expenses attributable to the liabilities of the asset under IFRS 5 shall continue to be recognized.
If the Group has classified an asset under IFRS 5, but the criteria for that are no longer met, the Group ceases to classify
the asset under IFRS 5. The Group measures these assets which cease to be classified as asset under IFRS 5 at the lower
of:
- its carrying amount before the asset was classified as asset under IFRS 5, adjusted for any depreciation, amortisation
or revaluations that would have been recognized had the asset not been classified as asset under IFRS 5, and
- its recoverable amount at the date of the subsequent decision not to sell.
The Group presents an asset classified as asset under IFRS 5 separately from other assets in the Consolidated Statement
of Financial Position. The liabilities of the asset under IFRS 5 are presented separately from other liabilities in the
Consolidated Statement of Financial Position. Those assets and liabilities shall not be offset and presented as a single
amount. The major classes of assets and liabilities classified as held for sale or discontinued operations are separately
disclosed in the Notes.
The Group presents separately any cumulative income or expense recognized in other comprehensive income relating to
a non-current asset (or disposal group) classified as held for sale. Results from discontinued operations are reported
separately in the Consolidated Statement of Profit or Loss as result from discontinued operations.
2.18. Interest income and income similar to interest income and interest expense
Interest income and expense are recognized in profit or loss in the period to which they relate, using the effective interest
rate method.
For exposures categorized into Stage 1 and Stage 2 the interest income is recognized on a gross basis. For exposures
categorized into Stage 3 (using effective interest rate) and for POCI (using credit-adjusted effective interest rate) the
interest income is recognized on a net basis.
The time-proportional income similar to interest income of derivative financial instruments is calculated without using
the effective interest method and the positive fair value adjustment of interest rate swaps are included in income similar
to interest income.
Interest income of loans at fair value through profit or loss is calculated based on interest fixed in the contract and
presented in “Income similar to interest income” line.
Interest from loans and deposits are accrued on a daily basis. Interest income and expense include certain transaction costs
and the amortisation of any discount or premium between the initial carrying amount of an interest-bearing instrument
and its amount at maturity calculated on an effective interest rate basis.
All interest income and expense recognized are arising from loans, placements with other banks, repo receivables,
securities at fair value through other comprehensive income, securities at amortized cost and amounts due to banks, repo
liabilities, deposits from customers, liabilities from issued securities, subordinated bonds and loans are presented under
these lines of Consolidated Financial Statements.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
573
NOTE 2:
SUMMARY OF MATERIAL ACCOUNTING POLICIES [continued]
2.19. Revenue recognition
The Group recognizes revenue from the following major sources:
- fee and commission income from financial services
- other revenue from customers.
2.19.1. Fees and commissions
Fees and commissions that are not involved in the amortized cost model are recognized in the Consolidated Statement of
Profit or Loss on an accrual basis according to IFRS 15 Revenue from contracts with customers. These fees are related to
deposits, cash withdrawals, security trading, bank card etc.
The Group earns fee and commission income from a diverse range of financial services it provides to its customers. Fee
and commission income is recognised at an amount that reflects the consideration to which the Group expects to be
entitled in exchange for providing the services. The performance obligations, as well as the timing of their satisfaction,
are identified, and determined, at the inception of the contract. When the Group provides a service to its customers,
consideration is invoiced and generally due immediately because it typically controls the services before transferring them
to the customer.
The Group provides foreign exchange trading services to its customers, the profit margin achieved on these transactions
is presented as Net profit from fees and commissions in the Consolidated Statement of Profit or Loss.
Performance obligations satisfied over time include asset management, deposit and account maintenance services, where
the customer simultaneously receives and consumes the benefits provided by the Group’s performance as the Group
performs.
The Group’s fee and commission income from services where performance obligations are satisfied over time is as
follows:
Deposit and account maintenance fees and commissions and fees related to cash withdrawal
The Group provides a number of account management services for both retail and corporate customers in which they
charge a fee. Fees related to these services can be typically account transaction fees (money transfer fees, direct debit
fees, money standing order fees, etc.), internet banking fees (e.g. OTP Direct fee), account control fees (e.g. sms fee), or
other fees for occasional services (account statement fees, other administration fees, etc.). Fees for ongoing account
management services are charged to the customer’s account on a monthly basis. The fees are commonly fixed amounts
that can be vary per account package and customer category. In the case of the transaction-based fees where the services
include money transfer the fee is charged when the transaction takes place. The rate of the fee is typically determined in
a certain % of the transaction amount. In the case of other transaction-based fees (e.g. SMS fee), the fee is settled monthly.
In the case of occasional services, the Group basically charges the fees when the services are used by the customer. The
fees can be fixed fees or they can be set in %. The rates are reviewed by the Group regularly.
These fees for ongoing account management services are charged on a monthly basis during the period when they are
provided. Transaction-based fees are charged when the transaction takes place or charged monthly at the end of the month.
Fees and commission related to the issued bank cards
The Group provides a variety of bank cards to its customers, for which different fees are charged. The fees are basically
charged in connection with the issuance of cards and the related card transactions. The annual fees of the cards are charged
in advance in a fixed amount. The amount of the annual card fee depends on the type of card. In case of transaction-based
fees (e.g. cash withdrawal/payment fee, merchant fee, interchange fee, etc.), the settlement of the fees will take place
immediately after the transaction or on a monthly basis. The fee is typically determined in % of the transaction with a
fixed minimum amount. For all other cases where the Group provides a continuous service to the customers (e.g. card
closing fee), the fees are charged monthly. The fee is calculated in a fix amount. The rates are reviewed by the Group
regularly.
These fees for ongoing services are charged on a monthly basis during the period when they are provided. Transaction-
based fees are charged when the transaction takes place or charged monthly at the end of the month.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
574
NOTE 2:
SUMMARY OF MATERIAL ACCOUNTING POLICIES [continued]
2.19. Revenue recognition [continued]
2.19.1. Fees and commissions [continued]
Fees and commissions related to security account management services
The Group provides its clients security account management services. Fees will be charged for account management and
transactions on accounts. Account management fees are typically charged quarterly or annually. The amount is determined
in %, based on the stocks of securities managed by the clients on the account in a given period. Fees for transactions on
the securities account are charged immediately after the transaction. They are determined in %, based on the transaction
amount. Fees for complex services provided to clients (e.g. portfolio management or custody) are typically charged
monthly or annually. The fees are fixed monthly amounts and in some cases a bonus fee are charged.
These fees for ongoing services are charged quarterly or annually during the period when they are provided. The fees are
accrued monthly. Transaction-based fees are charged when the transaction takes place.
Fees and commissions related to fund management
Fees from fund management services provided to investment funds and from portfolio management provided to insurance
companies, funds. The fee income are calculated on the basis of net asset value of the portfolio and by the fee rates
determined in the contracts about portfolio management.
These fees for ongoing services are charged usually on monthly (mutual funds) or semi-annually (venture capital funds)
during the period when they are provided but accrued monthly.
Net insurance fee income
Due to the fact that the Group rarely provides insurance services to its clients, only acts as an agent, the fee income
charged to the customers and fees payable to the insurance company are presented net in the fee income. In addition,
agency fee charged for the sale of insurance contracts is also recorded in this line. The fee is charged on a monthly basis
and determined in %.
Fees for ongoing services are charged on a monthly basis during the period when they are provided.
Other fees
Fees that are not significant in the Group total income are included in Other fees category. Such fees are safe lease, special
procedure fee, account rent fee, fee of a copy of document, etc. Other fees may include charges for continuous services
or for ad hoc administration services. Continuous fees are charged monthly (e.g., safe lease fees) at the beginning of the
period, typically at a fixed rate. Fees for ad hoc services are charged immediately after the service obligation were met,
usually in a fixed amount.
These fees for ongoing services are charged on a monthly basis during the period when they are provided. Fees for ad hoc
services are charged when the transaction takes place.
2.19.2. Other revenue from customers
Other revenue from customers contains revenues from:
- sale of agricultural produce,
- tourism activity,
- gain on transactions related to property activities,
- rental income,
- income from computer programming.
Revenue is measured based on the consideration to which the Group expects to be entitled in a contract with customers
and excludes amount collected on behalf of third parties. The Group recognizes revenue when it transfers control of a
product or service to customers. The Group has generally concluded that it is the principal in its revenue arrangements,
because it typically controls the goods and services before transferring them to the customer.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
575
NOTE 2:
SUMMARY OF MATERIAL ACCOUNTING POLICIES [continued]
2.19. Revenue recognition [continued]
2.19.2. Other revenue from customers [continued]
Typically, the Group’s other revenue from customers is recognized at the point in time when control of the goods or
services is transferred to the customer. Exceptions are revenues services provided to customers – for example rental
income – where the customer simultaneously receives and consumes the benefits as the Group performs.
The Group considers whether there are other promises in the contract that are separate performance obligations to which
a portion of the transaction price needs to be allocated. In determining the transaction price, the Group considers the
effects of variable consideration, existence of a significant financing component, and a consideration payable to the
customer, if any.
2.20. Profit from associates
Profit from associates refers to any distribution of an entity earnings to shareholders from stocks or mutual funds that is
owned by the Group. The Group recognizes profit from associates in the Consolidated Financial Statements when its right
to receive payment is established.
2.21. Income tax
The Group considers corporate income tax as current tax according to IAS 12. The Group also considers local business
tax and the innovation contribution as income tax in Hungary.
The annual taxation charge is based on the tax payable under fiscal regulations prevailing in the country where the
company is incorporated, adjusted for deferred taxation. Deferred taxation is accounted for using the balance sheet
liability method in respect of temporary differences between the tax bases of assets and liabilities and their carrying value
for financial reporting purposes, measured at the tax rates that apply to the future period when the asset is expected to be
realized or the liability is settled.
Current tax asset or current tax liability is presented related to income tax and innovation contribution separately in the
Consolidated Statement of Financial Position.
Pillar Two – Global Anti-base Erosion Model Rules (“Globe”), global minimum tax – introduces a minimum effective
tax rate of at least 15%, calculated based on a specific rule set. Pillar Two legislation has been enacted or substantively
enacted in certain jurisdictions the Group operates. The legislation will be effective for the Group’s financial year
beginning 1 January 2024, but in year 2023 no income tax results obtained from Pillar Two rules. The Group considers
this top-up tax as an income tax according to IAS 12.
Deferred tax assets are recognized by the Group for the amounts of income taxes that are recoverable in future periods in
respect of deductible temporary differences as well as the carryforward of unused tax losses and the carryforward of
unused tax credits.
The Group recognizes a deferred tax asset for all deductible temporary differences arising from investments in
subsidiaries, branches and associates, and interests in joint arrangements, to the extent that, and only to the extent that, it
is probable that:
- the temporary difference will reverse in the foreseeable future; and
- taxable profit will be available against which the temporary difference can be utilised.
The Group considers the availability of qualifying taxable temporary differences and the probability of other future
taxable profits to determine whether future taxable profits will be available according to IAS 12.
The Group recognizes a deferred tax liability for all taxable temporary differences associated with investments in
subsidiaries, branches and associates, and interests in joint arrangements, except to the extent that both of the following
conditions are satisfied:
- the Bank is able to control the timing of the reversal of the temporary difference, and
- it is probable that the temporary difference will not reverse in the foreseeable future.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
576
NOTE 2:
SUMMARY OF MATERIAL ACCOUNTING POLICIES [continued]
2.21. Income tax [continued]
The Group only offsets its deferred tax liabilities against deferred tax assets when:
-
there is a legally enforceable right to set-off current tax liabilities against current tax assets, and
-
the taxes are levied by the same taxation authorities on either
• the same taxable entity or
• different taxable entities which intend to settle current tax liabilities and assets on a net basis.
2.22. Banking tax
The Bank and some of its subsidiaries are obliged to pay banking tax based on Act LIX of 2006 in Hungary. As the
calculation is not based on the taxable profit but on the adjusted total assets as reported in the Separate Financial
Statements of the Bank and its entities for the second period preceding the current tax year, therefore, the banking tax is
considered as another administrative expense, not as income tax. Pursuant to Government Decree No. 197/2022 published
on 4 June 2022, the Hungarian Government decided to impose a windfall tax on credit institutions and financial enterprises
temporarily, that is for 2022 and 2023. As for 2022, the base of the windfall tax is the net revenues based on the 2021
financial statements, calculated according to local tax law, whereas the tax rate is 10%. These taxes are classified as levies
according to IFRS rules.
2.23. Off-balance sheet commitments and contingent liabilities
In the ordinary course of its business, the Group enters into off-balance sheet commitments such as guarantees, letters of
credit, commitments to extend credit and transactions with financial instruments. The provision for off-balance sheet
commitments and contingent liabilities is maintained at a level adequate to absorb future cash outflows which are probable
and relate to present obligations.
In the case of commitments and contingent liabilities, the Management determines the adequacy of the loss allowance
based upon reviews of individual items, recent loss experience, current economic conditions, the risk characteristics of
the various categories of transactions and other pertinent factors.
The Group recognizes provision for off-balance sheet commitment and contingent liabilities in accordance with IAS 37
when it has a present obligation as a result of a past event; it is probable that an outflow of resources embodying economic
benefits will be required to settle the obligation; and a reliable estimate can be made of the obligation. For financial
guarantees and loan commitments given which are under IFRS 9 the expected credit loss model is applied when the
provision is calculated (see more details in Note 2.6.). After initial recognition the Group subsequently measures those
contracts at a higher of the amount of the loss allowance or of the amount initially recognised less the cumulative amount
of income recognized in accordance with IFRS 15.
2.24. Share-based payment
The Group applies the requirements of IFRS 2 Share-based Payment.
The Group issues equity-settled share-based payment to certain employees. Equity-settled share-based payment is
measured at fair value at the grant date. The fair value determined at the grant date of the equity-settled share-based
payment is expensed on a straight-line basis over the year, based on the Group’s estimate of shares that will eventually
vest. Share-based payment is recorded in Consolidated Statement of Profit or Loss as Personnel expenses.
Fair value is measured by use of a binomial model. The expected life used in the model has been adjusted, based on the
Management’s best estimate, for the effects of non-transferability, exercise restrictions, and behavioural considerations.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
577
NOTE 2:
SUMMARY OF MATERIAL ACCOUNTING POLICIES [continued]
2.25. Employee benefits
The Group has applied the requirement of IAS 19 Employee Benefits. These benefits are recognised as an expense and
liability undiscounted in the Consolidated Financial Statements. Liabilities are regularly remeasured. Gains or losses due
to the remeasurement are recognised in the Consolidated Other Comprehensive Income.
Short-term employee benefits are employee benefits (other than termination benefits) that are expected to be settled
wholly before twelve months after the end of the annual reporting period in which the employees render the related
service. These can be wages, salaries and bonuses, premium, paid annual leave and paid sick leave and other free services
(health care, reward holiday). Long-term employee benefits are mostly the jubilee reward.
Post-employment benefits are employee benefits (other than termination and short-term employee benefits) that are
payable after the completion of employment. Post-employment benefit plans are formal or informal arrangements under
which an entity provides post-employment benefits for one or more employees. Post-employment benefit plans are
classified as either defined contribution plans or defined benefit plans, depending on the economic substance of the plan
as derived from its principal terms and conditions.
Defined benefit plan is post‑employment benefit plans other than defined contribution plan. The Group's net obligation
is calculated by estimating the amount of employee's future benefit based on their services for the current and prior
periods. The future value of benefit is being discounted to present value.
Termination benefits are employee benefits provided in exchange for the termination of an employee’s employment as a
result of either: an entity’s decision to terminate an employee’s employment before the normal retirement date or an
employee’s decision to accept an offer of benefits in exchange for the termination of employment. Other long-term
employee benefits are all employee benefits other than short-term employee benefits, postemployment benefits and
termination benefits.
2.26. Biological assets and agricultural produce
The Group recognises a biological asset or agricultural produce according to IAS 41 only when it controls the asset as a
result of past events, it is probable that future economic benefits will flow and the fair value or the cost can be measured
reliably.
Biological assets are measured on initial recognition and at subsequent periods at fair value less estimated costs to sell
unless fair value cannot be reliably measured.
Agricultural produce is measured at fair value less estimated costs to sell at the point of harvest.
The gain on initial recognition of biological assets at fair value less costs to sell, and changes in fair value less costs to
sell of biological assets during a period are included in profit or loss for the period in which it arises as other operating
income.
2.27. Consolidated Statement of Cash-flows
Cash flows arising from the operating, investing or financing activities are reported in the Statement of Cash-Flows of
the Group primarily on a gross basis. Net basis reporting are applied by the Group in the following cases:
- when the cash flows reflect the activities of the customer rather than those of the Group, and
- for items in which the turnover is quick, the amounts are large, and the maturities are short.
For the purposes of reporting Consolidated Statement of Cash-flows, cash and cash equivalents include cash, due from
banks and balances with the National Banks, excluding the compulsory reserve established by the National Banks. This
line item shows balances of HUF and foreign currency cash amounts, and sight deposit from NBH and from other banks,
furthermore, balances of current accounts.
Consolidated cash-flows from hedging activities are classified in the same category as the item being hedged. The
unrealized gains and losses from the translation of monetary items to the closing foreign exchange rates and unrealized
gains and losses from derivative financial instruments are presented net as operating activity separately in the
Consolidated Statement of Cash-flows for the monetary items which have been revalued.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
578
NOTE 2:
SUMMARY OF MATERIAL ACCOUNTING POLICIES [continued]
2.28. Segment reporting
IFRS 8 Operating Segments requires operating segments to be identified on the basis of internal reports about components
of the Group that are regularly reviewed by the chief operating decision maker in order to allocate resources to the
segments and to assess their performance.
Based on the above, the segments identified by the Group are the business and geographical segments.
The Group’s operating segments under IFRS 8 are therefore as follows: OTP Core Hungary, Merkantil Group, Asset
Management subsidiaries, Other subsidiaries, Bulgaria, Croatia, Slovenia, Romania, Serbia, Ukraine, Russia,
Montenegro, Albania, Moldova, Uzbekistan. Romanian segment is classified as discontinued operation from 2023 but in
line with management report it is still presented in Segment reporting as separate segment. In tables for 2024 the data for
Romanian segment contains incomes and expenses until it was disposed in July 2024.
2.29. Comparative balances
These Consolidated Financial Statements are prepared in accordance with the same accounting policies in all respects as
the Consolidated Financial Statements prepared in accordance with IFRS as adopted by the European Union for the year
ended 31 December 2023. However, in accordance with internal management reports there were two changes comparing
with the previous year.
One of them is the segmentation of loans that is changed in Note 37.1.1. where loans at amortized cost are presented by
stages. Car loans and municipal loans are not presented separately from the fourth quarter of 2024, municipal loans are
included in medium and large enterprise (“MLE”) loans while car loans in consumer loans, micro and small enterprise
(“MSE”) or MLE loans depending on client segment. The other change is the segment reporting regarding the scope of
“adjustment” items. For further details please see Note 49 Segment reporting. For comparative reasons these reports were
presented according to the new methodology in these Consolidated Financial Statements for the previous year 2023 too.
Relating to Note 22, 24 and 31, these notes have been adjusted with respect to the previous year’s disclosures to present
more transparently material items. Substance of the adjustments is disclosed in the footnotes of the disclosures. With
respect to Note 15, 48.3 macro hedge related disclosures indicated the changes.
In Note 43 the table about list of associates was changed in order to be more transparent by aggregating associates which
are owned through venture capital fund as these companies are immaterial. The comparative previous year’s table was
transformed to the same structure as well.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
579
NOTE 3:
SIGNIFICANT ACCOUNTING ESTIMATES AND DECISIONS IN THE APPLICATION OF
ACCOUNTING POLICIES
The presentation of financial statements in conformity with IFRS as adopted by EU requires the Management of the
Group to make judgement about estimates and assumptions that affect the reported amounts of assets and liabilities and
the disclosure of contingent assets and liabilities as at the date of the financial statements and their reported amounts of
revenues and expenses during the reporting period. The estimates and associated assumptions are based on the expected
loss and other factors that are considered to be relevant. The estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognized in the period. Actual results could differ from those
estimates. Significant areas of subjective judgement include:
3.1.
Loss allowances on financial instruments exposed to credit risk
The Group regularly assesses its financial instruments portfolio for loss allowance. Management determines the adequacy
of the loss allowances based upon reviews of individual loans and placements, recent loss experience, current economic
conditions, the risk characteristics of the various categories of loans and other pertinent factors.
The use of the three-stage model was implemented for IFRS 9 purposes. The impairment methodology is used to classify
financial instruments in order to determine whether credit risk has significantly increased since initial recognition and
to identify the credit-impaired assets. For instruments with credit-impairment or significant increase of credit risk
lifetime expected losses are recognized (see more details in Note 37.1.)
3.2.
Valuation of instruments without direct quotations
Financial instruments without direct quotations in an active market are valued using the valuation model technique. The
models are regularly reviewed and each model is calibrated for the most recent available market data. While the models
are built only on available data, their use is subject to certain assumptions and estimates (e.g. correlations, volatilities,
etc.). Changes in the model assumptions may affect the reported fair value of the relevant financial instruments.
IFRS 13 Fair Value Measurement seeks to increase the consistency and comparability in fair value measurements and
related disclosures through a 'fair value hierarchy'. The hierarchy categorises the inputs used in valuation techniques into
three levels. The hierarchy gives the highest priority to (unadjusted) quoted prices in active markets for identical assets
or liabilities and the lowest priority to unobservable inputs. The Group evaluates the levelling at each reporting period on
an instrument-by-instrument basis and reclassifies instruments when necessary, based on the facts at the beginning of the
reporting period. The objective of a fair value measurement is to estimate the price at which an orderly transaction to sell
the asset or to transfer the liability would take place between market participants at the measurement date under current
market conditions.
3.3.
Provisions
Provision is recognized and measured for commitments to extend credit and for warranties arising from banking activities
based on IFRS 9 Financial Instruments. Provision for these instruments is recognized based on the credit conversion
factor, which shows the proportion of the undrawn credit line that will probably be drawn.
Other provisions are recognized and measured based on IAS 37 Provisions, Contingent Liabilities and Contingent Assets.
The Group is involved in a number of ongoing legal disputes. Based upon historical experience and expert reports, the
Group assesses the developments in these cases, and the likelihood and the amount of potential financial losses which are
appropriately provided for. (See Note 24.)
Other provision includes provision for litigation, provision for retirement and expected liabilities and provision for
confirmed letter of credit.
A provision is recognized by the Group when it has a present obligation as a result of a past event, it is probable that an
outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be
made of the amount of the obligation.
3.4.
Impairment on goodwill
Goodwill acquired in a business combination is tested for impairment annually or more frequently when there is an
indication that the unit might be impaired, in accordance with IAS 36 “Impairment of assets”.
The Group calculates the fair value based on discounted cash-flow model. The 3-year period explicit cash-flow model
serves as a basis for the impairment test by which the Group defines the impairment need on goodwill based on the
strategic factors and financial data of its cash-generating units. In the calculation of the goodwill impairment, also the
expectations about possible variations in the amount or timing of those future cash-flows, the time value of money,
represented by the current market risk-free rate of interest and other factors are reflected.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
580
NOTE 3:
SIGNIFICANT ACCOUNTING ESTIMATES AND DECISIONS IN THE APPLICATION
OF ACCOUNTING POLICIES [continued]
3.5.
Contingent consideration
Contingent consideration generally arises where the acquirer agrees to transfer additional consideration to the former
owners of the acquired business after the acquisition date if certain specified events occur or conditions are met in the
future.
These future payments may be in cash or other assets and may be contingent upon the achievement of specified events,
and/or may be linked to future financial performance over a specified period of time.
Some changes in the fair value of contingent consideration may be the result of additional information that the acquirer
obtained after the acquisition date about fact and circumstances that existed at that date. Such changes are measurement
period adjustments and have impact of goodwill/negative goodwill. Changes resulting from events after the acquisition
date are not measurement period adjustments. Contingent considerations should be recorded on the date of acquisition in
consolidated financial statement at fair value.
The Group so far settled the contingent considerations in cash. The fair value estimation is made by the “Merger &
Acquisition” team based on the sale and purchase agreement (“SPA”) and other available information.
Regarding the contingent consideration related to the acquisition of Ipoteka Bank, OTP concluded the contract including
two instalments: first for 73.71% of the shares in 2023 (in December 2023 it increased to 79.58% after capital increase),
then second for 24.57% (in December 2023 it decreased to 19.16% after capital increase) of the shares 3 years later. The
price of 24.57% of the shares is variable, but within a predefined range and can be adjusted only with factors that have
not direct connection with the profit of Ipoteka Bank. The purchase of the second stock cannot be avoided by the parties
since the execution of the SPA. Considering the elements of the shares retained by Ministry of Finance of the Republic
of Uzbekistan for the given period are treated as financial liability.
The recognized liability includes the estimate of the adjustments to the second purchase price and does not include the
items that are considered as indemnity. Indemnification related expected cash-inflow is recognized as indemnification
asset (measured consistently with the measurement of underlying assets).
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
581
NOTE 4:
MACRO ENVIRONMENT, IMPACT OF ECONOMIC SITUATION ON THE GROUP
Macro economy and financial situation in Hungary
In 2024, inflation continued to recede in advanced economies, so the Fed and the ECB both started rate-cutting cycles.
The US presidential election and the expectations ahead of it led to a sharp turnaround in bond markets and interest rate
expectations, as the victory of Donald Trump, whose election promises included several highly inflationary elements,
became increasingly likely. In mid-September, yields started to pick up from the decline that had started in spring, and
expectations of further rate cuts began to ease. Growth remained strong in the United States, but the euro area continued
to struggle to recover from the downturn, where the energy crisis and the inflation shock owing to the Russia-Ukraine
war had thrown it. Meanwhile, labour markets remained tight on both sides of the Atlantic, with low unemployment and
strong wage dynamics.
As the year was nearing its end, it became clear that the USA’s growth was robust, as consumer spending and private
investment steadily boosted the economy, which expanded by 2.8%, well above the 1-1.5% rate expected at the beginning
of the year. Labour market conditions also surpassed expectations: despite minor temporary wobbling, employment
growth remained strong, the unemployment rate remained low, and wages increased by 4%. In the autumn, disinflation
stalled, and core inflation reflected 3-3.5% underlying price growth, well above the inflation target. Nevertheless, the Fed
reduced its base rate by 100 basis points, to 4.25-4.5% by the end of the year, as expected.
In the euro area, the recovery was also driven by consumption, but the pace of the rebound was slower than in the USA
and was uneven in the area. The best performers were tourism-driven southern member states, while the industry-heavy
economies struggled to recover from the shock of the energy crisis. Political crises are also weighing on the recovery,
with two major economies, Germany and France, both facing government crises. In the autumn, inflation temporarily fell
below the target but has been accelerating again since October as the drop in food and energy prices faded. Nevertheless,
the ECB continued its easing cycle, reducing the effective rate to 3% by the end of 2024; this is consistent with 100-basis-
point cut in the full year.
The Hungarian economy started to pick up in 2024, ending a longer and deeper recession than its regional peers saw in
2023, but just like in Europe, the recovery was uneven and fragile, rising by just 0.5% in full year 2024. The rise in real
wages helped consumption gradually pick up (it expanded by roughly 4% in 2024), and households’ precautionary savings
seemed to ease in the second half of the year. Despite the expanding consumption, the high exposure to the automotive
sector, the eroded room in fiscal policy, the falling exports, and a more than 10% plunge in investment pushed the
economy back into technical recession in the second and third quarters, before a recovery came in the fourth quarter. Net
exports’ contribution to growth was positive, but it did not stem from exports’ robust performance – it was only because
imports fell sharper than exports did. As a result of the government's stimulus measures, the housing market surged
together with households’ loan demand, while the corporate loan market’s rise was rather subdued. Labour market
tightness has clearly eased, employment slightly declined in the second half of the year, but the unemployment rate rose
in 2024.
Inflation slowed in Hungary, too, and briefly reached the 3% target in September, giving the MNB room to cut interest
rates to 6.5%, from 10.75% at the end of 2023. But inflation started to rise in October, and hit 4.6% in December, the
highest monthly rate in 2024. The escalation of the Middle East conflict and the rise in US yields forced the MNB to
pause its easing cycle. The EUR/HUF, which traded near 380 at the beginning of 2024, spent much of the second half-
year above the 400 mark.
After years of deficits of 7-8% of GDP, a fiscal adjustment came despite the unfavourable macroeconomic environment;
Hungary’s primary balance improved to close to zero in 2024, and the headline deficit fell to 4.8% of GDP, close to the
raised deficit target of 4.5%, but still far from the 3% Maastricht criterion. The reduction of government debt stalled in
2024, and the debt-to-GDP ratio rose to 73.9%-74%, up from 73.4% in 2023. Hungary’s external balance started to
improve rapidly after the energy price shock faded and domestic demand declined; the deficit swung from more than 8%
of GDP in 2022 to a slight surplus in 2023, before rising to 2.5% of GDP in 2024, and external debt started to slowly
decline.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
582
NOTE 4:
MACRO ENVIRONMENT, IMPACT OF ECONOMIC SITUATION ON THE GROUP
[continued]
Summary of economic policy measures made and other relevant regulatory changes in the period under review
Windfall tax
▪ Government decree No. 206/2023 (V.31.) published on 31 May 2023 outlined the details of the extra profit tax
payable by credit institutions in 2024. The basis of the tax is the 2022 profit before tax adjusted for several items.
The tax rate is 13% for the part of the tax base not exceeding HUF 20 billion, and 30% for the amount above that.
According to the decree, if the average amount of Hungarian government bonds owned by the financial institution
increases over a certain period, the windfall tax payable by the credit institution can be reduced. The reduction
cannot be more than 10% of the increase in government bond holdings and cannot exceed 50% of the windfall tax
payment obligation calculated without the reduction.
▪ The ruling was amended according to Government Decree No. 183/2024. (VII. 8.) as the windfall tax burden in
2024 can be reduced in proportion to the growth of government bonds maturing after 2027 only if the total volume
of government bonds increases at least with the same amount. The reduction can be up to 10% of the growth in the
notional of government bonds, but not more than 50% of the windfall tax payment obligation.
▪ In 2024 the gross amount of the windfall tax was HUF 13 billion in the case of the Hungarian Group members, from
which the increase in government bond holdings allowed for HUF 6.2 billion reduction, resulting in HUF 6.8 billion
windfall tax burden.
▪ According to Government Decree No. 356/2024 (XI. 21.) published on 21 November 2024, in 2025 the windfall
profit tax burden payable by OTP Group’s Hungarian group members might be around HUF 53 billion (before
corporate income tax), assuming the full utilization of the reduction opportunity related to the increase in the stock
of government securities.
Interest rate cap
▪ Pursuant to Government Decree No. 522/2023. (XI. 30.):
o The interest rate cap for the outstanding volume of certain residential mortgage loans was extended by six
months, until 30 June 2024.
o The rate cap for the existing volume of certain MSE loans was extended until 1 April 2024, and it was
terminated that after.
▪ On 20 June 2024, Government Decree No. 130/2024 (VI.20) enacted the extension of the interest rate cap on certain
housing loans, until 31 December 2024.
▪ On 2 December 2024, Government Decree No. 374/2024 (XII.2) enacted the extension of the interest rate cap on
certain housing loans, until 30 June 2025.
Voluntary interest rate cap on newly granted loans
▪ At the beginning of October 2023, the Ministry of Economic Development proposed that banks impose voluntary
interest rate caps on newly granted HUF-denominated working capital loans for businesses, and on residential
housing loans. The voluntary interest rate cap expired on 30 June 2024. OTP Bank participated in the initiative.
▪ Between 1 April and 31 October 2025, as part of the government’s 'New Economic Policy Action Plan', based on
the individual decision of the participating banks, 5% interest rate cap will be available for under 35 years old, first-
time home buyers for newly granted green housing loans, with properties under 60 square meter and price lower
than HUF 1.2 million per square meter. The rate cap will be applied in the first 5 years of the loan, and the product
will be free of disbursement and credit assessment fees.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
583
NOTE 4:
MACRO ENVIRONMENT, IMPACT OF ECONOMIC SITUATION ON THE GROUP
[continued]
Summary of economic policy measures made and other relevant regulatory changes in the period under review
[continued]
Family support schemes and economic stimulus measures
▪ The government extended childbirth pledge deadline until 1 July 2026, for all baby loan borrowers whose deadline
was or will be between 1 July 2024 and 30 June 2026, based on Government Decree No. 190/2024. (VII. 8.).
The government decrees of 388/2024 (XII. 11.) and 437/2024 (XII. 23.) have amended the terms and conditions
for the subsidized baby loan:
o
The interest-free feature of the loan may be regained if the first baby is born only after the fifth year, or if
one of the members of the former couple remarries after the first five years of the term and a child is born
from the new relationship. The penalty paid in a lump sum at the end of the fifth year will not be repaid to
the family, but the interest-free period will be restored, and thus the instalment will also be smaller. The
couple having this child may request a three-year payment moratorium.
o
If penalty imposed or interest subsidy repayment is obligated for violating any of the loan conditions, after
paying the penalty exemption can be requested even from interest rate increases, via individual application;
i.e. in certain cases, the loan may remain interest-free.
o
The eligibility age limit for wives increased from 30 the 35 years. However, the previous option to apply for
such loan for married couples where the wife is aged 35-41 and at least 12 weeks pregnant, ceased at the end
of the year.
▪ On 5 April 2024, the government announced a new subsidized home renovation loan programme, which began on
1 July 2024. The loan, with maximum amount of HUF 7 million and up to 12 years term, is available in OTP Bank’s
branches that function as ‘MFB points’, for the purpose of energy efficiency improvement of family houses built
before 1990.
▪ From 1 November 2024, the client interest rate of Széchenyi Card Programme’s investment loan products for
Hungarian micro, small and medium-sized enterprises was lowered to fixed 3.5%, from the previous 5%.
Capital regulation
▪ On 20 June 2024, the National Bank of Hungary raised the countercyclical capital buffer rate to 1%, effective from
1 July 2025. In its meeting of 27 June 2024, the central bank left the systemic risk capital buffer unchanged at 0%.
▪ MREL minimum requirement: effective from 1 January 2025, the National Bank of Hungary imposed the below
additional capital requirements for OTP Group, on consolidated level:
o 1.01%-points in case of the Common Equity Tier1 (CET1) capital, accordingly the minimum requirement for
the consolidated CET1 ratio is 5.51% (without regulatory capital buffers);
o 1.34%-points in case of the Tier1 capital, accordingly the minimum requirement for the consolidated Tier1
ratio is 7.34% (without regulatory capital buffers);
o 1.79%-points in case of the Total SREP Capital Requirement (TSCR), accordingly the minimum requirement
for the consolidated capital adequacy ratio is 9.79% (without regulatory capital buffers).
Larger one-off items
Special taxes on financial institutions:
In 2024 HUF (45.5) billion special taxes on financial institutions weighed on earnings (after tax) which incorporates both
the old banking tax in Hungary (HUF (28.7) billion after tax) and the windfall tax on extra profits (HUF (6.2) billion after
tax). Outside of Hungary, in Slovenia (HUF (9.2) billion after tax) and Romania (HUF (1.3) billion) arose banking tax
payment obligations.
Interest rate cap in Hungary and Serbia:
In 2024 altogether HUF (9.4) billion (after tax) amount was recognized in relation to the expected negative impact of the
rate cap scheme in Hungary. According to the effective regulation, in Hungary the interest rate cap on the affected
Hungarian mortgage loans was extended until 30 June 2025. In the case of MSE loans the rate cap was terminated by 1
April 2024.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
584
NOTE 4:
MACRO ENVIRONMENT, IMPACT OF ECONOMIC SITUATION ON THE GROUP
[continued]
Summary of economic policy measures made and other relevant regulatory changes in the period under review
[continued]
Larger one-off items [continued]
Interest rate cap in Hungary and Serbia [continued]:
On 21 November, the National Bank of Serbia approved the extension of the mortgage interest rate cap introduced in
October 2023, a measure that would have expired at the end of 2024. The interest rate cap on variable-rate loans increased
from 4.1% in 2024 to 5% between 1 January and 31 December 2025. In 4Q 2024 HUF (2.1) billion modification loss was
booked as a result of the extension of the interest rate cap.
Provision on Russian bonds:
In Hungary and Bulgaria HUF (45) billion impairment was created on Russian bonds, of which HUF (37.6) billion was
booked at OTP Bank (Hungary) and HUF (7.5) billion at DSK Bank (Bulgaria). Consequently, the coverage of Russian
bonds increased from 36% in 2023 to 73% in 2024.
Revaluation result of CSOK subsidized housing loans and baby loans:
Based on the IFRS9 accounting standard, subsidized mortgage loans, such as CSOK (Housing Subsidy for Families) and
CSOK Plus, as well as baby loans must be recorded in the bank's statement of financial position at fair value through
profit or loss. The positive revaluation result of these loans amounted to HUF 23.5 billion (after tax) in 2024.
The principles used in the preparation of the Consolidated Statement of Financial Position as at 31 December 2024
in connection with the evaluation of Russian and Ukrainian exposures
Ukraine
In 2022 Russia launched a still ongoing war against Ukraine.
OTP Group’s Ukrainian operation incorporates the Ukrainian bank, as well as the leasing and factoring companies. The
country-consolidated Ukrainian total assets represented HUF 1,187 billion at the end of 2024 (2.7% of total consolidated
assets), while net loans comprised HUF 389 billion (1.7% of consolidated net loans) and shareholders’ equity amounted
to HUF 206 billion (4.0% of the consolidated total equity).
At the end of 2023 the gross intragroup funding towards the Ukrainian operation represented HUF 55 billion, while taking
into account the Ukrainian deposits placed with the Headquarters, i.e. the net group funding stood at HUF 14 billion
equivalent towards the Ukrainian operation.
In 2024 the Ukrainian operation posted a profit after tax of HUF 41.2 billion, slightly less than the HUF 44.9 billion in
2023.
Russia
The total assets of the Group’s Russian operation represented HUF 2,371 billion at the end of 2024 (5.5% of consolidated
total assets), while net loans comprised HUF 998 billion (4.3% of consolidated net loans) and shareholders’ equity HUF
299 billion (5.8% of consolidated total equity).
The Russian operation posted HUF 136.9 billion profit after tax in 2024, after the HUF 95.7 billion profit reached in full-
year 2023.
As the Russian subsidiary repaid its maturing intragroup loans in 4Q 2022, the gross intragroup funding towards the
Russian operation declined to zero and remained nil since then. At the end of 2024 the intragroup subordinated loan
exposure toward the Russian operation amounted to HUF 11 billion equivalent.
In 2024 the Russian Central Bank approved dividend payment by OTP’s Russian subsidiary several times with a total
amount of RUB 28.3 billion (with NBH central fx rate for the end of 2024 HUF 103,578 billion). With this amount RUB
41.8 billion (with NBH central fx rate for the end of 2024 HUF 152,988 million) dividend was paid since 3Q 2023.
In the case of Ukraine and Russia OTP management applies a „going concern” approach, however in Russia the
management is still considering all strategic options, bearing in mind that any future solution should be strictly within the
framework and in accordance with applicable local and international regulations.
If the Russian entity was deconsolidated and the outstanding gross intragroup exposures were written off as well, the
effect for the consolidated CET1 ratio would be 30 bps, whereas in the Ukraine the effect would be 8 bps.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
585
NOTE 4:
MACRO ENVIRONMENT, IMPACT OF ECONOMIC SITUATION ON THE GROUP
[continued]
Significant estimates affected by the Russian-Ukrainian conflict during the preparation of these Consolidated
Financial Statements
During the preparation of these Consolidated Financial Statements, the Group identified the following estimates, which
were significantly affected by the Russian-Ukrainian conflict:
1) Evaluation of Russian sovereign exposures (government securities) and related reserves for expected credit losses
a) exposures of the Russian subsidiary bank
b) exposures of other members of the group (parent company and subsidiaries)
2) Evaluation of Ukrainian sovereign exposures (government securities) and related reserves for expected credit losses
a) exposures of the Ukrainian subsidiary bank
b) exposures of other members of the group (parent company and subsidiaries)
3) evaluation of derivative transactions denominated in Russian rubles
4) evaluation of derivative transactions denominated in the Ukrainian hryvnia
5) claims against Russian and Ukrainian central banks, provisions for expected credit losses related to Russian and
Ukrainian interbank claims and customer loans
a) the impact of the deterioration of the Russian and Ukrainian macro-environment
b) following direct exposure to the Russian and Ukrainian markets, non-Russian and Ukrainian bank exposures
c) exposures of Russian and Ukrainian subsidiary banks
6) evaluation of goodwill
7) deferred tax assets
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
586
NOTE 4:
MACRO ENVIRONMENT, IMPACT OF ECONOMIC SITUATION ON THE GROUP [continued]
Significant estimates affected by the Russian-Ukrainian conflict during the preparation of these Consolidated Financial Statements [continued]
Russia
Ukraine
Other countries
Reference
Gross value
Impairment /
Depreciation
Reference
Gross value
Impairment /
Depreciation
Reference
Gross value
Impairment /
Depreciation
Cash, amounts due from banks and balances
with the National Banks
87,222
-
72,907
(6)
765
-
Placements with other banks
5
1,086,808
-
5
59,855
(58)
-
-
Repo receivables
-
-
7,639
(301)
-
-
Financial assets at fair value through
profit or loss - derivatives
3
685
-
4
88
-
-
-
Securities at fair value through other
comprehensive income
1a
20,072
-
2a
155,135
-
77,352
(55,057)
Securities at amortized cost
2a
428,804
(118)
36,442
(26,299)
Loans at amortized cost
5
1,111,220
(113,633)
5
318,264
(34,352)
5
13,626
(7,034)
Finance lease receivables
122,633
(17,931)
-
-
Property and equipment
29,554
(18,747)
24,518
(9,109)
-
-
Intangible assets and goodwill
34,887
(15,199)
14,731
(8,697)
6
-
-
Right-of-use assets
12,161
(7,664)
5,969
(3,482)
-
-
Investment properties
-
-
231
-
-
-
Deferred tax assets
7
22,563
-
7
-
-
-
-
Current income tax receivables
21
-
364
--
-
-
Other assets
18,390
(6,711)
9,704
(1,344)
14,375
(12,493)
TOTAL ASSETS
2,423,583
(161,954)
1,220,842
(75,398)
142,560
(100,883)
Amounts due to banks, the National Governments,
deposits from the National Banks and other banks
44,256
-
42,786
-
-
-
Deposits from customers
1,876,526
-
842,437
-
59,289
-
TOTAL LIABILITIES
1,920,782
-
885,223
-
59,289
-
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
587
NOTE 4:
MACRO ENVIRONMENT, IMPACT OF ECONOMIC SITUATION ON THE GROUP
[continued]
Significant estimates affected by the Russian-Ukrainian conflict during the preparation of these Consolidated
Financial Statements [continued]
During the evaluation of these assets, the Group applied the evaluation principles detailed below, which evaluation
contains significant estimates on the part of the Management. The results of the estimates may vary significantly
depending on the development of the situation in the Russian-Ukrainian conflict.
References
1a. Evaluation of Russian sovereign exposures and related reserves for expected credit losses - exposures of the
Russian subsidiary bank
Within Russia, Russian government securities are marketable, and their repayment is expected to take place in accordance
with the original conditions. The fair value calculation of securities is based on market prices available and observable on
local trading platforms.
1b. Evaluation of Russian sovereign exposures and related reserves for expected credit losses - other exposures of
the group
Outside of Russia, the marketability of Russian government securities is significantly limited due to sanctions and capital
market participants turning away from Russian securities. The credit rating of the Russian state was withdrawn in 2022,
the Group classifies the Russian state as non-performing, and in accordance with this, it assigned the affected exposures
to the Stage 3 category. The Russian state not only recognizes its obligation and has the necessary financial reserves, but
would also be willing to pay, so the increased loss potential is caused by non-traditional credit risks. In the case of a
portfolio valued at fair value through other comprehensive income, the book value is determined based on the level 3
prices of IFRS13. Cash-flow estimation, current market benchmarks (provided by Bloomberg), liquidity and non-credit
risk considerations were taken into account in fair value calculation.
During 2024, the Bank conservatively increased provisions on its Russian sovereign exposures. That applies for non-
matured and overdue parts of the portfolio, as well.
For the non-matured bonds, the Bank uses a time band approach, the provision level is higher for the securities with longer
maturity.
In the case of overdue receivables, the Group determines the impairment based on its expectations regarding the
probability of recovery. Basically, a higher probability of return can be assigned to those items for which, as a result of
the legal steps taken by the Group, the claim has been paid in RUB by the competent Russian clearing house (NSD) and
access to the relevant amounts is subject to Hungarian authority approvals or modification of the legal background. It is
taken into consideration in the provision levels, that the latter can mean a long lasting process.
On the other hand, a lower probability of return and a longer time period were determined for those items where the
payment is expected in EUR or USD with the help of European clearing houses (Euroclear, Clearstream) requiring a
complex legal process.
The claims from the overdue Russian government bonds are classified to Other financial asset line and in the above table
presented within Other countries in the amount of HUF 9.4 billion with the impairment of HUF 8.5 billion.
2a. Valuation of Ukrainian sovereign exposures and related reserves for expected credit losses - exposures of the
Ukrainian subsidiary bank
The marketability of local government securities and the liquidity of the market are limited in Ukraine.
Ukrainian government securities can only be found in the books of the Ukrainian subsidiary as these exposures were
acquired after start of the war they are classified as Stage 1. In the case of a portfolio valued at fair value through other
comprehensive results, the book value is determined based on the level 3 prices of IFRS13. During the actual evaluation,
the expected cash flow is discounted using yield curves observed based on current market benchmarks (published by the
National Bank of Ukraine).
In order to reflect the increased uncertainty about external support of Ukraine, decision was made on additional provision
for the sovereign portfolio of the Ukrainian group-member on a conservative basis at Group level only reflecting a
prudential overlay.
2b. Valuation of Ukrainian sovereign exposures and related reserves for expected credit losses - other exposures
of the group
Ukrainian government securities are exclusively in the books of the Ukrainian subsidiary.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
588
NOTE 4:
MACRO ENVIRONMENT, IMPACT OF ECONOMIC SITUATION ON THE GROUP
[continued]
Significant estimates affected by the Russian-Ukrainian conflict during the preparation of these Consolidated
Financial Statements [continued]
References [continued]
3.
Valuation of Russian derivative transactions
In the case of futures contracts concluded with local partners on the Russian market, the evaluation is carried out using
yield curves available and observable on the local market. In cases where one of the partners is not Russian, the evaluation
is done using yield curves available and observable on the local market.
4.
Valuation of Ukrainian derivatives
The Treasury turnover of the Ukrainian bank is low, and a significant part of the derivative transactions are related to the
bank's risk management and concluded with the parent company. During the actual evaluation, the expected cash-flow is
discounted using yield curves observed based on current market benchmarks (published by the National Bank of Ukraine).
5.
Claims against Russian and Ukrainian central banks, provisions for expected credit losses related to Russian
and Ukrainian interbank claims and customer loans
As part of the continuous monitoring activity, OTP Group has explored and analyzed the secondary and tertiary negative
effects of the war in the corporate segment for Group members outside of Russia and Ukraine, including the effects of
the current sanctions policy. In the case of the affected customers, if the increased risk was substantiated, they were
classified in the Stage 2 category, while in the case of non-performance, the Group classified the given exposures in the
Stage 3 rating category.
In the case of Russian Group members, the impact of the current and forward-looking economic environment was taken
into account when determining the expected loss, considering expected economic slowdown in Russia.
In the case of Ukrainian Group members, the portfolio quality remained stable or even improved in some segments in
2024 and the Bank neither expects significant deterioration in 2025. The impact of the current and forward-looking
economic environment was taken into account when determining the expected loss, however, the Bank does not expect
any further substantial deterioration of the economic environment. The identification of the increased risk – given the
special situation – extends to regionally different war activity. In addition, the territorial distribution of exposures was
also taken into account when evaluating the expected loss, in the areas directly and indirectly affected by the war, the
Bank does not expect a significant return for non-performing customers, regardless of economic trends.
6.
Evaluation of goodwill
In connection with the involvement in the Russian-Ukrainian conflict, as a result of the company value review, the Group
considered it necessary to fully write off the existing goodwill in the case of the Russian subsidiary bank in the first
quarter of 2022, the value of which as at 31 December 2021 was HUF 40.9 billion. The effect of goodwill write-off on
the result was HUF 67.7 billion, and a HUF 26.8 billion loss was accounted for against equity. In the case of Ukraine,
there was no goodwill write-off.
Based on current experience, the Group takes into account the macroeconomic effects of the current geopolitical situation
in the mid- to long-term when determining the impairment of investments in the case of countries affected by the conflict.
In the case of Russian and Ukrainian operations, we currently do not consider it likely that the estimated investment value
before the conflict (2021) will be reached in the upcoming years as long the uncertainity due to the geopolitical conflict
lasts.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
589
NOTE 4:
MACRO ENVIRONMENT, IMPACT OF ECONOMIC SITUATION ON THE GROUP
[continued]
Significant estimates affected by the Russian-Ukrainian conflict during the preparation of these Consolidated
Financial Statements [continued]
References [continued]
7.
Deferred tax
Due to the uncertainty of the expected return, the Group did not recognize deferred tax assets in Ukraine, while in Russia,
the Group recognized HUF 22.56 billion and HUF 15.45 billion deferred tax assets in year 2024 and 2023, respectively.
There is no limit to unused tax credits in Russia. In addition, if the bank's taxable loss were to increase (if the impairment
calculated according to local rules approached the higher level of impairment according to IFRS), the difference between
the settlement and the tax loss would decrease, thus reducing the deferred tax asset. As a result, the bank was able to
utilize the temporary deferred tax asset both in the expected profitable operation and in a possible loss scenario.
Financial assets modified in the Group for the year ended 31 December 2024 (in HUF million)
Modification losses from changes other than Hungarian and Serbian interest rate cap resulted in HUF 325 million and
HUF 1,631 million loss as at 31 December 2024 and 2023, respectively. In the following tables the modification gains
and losses resulting from the prolongation of interest rate caps is presented. The newly granted loans have fixed interest
throughout the lifetime and the voluntary interest rate cap does not affect the previously disbursed loans.
Financial assets modified during the period related to moratorium in the Group for the year ended 31 December
2024 (in HUF mn)
Please see details in this note above under “Larger one-off items” where Interest rate cap is described.
Modification due to prolongation of the existing interest rate cap till 31 December 2025
Group
Gross carrying amount before modification
225,161
Loss allowance before modification
(1,540)
Net amortized cost before modification
223,621
Modification loss
(2,164)
Net amortized cost after modification
221,457
Modification due to prolongation of the existing interest rate cap till 30 June 2025
Group
Gross carrying amount before modification
240,610
Loss allowance before modification
(3,716)
Net amortized cost before modification
236,894
Modification loss
(5,500)
Net amortized cost after modification
231,394
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
590
NOTE 4:
MACRO ENVIRONMENT, IMPACT OF ECONOMIC SITUATION ON THE GROUP
[continued]
Financial assets modified during the period related to moratorium in the Group for the year ended 31 December
2024 (in HUF mn) [continued]
Modification due to prolongation of the existing interest rate cap till 31 December 2024
Group
Gross carrying amount before modification
236,341
Loss allowance before modification
(2,970)
Net amortized cost before modification
233,371
Modification loss
(5,204)
Net amortized cost after modification
228,167
Financial assets modified during the period related to moratorium in the Group for the year ended 31 December
2023 (in HUF mn)
Modification due to prolongation of the existing interest rate cap till 30 June 2024
Group
Gross carrying amount before modification
351,776
Loss allowance before modification
(12,702)
Net amortized cost before modification
339,074
Modification loss
(8,738)
Net amortized cost after modification
330,336
Modification due to prolongation of the existing interest rate cap till 31 December 2023
Group
Gross carrying amount before modification
709,771
Loss allowance before modification
(18,640)
Net amortized cost before modification
691,131
Modification loss
(27,772)
Net amortized cost after modification
663,359
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
591
NOTE 5:
CASH, AMOUNTS DUE FROM BANKS AND BALANCES WITH THE NATIONAL BANKS (in
HUF mn)
31/12/2024
31/12/2023
Cash on hand
In HUF
108,186
86,498
In foreign currency
558,501
519,333
666,687
605,831
Amounts due from banks and balances with the National Banks
31/12/2024
31/12/2023
Within one year
In HUF
1,532,990
2,275,719
In foreign currency
3,880,608
4,244,007
5,413,598
6,519,726
Over one year
In HUF
-
-
In foreign currency
-
-
-
-
Loss allowance on amounts due from bank and
balances with the National Banks
(1,273)
(508)
Total
6,079,012
7,125,049
Compulsory reserve set by
the National Banks
(2,561,725)
(2,265,707)
Cash and cash equivalents
3,517,287
4,859,342
Foreign subsidiary banks within the Group have to comply with country specific regulation of local National Banks. Each
country within the Group has its own regulation for compulsory reserve calculation and maintenance. Based on those
banks are obliged to place compulsory reserve at their National Bank in a specified percentage of their liabilities
considered in compulsory reserve calculation.
An analysis of the change in the loss allowance on amounts from banks and balances with the National Banks is as
follows:
31/12/2024
31/12/2023
Balance as at 1 January
508
1,703
Loss allowance for the period
5,072
11,859
Release of loss allowance for the period
(4,332)
(12,919)
Use of loss allowance for the period
(2)
(3)
Foreign currency translation difference
27
(132)
Closing balance
1,273
508
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
592
NOTE 6:
PLACEMENTS WITH OTHER BANKS (in HUF mn)
31/12/2024
31/12/2023
Within one year
In HUF
101,743
343,022
In foreign currency
1,522,070
961,554
1,623,813
1,304,576
Over one year
In HUF
192,276
184,696
In foreign currency
77,279
79,973
269,555
264,669
Loss allowance on placements
(1,467)
(2,247)
Total
1,891,901
1,566,998
An analysis of the change in the loss allowance on placements with other banks is as follows:
31/12/2024
31/12/2023
Balance as at 1 January
2,247
3,837
Loss allowance for the period
7,207
3,425
Release of loss allowance for the period
(5,904)
(4,880)
Use of loss allowance for the period
(754)
-
Assets held for sale
-
(12)
Foreign currency translation difference
(1,329)
(123)
Closing balance
1,467
2,247
Interest conditions of placements with other banks:
31/12/2024
31/12/2023
Interest rates on placements with other banks
denominated in HUF
0.00% - 25.00%
0.00% - 25.00%
Interest rates on placements with other banks
denominated in foreign currency
(0.20)% - 21.00%
0.00% - 22.00%
31/12/2024
31/12/2023
Average interest rates on placements
with other banks denominated in HUF (%)
6.67%
15.11%
Average interest rates on placements
with other banks denominated in foreign currency (%)
16.91%
13.03%
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
593
NOTE 7:
REPO RECEIVABLES (in HUF mn)
31/12/2024
31/12/2023
Within one year
In HUF
139,632
18,341
In foreign currency
192,717
206,077
332,349
224,418
Over one year
In HUF
-
37
In foreign currency
-
22
-
59
Loss allowance on repo receivables
(512)
(593)
Total
331,837
223,884
An analysis of the change in the loss allowance on repo receivables is as follows:
31/12/2024
31/12/2023
Balance as at 1 January
593
241
Loss allowance for the period
1,839
5,002
Release of loss allowance for the period
(1,914)
(4,631)
Use of loss allowance
-
-
Foreign currency translation difference
(6)
(19)
Closing balance
512
593
Interest conditions of repo receivables (%):
31/12/2024
31/12/2023
Interest rates on repo receivables denominated
in HUF
6.00% - 6.90%
0.00% - 11.00%
Interest rates on repo receivables denominated
in foreign currency
3.30% - 14.50%
0.00% - 17.96%
31/12/2024
31/12/2023
Average interest rates on repo
receivables denominated in HUF (%)
8.01%
11.83%
Average interest rates on repo
receivables denominated in foreign currency (%)
5.57%
6.92%
Securities as collaterals underlying repo receivable contracts:
Types of securities
31/12/2024
31/12/2023
Government bonds
155,864
31,333
Treasury bills
182,892
197,639
Total
338,756
228,972
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
594
NOTE 8:
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (in HUF mn)
31/12/2024
31/12/2023
Trading securities at fair value through profit or loss
Government bonds
86,050
58,232
Equity instruments and fund units
1,197
513
Corporate bonds
753
584
Discounted Treasury bills
3,918
3,959
Mortgage bonds
102
97
National Bank of Hungary bonds
412,402
-
Other interest-bearing securities
8,953
3,852
Other non-interest-bearing securities
982
331
514,357
67,568
Non-trading instruments mandatorily at
fair value through profit or loss
Open-ended fund units
73,913
64,002
Shares
2,617
3,686
76,530
67,688
Total
590,887
135,256
Positive fair value of derivative financial assets held for trading
31/12/2024
31/12/2023
Foreign exchange swaps held for trading
47,685
36,068
Interest rate swaps held for trading
56,637
65,711
Commodity swaps
10,472
32,336
CCIRS and mark-to-market CCIRS
held-for-trading 1
16,443
8,644
Foreign exchange forward contracts held for trading
17,051
7,101
Held-for-trading option contracts
2,711
3,040
Held-for-trading forward security agreement
21
3
Other derivative transactions held for trading2
1,493
726
Total
152,513
153,629
Total
743,400
288,885
1 CCIRS: Cross Currency Interest Rate Swaps (See Note 2.5.3.3.)
2 Other category includes: fx spot, equity swaps, option and index futures.
An analysis of securities held for trading portfolio by currency (%):
31/12/2024
31/12/2023
Denominated in HUF
89.65%
30.73%
Denominated in foreign currency
10.35%
69.27%
Total
100.00%
100.00%
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
595
NOTE 8:
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (in HUF mn)
[continued]
An analysis of government bond portfolio by currency (%):
31/12/2024
31/12/2023
Denominated in HUF
47.56%
22.71%
Denominated in foreign currency
52.44%
77.29%
Total
100.00%
100.00%
Interest conditions of held for trading securities (%):
31/12/2024
31/12/2023
Interest rates on securities held for trading
denominated in HUF
1.90% - 19.10%
1.90% - 16.66%
Interest rates on securities held for trading
denominated in foreign currency
0.00% - 18.00%
0.00% - 18.00%
Interest conditions and the remaining maturities of securities held for trading can be analysed as follows:
31/12/2024
31/12/2023
Within one year
With variable interest
161
135
With fixed interest
443,168
40,689
443,329
40,824
Over one year
With variable interest
3,648
1,154
With fixed interest
65,201
24,746
68,849
25,900
Non-interest-bearing securities
2,179
844
Total
514,357
67,568
Interest conditions and the remaining maturities of non-trading securities mandatorily at fair value through profit or loss
are as follows:
31/12/2024
31/12/2023
Within one year
With variable interest
-
-
With fixed interest
-
-
-
-
Over one year
With variable interest
-
-
With fixed interest
-
57
-
57
Non-interest-bearing securities
76,530
67,631
Total
76,530
67,688
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
596
NOTE 8:
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (in HUF mn)
[continued]
31/12/2024
31/12/2023
Profit from associates from shares measured
at fair value through profit or loss
10,246
14,297
An analysis of non-trading securities mandatorily at fair value through profit or loss portfolio by currency (%):
31/12/2024
31/12/2023
Denominated in HUF
64.74%
60.76%
Denominated in foreign currency
35.26%
39.24%
Total
100.00%
100.00%
Interest conditions of non-trading instruments mandatorily at fair value through profit or loss (%):
31/12/2024
31/12/2023
Interest rates on non-trading instruments mandatorily at fair
value through profit or loss denominated in foreign currency (%)
-
2.00% - 3.00%
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
597
NOTE 9:
SECURITIES AT FAIR VALUE THROUGH OTHER COMPREHENSIVE
INCOME (in HUF
mn)
31/12/2024
31/12/2023
Securities at fair value through other
comprehensive income
Government bonds
1,312,063
1,288,230
Corporate bonds
27,043
34,996
Listed securities:
In HUF
-
-
In foreign currency
12,774
16,989
12,774
16,989
Non-listed securities:
In HUF
10,140
12,115
In foreign currency
4,129
5,892
14,269
18,007
Mortgage bonds
34,233
30,344
Interest bearing treasury bills
86
235
Securities issued by the National Bank of Hungary
205,050
114,746
Other securities
44,349
72,429
Total
1,622,824
1,540,980
31/12/2024
31/12/2023
Non-interest-bearing instruments at fair value
through other comprehensive income
Listed securities:
In HUF
-
-
In foreign currency
11,931
9,472
11,931
9,472
Non-listed securities:
In HUF
403
403
In foreign currency
70,395
50,606
70,798
51,009
82,729
60,481
Total
1,705,553
1,601,461
Movement table of loss allowance of securities at fair value through other comprehensive income is presented in Note
27.
An analysis of securities at fair value through other comprehensive income by currency (%):
31/12/2024
31/12/2023
Denominated in HUF
35.30%
33.85%
Denominated in foreign currency
64.70%
66.15%
Total
100.00%
100.00%
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
598
NOTE 9:
SECURITIES AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME
(in HUF mn) [continued]
Detailed information of the non-interest-bearing instruments at fair value through other comprehensive income:
31/12/2024
31/12/2023
Strategic investments closely related to banking activity
Fair value
81,031
51,131
Dividend income from instruments held at the reporting date
1,036
369
Derecognition
Fair value of disposed, reclassified equity instrument,
fund units
-
2,277
Cumulative gain / loss on disposal, reclassification
transferred to retained earnings
-
3,978
Other strategic investments
Fair value
1,698
9,350
Dividend income from instruments held at the reporting date
46
61
Total
Total fair values
82,729
60,481
Dividend income from instruments held at the reporting date
1,082
430
Fair value of derecognized equity instrument, fund units
-
2,277
Cumulative gain / loss on disposal
transferred to retained earnings
-
3,978
Since the joining of OTP Banka d.d. (Slovenia) (previously: NKBM) into OTP Group on the 6 February 2023, investment
in Bankart d.o.o. became an associated company and the Group reclassified the investment in Bankart from Securities at
fair value through other comprehensive income to Associates and other investments. The amount of this reclassification
transferred to retained earnings was HUF 1,301 million and the fair value of the investment was HUF 2,277 million as at
the reclassification.
During the year ended 31 December 2022 HUF 2,677 million equity instruments measured at fair value through other
comprehensive income was sold but the realized income only in 2023 was transferred to retained earnings, while in 2024
there were no sale transactions.
An analysis of government bonds by currency (%):
31/12/2024
31/12/2023
Denominated in HUF
27.85%
29.83%
Denominated in foreign currency
72.15%
70.17%
Total
100.00%
100.00%
Interest conditions of the security portfolio at fair value through other comprehensive income are as follows (%):
31/12/2024
31/12/2023
Interest rates on securities at fair value through
other comprehensive income denominated in HUF
2.00% - 9.75%
2.00% - 13.80%
Interest rates on securities at fair value through
other comprehensive income denominated
in foreign currency
0.01% - 19.75%
0.01% - 19.75%
31/12/2024
31/12/2023
Average interest rates on securities at fair value through
other comprehensive income denominated in HUF (%)
3.40%
3.51%
Average interest rates on securities at fair value
through other comprehensive income denominated
in foreign currency (%)
4.49%
3.60%
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
599
NOTE 9:
SECURITIES AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME
(in HUF mn) [continued]
Interest conditions and the remaining maturities of securities at fair value through other comprehensive income can be
analysed as follows:
31/12/2024
31/12/2023
Within one year
With variable interest
6,062
456
With fixed interest
577,372
373,618
583,434
374,074
Over one year
With variable interest
10,457
18,136
With fixed interest
1,028,933
1,148,770
1,039,390
1,166,906
Non-interest-bearing securities
82,729
60,481
Total
1,705,553
1,601,461
Certain securities are hedged against interest rate risk. See Note 37.4.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
600
NOTE 10:
SECURITIES AT AMORTIZED COST (in HUF mn)
31/12/2024
31/12/2023
Government bonds
6,428,625
4,468,813
Corporate bonds
346,770
310,514
Discounted Treasury bills
137,317
67,653
Mortgage bonds
32,006
24,738
Interest bearing Treasury bills
1,663
6,480
Other securities
545,301
403,722
7,491,682
5,281,920
Loss allowance on securities at amortized cost
(44,505)
(32,648)
Total
7,447,177
5,249,272
Interest conditions and the remaining maturities of securities at amortized cost can be analysed as follows:
31/12/2024
31/12/2023
Within one year
With variable interest
-
-
With fixed interest
1,708,475
700,735
1,708,475
700,735
Over one year
With variable interest
25,325
6,005
With fixed interest
5,757,882
4,575,180
5,783,207
4,581,185
Total
7,491,682
5,281,920
An analysis of securities at amortized cost by currency (%):
31/12/2024
31/12/2023
Denominated in HUF
39.47%
46.81%
Denominated in foreign currency
60.53%
53.19%
Total
100.00%
100.00%
Interest conditions of securities at amortized cost (%):
31/12/2024
31/12/2023
Interest rates of securities at amortized cost
with variable interest
2.16% - 9.00%
0.75% - 2.91%
Interest rates of securities at amortized cost
with fixed interest
0.00% - 17.14%
0.00% - 26.00%
31/12/2024
31/12/2023
Average interest rates on securities
at amortized cost denominated in HUF (%)
5.43%
4.23%
Average interest rates on securities
at amortized cost denominated in foreign currency (%)
4.01%
4.71%
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
601
NOTE 10:
SECURITIES AT AMORTIZED COST (in HUF mn) [continued]
An analysis of the change in the loss allowance on securities at amortized cost is as follows:
31/12/2024
31/12/2023
Balance as at 1 January
32,648
43,049
Loss allowance for the period
25,766
10,875
Release of loss allowance
(15,707)
(20,060)
Use of loss allowance
(634)
-
Assets held for sale
-
(637)
Foreign currency translation difference
2,432
(579)
Closing balance
44,505
32,648
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
602
NOTE 11:
LOANS AT AMORTIZED COST AND AT FAIR VALUE (in HUF mn)
Loans at amortized cost
31/12/2024
31/12/2023
Within one year
In HUF
1,657,482
1,340,659
In foreign currency
4,172,610
3,714,471
5,830,092
5,055,130
Over one year
In HUF
2,501,910
2,516,270
In foreign currency
12,876,113
10,999,164
15,378,023
13,515,434
21,208,115
18,570,564
Loss allowance on loans
(917,734)
(894,031)
Total
20,290,381
17,676,533
An analysis of the gross loan portfolio at amortized cost by currency (%):
31/12/2024
31/12/2023
In HUF
19.61%
20.77%
In foreign currency
80.39%
79.23%
Total
100.00%
100.00%
Interest rates of the loan portfolio at amortized cost are as follows:
31/12/2024
31/12/2023
Loans at amortized cost denominated in HUF1
0.00% - 56.58%
0.00% - 59.99%
Loans at amortized cost denominated in foreign currency2
0.00% - 90.00%
(0.50)% - 90.00%
1 The highest interest rate relates to HUF loan is car loan.
2 The highest interest rate relates to loan in foreign currency is personal loan, card loan and POS services in Russia.
31/12/2024
31/12/2023
Average interest rates on loans at amortized cost
denominated in HUF (%)
10.26%
11.36%
Average interest rates on loans at amortized cost
denominated in foreign currency (%)
7.34%
6.12%
The amount of those loans which were written-off in the current year but they are still subject to enforcement activity to
be collected is still going on were HUF 51,657 million and HUF 64,487 million as at 31 December 2024 and 2023,
respectively.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
603
NOTE 11: LOANS AT AMORTIZED COST AND AT FAIR VALUE (in HUF mn) [continued]
An analysis of the change in the loss allowance on loans is as follows:
31/12/2024
31/12/2023
Balance as at 1 January
894,031
966,360
Loss allowance for the period
723,674
714,784
Release of loss allowance
(580,673)
(551,477)
Loss allowance in the current period
143,001
163,307
from this: effect of change in parameters
used for loss allowance calculation
(37,558)
(22,784)
Use of loss allowance
(119,999)
(61,078)
Partial write-off 1
(25,455)
(37,169)
Assets held for sale
-
(61,355)
Unwinding
56
-
Foreign currency translation difference
26,100
(76,034)
Closing balance
917,734
894,031
1 See details in Note 2.5.8.
Movement in loss allowance on loans and placements is summarized as below:
31/12/2024
31/12/2023
Release of loss allowance on placements and
loss from derecognition of placements
1,303
(1,455)
Loss allowance on loans and gain from
derecognition of loans
76,173
111,771
Total 2
77,476
110,316
2 See details in Note 31.
Loans mandatorily at fair value through profit or loss
31/12/2024
31/12/2023
Within one year
In HUF
79,661
77,886
In foreign currency
1,134
131
80,795
78,017
Over one year
In HUF
1,477,561
1,320,889
In foreign currency
1,425
1,579
1,478,986
1,322,468
Total
1,559,781
1,400,485
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
604
NOTE 11: LOANS AT AMORTIZED COST AND AT FAIR VALUE (in HUF mn) [continued]
An analysis of the loan portfolio mandatorily at fair value through profit or loss by currency (%):
31/12/2024
31/12/2023
In HUF
99.84%
99.88%
In foreign currency
0.16%
0.12%
Total
100.00%
100.00%
Interest rates of the loan portfolio mandatorily at fair value through profit or loss are as follows (%):
31/12/2024
31/12/2023
Interest rates on loans denominated
in HUF
1.31% - 28.32%
1.31% - 25.36%
Interest rates on loans denominated
in foreign currency
2.10% - 8.00%
5.00% - 30.00%
31/12/2024
31/12/2023
Average interest rates on loan portfolio at fair value through
profit or loss denominated in HUF (%)
6.71%
6.96%
Average interest rates on loan portfolio at fair value through
profit or loss denominated in foreign currency (%)
16.78%
4.68%
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
605
NOTE 12:
ASSOCIATES AND OTHER INVESTMENTS (in HUF mn)
31/12/2024
31/12/2023
Investments
Investments in associates (non-listed)
77,258
66,805
Other investments (non-listed)
57,470
39,019
134,728
105,824
Impairment on investments
(10,205)
(9,714)
Total
124,523
96,110
An analysis of the change in the impairment on investments is as follows:
31/12/2024
31/12/2023
Balance as at 1 January
9,714
12,080
Impairment for the period
1,175
44
Release of impairment for the period
(218)
(65)
Modification due to merge
673
(2,344)
Foreign currency translation difference
(1,139)
(1)
Closing balance
10,205
9,714
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
606
NOTE 13:
PROPERTY, EQUIPMENT AND INTANGIBLE ASSETS (in HUF mn)
There are different kinds of tangible and intangible assets held by the Group. The next section covers the explanation for
the changes from opening values to closing ones in the gross values, the accumulated depreciation and amortization and
in the impairment of the tangible and intangible assets in the Group. Relevant information about the fair values of the
tangible assets and gross amounts of those assets which were fully depreciated but which are still in use is specified below.
The carrying amount of the temporarily idle properties was HUF 3,103 million and HUF 3,334 million as at 31 December
2024 and 2023, respectively.
There was no restrictions on title and properties, plants or equipment pledged as security for liabilities as at 31 December
2024 but HUF 330 million restrictions was identified as at 31 December 2023.
As at 31 December 2024 and 31 December 2023 the amount of contractual commitments for the acquisition of tangible
and intangible assets was HUF 21,748 million and HUF 29,980 million, respectively. For research and development
purposes HUF 1,672 million expenses was accounted as at 31 December 2024.
Impairment for the properties in the current period was necessary as a result of the valuation performed by using the
comparative value method (market analogy method) with direct comparison to the market price of other similar properties.
Actual market transactions were used based on the 6-month period prior to the valuation date where the market price of
the analogous property is adjusted by an expert coefficient for market adaptation (“ECMA”). Usually this range is from
-25% to +25% and reflects the availability of sufficient market information for similar items. In case of properties ECMA
exceeded this range where the circumstances were exceptional although by decision of the appraiser it was used only for
unique properties with characteristics similar to the appraised ones, for which no sufficient market analogues are available.
The price was adjusted by coefficients reflecting the area, location, size and structure of the property, as well as a weighing
factor reflecting the weight of the selected market analogies in the determined fair value.
The Bank decided that the recoverable amount of goodwill is determined based on fair value less cost of disposal. When
the Bank prepares goodwill impairment tests of the subsidiaries, the two methods which are used based on discounted
cash-flow calculation that shows the same result; however, they represent different economical logics.
Based on the internal regulation of the Bank as at 31 December 2024 impairment test was prepared where a three-year
cash-flow model was applied with an explicit period between 2025-2027. The basis for the estimation was the actual data
of November 2024 and based on the prepared medium-term (2025-2027) forecasts. When the Bank prepared the
calculations for the period 2025-2027, it considered the actual worldwide economic situations, the expected economic
growth for the following years, their possible effects on the financial sector, the expected growth trajectory and the
expected changes of the mentioned factors.
Present value calculation with the Free Cash-Flow method
The Bank calculated the expected cash-flow for the given period based on the expected after-tax profit of the companies.
The calculation is highly sensitive to the level of discount rate and growth rate used. As discount factor the Bank uses a
zero coupon yield curve derived by the Headquarter Asset-Liability Management department. This zero coupon curve is
estimated for each related country, based on the countries’ issued bonds and segmented by the issuances’ currencies. In
case of the subsidiaries where the yield curves were not available (Ukraine) the daily Overnight deposit yield was used
as a benchmark, provided by National Bank of Ukraine as currently the only available proxy for the hryvnia rate.
The Bank calculated risk premiums on the basis of information from the country risk premiums that are published by
Aswath Damodaran – New York STERN University, according to the Bank’s assumption the risk-free interest rate
includes the country-dependent risks in an implicit way.
When the subsidiary has subordinated debt, the discount rate is calculated as a weighted average of the expected return
on equity presented previously and the subordinated debt’s interest rate. At the end of the calculation, the value of
subordinated debt is subtracted from the valuations’ result.
The growth rate in the explicit period is the growth rate of the profit after tax adjusted by the interest rate of the cash and
subordinated loans. The assumed growth rates for the periods of residual values reflect the long-term economic
expectations in case of every country.
The values of the subsidiaries in the FCF method were then calculated as the sum of the discounted cash-flows of the
explicit period, the present value of the terminal values and the initial free capital assuming an effective capital structure.
Summary of the impairment test for the year ended 31 December 2024 and 2023
Based on the valuations of the subsidiaries for the year ended 31 December 2024 and 2023 no goodwill impairment was
necessary to be recorded by the Group.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
607
NOTE 13:
PROPERTY, EQUIPMENT AND INTANGIBLE ASSETS (in HUF mn) [continued]
For the year ended 31 December 2024
Cost
Intangible
assets
Goodwill
Property
Machinery and
office equipment
Vehicle
Construction
in progress
Tangible assets subject
to operating lease
Total
Balance as at 1 January
542,735
66,932
421,607
276,542
41,931
45,897
36,624
1,432,268
Additions
177,293
1,671
35,487
62,257
4,507
70,260
19,618
371,093
Foreign currency
translation differences
12,813
2,705
14,279
7,357
250
2,222
2,056
41,682
Disposals
(69,527)
-
(13,045)
(15,443)
(1,790)
(66,937)
(16,778)
(183,520)
Closing balance
663,314
71,308
458,328
330,713
44,898
51,442
41,520
1,661,523
Depreciation and amortization
Intangible
assets
Property
Machinery and
office equipment
Vehicle
Tangible assets subject
to operating lease
Total
Balance as at 1 January
312,085
91,690
187,224
8,147
7,851
606,997
Charge for the period
64,283
13,349
35,899
2,574
5,380
121,485
Foreign currency
translation differences
7,340
3,208
5,357
137
668
16,710
Disposals
(13,957)
(3,226)
(12,822)
(489)
(4,202)
(34,696)
Closing balance
369,751
105,021
215,658
10,369
9,697
710,496
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
608
NOTE 13:
PROPERTY, EQUIPMENT AND INTANGIBLE ASSETS (in HUF mn) [continued]
For the year ended 31 December 2024 [continued]
Impairment
Intangible
assets
Property
Machinery and
office equipment
Tangible assets subject
to operating lease
Total
Balance as at 1 January
6,224
4,476
46
43
10,789
Impairment for the period
4,930
509
250
105
5,794
Release of impairment for the period
-
(193)
-
(99)
(292)
Foreign currency
translation differences
278
298
2
3
581
Use of impairment
(3,125)
(273)
(251)
-
(3,649)
Closing balance
8,307
4,817
47
52
13,223
Intangible
assets
Goodwill
Property
Machinery and
office equipment
Vehicle
Construction
in progress
Tangible assets subject
to operating lease
Total
Carrying value
Balance as at 1 January
224,426
66,932
325,441
89,272
33,784
45,897
28,730
814,482
Closing balance
285,256
71,308
348,490
115,008
34,529
51,442
31,771
937,804
Fair values
-
-
383,507
112,665
34,569
-
31,754
562,495
Gross amount of the fully
depreciated assets that
are still in use
66,341
-
6,717
96,990
1,310
-
-
171,358
An analysis of the intangible assets for the year ended 31 December 2024 is as follows:
Intangible assets
Self-developed
Purchased
Total
Gross values
22,771
640,543
663,314
Accumulated amortization
(9,225)
(360,526)
(369,751)
Impairment
-
(8,307)
(8,307)
Carrying value
13,546
271,710
285,256
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
609
NOTE 13:
PROPERTY, EQUIPMENT AND INTANGIBLE ASSETS (in HUF mn) [continued]
For the year ended 31 December 2024 [continued]
Carrying value of the investment and goodwill allocated to the appropriate cash generating units
Subsidiaries
Carrying
amounts of the
subsidiary in
HUF million
Goodwill
values in
HUF million
Goodwill values in
million functional
currency
Type of
functional
currency
Consolidated
ownership
interest
With ownership
adjusted company
value in HUF million
Applied long
term grow rate
Applied
long term
discount
rate
DSK Bank EAD
280,722
44,764
28,541
HUF
99.92%
1,313,300
3.00%
11.70%
(Bulgaria)
77
BGN
OTP banka d.d.
(Croatia)
205,349
23,806
58
EUR
100.00%
584,207
3.00%
9.90%
POK-DSK Rodina a.d.
(Bulgaria)
1,680
11
11
HUF
99.85%
23,645
3.00%
11.70%
George Consult
(Croatia)
225
227
1
EUR
76.00%
171
3.00%
9.90%
OTP Home Solutions Llc.
(Hungary)
4,810
478
478
HUF
100.00%
8,377
3.00%
14.42%
OTP Invest Drustvo AD
(Serbia)
1,087
352
100
RSD
100.00%
1,087
3.00%
12.60%
Hello Pay Ltd.
1,640
508
508
HUF
100.00%
1,738
3.00%
14.60%
(Hungary)
Aranykalász Group
15,012
342
342
HUF
75.00%
15,012
2.00%
12.50%
(Hungary)
Szekszárd Group
12,259
820
820
HUF
100.00%
12,259
2.00%
12.50%
(Hungary)
522,784
71,308
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
610
NOTE 13:
PROPERTY, EQUIPMENT AND INTANGIBLE ASSETS (in HUF mn) [continued]
For the year ended 31 December 2023
Cost
Intangible
assets
Goodwill
Property
Machinery and
office equipment
Vehicle
Construction
in progress
Tangible assets subject
to operating lease
Total
Balance as at 1 January
471,420
109,185
375,765
271,879
43,288
53,544
31,206
1,356,287
Increase due to acquisition
18,484
-
41,770
9,085
207
339
272
70,157
Additions
131,153
328
34,384
42,538
1,744
71,211
18,644
300,002
Foreign currency
translation differences
(16,618)
(1,715)
(11,158)
(10,447)
(419)
110
(1,482)
(41,729)
Disposals
(45,342)
(40,866)
(8,075)
(22,041)
(1,460)
(78,421)
(12,016)
(208,221)
Assets held for sale
(16,362)
-
(11,079)
(14,472)
(1,429)
(886)
-
(44,228)
Closing balance
542,735
66,932
421,607
276,542
41,931
45,897
36,624
1,432,268
Depreciation and amortization
Intangible
assets
Property
Machinery and
office equipment
Vehicle
Tangible assets subject
to operating lease
Total
Balance as at 1 January
299,912
93,288
195,614
9,140
8,855
606,809
Charge for the period
53,259
11,599
28,516
2,302
4,447
100,123
Foreign currency
translation differences
(9,862)
(3,455)
(8,392)
(265)
(447)
(22,421)
Disposals
(19,459)
(4,067)
(19,375)
(2,131)
(5,004)
(50,036)
Assets held for sale
(11,765)
(5,675)
(9,139)
(899)
-
(27,478)
Closing balance
312,085
91,690
187,224
8,147
7,851
606,997
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
611
NOTE 13:
PROPERTY, EQUIPMENT AND INTANGIBLE ASSETS (in HUF mn) [continued]
For the year ended 31 December 2023 [continued]
Impairment
Intangible
assets
Goodwill
Property
Machinery and
office equipment
Tangible assets subject
to operating lease
Total
Balance as at 1 January
2,796
40,866
4,251
46
19
47,978
Impairment for the period
4,361
-
441
820
30
5,652
Release of impairment for the period
-
-
-
(2)
-
(2)
Foreign currency
translation differences
37
-
(215)
2
(1)
(177)
Use of impairment
(970)
(40,866)
(1)
(820)
(5)
(42,662)
Closing balance
6,224
-
4,476
46
43
10,789
Intangible
assets
Goodwill
Property
Machinery and
office equipment
Vehicle
Construction
in progress
Tangible assets subject
to operating lease
Total
Carrying value
Balance as at 1 January
168,712
68,319
278,226
76,219
34,148
53,544
22,332
701,500
Closing balance
224,426
66,932
325,441
89,272
33,784
45,897
28,730
814,482
Fair values
-
-
350,867
89,318
33,779
-
28,730
502,694
Gross amount of the fully
depreciated assets that
are still in use
164,201
-
27,950
136,683
1,612
-
582
331,028
An analysis of the intangible assets for the year ended 31 December 2023 is as follows:
Intangible assets
Self-developed
Purchased
Total
Gross values
22,230
520,505
542,735
Accumulated amortization
(10,220)
(301,865)
(312,085)
Impairment
-
(6,224)
(6,224)
Carrying value
12,010
212,416
224,426
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
612
NOTE 13:
PROPERTY, EQUIPMENT AND INTANGIBLE ASSETS (in HUF mn) [continued]
For the year ended 31 December 2023 [continued]
Carrying value of the investment and goodwill allocated to the appropriate cash generating units
Subsidiaries
Carrying
amounts of the
subsidiary in
HUF million
Goodwill
values in
HUF million
Goodwill values in
million functional
currency
Type of
functional
currency
Consolidated
ownership
interest
With ownership
adjusted company
value in HUF million
Applied long
term grow rate
Applied
long term
discount
rate
DSK Bank EAD
280,722
43,684
28,541
HUF
99.92%
1,072,672
3.00%
12.28%
(Bulgaria)
77
BGN
OTP banka d.d.
(Croatia)
205,349
22,221
58
EUR
100.00%
465,038
3.00%
10.75%
POK-DSK Rodina a.d.
(Bulgaria)
1,680
11
11
HUF
99.85%
18,880
3.00%
12.28%
George Consult
(Croatia)
225
212
4
HRK
76.00%
171
3.00%
10.75%
OTP Home Solutions Llc.
(Hungary)
3,870
478
478
HUF
100.00%
3,870
3.00%
14.25%
OTP Invest Drustvo AD
(Serbia)
304
326
100
RSD
100.00%
304
3.00%
12.69%
492,150
66,932
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
613
NOTE 14: INVESTMENT PROPERTIES (in HUF mn)
An analysis of the change in gross values of investment properties is as follows:
Gross values
31/12/2024
31/12/2023
Balance as at 1 January
63,552
61,346
Increase due to transfer from inventories
or owner-occupied properties
3,788
-
Increase from purchase
32,106
10,363
Increase from acquisition
-
9,910
Transfer to held-for-sale properties
(231)
(34)
Transfer to inventories or owner-occupied properties
(983)
(4,985)
Disposal due to sale
(2,217)
(10,652)
Assets held for sale
-
(182)
Foreign currency translation difference
3,548
(2,214)
Closing balance
99,563
63,552
The applied depreciation and amortization rates were as follows:
31/12/2024
31/12/2023
Depreciation and amortization rates
1.49% - 50.00%
2.00% - 15.00%
An analysis of the movement in the depreciation and amortization on investment properties is as follows:
Depreciation and amortization
31/12/2024
31/12/2023
Balance as at 1 January
9,008
11,273
Additions due to transfer from inventories
or owner-occupied properties
1,491
-
Charge for the period
1,047
866
Assets held for sale
-
(86)
Transfer to inventories or owner-occupied properties
(158)
(2,178)
Disposal due to sale
(699)
(420)
Transfer to held-for-sale properties
(13)
(5)
Foreign currency translation difference
608
(442)
Closing balance
11,284
9,008
An analysis of the movement in the impairment on investment properties is as follows:
Impairment
31/12/2024
31/12/2023
Balance as at 1 January
1,163
2,621
Impairment for the period
7
32
Release of impairment for the period
(30)
(1,394)
Disposal due to sale
(1,179)
-
Assets held for sale
-
(34)
Decrease due to transfer to inventories
or owner-occupied properties
(3)
(11)
Foreign currency translation difference
81
(51)
Closing balance
39
1,163
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
614
NOTE 14: INVESTMENT PROPERTIES (in HUF mn) [continued]
Carrying values
31/12/2024
31/12/2023
Balance as at 1 January
53,381
47,452
Closing balance
88,240
53,381
Fair values
10,188
72,647
The amount of restrictions on the realisability of investment property was HUF 839 million as at 31 December 2024 and
HUF 781 million as at 31 December 2023.
The Group chose the cost model for measuring investment properties but estimates and reviews the fair value of the
investment properties by external experts, these investment properties would have been presented on level 3 in the fair
value hierarchy if the Group didn’t apply cost method for this recognition.
Income and expenses
31/12/2024
31/12/2023
Rental income
4,027
3,029
Direct operating expenses of investment properties
– income generating
486
451
Direct operating expenses of investment properties
– non income generating
241
307
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
615
NOTE 15:
DERIVATIVE FINANCIAL ASSETS DESIGNATED AS HEDGE ACCOUNTING (in HUF mn)
Positive fair value of derivative financial assets designated as fair value hedge
31/12/2024
31/12/2023
CCIRS and mark-to-market CCIRS designated
as fair value hedge
18,190
24,750
Interest rate swaps designated as fair value hedge
21,902
17,217
Interest rate swap designated as macro fair value hedge
10,289
-
Total
50,381
41,967
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
616
NOTE 16:
OTHER ASSETS (in HUF mn)
Other assets are expected to be recovered or settled no more than twelve months after the reporting period.
31/12/2024
31/12/2023
Other financial assets
Receivables from card operations
39,740
71,385
Prepayments and accrued income on other financial assets
31,042
34,369
Trade receivables
49,978
53,010
Receivables from investment services
51,401
56,855
Other advances
56,729
24,612
Stock exchange deals
27,524
20,451
Giro clearing accounts
48,354
31,022
Receivables due from pension funds and investment funds
7,064
8,507
Receivables from leasing activities
1,651
1,634
Advances for securities and investments
556
82
Other financial assets
24,458
15,075
Loss allowance on other financial assets
(46,177)
(34,602)
Total
292,320
282,400
Other financial assets contain claims from overdue Russian government bonds, for further information please see details
in Note 4. 1b.
Other non-financial assets
31/12/2024
31/12/2023
Prepayments and accrued income on other non-financial assets
73,159
59,311
Receivables, subsidies from the State, Government
16,319
21,085
Settlement and suspense accounts
27,894
26,409
Biological assets and agricultural produce
11,297
10,672
Other non-financial assets
42,621
45,294
Impairment on other non-financial assets
(5,176)
(4,437)
Total
166,114
158,334
Other assets (under IAS 2)
31/12/2024
31/12/2023
Inventories
42,232
56,552
Repossessed real estate
17,763
14,832
Repossessed other non-financial assets
2,887
2,289
Write-down of the assets measured under IAS 2
(7,128)
(4,977)
Total
55,754
68,696
Total other assets
514,188
509,430
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
617
NOTE 16:
OTHER ASSETS (in HUF mn) [continued]
An analysis of the movement in the loss allowance on other financial assets is as follows:
31/12/2024
31/12/2023
Balance as at 1 January
34,602
31,833
Loss allowance for the period
19,253
16,278
Release of allowance for the period
(8,847)
(7,016)
Use of loss allowance
(2,020)
(3,505)
Assets held for sale
-
(371)
Foreign currency translation difference
3,189
(2,617)
Closing balance
46,177
34,602
An analysis of the movement in the impairment on other non-financial assets is as follows:
31/12/2024
31/12/2023
Balance as at 1 January
4,437
7,041
Impairment for the period
1,316
778
Release of impairment for the period
(546)
(1,161)
Use of impairment
(41)
(583)
Assets held for sale
-
(1,576)
Foreign currency translation difference
10
(62)
Closing balance
5,176
4,437
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
618
NOTE 17:
AMOUNTS DUE TO BANKS, THE NATIONAL GOVERNMENTS, DEPOSITS FROM THE
NATIONAL BANKS AND OTHER BANKS (in HUF mn)
31/12/2024
31/12/2023
Within one year
In HUF
520,301
179,321
In foreign currency
377,892
244,011
898,193
423,332
Over one year
In HUF
312,107
737,892
In foreign currency
811,891
779,638
1,123,998
1,517,530
Total
2,022,191
1,940,862
Interest rates on amounts due to banks, the National Governments, deposits from the National Banks and other banks are
as follows:
31/12/2024
31/12/2023
Within one year
In HUF
(1.51)% - 9.23%
(2.40)% - 8.75%
In foreign currency
(2.12)% - 18.00%
(2.31)% - 18.00%
Over one year
In HUF
(1.41)% - 3.50%
(1.70)% - 11.40%
In foreign currency
(2.02)% - 13.50%
(2.12)% - 16.81%
31/12/2024
31/12/2023
Average interest rates on amounts due to banks,
the National Governments, deposits from the
National Banks and other banks denominated in HUF
3.10%
3.25%
Average interest rates on amounts due to banks,
the National Governments, deposits from the
National Banks and other banks denominated in
in foreign currency
7.82%
5.65%
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
619
NOTE 18:
REPO LIABILITIES (in HUF mn)
31/12/2024
31/12/2023
Within one year
In HUF
23,736
24,572
In foreign currency
108,401
101,665
132,137
126,237
Over one year
In HUF
-
-
In foreign currency
-
-
-
-
Total
132,137
126,237
Interest conditions on repo liabilities are as follows (%):
31/12/2024
31/12/2023
Interest rates on repo liabilities
denominated in HUF
(4.50)% - 6.30%
0.00% - 0.00%
Interest rates on repo liabilities
denominated in foreign currency
1.46% - 2.70%
0.00% - 3.65%
31/12/2024
31/12/2023
Average interest rates on repo liabilities
denominated in HUF
7.70%
12.85%
Average interest rates on repo liabilities
denominated in foreign currency
2.04%
4.22%
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
620
NOTE 19:
FINANCIAL LIABILITIES DESIGNATED AT FAIR VALUE THROUGH PROFIT OR LOSS (in
HUF mn)
31/12/2024
31/12/2023
Within one year
In HUF
1,709
1,816
In foreign currency
-
-
1,709
1,816
Over one year
In HUF
70,781
68,891
In foreign currency
-
-
70,781
68,891
Total
72,490
70,707
Contractual amount outstanding
17,000
17,747
Result from associated entity's measured
at fair value attributable to the Group
55,466
50,921
Interest conditions of financial liabilities designated at fair value through profit or loss can be analysed as follows:
31/12/2024
31/12/2023
Interest rates on financial liabilities designated at
fair value denominated in HUF within one year
4.33% - 8.24%
4.97% - 9,97%
Interest rates on financial liabilities designated at
fair value denominated in HUF over one year
3.14%
4.83%
Certain MFB (“Hungarian Development Bank”) refinanced loan receivables are categorised as fair value through profit
or loss based on SPPI test. Related refinancing loans at the liability side are categorised as fair value through profit or
loss based on fair value option due to accounting mismatch as provided by the IFRS 9 standard.
The Group controls capital funds where it does not hold the 100% of the owner rights. The related non-controlling interest
is treated as financial liability designated at fair value through profit or loss as it is not considered equity under IAS 32.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
621
NOTE 20:
DEPOSITS FROM CUSTOMERS (in HUF mn)
31/12/2024
31/12/2023
Within one year
In HUF
8,452,289
7,584,728
In foreign currency
22,752,752
20,332,288
31,205,041
27,917,016
Over one year
In HUF
224,878
244,965
In foreign currency
228,270
170,290
453,148
415,255
Deposits from customers total
31,658,189
28,332,271
Fair value changes of the hedged items
in portfolio hedge of interest rate risk
8,209
160
Total
31,666,398
28,332,431
Interest rates on deposits from customers are as follows:
31/12/2024
31/12/2023
Within one year
In HUF
0.00% - 17.50%
0.00% - 15.40%
In foreign currency
(0.85)% - 5.00%
0.00% - 23.00%
Over one year
In HUF
0.00% - 6.03%
(0.36)% - 17.50%
In foreign currency
0.00% - 23.00%
0.00% - 22.10%
31/12/2024
31/12/2023
Average interest rates on deposits from customers
denominated in HUF
1.94%
3.69%
Average interest rates on deposits from customers
denominated in foreign currency
1.43%
0.98%
An analysis of deposits from customers by type is as follows:
31/12/2024
31/12/2023
Retail deposits
17,967,496
56.75%
16,093,200
56.80%
Corporate deposits
12,538,696
39.61%
10,965,159
38.70%
Municipality deposits
1,151,997
3.64%
1,273,912
4.50%
Total
31,658,189
100.00%
28,332,271
100.00%
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
622
NOTE 21:
LIABILITIES FROM ISSUED SECURITIES (in HUF mn)
31/12/2024
31/12/2023
With original maturity
Within one year
In HUF
103,595
399,897
In foreign currency
163,970
153,264
267,565
553,161
Over one year
In HUF
302,741
283,165
In foreign currency
2,022,818
1,259,222
2,325,559
1,542,387
Total
2,593,124
2,095,548
Interest rates on liabilities from issued securities are as follows:
31/12/2024
31/12/2023
Issued securities denominated in HUF
1.25% - 12.00%
0.60% - 15.00%
Issued securities denominated in foreign currency
1.63% - 20.50%
1.63% - 16.00%
31/12/2024
31/12/2023
Average interest rates on issued securities
denominated in HUF
6.05%
8.83%
Average interest rates on issued securities
denominated in foreign currency
6.89%
7.14%
Issued securities denominated in HUF as at 31 December 2024 (in HUF mn)
Name
Date of issue
Maturity
Nominal
value
Amortized
cost
Interest conditions
Hedged
(in HUF mn)
(in HUF mn)
(actual interest
rate in % p.a.)
1
OTP_HUF_2025/3
12/01/2024
12/01/2025
1,919
2,060
fix
7.50
2
OTP_HUF_2025/4
18/11/2022
18/11/2025
2,155
2,289
fix
6.75
3
OTP_HUF_2025/5
30/06/2023
30/06/2025
5,957
6,284
fix
6.50
4
OTP_HUF_2025/6
28/03/2024
28/03/2025
5,559
5,837
fix
6.50
5
OTP_HUF_2025/7
26/04/2024
26/04/2025
8,190
8,528
fix
6.00
6
OTP_HUF_2025/8
24/05/2024
24/05/2025
5,860
6,075
fix
6.00
7
OTP_HUF_2025/9
07/06/2024
07/06/2025
5,756
5,955
fix
6.00
8
OTP_HUF_2025/10
05/07/2024
05/07/2025
11,675
12,024
fix
6.00
9
OTP_HUF_2025/11
02/08/2024
02/08/2025
6,698
6,868
fix
6.00
10
OTP_HUF_2025/12
30/08/2024
30/08/2025
4,532
4,618
fix
5.50
11
OTP_HUF_2025/13
27/09/2024
27/09/2025
5,162
5,239
fix
5.50
Subtotal
63,463
65,777
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
623
NOTE 21:
LIABILITIES FROM ISSUED SECURITIES (in HUF mn) [continued]
Issued securities denominated in HUF as at 31 December 2024 (in HUF mn) [continued]
Name
Date of issue
Maturity
Nominal
value
Amortized
cost
Interest conditions
Hedged
(in HUF mn)
(in HUF mn)
(actual interest
rate in % p.a.)
12
OTP_HUF_2025/14
31/10/2024
31/10/2025
5,826
5,883
fix
5.50
13
OTP_HUF_2025/15
29/11/2024
29/11/2025
3,243
3,260
fix
5.50
14
OTP_HUF_2025/16
18/12/2024
18/12/2025
7,324
7,343
fix
6.00
15
OTP_HUF_26/1
22/12/2022
05/01/2026
10,228
12,674
fix
12.00
hedged
16
OTP_HUF_2026/2
15/12/2023
15/12/2026
620
622
fix
7.40
17
OTP_TBSZ_HUF_2028/1
13/10/2023
15/12/2028
155
156
fix
6.88
18
OJB2025/II
03/02/2020
26/11/2025
22,550
21,315
fix
1.50
partly hedged
19
OJB2027/I
23/07/2020
27/10/2027
76,850
67,875
fix
1.25
20
OJB2029/A
25/07/2022
24/05/2029
72,303
72,349
floating
6.75
21
OJB2029_B
10/04/2024
20/06/2029
60,037
60,170
floating
6.75
22
OJB2031/I
18/08/2021
22/10/2031
82,000
63,713
fix
2.50
23
OJB2032/A
20/09/2023
24/11/2032
25,000
24,995
floating
6.75
24
Other
204
204
Total issued securities in HUF
429,803
406,336
Issued securities denominated in foreign currency as at 31 December 2024
Name
Date of
issue
Maturity
Type of
FX
Nominal value
Amortized cost
Interest
conditions
(FX mn)
(HUF mn)
(FX mn)
(HUF mn)
(actual interest
rate in % p.a.)
1
XS2871018136
31/07/2024
31/07/2027
CNY
300
16,176
300
16,443
fix
4.10
2
XS2560693181
01/12/2022
04/03/2026
EUR
648
265,938
649
282,387
fix
7.35
3
XS2642536671
27/06/2023
27/06/2026
EUR
110
45,110
110
46,871
fix
7.50
4
XS2698603326
05/10/2023
05/10/2027
EUR
649
266,321
664
276,203
fix
6.13
5
XS2737630314
22/12/2023
22/06/2026
EUR
75
30,757
75
31,845
fix
6.10
6
XS2754491640
31/01/2024
31/01/2029
EUR
598
245,420
607
260,169
fix
5.00
7
XS2838495542
12/06/2024
12/06/2028
EUR
698
286,058
710
298,861
fix
4.75
8
XS2917468618
16/10/2024
16/10/2030
EUR
499
204,680
500
206,807
fix
4.25
9
XS2703264635
13/10/2023
13/10/2026
RON
170
14,011
170
14,279
floating
8.10
10
XS2536446649
29/09/2022
29/09/2026
USD
60
23,616
60
24,063
fix
7.25
11
XS2626773381
25/05/2023
25/05/2027
USD
500
196,689
497
197,046
fix
7.50
12
AL0022100187
26/12/2023
26/12/2030
EUR
7
3,059
7
3,067
fix
4.50
13
AL0022100302
20/11/2024
20/11/2031
EUR
3
1,386
3
1,385
fix
4.50
14
SI0022104176
25/05/2021
25/05/2027
EUR
176
72,053
170
69,557
fix
1.63
15
XS2639027346
29/06/2023
29/06/2026
EUR
400
164,036
416
170,702
fix
7.38
16
XS2793675534
03/04/2024
03/04/2028
EUR
300
123,027
314
128,570
fix
4.75
17
XS2260457754
19/11/2020
19/11/2025
USD
300
118,080
294
115,787
fix
5.50
18
XS2808393370
22/04/2024
27/04/2027
UZS
1,370,220
41,792
1,401,497
42,746
fix
20.50
Total issued securities in FX
2,118,209
2,186,788
Total issued securities
2,593,124
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
624
NOTE 21:
LIABILITIES FROM ISSUED SECURITIES (in HUF mn) [continued]
Issued securities denominated in HUF as at 31 December 2023 (in HUF mn)
Name
Date of issue
Maturity
Nominal
value
Amortized
cost
Interest conditions
Hedged
(in HUF mn)
(in HUF mn)
(actual interest
rate in % p.a.)
1
OTPX2024A
18/06/2014
21/06/2024
241
283
indexed
1.30
hedged
2
OTPX2024B
10/10/2014
16/10/2024
295
339
indexed
0.70
hedged
3
OTPX2024C
15/12/2014
20/12/2024
242
275
indexed
0.60
hedged
4
OTP_HUF_24/1
17/02/2023
17/02/2024
26,079
28,593
fix
11.00
5
OTP_HUF_24/2
10/03/2023
10/03/2024
22,977
25,048
fix
11.00
6
OTP_HUF_24/3
31/03/2023
31/03/2024
17,015
18,441
fix
11.00
7
OTP_HUF_24/4
21/04/2023
21/04/2024
14,698
15,837
fix
11.00
8
OTP_HUF_24/5
12/05/2023
12/05/2024
13,946
14,937
fix
11.00
9
OTP_HUF_24/6
02/06/2023
02/06/2024
16,722
17,806
fix
11.00
10
OTP_HUF_24/7
23/06/2023
23/06/2024
11,232
11,859
fix
10.50
11
OTP_HUF_24/8
30/06/2023
30/06/2024
3,730
3,931
fix
10.50
12
OTP_HUF_24/9
28/07/2023
28/07/2024
4,173
4,364
fix
10.50
13
OTP_HUF_24/10
07/08/2023
07/08/2024
1,431
1,490
fix
10.00
14
OTP_HUF_24/11
01/09/2023
01/09/2024
2,655
2,743
fix
9.75
15
OTP_HUF_24/12
25/09/2023
25/09/2024
2,777
2,845
fix
9.00
16
OTP_HUF_24/13
20/10/2023
20/10/2024
3,494
3,557
fix
8.75
17
OTP_HUF_24/14
17/11/2023
17/11/2024
3,509
3,547
fix
8.50
18
OTP_HUF_24/15
20/12/2023
20/12/2024
2,994
3,004
fix
8.00
19
OTP_HUF_25/1
18/11/2022
18/11/2025
25,563
27,042
fix
15.00
hedged
20
OTP_HUF_25/2
30/06/2023
30/06/2025
5,116
5,431
fix
12.00
21
OTP_HUF_26/1
22/12/2022
05/01/2026
10,228
11,856
fix
12.00
hedged
22
OTP_HUF_26/2
15/12/2023
15/12/2026
647
649
fix
7.40
23
OTP_TBSZ_HUF_2028/1
13/10/2023
15/12/2028
155
159
fix
12.00
24
OJB2024_A
17/09/2018
20/05/2024
59,999
59,999
floating
11.32
25
OJB2024_C
24/02/2020
24/10/2024
80,000
79,818
floating
10.90
26
OJB2024_II
10/10/2018
24/10/2024
96,800
92,101
fix
2.50
27
OJB2025_II
03/02/2020
26/11/2025
22,550
21,140
fix
1.50
hedged
28
OJB2027_I
23/07/2020
27/10/2027
76,850
67,619
fix
1.25
29
OJB2029_A
25/07/2022
24/05/2029
66,520
66,360
floating
10.85
30
OJB2031_I
18/08/2021
22/10/2031
82,000
66,867
fix
2.50
31
OJB2032_A
20/09/2023
24/11/2032
25,000
24,916
floating
10.85
32
Other
206
206
Total issued securities in HUF
699,844
683,062
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
625
NOTE 21:
LIABILITIES FROM ISSUED SECURITIES (in HUF mn) [continued]
Issued securities denominated in foreign currency as at 31 December 2023
Name
Date of
issue
Maturity
Type of
FX
Nominal value
Amortized cost
Interest conditions
(FX mn)
(HUF mn)
(FX mn)
(HUF mn)
(actual interest rate
in % p.a.)
1
XS2560693181
01/12/2022
04/03/2026
EUR
649
248,497
689
263,732
fix
7.35
2
XS2626773381
25/05/2023
25/05/2027
USD
500
173,152
499
173,011
fix
7.50
3
XS2499691330
13/07/2022
13/07/2025
EUR
400
153,111
410
157,095
fix
5.50
4
XS2642536671
27/06/2023
27/06/2026
EUR
110
42,106
114
43,745
fix
7.50
5
XS2536446649
29/09/2022
29/09/2026
USD
60
20,786
61
21,180
fix
7.25
6
XS2698603326
05/10/2023
05/10/2027
EUR
650
248,725
674
258,006
fix
6.13
7
XS2737630314
22/12/2023
22/06/2026
EUR
75
28,709
75
28,778
fix
6.10
8
XS2703264635
13/10/2023
13/10/2026
RON
170
13,082
173
13,320
floating
8.10
9
SI0022104176
25/05/2021
25/05/2027
EUR
176
67,254
156
59,728
fix
1.63
10
XS2430442868
27/01/2022
27/01/2024
EUR
300
114,834
304
116,407
fix
1.88
11
XS2639027346
29/06/2023
29/06/2026
EUR
400
153,112
416
159,266
fix
7.38
12
XS2260457754
19/11/2020
19/11/2025
USD
300
103,932
285
98,589
fix
5.50
13
XS2331929963
16/04/2021
16/04/2024
UZS
685,065
19,250
698,553
19,629
fix
16.00
Total issued securities in FX
1,386,550
1,412,486
Total issued securities
2,095,548
Hedge accounting of issued bonds
Certain issued structured securities are hedged by the Bank with interest rate swaps (“IRS”) which exchange the fixed
and floating interest rate with the interest rate of the securities between the parties at a notional amount that equals the
nominal amount of the hedged securities. These are considered as fair value hedge relationships as they cover the interest
rate risk arising from the coupons of the hedged securities. OTP Bank does not intend to be exposed to the risk embedded
in the structured bonds, consequently as part of interest rate swap transaction the structured interest payments are swapped
to floating interest rate.
This hedging relationship meets all of the following hedge effectiveness requirements:
•
there is an economic relationship between the hedged item and the hedging instrument
•
the effect of credit risk does not dominate the value changes that result from that economic relationship
•
the hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged item that
the Bank actually hedges and the quantity of the hedging instrument that the Bank actually uses to hedge that
quantity of hedged item
The cash-flows of the fixed rate securities issued by the Bank are exposed to the changes in the HUF/EUR foreign
exchange rate and the volatility of the quoted interest rates of EUR and HUF. The interest rate risk and foreign exchange
risk related to these securities are hedged with EUR and HUF IRS transactions, where the fixed interests were swapped
to payments linked to 3-month HUF BUBOR and EURIBOR, resulting in a decrease in the interest rate and foreign
exchange exposure of issued securities.
Term Note Program in the value of HUF 800 billion for the year of 2023/2024
On 18 April 2023 the Bank initiated term note program in the value of HUF 800 billion with the intention of issuing
registered dematerialized bonds in public. On 7 August 2023, the National Bank of Hungary approved the prospectus
of Term Note Program. The prospectus is valid for 12 months following the disclosure.
The Issuer can initiate to introduce the bonds issued under the program to the Hungarian and to other stock exchanges
without any obligations.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
626
NOTE 21:
LIABILITIES FROM ISSUED SECURITIES (in HUF mn) [continued]
Term Note Program in the value of HUF 800 billion for the year of 2024/2025
On 30 April 2024 the Bank initiated term note program in the value of HUF 800 billion with the intention of issuing
registered dematerialized bonds in public. The NBH approved on 19 July 2024 the prospectus of Term Note Program.
The prospectus is valid for 12 months following the disclosure. At the same time Term Note Program for the year
2023/2024 was closed, which was originally valid till 7 August 2024.
Issuance of Senior Preferred Notes in the aggregate nominal amount of USD 500 million
OTP Bank Plc. has issued notes (ISIN: XS2626773381) on 25 May 2023 as value date in the aggregate nominal amount
of USD 500 million. The notes are rated ’Baa3’ by Moody’s Investor Services Cyprus Ltd., ’BBB-’ by S&P Ratings
Europe Limited and ’BBB+’ by Scope Ratings GmbH. The notes are listed on the Luxembourg Stock Exchange.
Issuance of Senior Non-Preferred Notes in the aggregate nominal amount of EUR 110 million
OTP Bank Plc. has issued notes (ISIN: XS2642536671) on 27 June 2023 as value date in the aggregate nominal amount
of EUR 110 million. The notes are listed on the Luxembourg Stock Exchange.
Issuance of Senior Preferred Notes in the aggregate nominal amount of EUR 650 million
OTP Bank Plc has issued the notes (ISIN: XS2698603326) on 5 October 2023 as value date in the aggregate nominal
amount of EUR 650 million. The notes are rated ’Baa3’ by Moody’s Investor Services Cyprus Ltd. and ’BBB+’ by Scope
Ratings GmbH. The notes are listed on the Luxembourg Stock Exchange.
Issuance of Senior Preferred Notes in the aggregate nominal amount of RON 170 million
OTP Bank Plc has issued the notes (ISIN: XS2703264635) on 13 October 2023 as value date in the aggregate nominal
amount of RON 170 million. The notes are rated ’BBB+’ by Scope Ratings GmbH. The notes are listed on the
Luxembourg Stock Exchange.
Issuance of Senior Non-Preferred Notes in the aggregate nominal amount of EUR 75 million
OTP Bank Plc has issued the notes (ISIN: XS2737630314) on 22 December 2023 as value date in the aggregate nominal
amount of EUR 75 million. The notes are listed on the Luxembourg Stock Exchange.
Issuance of Senior Preferred Notes in the aggregate nominal amount of EUR 600 million
The Bank has issued notes (ISIN: XS2754491640) on 31 January 2024 as value date in the aggregate nominal amount of
EUR 600 million. The notes are rated ’Baa3’ by Moody’s Investor Services Cyprus Ltd. and ’BBB+’ by Scope Ratings
GmbH. The notes are listed on the Luxembourg Stock Exchange.
Issuance of Green Senior Preferred Notes in the aggregate nominal amount of EUR 700 million
The Bank has issued notes (ISIN: XS2838495542) on 12 June 2024 as value date in the aggregate nominal amount of
EUR 700 million. The notes are rated ’BBB-’ by S&P Ratings Europe Limited and ’BBB+’ by Scope Ratings GmbH.
The notes are listed on the Luxembourg Stock Exchange.
Recall of Green Senior Preferred Notes due 2025 issued in amount of EUR 400 million
Notes (XS2499691330) have been redeemed in amount of EUR 400 million on 15 July 2024 and the principal amount,
together with accrued and unpaid interest was paid to the holders of the Notes.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
627
NOTE 21:
LIABILITIES FROM ISSUED SECURITIES (in HUF mn) [continued]
Issuance of Senior Preferred Notes in the aggregate nominal amount of CNY 300 million
The Bank has issued notes (ISIN: XS2871018136) on 31 July 2024 as value date in the aggregate nominal amount of
CNY 300 million. The notes are rated ’BBB+’ by Scope Ratings GmbH. The notes are listed on the Luxembourg Stock
Exchange.
Issuance of Senior Preferred Notes in the aggregate nominal amount of EUR 500 million
The Bank has issued notes (ISIN: XS2917468618) on 16 October 2024 as value date in the aggregate nominal amount of
EUR 500 million. The notes are rated ’Baa3’ by Moody’s Investor Services Cyprus Ltd. and ’BBB+’ by Scope Ratings
GmbH. The notes are listed on the Luxembourg Stock Exchange.
Issuance of Senior Non-Preferred bonds by Banka OTP Albania SHA
On 26 December 2023, Banka OTP Albania issued senior non-preferred bonds in the nominal amount of EUR 7.46 million
with maturity on 26 December 2030. On 20 November 2024, Banka OTP Albania issued senior non-preferred bonds in
the nominal amount of EUR 3.38 million with maturity on 20 November 2031. Both are with fixed rate 4.5%. They are
not listed on the stock exchange.
Issuance of Senior Preferred bonds by OTP banka d.d. (Slovenia)
On 29 June 2023, OTP banka d.d. issued senior preferred bonds NOVAKR 7 06/29/26 in the total nominal amount of
EUR 400 million with maturity 29 June 2026. The bonds are rated Baa2 by Moody's. The bonds are listed on the
Luxembourg Stock Exchange.
On 3 April 2024, OTP banka d.d. issued senior preferred bonds NOVAKR 4 3/4 04/03/28 in the total nominal amount of
EUR 300 million with maturity 3 April 2028 (and call option on 3 April 2027). The bonds are rated Baa2 by Moody's.
The bonds were listed on the Luxembourg Stock Exchange.
Issuance of Senior Non-Preferred bonds by Ipoteka
On 22 April 2024, Ipoteka Bank issued senior non-preferred bonds in the total nominal amount of UZS 1,370,220 million
with maturity on 27 April 2027. The bonds were rated BB- by Fitch and BB- by S&P. The bonds were listed on the
Vienna Stock Exchange.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
628
NOTE 22:
DERIVATIVE FINANCIAL LIABILITIES HELD-FOR-TRADING (in HUF mn)
Negative fair value of derivative financial liabilities held for trading by type of contracts
31/12/2024
31/12/2023
Foreign exchange swaps held for trading
54,715
51,928
Commodity swaps
10,477
31,661
Interest rate swaps held for trading
24,406
29,179
Foreign exchange forward contracts
held-for-trading
8,595
11,061
CCIRS and mark-to-market CCIRS
held for trading
11,627
8,945
Held for trading option contracts
2,106
2,904
Other derivative transactions held for trading1
2,163
4,810
Total
114,089
140,488
1 Other category includes: fx spot, equity swaps, forward rate and forward security agreement, options and index futures.
The table was changed compared to prior year since for year 2023 HUF 214 million related to held-for-trading forward rate agreement and HUF 1
million held-for-trading forward security agreement were reclassified to other category.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
629
NOTE 23:
DERIVATIVE FINANCIAL LIABILITIES DESIGNATED AS HEDGE ACCOUNTING (in HUF
mn)
Negative fair value of derivative financial liabilities designated as hedge accounting by type of contracts
31/12/2024
31/12/2023
CCIRS and mark-to-market CCIRS designated
as fair value hedge
4,280
10,009
Interest rate swaps designated as fair value hedge
10,325
53,939
Interest rate swap designated as macro fair value hedge
-
(49)
Total
14,605
63,899
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
630
NOTE 24:
PROVISIONS AND OTHER LIABILITIES (in HUF mn)
Other liabilities are expected to be recovered or settled no more than twelve months after the reporting period. Besides
the total other liabilities mentioned above, which are expected to be recovered or settled more than twelve months after
the reporting period are the following: accrued contractual liabilities, compulsory pension reserve, loans from government
and liabilities from preferential dividend shares.
31/12/2024
31/12/2023
Other financial liabilities
Liabilities connected to Cafeteria benefits
103,883
92,409
Liabilities from investment services
149,317
47,647
Accrued expenses on other financial liabilities
63,792
66,816
Liabilities from card transactions
56,949
119,984
Accounts payable
99,594
73,350
Liabilities due to short positions
47,157
19,107
Giro clearing accounts
70,773
42,172
Advances received from customers
11,809
15,061
Liabilities from wages and other salary related payments
48,270
40,631
Loans from government
5,511
7,473
Dividend payable
1,518
570
Other financial liabilities
109,356
85,507
Subtotal
767,929
610,727
Other non-financial liabilities
31/12/2024
31/12/2023
Clearing, settlement and pending accounts
84,731
31,143
Liabilities from social security contributions
17,240
16,204
Accrued expenses on other non-financial liabilities
33,173
17,577
Clearing account for advances on housing subsidies
12,333
10,824
Other non-financial liabilities
76,146
59,345
Subtotal
223,623
135,093
Total
991,552
745,820
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
631
NOTE 24:
PROVISIONS AND OTHER LIABILITIES (in HUF mn) [continued]
The provisions are detailed as follows:
31/12/2024
31/12/2023
Commitments and guarantees given
50,477
46,137
Total provision according to IFRS 9
50,477
46,137
Pending legal issues and tax litigation
39,867
39,351
Pensions and other retirement
benefit obligations
10,659
9,336
Other long-term employee benefits
3,126
2,510
Restructuring
10,371
6,206
Other provision1
17,137
17,579
Total provision according to IAS 37
81,160
74,982
Total
131,637
121,119
1The table was changed compared to prior year since for year 2023 HUF 363 million related to CHF loan provision was reclassified to other provision
category.
The movements of provisions according to IFRS 9 can be summarized as follows:
31/12/2024
31/12/2023
Balance as at 1 January
46,137
63,372
Provision for the period
106,372
104,871
Release of provision for the period
(104,001)
(124,741)
Use of provision
(30)
(59)
Change due to acquisition
-
11,439
Liabilities held for sale
-
(4,728)
Foreign currency translation differences
1,999
(4,017)
Closing balance
50,477
46,137
The movements of provisions according to IAS 37 can be summarized as follows:
31/12/2024
31/12/2023
Balance as at 1 January
74,982
68,249
Provision for the period
21,871
30,927
Release of provision for the period
(16,803)
(17,433)
Use of provision
(6,001)
(7,354)
Change due to actuarial gains or losses
related to employee benefits
1,012
350
Change due to acquisition
1,209
11,626
Unwinding of the discounted amount
24
88
Liabilities held for sale
-
(8,430)
Foreign currency translation differences
4,866
(3,041)
Closing balance
81,160
74,982
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
632
NOTE 25:
SUBORDINATED BONDS AND LOANS (in HUF mn)
31/12/2024
31/12/2023
Within one year
In HUF
-
-
In foreign currency
13,360
19,727
13,360
19,727
Over one year
In HUF
-
-
In foreign currency
355,999
542,669
355,999
542,669
Total
369,359
562,396
Types of subordinated bonds and loans are as follows:
31/12/2024
31/12/2023
Debt securities issued
22,243
19,727
Loan received
347,116
542,669
Total
369,359
562,396
Interest rates on subordinated bonds and loans are as follows:
31/12/2024
31/12/2023
Denominated in HUF
-
-
Denominated in foreign currency
0.00% - 8.75%
2.90% - 8.75%
31/12/2024
31/12/2023
Average interest rates on subordinated bonds
and loans denominated in foreign currency
7.28%
6.17%
Subordinated bonds and loans can be detailed as follows:
Type
Nominal value
Date of
issuance
Date of
maturity
Issue
price
Interest conditions
Interest rate
as at 31
December
2024
Subordinated
bond
EUR 229 million
07/11/2006
Perpetual
99.375%
Three-month EURIBOR +
3%, variable after year 10
(payable quarterly)
6.03%
Subordinated
bond
USD 645 million
15/02/2023
15/05/2033
99.417%
Fix 8.75%, annually
8.75%
Subordinated
loan
USD 17 million
05/06/2018
30/06/2025
100.00%
Bullet repayment, once at the
end of the loan agreement
5.00%
Subordinated
loan
UZS 179,948.4
million
30/04/2019
10/11/2028
100.00%
Fix 3.00%, quarterly
3.00%
Subordinated
loan
UZS 42,693.5
million
30/04/2019
10/11/2029
100.00%
Fix 3.00%, quarterly
3.00%
Subordinated
loan
UZS 201,450.1
million
30/04/2019
10/11/2030
100.00%
Fix 3.00%, quarterly
3.00%
Subordinated
loan
USD 25 million
30/03/2023
31/03/2030
100.00%
Fix 0.00%, quarterly
0.00%
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
633
NOTE 26:
SHARE CAPITAL (in HUF mn)
31/12/2024
31/12/2023
Authorized, issued and fully paid:
Ordinary shares
28,000
28,000
Share capital is the portion of the Bank’s equity that has been obtained by the issue of shares in the corporation to a
shareholder, usually for cash.
The nominal value of the shares is HUF 100 per shares. All of the shares are ordinary shares representing the same rights
to the shareholders. Furthermore, there are no restrictions on the distribution of dividends and the repayment of capital.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
634
NOTE 27:
RETAINED EARNINGS AND RESERVES (in HUF mn)
In 2024 dividend of HUF 150,000 million was paid out from the profit of the year 2023, which meant HUF 535.71
dividend per share payable to the shareholders. In 2025 dividend of HUF 270,000 million are expected to be proposed by
the Management from the profit of the year 2024, which means HUF 964.28 dividend per share payable to the
shareholders.
The retained earnings and reserves according to IFRS contains the retained earnings (HUF 639,228 million and HUF
459,037 million) and reserves (HUF 4,688,424 million and HUF 3,720,285 million) as at 31 December 2024 and 2023,
respectively. The reserves include mainly the option reserve, other reserves, the fair value adjustment of financial
instruments at fair value through other comprehensive income, share-based payment reserve, fair value of hedge
transactions, changes in equity accumulated in the previous years at the subsidiaries and due to consolidation as well as
translation of foreign exchange differences.
In the Consolidated Financial Statements, the Group recognizes the non-monetary items at historical cost. The difference
between the historical cost of the non-monetary items in HUF amount and the translated foreign currencies into the
presentation currency using the exchange rate at the balance sheet date, is presented in the shareholders’ equity as a
translation difference. The accumulated amounts of exchange differences were HUF 232,227 million and HUF 37,600
million as at 31 December 2024 and 2023, respectively.
Retained earnings
Profit of previous years generated by the Group that are not distributed to shareholders as dividends.
Other reserves
The other reserves contain separated reserves due to statutory provisions.
Option reserve
OTP Bank Plc and MOL Plc entered into a share swap agreement in 16 April 2009, whereby OTP has changed 24,000,000
OTP ordinary shares for 5,010,501 „A series” MOL shares. The amended final maturity of the share swap agreement is
11 July 2027, until which any party can initiate cash or physical settlement of the transaction.
Option reserve represents the written put option over OTP ordinary shares that are deducted from equity at the date of
OTP-MOL share swap transaction.
Share-based payment reserve
Share-based payment reserve represents the increase in the equity due to the goods or services were received by the Bank
in an equity-settled share-based payment transaction, valued at the fair value of the goods or services received (see details
in Note 40).
Other comprehensive income
Other comprehensive income comprises items of income and expense (including reclassification adjustments) that are not
recognized in profit or loss as required or permitted by other IFRSs.
Net investment hedge in foreign operations
Reserve presented as net investment hedge in foreign operations in the shareholders’ equity is related to OTP Luxembourg
S.à r.l., OTP banka d.d. (Croatia) and Crnogorska komercijalna banka a.d.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
635
NOTE 27:
RETAINED EARNINGS AND RESERVES (in HUF mn) [continued]
Changes in equity accumulated in the previous year at the subsidiaries and due to consolidation
The accumulated changes at the subsidiaries contain the accumulated gains and losses of the subsidiaries from the first
day when they were included in the consolidation process. The changes due to consolidation contain the effect on the
result of the eliminations in the consolidation process of the previous years.
31/12/2024
31/12/2023
Retained earnings
639,228
459,037
Capital reserve
52
52
Option reserve
(55,468)
(55,468)
Other reserves
273,280
197,294
Actuarial loss related to employee defined benefits
(779)
144
Fair value of financial instruments measured
at fair value through other comprehensive income
14,559
(33,229)
Share-based payment reserve
56,813
52,402
Net investment hedge in foreign operations
(57,423)
(30,113)
Profit after income tax
1,071,913
988,658
Changes in equity accumulated in the previous
year at the subsidiaries and due to consolidation
3,153,250
2,562,945
Foreign currency translation differences
232,227
37,600
Retained earnings and other reserves 1
5,327,652
4,179,322
1See more details in the Consolidated Statement of Comprehensive Income and in the Consolidated statement of Changes in equity on page 8 and 9.
Fair value adjustment of securities at fair value
through other comprehensive income
31/12/2024
31/12/2023
Balance as at 1 January
(86,397)
(164,432)
Change of fair value
5,237
89,047
Deferred tax related to change of fair value
2,921
(12,725)
Transfer to profit or loss due to derecognition
342
368
Deferred tax related to transfer to proft or loss
58
(54)
Disposal due to asset held-for-sale
817
-
Foreign currency translation difference
(2,308)
1,399
Closing balance
(79,330)
(86,397)
Expected credit loss on securities at fair value
through other comprehensive income
31/12/2024
31/12/2023
Balance as at 1 January
34,573
39,625
Increase of loss allowance
31,706
8,491
Release of loss allowance
(1,858)
(8,137)
Decrease due to sale, derecognition
-
(2,527)
Deferred tax effect
(7,160)
-
Disposal due to asset held-for-sale
(139)
-
Foreign currency translation difference
3,768
(2,879)
Closing balance
60,890
34,573
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
636
NOTE 27:
RETAINED EARNINGS AND RESERVES (in HUF mn) [continued]
Fair value changes of equity instruments
at fair value through other comprehensive income
31/12/2024
31/12/2023
Balance as at 1 January
18,595
17,131
Change of fair value
16,736
6,672
Deferred tax related to change of fair value
(2,115)
(947)
Transfer to retained earnings due to derecognition
-
(3,978)
Disposal due to asset held-for-sale
(740)
-
Foreign currency translation difference
523
(283)
Closing balance
32,999
18,595
Net investment hedge in foreign operations
31/12/2024
31/12/2023
Balance as at 1 January
(30,113)
(27,405)
Change of fair value on hedging item
(27,310)
(2,708)
Closing balance
(57,423)
(30,113)
Actuarial loss related to defined employee benefits
31/12/2024
31/12/2023
Balance as at 1 January
144
544
Change of actuarial loss related to
employee benefits
(1,012)
(350)
Deferred tax related to change of actuarial loss related to
employee benefits
26
(8)
Foreign currency translation difference
63
(42)
Closing balance
(779)
144
Foreign currency translation difference
31/12/2024
31/12/2023
Balance as at 1 January
37,600
237,853
Change of foreign currency translation
194,627
(200,253)
Closing balance
232,227
37,600
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
637
NOTE 28:
TREASURY SHARES (in HUF mn)
31/12/2024
31/12/2023
Nominal value (Ordinary shares)
1,901
1,267
Carrying value at acquisition cost
245,319
120,489
The changes in the carrying value of treasury shares are due to repurchase and sale transactions on market authorised by
the General Assembly.
Change in number of shares:
31/12/2024
31/12/2023
Number of shares as at 1 January
12,666,770
11,318,096
Additions
8,775,919
3,948,338
Disposals
(2,431,370)
(2,599,664)
Closing number of shares
19,011,319
12,666,770
Change in carrying value:
31/12/2024
31/12/2023
Balance as at 1 January
120,489
106,862
Additions
153,105
39,818
Disposals
(28,275)
(26,191)
Closing balance
245,319
120,489
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
638
NOTE 29:
NON-CONTROLLING INTEREST (in HUF mn)
31/12/2024
31/12/2023
Balance as at 1 January
7,960
5,959
Increase due to business combination
-
3,149
Non-controlling interest included in net profit for the period
4,227
1,801
Dividend paid to non-controlling interest
(2,643)
(2,118)
Purchase of non-controlling interest
(350)
(159)
Foreign currency translation difference
486
(672)
Closing balance
9,680
7,960
The non-controlling interest is not significant in respect of the whole OTP Group.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
639
NOTE 30:
INTEREST INCOME, INCOME SIMILAR TO INTEREST INCOME AND EXPENSE (in HUF
mn)
Year ended 31
December 2024
Year ended 31
December 2023
Interest income calculated using
the effective interest method from / on
loans
1,584,771
1,348,528
securities at amortized cost
352,733
242,256
finance lease receivables
110,830
100,749
securities at fair value through other
comprehensive income
60,806
55,320
banks and balances with the National Banks
171,238
354,208
placements with other banks
240,932
195,921
liabilities (negative interest expense)
492
684
repo receivables
20,336
17,011
Subtotal
2,542,138
2,314,677
Income similar to interest income from
swap deals related to credit institutions
385,122
390,648
loans mandatorily at fair value through profit or loss
99,559
92,117
swap deals related to clients
40,359
138,567
rental income
13,479
12,255
non-trading instruments mandatorily at fair value
through profit or loss
1,465
-
Subtotal
539,984
633,587
Total interest income and incomes similar
to interest income
3,082,122
2,948,264
Year ended 31
December 2024
Year ended 31
December 2023
Interest expense due to / from / on
swaps related to banks, National Governments
and to deposits from the National Banks
412,274
512,481
deposits from customers
460,991
481,807
swaps related to deposits from customers
120,223
278,907
banks, National Governments and on deposits
from the National Banks
123,373
76,465
issued securities
157,008
116,628
subordinated and supplementary bonds and loans
35,471
32,565
financial assets (negative interest income)
4,719
11,443
depreciation of assets subject to operating lease
and investment properties
6,427
5,313
leases
3,557
2,970
repo liabilities
11,049
40,398
other
1,690
2,581
Total interest expense
1,336,782
1,561,558
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
640
NOTE 31:
LOSS ALLOWANCES / IMPAIRMENT / PROVISIONS (in HUF mn)
Year ended 31
December 2024
Year ended 31
December 2023
Loss allowance on loans
Loss allowance for the period
723,674
714,784
Release of loss allowance
(589,629)
(561,813)
from this: impairment gain
8,956
10,336
Income from loan recoveries
(57,110)
(39,948)
Income from recoveries exceeding the gross loans
(8,956)
(11,015)
Impairment gain
(33,939)
(20,022)
Income from provisions on loans before OTP acquisition
(978)
(816)
Income from recoveries of written-off, but
legally existing loans
(13,237)
(8,095)
Change in the fair value attributable to changes in the
credit risk of loans mandatorily measured
at fair value through profit of loss
(5,504)
91
Loss allowance on finance lease
30,347
35,494
Release of loss allowance on finance lease
(36,865)
(37,150)
64,913
111,458
Loss allowance / (Release of loss allowance) on
due from banks, balances with National Banks
Loss allowance for the period
5,072
11,859
Release of loss allowance
(4,332)
(12,919)
740
(1,060)
placements
Loss allowance for the period
7,207
3,425
Release of loss allowance
(5,904)
(4,880)
1,303
(1,455)
repo receivables
Loss allowance for the period
1,839
5,002
Release of loss allowance
(1,914)
(4,631)
(75)
371
Subtotal1
1,968
(2,144)
Total
66,881
109,314
1The tables for allowances on due from banks, balances with National Banks, placements and repo receivables were changed compared to prior year
when they were presented altogether. In the current year they are separated, figures for year 2023 remained the same.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
641
NOTE 31:
LOSS ALLOWANCES / IMPAIRMENT / PROVISIONS (in HUF mn) [continued]
Loss allowance / (Release of loss allowance) on
Year ended 31
December 2024
Year ended 31
December 2023
securities at fair value through other comprehensive
income
Loss allowance for the period
31,706
8,491
Release of loss allowance
(1,858)
(8,137)
29,848
354
securities at amortized cost
Loss allowance for the period
25,766
10,875
Release of loss allowance
(15,707)
(20,060)
10,059
(9,185)
Subtotal
39,907
(8,831)
Impairment / (Release of impairment) on
intangible, tangible assets subject to operating lease
Impairment for the period
105
30
Release of impairment
(99)
-
6
30
investment properties
Impairment for the period
7
32
Release of impairment
(30)
(1,394)
(23)
(1,362)
Subtotal
(17)
(1,332)
Provision on / (Release of provision)
commitments and guarantees given
Provision for the period
106,372
104,871
Release of provision
(104,001)
(124,741)
Subtotal
2,371
(19,870)
Total loss allowances, impairment and provisions
109,142
79,281
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
642
NOTE 32:
NET PROFIT FROM FEES AND COMMISSIONS (in HUF mn)
Income from fees and commissions
Year ended 31
December 2024
Year ended 31
December 2023
Fees and commissions related to lending1
54,057
45,741
Deposit and account maintenance
fees and commissions
354,823
291,530
Fees and commissions related to
the issued bank cards
198,040
164,161
Currency exchange gains and losses
177,228
120,693
Fees related to cash withdrawal
72,890
68,826
Fees and commissions related
to security trading
46,227
35,545
Fees and commissions related to fund management
59,251
47,445
Insurance fee income
25,701
21,727
Other
57,770
65,641
Fees and commissions from contracts with customers
991,930
815,568
Total
1,045,987
861,309
1 Fees and commissions related to lending aren’t included in the effective interest rate calculation due to their nature..
Expense from fees and commissions
Year ended 31
December 2024
Year ended 31
December 2023
Fees and commissions related to issued bank cards
84,357
66,747
Interchange fees
44,349
36,386
Fees and commissions paid on loans
12,477
9,638
Fees and commissions related to deposits
11,644
10,501
Cash withdrawal transaction fees
8,607
7,824
Fees and commissions related to security trading
7,344
7,004
Insurance fees
2,117
1,737
Fees and commissions related to collection of loans
665
705
Postal fees
4,706
4,965
Money market transaction fees and commissions
1,128
739
Other agent fee
2,014
1,684
Other
23,924
21,386
Total
203,332
169,316
Net profit from fees and commissions
842,655
691,993
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
643
NOTE 33:
GAINS AND LOSSES BY TRANSACTIONS (in HUF mn)
Gains and losses by transactions
Year ended 31
December 2024
Year ended 31
December 2023
Gain by transactions
6,473
4,972
Loss by transactions
(11,215)
(3,629)
(Loss) / Gain from derecognition of loans, placements, finance
lease
(4,742)
1,343
Gain by transactions
826
1,110
Loss by transactions
(10,493)
(19,635)
Loss from derecognition of securities
and other receivables at amortized cost
(9,667)
(18,525)
Loss from derecognition of financial
assets at amortized cost
(14,409)
(17,182)
Derecognition of financial assets is mainly related to sale transactions both in case of securities and loans due to better
investment options related to short-term opportunities on the market.
Foreign exchange result consists of revaluation difference from converting assets and liabilities in foreign currencies into
the presentation currency of the consolidation financial statements.
Gains and losses by transactions
Year ended 31
December 2024
Year ended 31
December 2023
Gain by transactions
17,879
18,497
Loss by transactions
(5,761)
(10,784)
Fx gain on securities at fair value through profit or loss
12,118
7,713
Gain by transactions
10
1,478
Loss by transactions
(325)
(687)
Fx (loss) / gain on derecognition of investment
in subsidiaries, associates
(315)
791
Gain by transactions
97
1,175
Loss by transactions
(1,574)
(2,396)
Fx loss on securities at fair value
through other comprehensive income
(1,477)
(1,221)
Gain on securities, net
10,326
7,283
Gains and losses by transactions
Year ended 31
December 2024
Year ended 31
December 2023
Gain by transactions
8,607
8,875
Loss by transactions
(2,564)
(635)
Gain on non-trading securities mandatorily
at fair value through profit or loss
6,043
8,240
Gain by transactions
75,057
115,152
Loss by transactions
(51,726)
(21,571)
Gain on loans mandatorily at fair value through profit
or loss (adjustment resulting from change in market factors)
23,331
93,581
Gain by transactions
2,236
766
Loss by transactions
(4,236)
(7,974)
Loss on financial assets and liabilities
designated at fair value through profit or loss
(2,000)
(7,208)
Fair value adjustment on financial instruments measured
at fair value through profit or loss
27,374
94,613
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
644
NOTE 33:
GAINS AND LOSSES BY TRANSACTIONS (in HUF mn) [continued]
Gains and losses by transactions
Year ended 31
December 2024
Year ended 31
December 2023
Gain by transactions
90,509
85,387
Loss by transactions
(79,333)
(104,061)
Gain / (Loss) from fx swap, swap and option deals
11,176
(18,674)
Gain by transactions
5,593
6,569
Loss by transactions
(5,373)
(6,554)
Gain from option deals
220
15
Gain by transactions
382,306
501,377
Loss by transactions
(381,537)
(497,715)
Gain from commodities deals
769
3,662
Gain by transactions
473
2,633
Loss by transactions
(634)
(396)
(Loss) / Gain from futures deals
(161)
2,237
Net results on derivative instruments and hedge relationships
12,004
(12,760)
Gains and losses attributable to the hedged risk on the hedged item and on the hedging instruments and ineffectiveness in
case of fair value hedge on amortised cost line items are as follows:
Fair value hedge
Year ended 31
December 2024
Year ended 31
December 2023
Hedged items
(28,937)
(15,433)
Hedging instrument
38,549
2,855
Hedge ineffectiveness
9,612
(12,578)
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
645
NOTE 34:
OTHER OPERATING INCOME AND EXPENSES AND OTHER ADMINISTRATIVE
EXPENSES (in HUF mn)
Other operating income
Year ended 31
December 2024
Year ended 31
December 2023
Income from agricultural activity
86,486
72,323
Income from tourism activity
4,042
3,911
Gains on transactions related to property activities
15,918
7,194
Rental income
2,607
2,780
Income from computer programming
1,962
1,563
Fair value adjustment of biological assets and agricultural produce
(2,343)
(4,874)
Income from written-of receivable
4,996
4,163
Income from air passenger transport
2,151
1,958
Gains on transactions related to insurance activity
2,696
1,915
Non-repayable assets received
1,039
531
Negative goodwill due to acquisition
-
198,361
Other income from non-financial activities
28,341
34,441
Total
147,895
324,266
Other operating expenses
Year ended 31
December 2024
Year ended 31
December 2023
Expense related to agricultural activity
65,461
47,780
Provision for off-balance sheet
commitments and contingent liabilities
5,068
13,494
Financial support for sport association and
organization of public utility
14,492
14,475
Loss allowance and loan losses on
other financial assets
9,948
8,919
Impairment / (Release of impairment) on investments1
957
(21)
Non-repayable assets contributed
2,204
885
Impairment of right-of-use assets
1,833
-
Impairment on tangible and intangible assets
5,496
5,620
Impairment and loan losses on other non-financial assets
and assets measured under IAS 2
3,218
1,312
Operating expenses of assets subject to
operating lease and investment property
1,114
1,252
Other
17,383
16,854
Other expenses from non-financial activities
7,177
6,711
Other costs
10,206
10,143
Total
127,174
110,570
1 See details in Note 12.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
646
NOTE 34:
OTHER OPERATING INCOME AND EXPENSES AND OTHER ADMINISTRATIVE
EXPENSES (in HUF mn) [continued]
Other administrative expenses
Year ended 31
December 2024
Year ended 31
December 2023
Personnel expenses
Wages
426,083
367,910
Taxes related to personnel expenses
69,612
58,267
Other personnel expenses
54,480
52,519
Subtotal
550,175
478,696
Depreciation, amortization of tangible, intangible assets,
right-of-use assets 2
134,293
111,996
Other administrative expenses
Taxes, other than income tax 3
171,961
165,632
Services
202,510
182,393
Professional fees
34,131
27,935
Fees payable to authorities and other fees
57,542
58,949
Advertising
38,835
26,067
Administration expenses
16,792
16,685
Rental fees
6,535
5,984
Subtotal
528,306
483,645
Total
1,212,774
1,074,337
2 See details in Note 13 and Note 36.
3 Special tax of financial institutions was paid by the Group in the amount of HUF 39,711 million for the year ended 31 December 2024 and HUF
56,572 million for the year ended 31 December 2023, recognized as an expense thus decreased the corporate tax base. For the year ended 31 December
2024 financial transaction duty was paid by the Bank in the amount of HUF 122,434 million while for the year ended 31 December 2023 the same duty
was HUF 97,704 million.
Ernst & Young Audit Ltd.
Year ended 31
December 2024
Year ended 31
December 2023
In thousand EUR
OTP – annual audit – separate financial statements
600
573
OTP – annual audit – consolidated financial statements
967
923
Other audit services based on statutory provisions to
OTP Group members
1,477
1,184
Other services providing assurance
3,231
1,088
Other non-audit services
662
550
Total
6,937
4,318
Ernst & Young Network
Year ended 31
December 2024
Year ended 31
December 2023
In thousand EUR
Audit based on statutory provisions
3,214
3,648
Other services providing assurance
-
-
Tax consulting services
205
88
Other non-audit services
196
945
Total
3,615
4,681
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
647
NOTE 35:
INCOME TAXES (in HUF mn)
The Group is presently liable for income tax at rates between 9% and 35% of taxable income.
Deferred tax is calculated at the income tax rate of 9% in Hungary and Montenegro, 10% in Bulgaria, 12% in Moldova,
12.5% in Cyprus, 15% in Serbia and Albania, 18% in Croatia and Ukraine, 20% in Russia and Uzbekistan, 22% in
Slovenia, 25.8% in the Netherlands and 35% in Malta.
The breakdown of the income tax expense is:
31/12/2024
31/12/2023
Current tax expense
259,188
185,055
Deferred tax expense
(5,748)
4,423
Total
253,440
189,478
A reconciliation of the net deferred tax asset/liability is as follows:
31/12/2024
31/12/2023
Balance as at 1 January
27,028
35,327
Deferred tax income / (expense) in profit or loss
5,748
(4,423)
Deferred tax liability related to items
recognized directly in equity and in Comprehensive Income
(8,673)
(10,072)
Due to acquisition of subsidiary
(80)
12,034
Assets held for sale
-
(394)
Foreign currency translation difference
(77)
(5,444)
Closing balance
23,946
27,028
A breakdown of the deferred tax assets are as follows:
31/12/2024
31/12/2023
Loss allowance on granted loans
27,657
46,155
Provision for off-balance sheet commitments and
contingent liabilities, derivative financial instruments
6,226
5,145
Securities at amortized cost
949
589
Difference in depreciation of tangible assets,
tangible assets subject to operating lease
1,679
1,377
Fair value adjustment of non-trading instruments
mandatorily at fair value though profit or loss
1,064
92
Fair value adjustment of derivative financial instruments
9,036
6,904
Provision on other financial, non-financial liabilities
1,195
1,574
Difference in accounting for leases
-
12
Fair value adjustment of securities at fair value
through other comprehensive income
2,856
2,824
Loss allowance / impairment on other
financial, non-financial assets
9,558
2,457
Tax accrual caused by negative taxable income
30,189
24,511
Difference in depreciation of right-of-use assets
244
189
Loss allowance on investment
113
74
Repurchase agreement and security lending
1
-
Cash, amounts due from banks, balances with the National Banks
interbank placements and receivables
192
90
Fair value adjustment of securities at fair value
through profit or loss
-
2,630
Difference in accounting for investment properties
155
7
Issued securities
1,140
38
Amounts unenforceable by tax law
-
43
Other
7,421
1,204
Deferred tax asset
99,675
95,915
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
648
NOTE 35:
INCOME TAXES (in HUF mn) [continued]
A breakdown of the deferred tax liabilities are as follows:
31/12/2024
31/12/2023
Difference in depreciation of tangible assets
(16,042)
(10,873)
Fair value adjustment of securities at fair value
through other comprehensive income
(15,089)
(5,189)
Fair value adjustment of securities at fair value
through profit or loss
(2,376)
(2)
Loss allowance on investment
(1,751)
(1,673)
Fair value adjustment of non-trading instruments
mandatorily at fair value though profit or loss
(1,374)
(312)
Securities at amortized cost
(3,742)
(3,580)
Provision for off-balance sheet commitments
and contingent liabilities, derivative financial instruments
(531)
(649)
Loss allowance on granted loans
(2,462)
(1,487)
Cash, amounts due from banks, balances with the National Banks
interbank placements and receivables
(1,478)
(1,196)
Unused tax allowance
-
(1)
Loss allowance / impairment on other
financial, non-financial assets
(1,883)
(11,011)
Repurchase agreement and security lending
(13)
(36)
Provision on other financial, non-financial liabilities
(2,225)
(917)
Difference in accounting for investment properties
(2,442)
(748)
Issued securities
-
(298)
Difference in accounting for leases
-
(1,330)
Difference in depreciation of right-of-use assets
(374)
(5)
Other
(23,947)
(29,580)
Deferred tax liabilities
(75,729)
(68,887)
31/12/2024
31/12/2023
Net deferred tax asset
23,946
27,028
(amount presented in the
consolidated statement of financial position)
Deferred tax assets
56,583
55,691
Deferred tax liabilities
(32,637)
(28,663)
Among deferred tax assets the tax accruals are included the following accruals by entities:
Tax accrual caused by negative
31/12/2024
31/12/2023
Date until
taxable income
it can be used
Merkantil Lease Ltd.
25
-
31 December 2026
Merkantil Lease Ltd.
78
-
31 December 2027
Merkantil Rental Ltd.
94
-
31 December 2028
OTP Real Estate Leasing Ltd.
14
102
31 December 2025
OTP Real Estate Leasing Ltd.
14
-
31 December 2026
OTP Real Estate Leasing Ltd.
15
-
31 December 2027
OTP Real Estate Leasing Ltd.
15
-
31 December 2028
OTP Real Estate Leasing Ltd.
15
-
31 December 2029
OTP Real Estate Leasing Ltd.
15
-
31 December 2030
OTP Real Estate Leasing Ltd.
15
-
31 December 2031
OTP Real Estate Leasing Ltd.
15
-
31 December 2032
Nagisz Ltd.
9
56
31 December 2030
OTP banka d.d. (Slovenia)
29,865
24,353
31 December 2029
30,189
24,511
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
649
NOTE 35:
INCOME TAXES (in HUF mn) [continued]
Residual tax loss for which the OTB banka d.d. Slovenia has not recorded deferred tax assets amounts to HUF 334,621
million and HUF 409,628 million, so the unrecognized deferred tax assets amount to HUF 73,617 million and HUF 90,118
million as at 31 December 2024 and 2023, respectively. Tax losses could be carried forward indefinitely until 2024 and
can be carried forward for five years from 2024 in accordance with the Slovenian Corporate Income Tax Act.
A reconciliation of the income tax income / expense is as follows:
31/12/2024
31/12/2023
Profit before income tax
1,309,824
1,201,183
Income tax expense at statutory tax rates
218,249
174,872
Income tax adjustments due to permanent
differences are as follows:
Deferred use of tax allowance
(26)
-
Share-based payment and its tax effect of transaction costs
recognized directly in shareholders' equity
408
312
Goodwill / negative goodwill correction by local law
307
-
Reversal of statutory general provision
(7)
(9)
Tax effect on discontinued operation
1,778
-
Business tax and innovation contribution
30,944
27,418
Foreign withholding tax
21,040
7,218
Global minimum tax
11,076
-
Utilization of tax loss
(14,357)
(9,073)
Amounts unenforceable by tax law
173
55
Use of tax allowance in the current year
(1,276)
989
Other
(14,869)
(12,304)
Total income tax expense
253,440
189,478
Effective tax rate
19.35%
15.77%
31/12/2024
31/12/2023
Net current tax liability
(69,727)
(62,175)
(amount presented in the consolidated statement
of financial position)
Current income tax receivables
7,060
7,773
Current income tax payable
(76,787)
(69,948)
Global minimum tax
The global minimum tax legislation has been enacted in certain jurisdictions the Group operates in, mainly in the EU
Member States. The Group is in scope of the global minimum tax legislation. The legislation has been in effect for the
Group’s financial year beginning 1 January 2024 and introduced a minimum rate of effective taxation of 15%.
From an accounting perspective, it is unclear if the global minimum tax rules create additional temporary differences,
whether to remeasure deferred taxes for the global minimum tax rules and which tax rate to use to measure deferred taxes.
In response to this uncertainty, IAS 12 ‘Income taxes’ has been amended to introduce a mandatory temporary exception
to the requirements of IAS 12. Under the mandatory temporary exception, a company does not recognize or disclose
information about deferred tax assets and liabilities related to the global minimum tax rules. The Group applied the
temporary exception for the year-ended 31 December 2024.
The global minimum tax legislation had been subject to several significant changes since its first publication and changes
are still expected. Based on the most recent information available regarding the financial performance of the group entities
and the prevailing interpretation of the global minimum tax legislation, the calculated amount of taxes imposed under the
global minimum tax legislation is HUF 11,075.6 million in 2024, the overwhelming majority of which relates to profits
earned in Bulgaria. The amount of taxes under the global minimum tax legislation is included in the income tax expense
recognized in the Consolidated statement of profit or loss in 2024.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
650
NOTE 36: LEASES (in HUF mn)
The Group as a lessee:
Right-of-use assets by class of underlying assets as at 31 December 2024:
31/12/2024
Property
Office
equipment
and vehicles
Total
Depreciation expense of right-of-use assets
16,432
1,756
18,188
Additions to right-of-use assets
15,992
558
16,550
Carrying amount of right-of-use assets
at the end of the reporting period
75,744
4,086
79,830
Right-of-use assets by class of underlying assets as at 31 December 2023:
31/12/2023
Property
Office
equipment
and vehicles
Total
Depreciation expense of right-of-use assets
15,094
1,226
16,320
Additions to right-of-use assets
33,091
2,656
35,747
Carrying amount of right-of-use assets
at the end of the reporting period
69,603
5,095
74,698
The total cash outflow for leases was HUF 21,512 million as at 31 December 2024 and HUF 40,746 million as at 31
December 2023.
The Group mainly leases real estates, a significant part of its right-of-use assets are related to office buildings and office
space, a smaller part to branch offices.
Leasing liabilities by maturities:
31/12/2024
31/12/2023
Within one year
15,171
12,425
Over one year
66,938
63,888
Total
82,109
76,313
Lease liabilities by payments:
31/12/2024
31/12/2023
Arising from fixed lease payments
36,587
32,119
Arising from variable lease payments
45,522
44,194
Total
82,109
76,313
On 31 December 2024 and 2023 HUF 1,025 million and HUF 335 million is the lease payment respectively to be paid in
the future due to leases not yet commenced to which the Group is committed. The future lease payment not taken into
account would be HUF 4,862 million as at 31 December 2024 and would have been HUF 2,868 million as at 31 December
2023 arising from extension options if they had been taken into account.
The most typical indexes/rates on which the variable lease payments depend are: Consumer Price Index, Inflation Rate,
EURIBOR.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
651
NOTE 36:
LEASES (in HUF mn) [continued]
The Group as a lessee [continued]:
Amounts recognized in profit and loss
31/12/2024
31/12/2023
Interest expense on lease liabilities
3,557
2,970
Expense relating to short-term leases
3,539
3,753
Expense relating to leases of low value assets
1,949
1,323
Expense relating to variable lease payments not included
in the measurement of lease liabilities
5
4
Income from subleasing right-of-use assets
3
-
Gains or losses arising from sale and leaseback transactions
-
-
The Group as a lessor:
The Group’s leasing activities are most significant in Hungary, Bulgaria, Croatia and Slovenia. The main activity of the
leasing companies is finance leasing. More than half of the underlying assets are passenger cars, besides this the Group
leases mainly agricultural machinery, commercial vehicles, vessels and construction machinery.
The Group manages the risk associated with the rights held in the underlying assets by, inter alia, buy-back agreements,
determining the residual values on level lower than future market values and registering pledge on the underlying asset.
The Group as a lessor, finance lease:
Amounts receivable under finance leases
31/12/2024
31/12/2023
In less than 1 year
601,731
527,875
Between 1 and 2 years
435,784
379,355
Between 2 and 3 years
324,401
280,865
Between 3 and 4 years
216,742
186,890
Between 4 and 5 years
122,533
117,878
More than 5 years
75,526
65,018
Total receivables from undiscounted lease payments
1,776,717
1,557,881
Unguaranteed residual values
-
68
Gross investment in the lease
1,776,717
1,557,949
Less: unearned finance income
(225,383)
(223,217)
Present value of minimum lease payments receivable
1,551,334
1,334,732
Loss allowance
(39,857)
(45,020)
Net investment in the lease
1,511,477
1,289,712
An analysis of the change in the gross values on finance receivables is as follows:
31/12/2024
31/12/2023
Balance as at 1 January
1,334,732
1,351,883
Additions due to new contracts
839,584
678,107
Additions due to interest income and amortized fees
110,054
103,223
Decrease due to write-off
(505)
(115)
Decrease due to repossession of the asset
(3,040)
(11,259)
Decrease due to sale
(5,455)
(2,456)
Assets held for sale
-
(66,511)
Decrease due to early repayment
(94,348)
(78,856)
Decrease due to regular lease payment
(691,799)
(589,498)
Foreign currency translation difference
62,111
(49,786)
Closing balance
1,551,334
1,334,732
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
652
NOTE 36:
LEASES (in HUF mn) [continued]
The Group as a lessor [continued]:
The Group as a lessor, finance lease [continued]:
An analysis of the change in the loss allowance on finance receivables is as follows:
31/12/2024
31/12/2023
Balance as at 1 January
45,020
53,131
Loss allowance for the period
30,347
35,494
Release of loss allowance
(36,865)
(37,150)
Use of loss allowance
(1,279)
(98)
Partial write-off
(128)
(7)
Decrease due to sale
(5)
(545)
Assets held for sale
-
(2,906)
Foreign currency translation difference
2,767
(2,899)
Closing balance
39,857
45,020
Result from finance leases
31/12/2024
31/12/2023
Selling profit or loss
-
-
Finance income on the net investment in the lease
110,830
100,749
Income relating to variable lease payments not included
in the measurement of the net investment in the lease
-
-
The Group as a lessor, operating lease:
Amounts receivable under operating leases
31/12/2024
31/12/2023
In less than 1 year
16,361
13,464
Between 1 and 2 years
11,607
8,540
Between 2 and 3 years
9,126
7,500
Between 3 and 4 years
6,059
6,187
Between 4 and 5 years
2,732
3,703
More than 5 years
2,428
1,786
Total receivables from undiscounted lease payments
48,313
41,180
Result from operating leases
31/12/2024
31/12/2023
Lease income
16,086
15,035
Therein lease income relating to variable lease
payments that do not depend on an index or a rate
-
-
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
653
NOTE 37:
FINANCIAL RISK MANAGEMENT (in HUF mn)
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity
instrument of another entity.
Financial instruments may result in certain risks to the Group. The most significant risks the Group faces include:
37.1. Credit risk
The Group takes on exposure to credit risk which is the risk that a counter-party will be unable to pay amounts in full
when due. The Group structures the levels of credit risk it undertakes by placing limits on the amount of risk accepted in
relation to one borrower, or banks of borrowers, and to geographical areas and loan types. Such risks are monitored on a
periodical basis and are subject to an annual or more frequent review. The exposure to any borrower including banks and
brokers is further restricted by sub-limits covering on and off-balance sheet exposures and daily delivery risk limits in
relation to trading items such as forward foreign exchange contracts. Actual exposures against limits are monitored daily.
Exposure to credit risk is managed through regular analysis of the ability of borrowers and potential borrowers to meet
interest and principal repayment obligations and by changing these lending limits when appropriate. Exposure to credit
risk is managed by obtaining collateral, corporate and personal guarantees.
Defining the expected credit loss on individual and collective basis
On individual basis:
Individually assessed are the non-retail or non- micro- and small enterprise exposure of significant amount on a stand-
alone basis:
• exposure in stage 3,
• exposure in workout management,
• purchased or originated credit-impaired instruments which are in accordance with the conditions mentioned above.
The calculation of impairment must be prepared and approved by the risk management functional areas. The calculation,
all relevant factors (amortized cost, original and current EIR, contracted and expected cash flows (from business and/or
collateral) for the individual periods of the entire lifecycle, other essential information enforced during the valuation) and
the criteria thereof (including the factors underlying the classification as stage 3) must be documented individually.
The expected credit loss of the exposure equals the difference of the items’ AC (gross book value) on the valuation date
and the present value of the receivable's expected cash flows discounted to the valuation date by the exposure's original
effective interest rate (EIR) (calculated at the initial recognition, or in the case of variable rate, recalculated due to the last
interest rate change). The estimation of the expected future cash flows should be forward looking, it must also contain the
effects of the possible change of macroeconomic outlook.
At least two scenarios must be used for the estimation of the expected cash flow. It should be at least one scenario in
which the entity anticipates that realized cash flows will be significantly different from the contractual cash flows.
Probability weights must be allocated to the individual scenarios. The estimation must reflect the probability of the
occurrence and non-occurrence of the credit loss, even if the most probable result is the non-occurrence of the loss.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
654
NOTE 37:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
37.1. Credit risk [continued]
Defining the expected credit loss on individual and collective basis [continued]
On collective basis:
The following exposures are subject to collective assessment:
• retail exposure irrespective of the amount,
• micro and small enterprise exposures irrespective of the amount,
• all other exposure which are insignificant on a stand-alone basis and not part of the workout management,
• exposure which are not in stage 3, significant on a stand-alone basis,
• purchased or originated credit-impaired instruments which are in accordance with the conditions mentioned above.
In the collective impairment methodology credit risk and the change of credit risk can be correctly captured by
understanding the risk characteristics of the portfolio. In order to achieve this, the main risk drivers shall be identified and
used to form homogeneous segments having similar risk characteristics. The segmentation is expected to stay stable from
month to month, however a regular (at least yearly) revision of the segmentation process should be set up to capture the
change of risk characteristics. The segmentation must be performed separately for each parameter, since in each case
different factors may have relevance.
The Bank's Headquarter Group Reserve Committee stipulates the guidelines related to the collective impairment
methodology at group level. In addition, it has right of agreement in respect of the risk parameters (PD -probability of
default, LGD - loss given default, EAD – exposure at default) and segmentation criteria proposed by the group members.
The review of the parameters must be performed at least annually, and the results should be approved by the Group
Reserve Committee. Local Risk Managements are responsible for parameter estimations / updates, macroeconomic
scenarios are calculated by OTP Bank Headquarter for each subsidiary and each parameter. Based on the consensus
proposal of Local Risk Management and OTP Bank Headquarter, the Group Reserve Committee decides on the
modification of parameters (all parameters for impairment calculation).
At least on a yearly basis the impairment parameters should be back tested as well.
The expected loss calculation should be forward looking, including forecasts of future economic conditions. This may be
achieved by applying 3-5 different macroeconomic scenarios, which may be integrated in the PD, LGD and EAD
parameters.
During 2024 in line with the rollout plan DSK Bank and OTP banka Srbija implemented the advanced, lifetime-based
methodology for some portfolios to identify the significant increase in credit risk, this methodological change resulted in
HUF 3 billion provision creation in the second quarter (DSK Bank) and HUF 1.5 billion in the fourth quarter. DSK bank
identified “novel risks” in the fourth quarter, the provision increase was EUR 10 million. In the fourth quarter of year
2024 a new forward-looking methodology was implemented in Ipoteka Bank regarding the PD parameter estimation in
line with the Group IFRS9 methodology. The refinement in the methodology resulted immaterial effect on the total ECL
level.
During 2023 there were ECL SICR methodological changes in Hungary. The previously used methodology – which was
based on rating category changes – was replaced by the advanced, lifetime-based methodology to identify the significant
increase in credit risk. The changes resulted HUF 2.8 billion more impairment in 2023. The impact of the SICR
methodology changes and parameter updates are presented under Note 11 as part of effect of change in parameters used
for loss allowance calculation line item.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
655
NOTE 37:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
37.1. Credit risk [continued]
37.1.1. Gross values and loss allowance / provision of financial instruments by stages
Gross carrying amount and accumulated loss allowance of financial assets at amortized cost and of interest-bearing securities at fair value through other comprehensive income and
financial commitments and provision on them by stages as at 31 December 2024:
Gross carrying amount / Notional value
Accumulated loss allowance / Provision
31/12/2024
Carrying
amount /
Exposure
Stage 1
Stage 2
Stage 3
POCI
Total
Stage 1
Stage 2
Stage 3
POCI
Total
Placements with other banks
1,891,901
1,890,786
1,013
1,569
-
1,893,368
505
958
4
-
1,467
Repo receivables
331,837
332,349
-
-
-
332,349
512
-
-
-
512
Mortgage loans
5,947,341
5,431,298
472,986
98,928
62,342
6,065,554
13,685
37,630
44,604
22,294
118,213
Loans to medium
and large corporates
8,430,951
7,032,611
1,396,700
268,335
65,329
8,762,975
58,069
113,232
140,769
19,954
332,024
Consumer loans
4,995,814
4,346,073
719,392
281,199
38,405
5,385,069
59,143
118,967
207,025
4,120
389,255
Loans to micro
and small enterprises
916,275
655,090
256,690
72,173
10,564
994,517
6,606
19,342
50,005
2,289
78,242
Loans at amortized cost
20,290,381
17,465,072
2,845,768
720,635
176,640
21,208,115
137,503
289,171
442,403
48,657
917,734
Finance lease receivable
1,511,477
1,327,216
169,791
54,290
37
1,551,334
6,522
6,168
27,167
-
39,857
Interest-bearing securities at
fair value through other
comprehensive income1
1,622,824
1,593,287
1,739
27,798
-
1,622,824
12,906
87
55,057
-
68,050
Securities at amortized cost
7,447,177
7,441,670
12,521
37,491
-
7,491,682
16,301
855
27,349
-
44,505
Financial assets total
33,095,597
30,050,380
3,030,832
841,783
176,677
34,099,672
174,249
297,239
551,980
48,657
1,072,125
Loan commitments given
5,660,885
5,347,629
332,965
12,610
599
5,693,803
19,520
12,046
1,255
97
32,918
Financial guarantees given
1,535,734
1,440,075
95,405
11,832
67
1,547,379
4,450
2,357
4,773
65
11,645
Other commitments given
1,033,567
980,085
51,765
6,015
1,616
1,039,481
2,134
1,785
549
1,446
5,914
Financial liabilities total
8,230,186
7,767,789
480,135
30,457
2,282
8,280,663
26,104
16,188
6,577
1,608
50,477
1 Interest bearing securities at fair value through other comprehensive income are recognized in the Consolidated statement of financial position as at fair value (see in Note 9). Loss allowances for securities at fair value through
other comprehensive income that are in Stage 1 and / or in Stage 2 is recognized in the Other comprehensive income. It is included in the accumulated loss allowance of this table showed above.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
656
NOTE 37:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
37.1. Credit risk [continued]
37.1.1. Gross values and loss allowance / provision of financial instruments by stages [continued]
Gross carrying amount and accumulated loss allowance of financial assets at amortized cost and of interest-bearing securities at fair value through other comprehensive income and
financial commitments and provision on them by stages as at 31 December 2023:
Gross carrying amount / Notional value
Accumulated loss allowance / Provision
31/12/2023
Carrying
amount /
Exposure
Stage 1
Stage 2
Stage 3
POCI
Total
Stage 1
Stage 2
Stage 3
POCI
Total
Placements with other banks
1,566,998
1,569,167
63
15
-
1,569,245
2,182
55
10
-
2,247
Repo receivables
223,884
224,477
-
-
-
224,477
593
-
-
-
593
Mortgage loans
5,034,890
4,562,463
438,501
96,334
53,399
5,150,697
12,870
28,369
50,155
24,413
115,807
Loans to medium
and large corporates
7,904,890
6,675,761
1,221,137
245,491
40,515
8,182,904
32,632
87,746
147,793
9,843
278,014
Consumer loans
3,770,593
3,312,352
558,058
281,209
11,894
4,163,513
77,799
92,583
216,265
6,273
392,920
Loans to micro
and small enterprises
966,160
713,352
237,948
84,887
37,263
1,073,450
14,491
29,446
51,855
11,498
107,290
Loans at amortized cost1
17,676,533
15,263,928
2,455,644
707,921
143,071
18,570,564
137,792
238,144
466,068
52,027
894,031
Finance lease receivable
1,289,712
1,095,039
176,856
62,799
38
1,334,732
5,331
8,342
31,309
38
45,020
Interest-bearing securities at
fair value through other
comprehensive income2
1,540,980
1,423,021
87,085
30,874
-
1,540,980
11,395
258
22,920
-
34,573
Securities at amortized cost
5,249,272
5,228,599
12,224
41,097
-
5,281,920
17,141
755
14,752
-
32,648
Financial assets total
27,547,379
24,804,231
2,731,872
842,706
143,109
28,521,918
174,434
247,554
535,059
52,065
1,009,112
Loan commitments given
4,755,009
4,495,101
277,346
11,673
823
4,784,943
19,890
7,772
2,007
265
29,934
Financial guarantees given
1,474,285
1,381,657
92,012
10,222
64
1,483,955
6,392
2,012
1,206
60
9,670
Other commitments given
864,718
829,611
34,112
5,909
1,619
871,251
1,860
1,388
2,354
931
6,533
Financial liabilities total
7,094,012
6,706,369
403,470
27,804
2,506
7,140,149
28,142
11,172
5,567
1,256
46,137
1 Please see details in Note 2.29.
2 Interest bearing securities at fair value through other comprehensive income are recognized in the Consolidated statement of financial position as at fair value (see in Note 9). Loss allowances for securities at fair value through
other comprehensive income that are in Stage 1 and / or in Stage 2 is recognized in the Other comprehensive income. It is included in the accumulated loss allowance of this table showed above.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
657
NOTE 37:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
37.1. Credit risk [continued]
37.1.2. Financial instruments under simplified approach by day-past-due categories
31/12/2024
Without delay
< 30 days
31 - 60 days
61 - 90 days
> 91 days
Closing balance
Expected credit loss rate
3.67%
6.03%
2.79%
18.66%
65.02%
Gross value
145,429
34,947
2,544
5,718
53,582
242,220
Loss allowance
(5,333)
(2,108)
(71)
(1,067)
(34,839)
(43,418)
Net carrying amount
140,096
32,839
2,473
4,651
18,743
198,802
31/12/2023
Without delay
< 30 days
31 - 60 days
61 - 90 days
> 91 days
Closing balance
Expected credit loss rate
2.69%
2.69%
3.80%
6.03%
44.49%
Gross value
114,764
26,136
2,340
1,029
67,177
211,446
Loss allowance
(3,082)
(703)
(89)
(62)
(29,890)
(33,826)
Net carrying amount
111,682
25,433
2,251
967
37,287
177,620
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
658
NOTE 37:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
37.1. Credit risk [continued]
37.1.3. Movement table of gross values on financial instruments
Movement of gross values of financial assets at amortized cost and on interest bearing securities at fair value through other comprehensive income and of financial commitments as at
31 December 2024:
31/12/2024
Opening
balance
Increases due to
origination and
acquisition
Increase on
opening
balance
Decreases due to
payments and
derecognition
Transfers
between
stages (net)
Changes due to
modifications
without
derecognition (net)
Decrease
due to
write-offs
Foreign
exchange and
other adjustment
Closing
balance
Stage 1
24,804,231
49,571,066
3,265,291
(47,671,939)
(557,933)
(385,833)
(77,702)
1,103,199
30,050,380
Placements with other banks
1,569,167
12,121,835
34,344
(11,915,052)
(2,878)
70,700
-
12,670
1,890,786
Repo receivables
224,477
25,909,255
829,891
(26,642,511)
-
-
-
11,237
332,349
Loans at amortized cost
15,263,928
8,021,531
1,277,288
(6,771,271)
(610,914)
(455,022)
(77,702)
817,234
17,465,072
Finance lease receivables
1,095,039
653,498
41,095
(484,115)
(25,069)
(1,690)
-
48,458
1,327,216
Interest-bearing securities at fair value
through other comprehensive income
1,423,021
936,826
48,326
(965,565)
85,223
-
-
65,456
1,593,287
Securities at amortized cost
5,228,599
1,928,121
1,034,347
(893,425)
(4,295)
179
-
148,144
7,441,670
Stage 2
2,731,872
557,587
221,602
(1,005,159)
368,756
51,024
(4,568)
109,718
3,030,832
Placements with other banks
63
-
2,006
(1,994)
887
-
-
51
1,013
Repo receivables
-
-
-
-
-
-
-
-
-
Loans at amortized cost
2,455,644
495,632
213,584
(898,194)
434,478
51,024
(4,568)
98,168
2,845,768
Finance lease receivables
176,856
61,955
5,711
(97,828)
14,319
-
-
8,778
169,791
Interest-bearing securities at fair value
through other comprehensive income
87,085
-
-
(2,397)
(85,223)
-
-
2,274
1,739
Securities at amortized cost
12,224
-
301
(4,746)
4,295
-
-
447
12,521
Stage 3
842,706
127,120
38,712
(316,752)
189,177
60,452
(123,558)
23,926
841,783
Placements with other banks
15
8,575
5
(9,087)
1,991
-
(7)
77
1,569
Repo receivables
-
-
-
-
-
-
-
-
-
Loans at amortized cost
707,921
112,880
34,359
(268,866)
176,437
60,454
(123,037)
20,487
720,635
Finance lease receivables
62,799
4,616
1,561
(27,832)
10,749
(2)
(514)
2,913
54,290
Interest-bearing securities at fair value
through other comprehensive income
30,874
-
27
(3,103)
-
-
-
-
27,798
Securities at amortized cost
41,097
1,049
2,760
(7,864)
-
-
-
449
37,491
Financial assets subtotal
28,378,809
50,255,773
3,525,605
(48,993,850)
-
(274,357)
(205,828)
1,236,843
33,922,995
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
659
NOTE 37:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
37.1. Credit risk [continued]
37.1.3. Movement table of gross values on financial instruments [continued]
Movement of gross values of financial assets at amortized cost and on interest-bearing securities at fair value through other comprehensive income and of financial commitments as at
31 December 2024 [continued]:
31/12/2024
Opening
balance
Increases due to
origination and
acquisition
Increase on
opening
balance
Decreases due to
payments and
derecognition
Transfers
between
stages (net)
Changes due to
modifications
without
derecognition (net)
Decrease
due to
write-offs
Foreign
exchange and
other adjustment
Closing
balance
POCI
143,109
57,247
9,563
(33,303)
-
(4,826)
(4,076)
8,963
176,677
Placements with other banks
-
-
-
-
-
-
-
-
-
Repo receivables
-
-
-
-
-
-
-
-
-
Loans at amortized cost
143,071
57,247
9,563
(33,300)
-
(4,826)
(4,076)
8,961
176,640
Finance lease receivables
38
-
-
(3)
-
-
-
2
37
Interest-bearing securities at fair value
through other comprehensive income
-
-
-
-
-
-
-
-
-
Securities at amortized cost
-
-
-
-
-
-
-
-
-
Financial assets total
28,521,918
50,313,020
3,535,168
(49,027,153)
-
(279,183)
(209,904)
1,245,806
34,099,672
Loan commitments and financial guarantees
given - stage 1
6,706,369
4,352,876
1,242,666
(4,682,200)
(71,095)
(23,984)
-
243,157
7,767,789
Loan commitments and financial guarantees
given - stage 2
403,470
220,286
66,676
(277,203)
58,042
(3,896)
-
12,760
480,135
Loan commitments and financial guarantees
given - stage 3
27,804
7,868
888
(19,335)
13,053
(326)
-
505
30,457
Loan commitments and financial guarantees
given - poci
2,506
2,190
528
(3,118)
-
(3)
-
179
2,282
Financial liabilities total
7,140,149
4,583,220
1,310,758
(4,981,856)
-
(28,209)
-
256,601
8,280,663
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
660
NOTE 37:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
37.1. Credit risk [continued]
37.1.3. Movement table of gross values on financial instruments [continued]
Movement of gross values of financial assets at amortized cost and on interest-bearing securities at fair value through other comprehensive income and of financial commitments as at
31 December 2023:
31/12/2023
Opening
balance
Increases due to
origination and
acquisition
Increase on
opening
balance
Decreases due to
payments and
derecognition
Transfers
between
stages (net)
Changes due to
modifications
without
derecognition (net)
Decrease
due to
write-offs
Assets held
for sale
Foreign
exchange and
other adjustment
Closing
balance
Stage 1
23,127,980
23,356,461
3,416,632
(22,203,492)
(508,278)
(306,140)
(245)
(1,320,012)
(758,675)
24,804,231
Placements with other banks
1,354,832
7,416,490
381,963
(7,453,395)
-
-
-
(4,529)
(126,194)
1,569,167
Repo receivables
41,250
4,458,449
53,911
(4,337,597)
-
-
-
-
8,464
224,477
Loans at amortized cost
14,176,668
8,774,565
2,081,887
(7,499,976)
(496,301)
(306,192)
(245)
(938,176)
(528,302)
15,263,928
Finance lease receivables
1,045,688
527,738
214,240
(597,894)
(10,997)
-
-
(52,206)
(31,530)
1,095,039
Interest-bearing securities at fair value
through other comprehensive income
1,642,481
798,838
55,751
(1,006,842)
-
52
-
(39,100)
(28,159)
1,423,021
Securities at amortized cost
4,867,061
1,380,381
628,880
(1,307,788)
(980)
-
-
(286,001)
(52,954)
5,228,599
Stage 2
2,228,626
714,891
212,807
(638,272)
441,295
34,021
(2,212)
(172,079)
(87,205)
2,731,872
Placements with other banks
63
-
-
-
-
-
-
-
-
63
Repo receivables
-
-
-
-
-
-
-
-
-
-
Loans at amortized cost
1,949,320
554,572
176,241
(459,903)
436,755
34,021
(2,212)
(161,009)
(72,141)
2,455,644
Finance lease receivables
235,817
72,482
36,313
(148,456)
3,560
-
-
(11,070)
(11,790)
176,856
Interest-bearing securities at fair value
through other comprehensive income
28,285
83,167
-
(21,461)
-
-
-
-
(2,906)
87,085
Securities at amortized cost
15,141
4,670
253
(8,452)
980
-
-
-
(368)
12,224
Stage 3
989,503
190,604
27,942
(252,740)
66,975
16,888
(73,726)
(63,427)
(59,313)
842,706
Placements with other banks
24
-
75
(84)
-
-
-
-
-
15
Repo receivables
-
-
-
-
-
-
-
-
-
-
Loans at amortized cost
837,964
171,781
24,518
(214,793)
59,541
16,888
(73,594)
(60,193)
(54,191)
707,921
Finance lease receivables
70,050
15,286
3,349
(25,520)
7,434
-
(132)
(3,234)
(4,434)
62,799
Interest-bearing securities at fair value
through other comprehensive income
28,680
3,480
-
(1,231)
-
-
-
-
(55)
30,874
Securities at amortized cost
52,785
57
-
(11,112)
-
-
-
-
(633)
41,097
Financial assets subtotal
26,346,109
24,261,956
3,657,381
(23,094,504)
(8)
(255,231)
(76,183)
(1,555,518)
(905,193)
28,378,809
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
661
NOTE 37:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
37.1. Credit risk [continued]
37.1.3. Movement table of gross values on financial instruments [continued]
Movement of gross values of financial assets at amortized cost and on interest-bearing securities at fair value through other comprehensive income and of financial commitments as at
31 December 2023 [continued]:
31/12/2023
Opening
balance
Increases due to
origination and
acquisition
Increase on
opening
balance
Decreases due to
payments and
derecognition
Transfers
between
stages (net)
Changes due to
modifications
without
derecognition (net)
Decrease
due to
write-offs
Assets held
for sale
Foreign
exchange and
other adjustment
Closing
balance
POCI
97,194
19,386
41,718
(2,872)
8
-
(6,616)
(4,185)
(1,524)
143,109
Placements with other banks
-
-
-
-
-
-
-
-
-
-
Repo receivables
-
-
-
-
-
-
-
-
-
-
Loans at amortized cost
96,866
19,386
41,366
(2,302)
5
-
(6,553)
(4,185)
(1,512)
143,071
Finance lease receivables
328
-
352
(570)
3
-
(63)
(12)
38
Interest-bearing securities at fair value
through other comprehensive income
-
-
-
-
-
-
-
-
-
-
Securities at amortized cost
-
-
-
-
-
-
-
-
-
-
Financial assets total
26,443,303
24,281,342
3,699,099
(23,097,376)
-
(255,231)
(82,799)
(1,559,703)
(906,717)
28,521,918
Loan commitments and financial guarantees
given - stage 1
5,842,958
3,472,892
53,896,979
(56,158,534)
(152,848)
3,465
-
-
(198,543)
6,706,369
Loan commitments and financial guarantees
given - stage 2
359,236
178,252
127,132
(382,733)
138,545
1,149
-
-
(18,111)
403,470
Loan commitments and financial guarantees
given - stage 3
58,980
4,908
910
(48,833)
14,304
14
-
-
(2,479)
27,804
Loan commitments and financial guarantees
given - poci
202
2,719
566
(972)
(1)
-
-
-
(8)
2,506
Financial liabilities total
6,261,376
3,658,771
54,025,587
(56,591,072)
-
4,628
-
-
(219,141)
7,140,149
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
662
NOTE 37:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
37.1. Credit risk [continued]
37.1.4. Movement table of loss allowance / provision on financial instruments
Movement of loss allowance on financial assets at amortized cost and on interest-bearing securities at fair value through other comprehensive income and of provision of financial
commitments as at 31 December 2024:
31/12/2024
Opening
balance
Increases due
to origination
and acquisition
Decreases
due to
derecognition
Transfers
between
stages (net)
Changes due to
change in credit
risk (net)
Changes due to
modifications
without
derecognition (net)
Decrease in loss
allowance account
due to write-offs
Foreign
exchange and
other adjustment
Closing
balance
Stage 1
174,434
97,184
(92,071)
(21,893)
14,001
(3,066)
(1,030)
6,690
174,249
Placements with other banks
2,182
2,077
(3,709)
-
(209)
-
-
164
505
Repo receivables
593
7,730
(8,052)
-
249
-
-
(8)
512
Loans at amortized cost
137,792
77,157
(68,211)
(25,665)
14,422
(2,853)
(1,030)
5,891
137,503
Finance lease receivables
5,331
2,591
(5,159)
3,821
(318)
(73)
-
329
6,522
Interest-bearing securities at fair value
through other comprehensive income
11,395
4,150
(2,964)
(2,150)
2,354
46
-
75
12,906
Securities at amortized cost
17,141
3,479
(3,976)
2,101
(2,497)
(186)
-
239
16,301
Stage 2
247,554
30,326
(64,795)
(11,643)
54,067
33,705
(1,311)
9,336
297,239
Placements with other banks
55
-
(41)
-
938
-
-
6
958
Repo receivables
-
-
-
-
-
-
-
-
-
Loans at amortized cost
238,144
28,554
(60,447)
(10,722)
52,253
33,705
(1,311)
8,995
289,171
Finance lease receivables
8,342
1,772
(3,761)
(970)
498
-
-
287
6,168
Interest-bearing securities at fair value
through other comprehensive income
258
-
(125)
-
(59)
-
-
13
87
Securities at amortized cost
755
-
(421)
49
437
-
-
35
855
Stage 3
535,059
29,447
(85,603)
33,536
102,133
19,342
(96,122)
14,188
551,980
Placements with other banks
10
-
(224)
-
148
-
(7)
77
4
Repo receivables
-
-
-
-
-
-
-
-
-
Loans at amortized cost
466,068
26,150
(75,990)
36,389
53,089
19,342
(95,603)
12,958
442,403
Finance lease receivables
31,309
2,247
(8,082)
(2,853)
4,058
-
(512)
1,000
27,167
Interest-bearing securities at fair value
through other comprehensive income
22,920
-
-
2,150
29,987
-
-
-
55,057
Securities at amortized cost
14,752
1,050
(1,307)
(2,150)
14,851
-
-
153
27,349
Loss allowance on financial assets
b
l
957,047
156,957
(242,469)
-
170,201
49,981
(98,463)
30,214
1,023,468
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
663
NOTE 37:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
37.1. Credit risk [continued]
37.1.4. Movement table of loss allowance / provision on financial instruments [continued]
Movement of loss allowance on financial assets at amortized cost and on interest-bearing securities at fair value through other comprehensive income and of provision of financial
commitments as at 31 December 2024 [continued]:
31/12/2024
Opening
balance
Increases due
to origination
and acquisition
Decreases
due to
derecognition
Transfers
between
stages (net)
Changes due to
change in credit
risk (net)
Changes due to
modifications
without
derecognition (net)
Decrease in loss
allowance account
due to write-offs
Foreign
exchange and
other adjustment
Closing
balance
POCI
52,065
137
(11,443)
-
8,484
1,005
(3,859)
2,268
48,657
Placements with other banks
-
-
-
-
-
-
-
-
-
Repo receivables
-
-
-
-
-
-
-
-
-
Loans at amortized cost
52,027
137
(11,440)
-
8,484
1,005
(3,859)
2,303
48,657
Finance lease receivables
38
-
(3)
-
-
-
-
(35)
-
Interest-bearing securities at fair value
through other comprehensive income
-
-
-
-
-
-
-
-
-
Securities at amortized cost
-
-
-
-
-
-
-
-
-
Loss allowance on financial assets total
1,009,112
157,094
(253,912)
-
178,685
50,986
(102,322)
32,482
1,072,125
Loan commitments and financial guarantees
given - stage 1
28,142
14,476
(10,645)
(4,365)
(3,420)
850
-
1,066
26,104
Loan commitments and financial guarantees
given - stage 2
11,172
3,746
(5,965)
2,752
4,098
52
-
333
16,188
Loan commitments and financial guarantees
given - stage 3
5,567
1,505
(3,187)
1,613
1,149
(169)
-
99
6,577
Loan commitments and financial guarantees
given - poci
1,256
-
(562)
-
824
-
-
90
1,608
Provision on financial liabilities total
46,137
19,727
(20,359)
-
2,651
733
-
1,588
50,477
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
664
NOTE 37:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
37.1. Credit risk [continued]
37.1.4. Movement table of loss allowance / provision on financial instruments [continued]
Movement of loss allowance on financial assets at amortized cost and on interest-bearing securities at fair value through other comprehensive income and of provision of financial
commitments as at 31 December 2023:
31/12/2023
Opening
balance
Increases due
to origination
and acquisition
Decreases
due to
derecognition
Transfers
between
stages (net)
Changes due to
change in credit
risk (net)
Changes due to
modifications
without
derecognition (net)
Decrease in
loss allowance
account due to
write-offs
Assets held
for sale
Foreign
exchange
and other
adjustment
Closing
balance
Stage 1
198,457
182,142
(50,688)
(120,176)
(7,185)
(3,832)
(137)
(11,421)
(12,726)
174,434
Placements with other banks
3,801
21,893
(10,716)
-
(13,863)
-
-
(12)
1,079
2,182
Repo receivables
241
28,013
(12,536)
-
(15,120)
-
-
-
(5)
593
Loans at amortized cost
152,189
120,934
(24,021)
(118,838)
34,649
(3,832)
(137)
(10,089)
(13,063)
137,792
Finance lease receivables
4,797
2,665
(760)
(1,255)
838
-
-
(683)
(271)
5,331
Interest-bearing securities at fair value
through other comprehensive income
13,754
5,346
(2,384)
-
(5,302)
-
-
-
(19)
11,395
Securities at amortized cost
23,675
3,291
(271)
(83)
(8,387)
-
-
(637)
(447)
17,141
Stage 2
240,869
63,850
(26,201)
59,380
(65,542)
6,335
(1,131)
(16,538)
(13,468)
247,554
Placements with other banks
12
-
-
-
147
-
-
-
(104)
55
Repo receivables
-
-
-
-
-
-
-
-
-
-
Loans at amortized cost
223,965
56,062
(20,246)
59,297
(57,563)
6,335
(1,131)
(15,806)
(12,769)
238,144
Finance lease receivables
15,241
2,774
(404)
-
(8,052)
-
-
(732)
(485)
8,342
Interest-bearing securities at fair value
through other comprehensive income
1,040
4,603
(5,266)
-
(19)
-
-
-
(100)
258
Securities at amortized cost
611
411
(285)
83
(55)
-
-
-
(10)
755
Stage 3
632,966
62,579
(65,642)
60,796
5,297
2,207
(67,994)
(35,475)
(59,675)
535,059
Placements with other banks
24
1
-
-
50
-
-
-
(65)
10
Repo receivables
-
-
-
-
-
-
-
-
-
-
Loans at amortized cost
556,473
52,104
(61,111)
59,541
13,856
2,207
(67,862)
(33,984)
(55,156)
466,068
Finance lease receivables
32,875
10,474
(1,507)
1,255
(8,268)
-
(132)
(1,491)
(1,897)
31,309
Interest-bearing securities at fair value
through other comprehensive income
24,831
-
(413)
-
(1)
-
-
-
(1,497)
22,920
Securities at amortized cost
18,763
-
(2,611)
-
(340)
-
-
-
(1,060)
14,752
Loss allowance on financial assets
b
l
1,072,292
308,571
(142,531)
-
(67,430)
4,710
(69,262)
(63,434)
(85,869)
957,047
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
665
NOTE 37:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
37.1. Credit risk [continued]
37.1.4. Movement table of loss allowance / provision on financial instruments [continued]
Movement of loss allowance on financial assets at amortized cost and on interest-bearing securities at fair value through other comprehensive income and of provision of financial
commitments as at 31 December 2023 [continued]:
31/12/2023
Opening
balance
Increases due
to origination
and acquisition
Decreases
due to
derecognition
Transfers
between
stages (net)
Changes due to
change in credit
risk (net)
Changes due to
modifications
without
derecognition (net)
Decrease in
loss allowance
account due to
write-offs
Assets held
for sale
Foreign
exchange
and other
adjustment
Closing
balance
POCI
33,951
-
(2,603)
-
17,029
-
(3,702)
(1,476)
8,866
52,065
Placements with other banks
-
-
-
-
-
-
-
-
-
-
Repo receivables
-
-
-
-
-
-
-
-
-
-
Loans at amortized cost
33,733
-
(2,302)
-
16,825
-
(3,639)
(1,476)
8,886
52,027
Finance lease receivables
218
-
(301)
-
204
-
(63)
-
(20)
38
Interest-bearing securities at fair value
through other comprehensive income
-
-
-
-
-
-
-
-
-
-
Securities at amortized cost
-
-
-
-
-
-
-
-
-
-
Loss allowance on financial assets total
1,106,243
308,571
(145,134)
-
(50,401)
4,710
(72,964)
(64,910)
(77,003)
1,009,112
Loan commitments and financial guarantees
given - stage 1
41,557
16,878
(8,107)
(12,482)
(4,418)
4
-
-
(5,290)
28,142
Loan commitments and financial guarantees
given - stage 2
15,121
2,686
(4,336)
9,186
(11,278)
307
-
-
(514)
11,172
Loan commitments and financial guarantees
given - stage 3
6,665
852
(1,499)
3,296
(3,388)
9
-
-
(368)
5,567
Loan commitments and financial guarantees
given - poci
29
832
(34)
-
430
-
-
-
(1)
1,256
Provision on financial liabilities total
63,372
21,248
(13,976)
-
(18,654)
320
-
-
(6,173)
46,137
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
666
NOTE 37:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
37.1. Credit risk [continued]
37.1.5. Loan portfolio by internal ratings
31/12/2024
Gross carrying amount
Internal rating grade
Stage 1
Stage 2
Stage 3
POCI
Total
Low risk grade (1-4)
12,329,875
987,132
-
6,655
13,323,662
Medium risk grade (5-7)
6,170,989
1,499,654
-
78,012
7,748,655
High risk grade (8-9)
291,424
528,773
-
8,907
829,104
Non-performing
-
-
774,925
83,103
858,028
Total loans at amortized cost
and finance lease receivable
18,792,288
3,015,559
774,925
176,677
22,759,449
31/12/2024
Accumulated loss allowance
Internal rating grade
Stage 1
Stage 2
Stage 3
POCI
Total
Low risk grade (1-4)
69,858
86,080
-
185
156,123
Medium risk grade (5-7)
67,302
152,411
-
12,292
232,005
High risk grade (8-9)
6,865
56,848
-
231
63,944
Non-performing
-
-
469,570
35,949
505,519
Total loans at amortized cost
and finance lease receivable
144,025
295,339
469,570
48,657
957,591
31/12/2023
Gross carrying amount
Internal rating grade
Stage 1
Stage 2
Stage 3
POCI
Total
Low risk grade (1-4)
10,537,131
886,493
-
4,209
11,427,833
Medium risk grade (5-7)
5,633,057
1,283,637
-
53,680
6,970,374
High risk grade (8-9)
172,435
466,658
-
5,247
644,340
Non-performing
-
-
805,560
57,189
862,749
Total loans at amortized cost
and finance lease receivable
16,342,623
2,636,788
805,560
120,325
19,905,296
31/12/2023
Accumulated loss allowance
Internal rating grade
Stage 1
Stage 2
Stage 3
POCI
Total
Low risk grade (1-4)
57,516
67,598
-
257
125,371
Medium risk grade (5-7)
58,691
128,311
-
9,585
196,587
High risk grade (8-9)
7,074
54,521
-
396
61,991
Non-performing
-
-
516,126
38,976
555,102
Total loans at amortized cost
and finance lease receivable
123,281
250,430
516,126
49,214
939,051
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
667
NOTE 37:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
37.1. Credit risk [continued]
37.1.6. Geographical analysis of the loan portfolio
The geographical analysis of the non-qualified and qualified gross loan portfolio at amortized cost, finance lease
receivables, placements with other banks and repo receivables and their loss allowances is as follows:
31/12/2024
31/12/2023
Country
Gross amount of
exposure
Loss
allowance
Gross amount of
exposure
Loss
allowance
Hungary
6,031,853
247,357
5,626,438
242,888
Bulgaria
4,751,756
142,822
3,816,273
121,488
Croatia
2,802,968
88,648
2,345,342
97,746
Slovenia
2,657,708
45,290
2,774,813
30,370
Serbia
2,656,365
84,911
2,324,130
70,973
Russia
2,209,676
121,391
1,435,654
137,714
Uzbekistan
1,300,549
121,084
995,010
97,557
Montenegro
547,509
14,351
446,091
17,541
Albania
506,958
20,809
392,333
18,059
Ukraine
450,007
52,645
408,142
85,631
Moldova
185,111
7,266
153,566
7,171
Germany
127,030
4,250
128,158
2,849
The Netherlands
120,264
2,211
153,202
2,787
United States of America
117,556
382
146,703
485
Romania
92,050
177
65,234
1,168
France
98,937
326
167,441
543
Belgium
52,880
130
64,906
240
Austria
40,781
220
34,095
104
Slovakia
69,786
409
40,899
930
Spain
15,312
517
20,137
338
Switzerland
11,705
183
5,668
76
United Kingdom
28,745
265
29,879
1,794
Luxembourg
28,654
266
33,109
1,210
Poland
24,322
513
27,022
857
Italy
18,116
670
32,403
587
Ireland
12,129
56
4,155
30
Cyprus
142
13
36
15
Denmark
128
2
127
2
Subtotal
24,958,997
957,164
21,670,966
941,153
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
668
NOTE 37:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
37.1. Credit risk [continued]
37.1.6. Geographical analysis of the loan portfolio [continued]
31/12/2024
31/12/2023
Country
Gross amount of
exposure
Loss
allowance
Gross amount of
exposure
Loss
allowance
Czech Republic
3,002
7
1,153
14
Portugalia
3,086
182
302
3
Canada
86
2
164
3
Australia
96
-
76
-
Greece
1,961
192
1,440
123
Turkey
340
7
1,953
51
Israel
1,389
10
1,080
13
Bosnia and Herzegovina
1,915
318
1,401
155
Sweden
784
13
374
25
Norway
111
1
4,808
54
United Arab Emirates
3,049
1,051
28
12
Egypt
100
4
693
11
Kazakhstan
345
7
218
8
Latvia
132
4
44
33
Gibraltar
-
-
9,384
57
Other1
9,773
608
4,934
176
Subtotal
26,169
2,406
28,052
738
Total
24,985,166
959,570
21,699,018
941,891
1Other category as at 31 December 2024 mainly includes e.g.: Tunisia, Algeria, Kosovo, Armenia, Republic of South-Africa, Japan, Brazil, North-
Macedonia, India, Finland, China, Iceland, Georgia and other countries.
The geographical analysis of the non-qualified and qualified loan portfolio mandatorily at fair value through profit or loss
is as follows:
Country
31/12/2024
31/12/2023
Hungary
1,559,631
1,399,463
Switzerland
127
-
Germany
10
-
United Kingdom
-
998
Slovakia
1
11
Romania
2
2
Others
10
11
Total loans at fair value
1,559,781
1,400,485
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
669
NOTE 37:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
37.1. Credit risk [continued]
37.1.7. Loan portfolio classification by economic activities
Gross loan at amortized cost and finance lease
31/12/2024
31/12/2023
receivable portfolio by economic activities
Retail
10,717,244
7,735,508
Agriculture, forestry and fishing
766,924
796,687
Manufacturing, mining and quarrying
and other industry
3,330,225
2,963,753
Construction
923,426
882,237
Wholesale and retail trade, transportation,
storage and hospitality
3,617,724
3,641,475
Information and communication
279,907
276,945
Financial and insurance activities
432,383
825,663
Real estate activities
999,529
1,006,429
Professional, scientific, technical, administration
and support service activities
877,282
810,498
Public administration, defence, education,
human health and social work activities
578,553
550,186
Other services
236,252
415,915
Total gross loans and finance lease receivable
22,759,449
19,905,296
Loss allowance on loans at amortized cost and
31/12/2024
31/12/2023
finance lease receivable by economic activities
Retail
415,191
427,342
Agriculture, forestry and fishing
42,137
41,221
Manufacturing, mining and quarrying
and other industry
183,900
110,915
Construction
47,242
42,661
Wholesale and retail trade, transportation,
storage and hospitality
170,773
217,283
Information and communication
12,998
8,628
Financial and insurance activities
7,429
10,523
Real estate activities
35,331
36,600
Professional, scientific, technical, administration
and support service activities
27,885
26,433
Public administration, defence, education,
human health and social work activities
10,803
8,810
Other services
3,902
8,635
Total loss allowance on loans and
finance lease receivable
957,591
939,051
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
670
NOTE 37:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
37.1. Credit risk [continued]
37.1.8. Collateral
The values of collateral received and held by the Group by types are as follows (total value of the collaterals). The
collateral covers loans as well as off-balance sheet exposures.
Held collaterals at book value by type of collateral
31/12/2024
31/12/2023
Mortgages
23,642,106
21,549,776
Guarantees and warranties
1,745,316
1,436,170
Guarantees of state or state-owned organizations
1,934,251
1,786,112
Assignments (revenue or other receivables)
222,085
263,292
Securities
270,824
235,213
Cash deposits
299,769
285,722
Other
3,077,755
2,973,138
Total
31,192,106
28,529,423
Held collaterals at fair value by type of collateral
31/12/2024
31/12/2023
Mortgages
28,502,087
25,222,164
Guarantees and warranties
1,754,520
1,411,444
Guarantees of state or state-owned organizations
1,945,681
1,659,146
Assignments (revenue or other receivables)
374,866
410,643
Securities
308,090
394,575
Cash deposits
284,637
359,261
Other
3,703,979
3,471,916
Total
36,873,860
32,929,149
The values of collateral received and held by the Group by types are as follows (to the extent of the exposures). The
collaterals cover loans as well as off-balance sheet exposures.
Held collaterals at book value by type of collateral
31/12/2024
31/12/2023
Mortgages
10,372,684
9,155,801
Guarantees of state or state-owned organizations
1,614,324
1,466,444
Guarantees and warranties
1,360,597
996,758
Assignments (revenue or other receivables)
97,793
148,043
Securities
94,680
79,742
Cash deposits
162,142
103,650
Other
1,014,932
1,286,908
Total
14,717,152
13,237,346
The coverage level of the loan portfolio to the total collateral at book value decreased from 115.14% to 109.64% and the
coverage level to the extent of the exposures at book value decreased from 53.42% to 51.73% as at 31 December 2024
comparing with the previous period.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
671
NOTE 37:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
37.1. Credit risk [continued]
37.1.8. Collateral [continued]
The values of collateral received and held by the Group by the positions of the related exposures are as follows:
31/12/2024
Maximum exposure to
credit risk, book value
Fair value of collaterals
Surplus collateral
Net exposure
Associated expected
credit loss
On balance items
Cash, due from banks and balances with the National Banks
6,079,012
-
-
6,079,012
(1,273)
Placements with other banks
1,891,901
136,366
(369)
1,755,904
(1,467)
Repo receivables
331,837
35,435
14,058
282,344
(512)
Securities at amortized cost
7,447,177
20,944
(449)
7,426,682
(44,505)
Loans and undrawn line of credit
27,930,682
31,644,423
(10,653,035)
6,939,294
(990,509)
Total financial assets at amortized cost
43,680,609
31,837,168
(10,639,795)
22,483,236
(1,038,266)
Financial assets at fair value through profit or loss
512,178
3,331,055
(1,830,051)
(988,826)
-
Financial assets at fair value through other comprehensive income
1,622,824
7,405
(315)
1,615,734
(60,890)
Derivative financial instruments
202,894
129,509
-
73,385
-
Total financial assets at fair value
2,337,896
3,467,969
(1,830,366)
700,293
(60,890)
Total on balance sheet items
46,018,505
35,305,137
(12,470,161)
23,183,529
(1,099,156)
Off-balance items
Financial guarantees
1,535,734
1,295,042
(253,697)
494,389
(11,645)
Other off-balance sheet commitments
565,628
273,681
(80,899)
372,846
(5,914)
Total off-balance sheet items
2,101,362
1,568,723
(334,596)
867,235
(17,559)
31/12/2023
Maximum exposure to
credit risk, book value
Fair value of collaterals
Surplus collateral
Net exposure
Associated expected
credit loss
On balance items
Cash, due from banks and balances with the National Banks
7,125,049
1,528
-
7,123,521
(508)
Placements with other banks
1,566,998
10,801
(1,090)
1,557,287
(2,247)
Repo receivables
223,884
17,711
-
206,173
(593)
Securities at amortized cost
5,249,272
45,954
(844)
5,204,162
(32,648)
Loans and undrawn line of credit
24,181,710
30,948,896
(9,314,169)
2,546,983
(968,985)
Total financial assets at amortized cost
38,346,913
31,024,890
(9,316,103)
16,638,126
(1,004,981)
Financial assets at fair value through profit or loss
66,724
918,520
(44,555)
(807,241)
-
Financial assets at fair value through other comprehensive income
1,540,980
13,646
(597)
1,527,931
(34,573)
Derivative financial instruments
195,596
-
-
195,596
-
Total financial assets at fair value
1,803,300
932,166
(45,152)
916,286
(34,573)
Total on balance sheet items
40,150,213
31,957,056
(9,361,255)
17,554,412
(1,039,554)
Off-balance items
Financial guarantees
1,412,288
809,462
(253,697)
856,523
(9,670)
Other off-balance sheet commitments
466,260
162,631
(80,899)
384,528
(6,533)
Total off-balance sheet items
1,878,548
972,093
(334,596)
1,241,051
(16,203)
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
672
NOTE 37:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
37.1. Credit risk [continued]
37.1.8. Collateral [continued]
Returns from realization of collaterals taken into possession by types of collateral
Types of collateral
31/12/2024
31/12/2023
Real estate
15,796
13,944
from this: real estate taken into possession
by OTP group member
5,470
2,597
Guarantee
47,292
28,062
Bail
31
407
Movable property
5,807
3,576
Other
3,399
1,138
Proceeds from enforcement of collaterals
72,325
47,127
37.1.9. Restructured loans
31/12/2024
31/12/2023
Gross
portfolio
Loss
allowance
Gross
portfolio
Loss
allowance
Retail mortgage loans
16,542
(1,102)
31,828
(2,570)
Loans to medium and large corporations
209,001
(28,987)
212,158
(24,634)
Retail consumer loans
54,239
(18,861)
45,587
(17,525)
Loans to micro and small enterprises
23,580
(2,247)
33,102
(2,991)
Municipal
1,433
(48)
1,134
(52)
Other loans
4,345
(1,130)
1,752
(791)
Total
309,140
(52,375)
325,561
(48,563)
The forborne definition used by the Group is based on EU 2015/227 regulation.
Restructuring (forbearance) is a modification of the contract – initiated by either the client or the bank – that provides a
concession or allowance towards the client in respect to the client’s current or future financial difficulties. The table of
restructured loans contains exposures classified as performing forborne. An exposure is considered performing forborne
if the conditions of the non-performing status are not met at the time of the restructuring, or the exposure fulfilled the
requirements of the minimum one-year cure period as non-performing forborne.
There is no significant change in the forborne exposures compared to the end of previous year 2023.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
673
NOTE 37:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
37.1. Credit risk [continued]
37.1.10. Financial instruments by Moody’s rating categories
Trading securities as at fair value through profit or loss
31/12/2024
Aaa
Aa2
Aa3
A1
A2
A3
Baa1
Baa2
Baa3
Ba1
Ba2
Ba3
B2
Not
rated
Total
Government bonds
8,738
-
9,910
-
2,499
1,138
10,287
46,394
3,499
-
1,648
1,707
230
-
86,050
Equity instruments
and fund units
-
12
11
17
42
52
22
56
54
145
-
5
-
781
1,197
Corporate bonds
-
-
-
-
-
-
-
-
-
-
-
-
-
753
753
Discounted Treasury bills
-
-
-
-
-
20
-
3,844
-
-
-
-
-
54
3,918
Mortgage bonds
-
-
-
93
-
-
-
-
-
-
-
-
-
9
102
National Bank of Hungary bonds
-
-
-
-
-
-
-
8,878
-
-
-
-
-
403,524
412,402
Other interest
bearing securities
-
-
-
-
-
173
-
4,287
472
1,183
-
-
-
2,838
8,953
Other non-interest
bearing securities
-
-
-
-
-
-
-
-
-
-
-
-
-
982
982
Total
8,738
12
9,921
110
2,541
1,383
10,309
63,459
4,025
1,328
1,648
1,712
230
408,941
514,357
31/12/2023
Aaa
Aa2
Aa3
A2
A3
Baa1
Baa2
Baa3
Ba1
Ba2
Ba3
B1
Not rated
Total
Government bonds
2,122
14,925
-
532
-
9,531
28,869
910
-
718
-
625
-
58,232
Equity instruments
and fund units
-
23
52
56
33
17
20
2
39
-
4
-
267
513
Corporate bonds
-
-
-
-
-
-
-
40
-
-
-
-
544
584
Discounted Treasury bills
-
-
-
-
8
-
3,918
-
-
-
-
-
33
3,959
Mortgage bonds
-
-
-
-
-
-
-
-
-
-
-
-
97
97
Other interest
bearing securities
-
-
-
-
-
-
2,211
-
-
-
-
-
1,641
3,852
Other non-interest
bearing securities
-
-
-
-
-
-
-
-
-
-
-
-
331
331
Total
2,122
14,948
52
588
41
9,548
35,018
952
39
718
4
625
2,913
67,568
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
674
NOTE 37:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
37.1. Credit risk [continued]
37.1.10. Financial instruments by Moody’s rating categories [continued]
Non-trading instruments mandatorily at fair value through profit or loss
31/12/2024
Aaa
Aa3
A3
Baa2
Not rated
Total
Non-trading equity instruments mandatorily at
fair value through profit or loss
6,096
-
575
28,513
38,729
73,913
Non-trading debt instruments mandatorily at
fair value through profit or loss
-
839
-
-
1,778
2,617
Total
6,096
839
575
28,513
40,507
76,530
31/12/2023
Aaa
Aa2
Aa3
A3
Baa2
Not rated
Total
Non-trading equity instruments mandatorily at
fair value through profit or loss
11,196
-
-
471
-
52,335
64,002
Non-trading debt instruments mandatorily at
fair value through profit or loss
1,166
655
6
-
45
1,814
3,686
Total
12,362
655
6
471
45
54,149
67,688
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
675
NOTE 37:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
37.1. Credit risk [continued]
37.1.10. Financial instruments by Moody’s rating categories [continued]
Securities at fair value through other comprehensive income
31/12/2024
Aaa
Aa1
Aa3
A1
A2
A3
Baa1
Baa2
Baa3
Ba1
Ba2
B1
Ca
Not
rated
N/A
Total
Government bonds
40,673
2,275
10,356
8,665
19,924
207,629
115,964
245,858
81,623
-
296,786
102,780
155,135
-
24,395
1,312,063
Corporate bonds
-
833
822
-
-
2,056
-
-
-
7,326
5,866
-
-
10,140
-
27,043
Mortgage bonds
13,169
-
390
11,751
-
-
-
-
-
-
-
-
-
8,923
-
34,233
National Bank of
Hungary bonds
-
-
-
-
-
-
-
205,050
-
-
-
-
-
-
-
205,050
Interest bearing
treasury bills
-
-
-
-
-
-
-
86
-
-
-
-
-
-
-
86
Other securities
2,409
-
-
615
812
8,361
-
-
-
-
26,606
-
-
5,546
-
44,349
Non-trading
equity instruments
-
-
10,143
-
-
27,003
-
-
-
-
-
-
-
45,583
-
82,729
Total
56,251
3,108
21,711
21,031
20,736
245,049
115,964
450,994
81,623
7,326
329,258
102,780
155,135
70,192
24,395
1,705,553
31/12/2023
Aaa
Aa1
Aa2
Aa3
A1
A2
A3
Baa1
Baa2
Baa3
Ba1
Ba2
B2
Ca
Not
rated
N/A
Total
Government bonds
17,862
2,480
9,863
1,852
15,740
18,033
96,741
107,428
572,598
72,542
-
135,873
95,481
85,428
25,436
30,873
1,288,230
Corporate bonds
-
1,526
751
-
-
-
4,336
-
-
-
3,840
5,504
6,924
-
12,115
-
34,996
Mortgage bonds
-
-
-
-
21,463
-
-
-
-
-
-
-
-
-
8,881
-
30,344
National Bank of
Hungary bonds
-
-
-
-
-
-
-
-
114,746
-
-
-
-
-
-
-
114,746
Interest bearing
treasury bills
-
-
-
-
-
-
-
-
235
-
-
-
-
-
-
-
235
Other securities
28,404
-
1,541
734
553
2,632
9,171
-
-
-
-
24,424
-
-
4,970
-
72,429
Non-trading
equity instruments
8,984
-
-
160
-
-
19,056
3,219
278
-
-
-
-
-
28,784
-
60,481
Total
55,250
4,006
12,155
2,746
37,756
20,665
129,304
110,647
687,857
72,542
3,840
165,801
102,405
85,428
80,186
30,873
1,601,461
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
676
NOTE 37:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
37.1. Credit risk [continued]
37.1.10. Financial instruments by Moody’s rating categories [continued]
Securities at amortized cost
31/12/2024
Aaa
Aa1
Aa2
Aa3
A1
A2
A3
Baa1
Baa2
Baa3
Ba1
Ba2
B1
B3
Caa1
Ca
C
Not
rated
N/A
Total
Government bonds
630,724
101,890
8,160
215,094
1,224
213,019
816,635
645,168
2,892,326
383,412
-
23,728
87,987
51,204
-
308,362
2,510
-
7,211
6,388,654
Corporate bonds
1,980
1,549
6,944
12,634
4,093
4,422
14,500
15,729
15,942
774
581
-
-
-
-
-
-
264,506
-
343,654
Discounted Treasury bills
-
-
-
-
-
-
-
22
92,894
-
-
-
-
43,535
-
-
-
-
-
136,451
Mortgage bonds
2,077
-
-
-
18,057
-
-
-
-
-
-
-
-
-
-
-
-
11,847
-
31,981
Interest bearing Treasury bills
-
-
-
-
-
-
-
-
-
-
-
-
1,658
-
-
-
-
-
1,658
Other securities
87,011
-
27,855
56,856
119,230
53,358
65,109
48,363
16,259
14,507
2,517
-
-
-
1,628
-
-
52,086
-
544,779
Total
721,792
103,439
42,959
284,584
142,604
270,799
896,244
709,282
3,017,421
398,693
3,098
23,728
89,645
94,739
1,628
308,362
2,510
328,439
7,211
7,447,177
31/12/2023
Aaa
Aa1
Aa2
Aa3
A1
A2
A3
Baa1
Baa2
Baa3
Ba1
Ba2
Ba3
B1
B2
B3
Caa1
Ca
Not
rated
N/A
Total
Government bonds
464,270
75,313
54,311
38,405
11,767
149,424
219,773
295,442
2,558,935
72,024
-
19,625
68,071
35,377
29,321
57,801
-
268,207
-
22,174
4,440,240
Corporate bonds
1,802
1,414
13,396
4,471
2,991
5,182
16,084
14,592
17,371
16,064
-
-
-
-
6,427
-
-
-
207,836
-
307,630
Discounted
Treasury bills
6,454
7,234
12,497
10,245
-
-
1,120
-
-
-
-
-
-
-
-
29,407
-
-
54
-
67,011
Mortgage bonds
13,019
11,689
24,708
Interest bearing
Treasury bills
-
-
-
-
-
-
-
-
-
-
-
-
-
-
6,462
-
-
-
-
-
6,462
Other securities
26,494
-
14,868
61,393
66,831
35,813
50,775
50,481
24,007
17,747
4,244
-
-
-
-
-
1,491
-
49,077
-
403,221
Total
499,020
83,961
95,072
114,514
94,608
190,419
287,752
360,515
2,600,313
105,835
4,244
19,625
68,071
35,377
42,210
87,208
1,491
268,207
268,656
22,174
5,249,272
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
677
NOTE 37:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
37.2. Maturity analysis of financial assets and liabilities
Liquidity risk is a measure of the extent to which the Group may be required to raise funds to meet its commitments
associated with financial instruments. The Group maintains its liquidity position in accordance with regulations prescribed
by the NBH.
The essential aspect of the liquidity risk management strategy is to identify all relevant systemic and idiosyncratic sources
of liquidity risk and to measure the probability and severity of such events. During liquidity risk management the Group
considers the effect of liquidity risk events caused by reasons arising in the bank business line (deposit withdrawal), the
national economy (exchange rate shock yield curve shock) and the global financial system (capital market shock).
In line with the Group’s risk management policy liquidity risks are measured and managed on multiply hierarchy levels
and applying integrated unified VaR based methodology. The basic requirement is that the Group must keep high quality
liquidity reserves which means it can fulfill all liabilities when they fall due without material additional costs.
The liquidity reserves can be divided in two parts. There are separate decentralized liquid asset portfolios at subsidiary
level and a centralized flexible liquidity pool at a Group level. The reserves at subsidiary levels are held to cover the
relevant shocks of the subsidiaries which may arise in local currencies (deposit withdrawal, local capital market shock,
unexpected business expansion), while the centralized liquidity pool is held to cover the Bank’s separate shocks (deposit-
, yield curve- and exchange rate shocks) and all group member’s potential shocks that may arise in foreign currencies
(deposit withdrawal, capital market shock).
The recalculation of shocks is made at least quarterly while the recalibration of shock measurement models and review
of the risk management methodology is an annual process. The monitoring of liquidity reserves for both centralized and
decentralized liquid asset portfolio has been built into the daily reporting process.
Due to the balance sheet adjustment process (deleveraging) experienced in the last few years, the liquidity reserves of the
Group increased significantly while the liquidity risk exposure has decreased considerably. Currently the (over)coverage
of potential liquidity risk exposure by high quality liquid assets is high. There were no material changes in the liquidity
risk management process for the year ended 31 December 2024.
The contractual amounts disclosed in the maturity analyses are the contractual undiscounted cash-flows like gross finance
lease obligations (before deducting finance charges); prices specified in forward agreements to purchase financial assets
for cash; net amounts for pay-floating/receive-fixed interest rate swaps for which net cash-flows are exchanged;
contractual amounts to be exchanged in a derivative financial instrument for which gross cash-flows are exchanged; gross
loan commitments.
Such undiscounted cash-flows differ from the amount included in the Consolidated Statement of Financial Position
because the amount in that statement is based on discounted cash-flows. When the amount payable is not fixed, the amount
disclosed is determined by reference to the conditions existing at the end of the reporting period. For example, when the
amount payable varies with changes in an index, the amount disclosed may be based on the level of the index at the end
of the period.
The following tables provide an analysis of assets and liabilities about the non-discounted cash-flow into relevant maturity
groupings based on the remaining period from the balance sheet date to the contractual maturity date. It is presented under
the most prudent consideration of maturity dates where options or repayment schedules allow for early repayment
possibilities.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
678
NOTE 37:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
37.2. Maturity analysis of financial assets and liabilities [continued]
31/12/2024
Within 3
months
Within one year
and over 3
months
Within 5 years
and over one
year
Over 5 years
Without
maturity
Total
Cash, amounts due from banks and balances with the National Banks
6,081,452
149
-
-
-
6,081,601
Placements with other banks
1,573,903
55,598
167,564
105,797
1,811
1,904,673
Repo receivables
332,369
-
-
-
-
332,369
Trading securities at fair value through profit or loss
435,363
10,204
44,540
25,888
377
516,372
Non-trading instruments mandatorily at fair value through profit or loss
6,671
-
-
-
57,543
64,214
Securities at fair value through other comprehensive income
308,098
204,069
980,059
262,531
158,247
1,913,004
Securities at amortized cost
710,483
1,055,389
3,288,055
2,898,233
-
7,952,160
Loans at amortized cost
2,547,329
4,315,757
8,552,986
8,516,428
-
23,932,500
Finance lease receivable
148,644
356,068
1,063,186
105,855
-
1,673,753
Loans mandatorily at fair value through profit or loss
36,245
44,927
256,515
1,132,775
-
1,470,462
Associates and other investments
-
-
-
-
134,728
134,728
Other financial assets1
316,678
7,435
13,558
283
1,273
339,227
TOTAL ASSETS
12,497,235
6,049,596
14,366,463
13,047,790
353,979
46,315,063
Amounts due to banks, the National Governments,
deposits from the National Banks and other banks
407,594
506,520
629,096
627,990
-
2,171,200
Repo liabilities
132,122
15
-
-
-
132,137
Financial liabilities designated at fair value through profit or loss
650
1,059
5,130
65,627
-
72,466
Deposits from customers2
29,551,220
1,723,312
430,297
53,913
-
31,758,742
Liabilities from issued securities
65,947
224,388
2,034,050
316,132
-
2,640,517
Leasing liabilities
4,177
11,022
38,641
32,261
-
86,101
Other financial liabilities1
717,826
40,698
26,643
60
2,181
787,408
Subordinated bonds and loans
76
9,597
7,360
361,046
-
378,079
TOTAL LIABILITIES
30,879,612
2,516,611
3,171,217
1,457,029
2,181
38,026,650
NET POSITION3
(18,382,377)
3,532,985
11,195,246
11,590,761
351,798
8,288,413
1 Without derivative financial instruments.
2 Deposit from customers includes the fair value changes on hedged deposits involved in portfolio hedge of interest rate risk.
3 Analysis for net position of assets and liabilities are calculated in accordance with IFRS 7, therefore certain financial instruments are presented in the earliest period in which the Group could be required to pay. On-demand
deposits are presented in the earliest (within 3 month) period category, however based on the Management’s discretion the Group has appropriate liquidity reserves as maintenance and management of liquidity risk.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
679
NOTE 37:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
37.2. Maturity analysis of financial assets and liabilities [continued]
31/12/2024
Within 3
months
Within one year
and over 3
months
Within 5 years
and over one
year
Over 5 years
Without
maturity
Total
Receivables from derivative financial instruments held for trading
5,850,423
1,437,108
672,271
59,398
-
8,019,200
Liabilities from derivative financial instruments held for trading
(5,875,018)
(1,461,135)
(678,939)
(63,456)
-
(8,078,548)
Net position of financial instruments
held for trading
(24,595)
(24,027)
(6,668)
(4,058)
-
(59,348)
Receivables from derivative financial instruments
designated as hedge accounting
39,945
242,697
873,658
25,923
-
1,182,223
Liabilities from derivative financial instruments
designated as hedge accounting
(30,267)
(242,235)
(819,664)
(18,919)
-
(1,111,085)
Net position of financial instruments designated
as hedge accounting
9,678
462
53,994
7,004
-
71,138
Net position of derivative financial instruments total
(14,917)
(23,565)
47,326
2,946
-
11,790
Commitments to extend credit
4,703,379
650,088
255,927
84,409
-
5,693,803
Bank guarantees
687,488
333,929
380,441
145,521
-
1,547,379
Confirmed letters of credit
26,331
6,973
7,816
-
-
41,120
Factoring loan commitment
466,323
1,616
-
-
-
467,939
Other commitments
122,059
170,113
173,083
65,167
-
530,422
Off-balance sheet commitments
6,005,580
1,162,719
817,267
295,097
-
8,280,663
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
680
NOTE 37:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
37.2. Maturity analysis of financial assets and liabilities [continued]
31/12/2023
Within 3
months
Within one year
and over 3
months
Within 5 years
and over one
year
Over 5 years
Without
maturity
Total
Cash, amounts due from banks and balances with the National Banks
7,125,535
120
-
-
-
7,125,655
Placements with other banks
1,293,027
14,893
173,595
91,787
1,098
1,574,400
Repo receivables
224,555
-
65
-
-
224,620
Trading securities at fair value through profit or loss
39,807
2,531
17,808
6,673
52
66,871
Non-trading instruments mandatorily at fair value through profit or loss
4,752
-
58
21
49,216
54,047
Securities at fair value through other comprehensive income
216,151
163,292
1,030,583
244,023
117,626
1,771,675
Securities at amortized cost
506,405
281,883
3,028,531
1,622,705
-
5,439,524
Loans at amortized cost
2,184,372
3,423,492
7,381,337
7,325,898
40,988
20,356,087
Finance lease receivable
138,144
326,395
878,914
112,276
-
1,455,729
Loans mandatorily at fair value through profit or loss
38,389
40,227
238,792
1,026,918
-
1,344,326
Associates and other investments
-
-
-
-
105,824
105,824
Other financial assets1
273,035
25,755
3,513
10,521
4,179
317,003
TOTAL ASSETS
12,044,172
4,278,588
12,753,196
10,440,822
318,983
39,835,761
Amounts due to banks, the National Governments,
deposits from the National Banks and other banks
276,875
164,640
1,133,668
518,712
-
2,093,895
Repo liabilities
126,237
-
-
-
-
126,237
Financial liabilities designated at fair value through profit or loss
739
1,077
5,387
62,240
-
69,443
Deposits from customers2
26,566,638
1,362,729
391,470
26,550
-
28,347,387
Liabilities from issued securities
143,613
424,469
1,253,504
330,306
-
2,151,892
Leasing liabilities
3,100
10,046
50,179
18,270
-
81,595
Other financial liabilities1
562,576
34,753
28,200
2
5,555
631,086
Subordinated bonds and loans
7,273
1,844
14,234
546,893
-
570,244
TOTAL LIABILITIES
27,687,051
1,999,558
2,876,642
1,502,973
5,555
34,071,779
NET POSITION3
(15,642,879)
2,279,030
9,876,554
8,937,849
313,428
5,763,982
1 Without derivative financial instruments
2 Deposit from customers includes the fair value changes on hedged deposits involved in portfolio hedge of interest rate risk.
3 Analysis for net position of assets and liabilities are calculated in accordance with IFRS 7, therefore certain financial instruments are presented in the earliest period in which the Group could be required to pay. On-demand
deposits are presented in the earliest (within 3 month) period category, however based on the Management’s discretion the Group has appropriate liquidity reserves as maintenance and management of liquidity risk.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
681
NOTE 37:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
37.2. Maturity analysis of financial assets and liabilities [continued]
31/12/2023
Within 3
months
Within one year
and over 3
months
Within 5 years
and over one
year
Over 5 years
Without
maturity
Total
Receivables from derivative financial instruments held for trading
7,408,699
1,198,261
827,516
21,685
-
9,456,161
Liabilities from derivative financial instruments held for trading
(7,308,301)
(1,210,824)
(886,862)
(24,149)
-
(9,430,136)
Net position of financial instruments
held for trading
100,398
(12,563)
(59,346)
(2,464)
-
26,025
Receivables from derivative financial instruments
designated as hedge accounting
86,989
283,147
765,793
211,390
-
1,347,319
Liabilities from derivative financial instruments
designated as hedge accounting
(84,445)
(296,781)
(1,810,723)
(204,952)
-
(2,396,901)
Net position of financial instruments designated
as hedge accounting
2,544
(13,634)
(1,044,930)
6,438
-
(1,049,582)
Net position of derivative financial instruments total
102,942
(26,197)
(1,104,276)
3,974
-
(1,023,557)
Commitments to extend credit
4,148,938
461,161
156,921
39,707
-
4,806,727
Bank guarantees
644,440
313,978
305,642
157,898
-
1,421,958
Confirmed letters of credit
42,990
11,403
7,604
-
-
61,997
Factoring loan commitment
456,411
4,044
-
-
-
460,455
Other commitments
89,821
152,175
128,559
40,241
-
410,796
Off-balance sheet commitments
5,382,600
942,761
598,726
237,846
-
7,161,933
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
682
NOTE 37:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
37.3. Net foreign currency position and foreign currency risk
31/12/2024
USD
EUR
CHF
Other
Total
Assets
1,530,210
17,126,367
80,020
11,582,268
30,318,865
Liabilities
(2,036,244)
(15,307,447)
(166,380)
(9,749,648)
(27,259,719)
Derivative financial
instruments
426,671
(118,045)
85,845
(47,804)
346,667
Net position
(79,363)
1,700,875
(515)
1,784,816
3,405,813
31/12/2023
USD
EUR
CHF
Other
Total
Assets
1,425,785
15,568,497
67,915
10,112,894
27,175,091
Liabilities
(1,958,951)
(14,622,216)
(170,709)
(8,299,337)
(25,051,213)
Derivative financial
instruments
691,178
1,038,718
156,360
5,047
1,891,303
Net position
158,012
1,984,999
53,566
1,818,604
4,015,181
The table above provides an analysis of the main foreign currency exposures of the Group that arise in the non-functional
currency of the entities constituting the Group. The remaining foreign currencies are shown within ‘Others’. ‘Others’
category contains mainly foreign currencies in RON, RSD, HRK, UAH, RUB, BGN, ALL, MDL and UZS. The Group
monitors its foreign exchange position for compliance with the regulatory requirements of the National Banks and its own
limit system established in respect of limits on open positions. The measurement of the open foreign currency position of
the Group involves monitoring the “VaR” limit on the foreign exchange exposure of the Group. The derivative financial
instruments detailed in the table above are presented at fair value.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
683
NOTE 37:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
37.4. Interest rate risk management
Interest rate risk is the risk that the value of a financial instrument will fluctuate due to changes in market interest rates.
The length of time for which the rate of interest is fixed on a financial instrument, therefore, indicates to what extent it is
exposed to interest rate risk.
The majority of the interest-bearing assets and liabilities of the Group are structured to match either short-term assets and
short-term liabilities, or long-term assets and liabilities with repricing opportunities within one year, or long-term assets
and corresponding liabilities where repricing is performed simultaneously.
In addition, the significant spread existing between the different types of interest-bearing assets and liabilities enables the
Group to benefit from a high level of flexibility in adjusting for its interest rate matching and interest rate risk exposure.
The following table presents the interest repricing periods of the assets and liabilities. Variable yield assets and liabilities
have been reported in accordance with their next repricing date. Fixed income assets and liabilities have been reported in
accordance with their maturity.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
684
NOTE 37:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
37.4. Interest rate risk management [continued]
As at 31 December 2024
ASSETS
Within 1 month
Over 1 month and
Within 3 months
Over 3 months and
Within 12 months
Over 1 year and
Within 2 years
Over 2 years
Non-interest-
bearing
Total
Total
HUF
Fx
HUF
Fx
HUF
Fx
HUF
Fx
HUF
Fx
HUF
Fx
HUF
Fx
Cash, amounts due from banks and
balances with the
National Banks
1,409,105
2,745,110
10
534
-
689
-
-
-
1
232,060
1,691,503
1,641,175
4,437,837
6,079,012
fixed rate
1,402,976
2,509,429
2
534
-
689
-
-
-
1
-
-
1,402,978
2,510,653
3,913,631
variable rate
6,129
235,681
8
-
-
-
-
-
-
-
-
-
6,137
235,681
241,818
non-interest-bearing
-
-
-
-
-
-
-
-
-
-
232,060
1,691,503
232,060
1,691,503
1,923,563
Placements with other banks
203,611
1,168,594
32,057
83,994
1
54,955
-
4,183
1,344
64,992
55,057
223,113
292,070
1,599,831
1,891,901
fixed rate
15,176
1,032,986
-
83,825
1
54,955
-
4,183
1,344
63,298
-
-
16,521
1,239,247
1,255,768
variable rate
188,435
135,608
32,057
169
-
-
-
-
-
1,694
-
-
220,492
137,471
357,963
non-interest-bearing
-
-
-
-
-
-
-
-
-
-
55,057
223,113
55,057
223,113
278,170
Repo receivables
139,427
192,276
-
-
-
-
-
-
-
-
-
134
139,427
192,410
331,837
fixed rate
139,427
192,276
-
-
-
-
-
-
-
-
-
-
139,427
192,276
331,703
variable rate
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
non-interest-bearing
-
-
-
-
-
-
-
-
-
-
-
134
-
134
134
Trading instruments at fair value
through profit or loss
417,158
4,811
1,149
9,462
5,236
9,679
525
9,183
36,602
18,373
450
1,729
461,120
53,237
514,357
fixed rate
415,465
4,757
214
9,462
4,109
9,679
525
9,183
36,602
18,373
-
-
456,915
51,454
508,369
variable rate
1,693
54
935
-
1,127
-
-
-
-
-
-
-
3,755
54
3,809
non-interest-bearing
-
-
-
-
-
-
-
-
-
-
450
1,729
450
1,729
2,179
Non-trading instruments mandatorily at fair value
through profit or loss
-
-
-
-
-
-
-
-
-
-
49,547
26,983
49,547
26,983
76,530
fixed rate
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
variable rate
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
non-interest-bearing
-
-
-
-
-
-
-
-
-
-
49,547
26,983
49,547
26,983
76,530
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
685
NOTE 37:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
37.4. Interest rate risk management [continued]
As at 31 December 2024 [continued]
ASSETS [continued]
Within 1 month
Over 1 month and
Within 3 months
Over 3 months and
Within 12 months
Over 1 year and
Within 2 years
Over 2 years
Non-interest-
bearing
Total
Total
HUF
Fx
HUF
Fx
HUF
Fx
HUF
Fx
HUF
Fx
HUF
Fx
HUF
Fx
Securities at fair value through other
comprehensive income
312,048
12,489
281
59,022
91,839
171,975
127
211,180
197,315
566,548
403
82,326
602,013
1,103,540
1,705,553
fixed rate
301,641
12,489
36
59,022
91,839
167,846
127
209,442
197,315
566,548
-
-
590,958
1,015,347
1,606,305
variable rate
10,407
-
245
-
-
4,129
-
1,738
-
-
-
-
10,652
5,867
16,519
non-interest-bearing
-
-
-
-
-
-
-
-
-
-
403
82,326
403
82,326
82,729
Securities at amortized cost
10,795
497,298
10,042
159,923
690,404
426,360
755,037
557,349
1,473,057
2,844,974
-
21,938
2,939,335
4,507,842
7,447,177
fixed rate
751
497,298
-
155,801
690,404
426,360
755,037
557,349
1,472,558
2,844,974
-
-
2,918,750
4,481,782
7,400,532
variable rate
10,044
-
10,042
4,122
-
-
-
-
499
-
-
-
20,585
4,122
24,707
non-interest-bearing
-
-
-
-
-
-
-
-
-
-
-
21,938
-
21,938
21,938
Loans at amortized cost,
net of allowance for loan losses
1,042,915
8,293,966
423,550
2,216,029
144,037
1,753,825
167,504
762,093
2,033,163
3,190,139
131,337
131,823
3,942,506
16,347,875
20,290,381
fixed rate
44,776
2,012,784
58,830
267,791
73,472
918,694
134,008
745,751
1,529,058
3,133,887
-
-
1,840,144
7,078,907
8,919,051
variable rate
998,139
6,281,182
364,720
1,948,238
70,565
835,131
33,496
16,342
504,105
56,252
-
-
1,971,025
9,137,145
11,108,170
non-interest-bearing
-
-
-
-
-
-
-
-
-
-
131,337
131,823
131,337
131,823
263,160
Finance lease receivables
29,187
117,006
11,948
182,729
19,684
218,323
49,854
165,108
298,129
412,867
92
6,550
408,894
1,102,583
1,511,477
fixed rate
8,234
3,853
2,553
22,739
19,478
77,985
49,334
82,644
282,166
258,657
-
-
361,765
445,878
807,643
variable rate
20,953
113,153
9,395
159,990
206
140,338
520
82,464
15,963
154,210
-
-
47,037
650,155
697,192
non-interest-bearing
-
-
-
-
-
-
-
-
-
-
92
6,550
92
6,550
6,642
Loans mandatorily at fair value
through profit or loss
52,930
-
73,479
-
444,796
2,558
291,153
-
694,865
-
-
-
1,557,223
2,558
1,559,781
fixed rate
-
-
-
-
-
2,558
-
-
-
-
-
-
-
2,558
2,558
variable rate
52,930
-
73,479
-
444,796
-
291,153
-
694,865
-
-
-
1,557,223
-
1,557,223
non-interest-bearing
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Fair value adjustment of derivative
financial instruments
1,135,228
1,050,184
1,082,978
1,051,630
1,000,250
614,282
188,848
36,176
326,300
317,311
837,606
327,441
4,571,210
3,397,024
7,968,234
fixed rate
1,067,092
986,576
854,189
542,623
651,699
448,091
188,848
36,137
329,605
316,781
-
-
3,091,433
2,330,208
5,421,641
variable rate
68,136
63,608
228,789
509,007
348,551
166,191
-
39
(3,305)
530
-
-
642,171
739,375
1,381,546
non-interest-bearing
-
-
-
-
-
-
-
-
-
-
837,606
327,441
837,606
327,441
1,165,047
Other financial assets
617
38,521
805
17
216
1,790
-
-
-
186
99,212
150,956
100,850
191,470
292,320
fixed rate
313
33,966
132
3
216
1,790
-
-
-
181
-
-
661
35,940
36,601
variable rate
304
4,555
673
14
-
-
-
-
-
5
-
-
977
4,574
5,551
non-interest-bearing
-
-
-
-
-
-
-
-
-
-
99,212
150,956
99,212
150,956
250,168
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
686
NOTE 37:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
37.4. Interest rate risk management [continued]
As at 31 December 2024 [continued]
LIABILITIES
Within 1 month
Over 1 month and
Within 3 months
Over 3 months and
Within 12 months
Over 1 year and
Within 2 years
Over 2 years
Non-interest-
bearing
Total
Total
HUF
Fx
HUF
Fx
HUF
Fx
HUF
Fx
HUF
Fx
HUF
Fx
HUF
Fx
Amounts due to banks, the Hungarian
Government, deposits from
the National Bank of Hungary and other banks
56,243
107,988
176,224
313,462
295,501
124,345
89,956
110,324
160,824
448,283
53,660
85,381
832,408
1,189,783
2,022,191
fixed rate
15,565
23,373
98,839
68,997
281,384
61,808
89,956
100,447
160,824
418,827
-
-
646,568
673,452
1,320,020
variable rate
40,678
84,615
77,385
244,465
14,117
62,537
-
9,877
-
29,456
-
-
132,180
430,950
563,130
non-interest-bearing
-
-
-
-
-
-
-
-
-
-
53,660
85,381
53,660
85,381
139,041
Repo liabilities
23,736
108,401
-
-
-
-
-
-
-
-
-
-
23,736
108,401
132,137
fixed rate
23,736
108,401
-
-
-
-
-
-
-
-
-
-
23,736
108,401
132,137
variable rate
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
non-interest-bearing
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Financial liabilities designated at fair value
through profit or loss
17,008
-
-
-
-
-
16
-
1,456
-
54,010
-
72,490
-
72,490
fixed rate
-
-
-
-
-
-
16
-
-
-
-
-
16
-
16
variable rate
17,008
-
-
-
-
-
-
-
1,456
-
-
-
18,464
-
18,464
non-interest-bearing
-
-
-
-
-
-
-
-
-
-
54,010
-
54,010
-
54,010
Deposits from customers1
8,226,803
20,445,413
117,347
745,736
77,747
1,184,609
60,318
185,142
141,261
145,784
53,691
282,547
8,677,167
22,989,231
31,666,398
fixed rate
1,080,245
9,229,742
117,347
744,055
77,652
1,182,192
60,318
181,916
141,261
143,141
-
-
1,476,823
11,481,046
12,957,869
variable rate
7,146,558
11,215,671
-
1,681
95
2,417
-
3,226
-
2,643
-
-
7,146,653
11,225,638
18,372,291
non-interest-bearing
-
-
-
-
-
-
-
-
-
-
53,691
282,547
53,691
282,547
336,238
Liabilities from issued securities
181,102
2,501
14,410
-
87,099
131,816
8,298
586,584
115,427
1,455,408
-
10,479
406,336
2,186,788
2,593,124
fixed rate
2,262
2,501
14,410
-
87,099
117,537
8,298
586,584
115,427
1,455,408
-
-
227,496
2,162,030
2,389,526
variable rate
178,840
-
-
-
-
14,279
-
-
-
-
-
-
178,840
14,279
193,119
non-interest-bearing
-
-
-
-
-
-
-
-
-
-
-
10,479
-
10,479
10,479
1Deposit from customers includes the fair value changes on hedged deposits involved in portfolio hedge of interest rate risk.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
687
NOTE 37:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
37.4. Interest rate risk management [continued]
As at 31 December 2024 [continued]
LIABILITIES [continued]
Within 1 month
Over 1 month and
Within 3 months
Over 3 months and
Within 12 months
Over 1 year and
Within 2 years
Over 2 years
Non-interest-
bearing
Total
Total
HUF
Fx
HUF
Fx
HUF
Fx
HUF
Fx
HUF
Fx
HUF
Fx
HUF
Fx
Fair value adjustment of derivative
financial instruments
905,752
1,553,774
1,422,318
639,273
1,237,309
523,519
149,761
42,400
291,452
215,645
696,524
216,307
4,703,116
3,190,918
7,894,034
fixed rate
781,932
1,508,386
878,673
490,085
769,354
332,117
149,585
42,394
291,452
215,645
-
-
2,870,996
2,588,627
5,459,623
variable rate
123,820
45,388
543,645
149,188
467,955
191,402
176
6
-
-
-
-
1,135,596
385,984
1,521,580
non-interest-bearing
-
-
-
-
-
-
-
-
-
-
696,524
216,307
696,524
216,307
912,831
Leasing liabilities
291
1,207
1,566
2,610
156
13,023
129
11,438
875
46,043
1,043
3,728
4,060
78,049
82,109
fixed rate
182
707
2
1,583
9
7,390
3
5,331
389
15,527
-
-
585
30,538
31,123
variable rate
109
500
1,564
1,027
147
5,633
126
6,107
486
30,516
-
-
2,432
43,783
46,215
non-interest-bearing
-
-
-
-
-
-
-
-
-
-
1,043
3,728
1,043
3,728
4,771
Other financial liabilities
1,144
45,638
1
249
826
1,942
-
158
-
252
476,830
291,366
478,801
339,605
818,406
fixed rate
451
45,580
1
83
826
1,801
-
138
-
248
-
-
1,278
47,850
49,128
variable rate
693
58
-
166
-
141
-
20
-
4
-
-
693
389
1,082
non-interest-bearing
-
-
-
-
-
-
-
-
-
-
476,830
291,366
476,830
291,366
768,196
Subordinated bonds and loans
-
42
-
94,656
-
9,646
-
2,874
-
262,135
-
6
-
369,359
369,359
fixed rate
-
42
-
43
-
9,646
-
2,874
-
262,135
-
-
-
274,740
274,740
variable rate
-
-
-
94,613
-
-
-
-
-
-
-
-
-
94,613
94,613
non-interest-bearing
-
-
-
-
-
-
-
-
-
-
-
6
-
6
6
Net position
(4,659,058)
(8,144,709)
(95,567)
1,967,354
697,825
1,265,536
1,144,570
806,352
4,349,480
4,841,841
70,006
1,774,682
1,507,256
2,511,056
4,018,312
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
688
NOTE 37:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
37.4. Interest rate risk management [continued]
As at 31 December 2023
ASSETS
Within 1 month
Over 1 month and
Within 3 months
Over 3 months and
Within 12 months
Over 1 year and
Within 2 years
Over 2 years
Non-interest-
bearing
Total
Total
HUF
Fx
HUF
Fx
HUF
Fx
HUF
Fx
HUF
Fx
HUF
Fx
HUF
Fx
Cash, amounts due from banks and
balances with the
National Banks
2,183,603
3,080,965
-
19,565
-
20,837
-
8,464
-
13,708
178,600
1,619,307
2,362,203
4,762,846
7,125,049
fixed rate
15,209
2,935,907
-
-
-
86
-
-
-
2
-
-
15,209
2,935,995
2,951,204
variable rate
2,168,394
145,058
-
19,565
-
20,751
-
8,464
-
13,706
-
-
2,168,394
207,544
2,375,938
non-interest-bearing
-
-
-
-
-
-
-
-
-
-
178,600
1,619,307
178,600
1,619,307
1,797,907
Placements with other banks
349,710
746,451
94,487
46,167
14,115
31,926
-
26,306
-
77,964
68,900
110,972
527,212
1,039,786
1,566,998
fixed rate
12,841
728,857
34,723
21,302
-
28,799
-
26,306
-
75,866
-
-
47,564
881,130
928,694
variable rate
336,869
17,594
59,764
24,865
14,115
3,127
-
-
-
2,098
-
-
410,748
47,684
458,432
non-interest-bearing
-
-
-
-
-
-
-
-
-
-
68,900
110,972
68,900
110,972
179,872
Repo receivables
18,263
202,272
-
3,248
-
-
37
-
-
6
-
58
18,300
205,584
223,884
fixed rate
18,263
202,272
-
3,248
-
-
37
-
-
6
-
-
18,300
205,526
223,826
variable rate
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
non-interest-bearing
-
-
-
-
-
-
-
-
-
-
-
58
-
58
58
Trading instruments at fair value
through profit or loss
11,732
5,548
625
10,605
1,240
13,334
2,293
7,454
4,653
9,240
217
627
20,760
46,808
67,568
fixed rate
11,507
5,515
71
10,605
948
13,155
2,287
7,454
4,653
9,240
-
-
19,466
45,969
65,435
variable rate
225
33
554
-
292
179
6
-
-
-
-
-
1,077
212
1,289
non-interest-bearing
-
-
-
-
-
-
-
-
-
-
217
627
217
627
844
Non-trading instruments mandatorily at fair value
through profit or loss
-
-
-
-
-
-
-
-
-
-
41,130
26,558
41,130
26,558
67,688
fixed rate
-
-
-
-
-
-
-
-
-
-
57
-
57
-
57
variable rate
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
non-interest-bearing
-
-
-
-
-
-
-
-
-
-
41,073
26,558
41,073
26,558
67,631
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
689
NOTE 37:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
37.4. Interest rate risk management [continued]
As at 31 December 2023 [continued]
ASSETS [continued]
Within 1 month
Over 1 month and
Within 3 months
Over 3 months and
Within 12 months
Over 1 year and
Within 2 years
Over 2 years
Non-interest-
bearing
Total
Total
HUF
Fx
HUF
Fx
HUF
Fx
HUF
Fx
HUF
Fx
HUF
Fx
HUF
Fx
Securities at fair value through other
comprehensive income
222,862
711
46
50,498
13,145
151,935
96,740
153,331
208,914
642,798
403
60,078
542,110
1,059,351
1,601,461
fixed rate
210,231
709
44
50,498
13,145
151,481
96,740
149,484
208,914
641,142
-
-
529,074
993,314
1,522,388
variable rate
12,631
2
2
-
-
454
-
3,847
-
1,656
-
-
12,633
5,959
18,592
non-interest-bearing
-
-
-
-
-
-
-
-
-
-
403
60,078
403
60,078
60,481
Securities at amortized cost
1,268
329,278
-
119,709
129,361
199,108
636,997
326,501
1,689,717
1,817,333
-
-
2,457,343
2,791,929
5,249,272
fixed rate
1,268
329,278
-
114,865
129,361
197,947
636,997
326,501
1,689,717
1,817,333
-
-
2,457,343
2,785,924
5,243,267
variable rate
-
-
-
4,844
-
1,161
-
-
-
-
-
-
-
6,005
6,005
non-interest-bearing
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Loans at amortized cost,
net of allowance for loan losses
886,690
7,262,799
427,155
1,870,582
127,122
1,776,768
153,043
594,725
1,929,709
2,418,583
116,419
112,938
3,640,138
14,036,395
17,676,533
fixed rate
43,777
1,077,919
16,415
220,298
68,967
732,988
123,176
557,721
1,316,067
2,354,992
-
-
1,568,402
4,943,918
6,512,320
variable rate
842,913
6,184,880
410,740
1,650,284
58,155
1,043,780
29,867
37,004
613,642
63,591
-
-
1,955,317
8,979,539
10,934,856
non-interest-bearing
-
-
-
-
-
-
-
-
-
-
116,419
112,938
116,419
112,938
229,357
Finance lease receivables
41,807
293,789
5,628
136,318
24,443
151,241
43,716
109,584
260,094
218,359
231
4,502
375,919
913,793
1,289,712
fixed rate
6,926
175,117
3,360
7,847
24,172
32,945
43,396
40,115
242,904
97,957
-
-
320,758
353,981
674,739
variable rate
34,881
118,672
2,268
128,471
271
118,296
320
69,469
17,190
120,402
-
-
54,930
555,310
610,240
non-interest-bearing
-
-
-
-
-
-
-
-
-
-
231
4,502
231
4,502
4,733
Loans mandatorily at fair value
through profit or loss
28,046
-
9,571
-
264,085
1,711
304,546
-
792,526
-
-
-
1,398,774
1,711
1,400,485
fixed rate
-
-
-
-
-
1,711
-
-
-
-
-
-
-
1,711
1,711
variable rate
28,046
-
9,571
-
264,085
-
304,546
-
792,526
-
-
-
1,398,774
-
1,398,774
non-interest-bearing
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Fair value adjustment of derivative
financial instruments
718,070
2,088,017
961,287
1,413,898
487,263
725,487
54,251
111,275
297,986
233,911
580,115
148,516
3,098,972
4,721,104
7,820,076
fixed rate
610,190
2,025,881
364,434
1,025,262
323,861
444,688
54,251
111,035
297,986
231,517
-
-
1,650,722
3,838,383
5,489,105
variable rate
107,880
62,136
596,853
388,636
163,402
280,799
-
240
-
2,394
-
-
868,135
734,205
1,602,340
non-interest-bearing
-
-
-
-
-
-
-
-
-
-
580,115
148,516
580,115
148,516
728,631
Other financial assets
300
22,255
2,464
7,820
38
13
-
683
-
9,551
95,864
143,412
98,666
183,734
282,400
fixed rate
19
19,301
973
7,508
38
5
-
683
-
9,530
-
-
1,030
37,027
38,057
variable rate
281
2,954
1,491
312
-
8
-
-
-
21
-
-
1,772
3,295
5,067
non-interest-bearing
-
-
-
-
-
-
-
-
-
-
95,864
143,412
95,864
143,412
239,276
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
690
NOTE 37:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
37.4. Interest rate risk management [continued]
As at 31 December 2023 [continued]
LIABILITIES
Within 1 month
Over 1 month and
Within 3 months
Over 3 months and
Within 12 months
Over 1 year and
Within 2 years
Over 2 years
Non-interest-
bearing
Total
Total
HUF
Fx
HUF
Fx
HUF
Fx
HUF
Fx
HUF
Fx
HUF
Fx
HUF
Fx
Amounts due to banks, the Hungarian
Government, deposits from
the National Bank of Hungary
and other banks
76,208
156,143
25,234
132,265
147,542
151,010
371,329
88,629
241,628
434,069
55,272
61,533
917,213
1,023,649
1,940,862
fixed rate
18,526
50,694
25,233
28,872
118,910
66,941
371,329
73,820
241,628
395,989
-
-
775,626
616,316
1,391,942
variable rate
57,682
105,449
1
103,393
28,632
84,069
-
14,809
-
38,080
-
-
86,315
345,800
432,115
non-interest-bearing
-
-
-
-
-
-
-
-
-
-
55,272
61,533
55,272
61,533
116,805
Repo liabilities
24,572
101,665
-
-
-
-
-
-
-
-
-
-
24,572
101,665
126,237
fixed rate
24,572
101,665
-
-
-
-
-
-
-
-
-
-
24,572
101,665
126,237
variable rate
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
non-interest-bearing
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Financial liabilities designated at fair value
through profit or loss
19,761
-
-
-
-
-
-
-
1,481
-
49,465
-
70,707
-
70,707
fixed rate
-
-
-
-
-
-
-
-
25
-
-
-
25
-
25
variable rate
19,761
-
-
-
-
-
-
-
1,456
-
-
-
21,217
-
21,217
non-interest-bearing
-
-
-
-
-
-
-
-
-
-
49,465
-
49,465
-
49,465
Deposits from customers1
7,317,642
17,837,998
163,141
553,995
107,810
1,023,858
31,774
173,344
189,371
258,705
19,955
654,838
7,829,693
20,502,738
28,332,431
fixed rate
1,109,775
9,060,538
163,141
552,607
107,810
1,015,265
31,774
172,913
189,371
258,705
-
-
1,601,871
11,060,028
12,661,899
variable rate
6,207,867
8,777,460
-
1,388
-
8,593
-
431
-
-
-
-
6,207,867
8,787,872
14,995,739
non-interest-bearing
-
-
-
-
-
-
-
-
-
-
19,955
654,838
19,955
654,838
674,793
Liabilities from issued securities
249,008
-
72,641
19,182
178,027
112,356
32,371
268,667
151,014
1,004,515
1
7,766
683,062
1,412,486
2,095,548
fixed rate
206
-
72,083
19,182
178,027
99,036
32,371
268,667
151,014
1,004,515
-
-
433,701
1,391,400
1,825,101
variable rate
248,802
-
558
-
-
13,320
-
-
-
-
-
-
249,360
13,320
262,680
non-interest-bearing
-
-
-
-
-
-
-
-
-
-
1
7,766
1
7,766
7,767
1Deposit from customers includes the fair value changes on hedged deposits involved in portfolio hedge of interest rate risk.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
691
NOTE 37:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
37.4. Interest rate risk management [continued]
As at 31 December 2023 [continued]
LIABILITIES [continued]
Within 1 month
Over 1 month and
Within 3 months
Over 3 months and
Within 12 months
Over 1 year and
Within 2 years
Over 2 years
Non-interest-bearing
Total
Total
HUF
Fx
HUF
Fx
HUF
Fx
HUF
Fx
HUF
Fx
HUF
Fx
HUF
Fx
Fair value adjustment of derivative
financial instruments
1,822,128
1,016,999
524,302
1,865,964
445,921
874,989
59,172
111,700
197,826
173,012
693,221
43,633
3,742,570
4,086,297
7,828,867
fixed rate
1,772,814
881,895
373,167
1,019,236
280,907
500,307
59,172
111,700
197,826
173,012
-
-
2,683,886
2,686,150
5,370,036
variable rate
49,314
135,104
151,135
846,728
165,014
374,682
-
-
-
-
-
-
365,463
1,356,514
1,721,977
non-interest-bearing
-
-
-
-
-
-
-
-
-
-
693,221
43,633
693,221
43,633
736,854
Leasing liabilities
368
596
1,733
3,030
523
6,284
1,208
16,417
1,758
36,875
-
7,521
5,590
70,723
76,313
fixed rate
359
465
60
2,074
163
2,226
12
8,345
1,290
8,503
-
-
1,884
21,613
23,497
variable rate
9
131
1,673
956
360
4,058
1,196
8,072
468
28,372
-
-
3,706
41,589
45,295
non-interest-bearing
-
-
-
-
-
-
-
-
-
-
-
7,521
-
7,521
7,521
Other financial liabilities
2,442
61,562
678
292
51
1,078
-
179
4
46
349,062
241,470
352,237
304,627
656,864
fixed rate
2,170
61,551
-
272
51
744
-
86
4
46
-
-
2,225
62,699
64,924
variable rate
272
11
678
20
-
334
-
93
-
-
-
-
950
458
1,408
non-interest-bearing
-
-
-
-
-
-
-
-
-
-
349,062
241,470
349,062
241,470
590,532
Subordinated bonds and loans
-
30
-
89,415
-
192,337
-
10,019
-
270,280
-
315
-
562,396
562,396
fixed rate
-
30
-
-
-
443
-
10,019
-
270,280
-
-
-
280,772
280,772
variable rate
-
-
-
89,415
-
191,894
-
-
-
-
-
-
-
281,309
281,309
non-interest-bearing
-
-
-
-
-
-
-
-
-
-
-
315
-
315
315
Net position
(5,049,778)
(5,142,908)
713,534
1,014,267
180,938
710,448
795,769
669,368
4,400,517
3,263,951
(85,097)
1,209,892
955,883
1,725,018
2,680,901
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
692
NOTE 37:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
37.5. Market risk
The Group takes on exposure to market risks. Market risks arise from open positions in interest rate, currency and equity
products, all of which are exposed to general and specific market movements. The Group applies a ‘Value-at-Risk’ (VaR)
methodology to estimate the market risk of positions held and the maximum losses expected, based upon a number of
assumptions for various changes in market conditions. The Management Board sets limits on the value of risk that may
be accepted, which is monitored on a daily basis. (Analysis of liquidity risk, foreign currency risk and interest rate risk is
detailed in Notes 37.2., 37.3. and 37.4., respectively.)
37.5.1. Market Risk sensitivity analysis
The VaR risk measure estimates the potential loss in pre-tax profit over a given holding period for a specified confidence
level.
The VaR methodology is a statistically defined, probability-based approach that takes into account market volatilities as
well as risk diversification by recognizing offsetting positions and correlations between products and markets. Risks can
be measured consistently across all markets and products, and risk measures can be aggregated to arrive at a single risk
number. The one-day 99% VaR number used by the Group reflects the 99% probability that the daily loss will not exceed
the reported VaR.
VaR methodologies are employed to calculate daily risk numbers include the historical and variance-covariance approach.
The diversification effect has not been validated among the various market risk types when capital calculation happens.
In addition to these two methodologies, Monte Carlo simulations are applied to the various portfolios on a monthly basis
to determine potential future exposure.
The VaR of the trading portfolio can be summarized as follows (in HUF mn):
Historical VaR (99%, one-day) by risk type
Average VaR
31/12/2024
31/12/2023
Foreign exchange
6,936
10,391
Interest rate
263
406
Equity instruments
11
18
Diversification
-
-
Total VaR exposure
7,209
10,815
The table above shows the VaR figures by asset classes. Since processes driving the value of the major asset classes are
not independent (for example the depreciation of HUF against the EUR mostly coincide with the increase of the yields of
Hungarian Government Bonds), a diversification impact emerges, so the overall VaR is less than the sum of the VaR of
each individual asset class.
While VaR captures the Group’s daily exposure to currency and interest rate risk, sensitivity analysis evaluates the impact
of a reasonably possible change in interest or foreign currency rates over a year. The longer time frame of sensitivity
analysis complements VaR and helps the Group to assess its market risk exposures. Details of sensitivity analysis for
foreign currency risk are set out in Note 37.5.2., for interest rate risk in Note 37.5.3., and for equity price sensitivity
analysis in Note 37.5.4.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
693
NOTE 37:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
37.5. Market risk [continued]
37.5.2. Foreign currency sensitivity analysis
The Bank changed its methodology of foreign currency sensitivity analysis and has been using a historical VaR calculation
since 31 March 2021. The former Monte Carlo simulation represented the Group’s sensitivity to the rise and fall in the
HUF exchange rate against EUR, over a 3-month period. The sensitivity analysis included only outstanding foreign
currency denominated monetary items as strategic open positions related to foreign activities. In line with the
Management's intention, the former EUR (310) million strategic open position was fully closed as at 31 March 2021.
Since the closing of the strategic open position, the Group has been using a historical VaR calculation with a one-day
holding period. The analysis includes the same net open foreign exchange position as used under the internal capital
adequacy assessment process (ICAAP). The VaR methodology is a statistically defined, probability-based approach that
takes into account market volatilities as well as risk diversification by recognizing offsetting positions and correlations
between products and markets.
Additionally, the Bank determines the foreign currency risk of assets evaluated through the Other Comprehensive Income,
which includes securities valuated on fair value through other comprehensive income and the foreign currency translation
reserves.
The following table shows the result of the foreign currency sensitivity analysis.
The numbers below indicate the expected daily profit or loss of the portfolio beside the given confidence level.
Probability
Effects to the Consolidated
Statement of Profit or Loss
Effects to the Consolidated
Statement of Other
Comprehensive Income
In HUF million
In HUF million
31/12/2024
31/12/2023
31/12/2024
31/12/2023
1%
(4,017)
(9,947)
(6,716)
(4,201)
5%
(2,463)
(4,586)
(3,322)
(3,150)
25%
(988)
(1,041)
(1,155)
(1,264)
50%
(94)
157
(7)
(211)
25%
862
1,488
930
928
5%
2,202
4,740
2,634
2,480
1%
2,890
7,333
4,961
4,116
Note:
(1) Historical VaR simulation is based on the empirical distribution of the historical exchange rate movements between
31 December 2023 and 31 December 2024.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
694
NOTE 37:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
37.5. Market risk [continued]
37.5.3. Interest rate sensitivity analysis
The sensitivity analyses below have been determined based on the exposure to interest rates for both derivatives and non-
derivative instruments at the balance sheet date. The analysis is prepared assuming the amount of assets and liabilities
outstanding at the balance sheet date was outstanding for the whole year. The analysis was prepared by assuming only
adverse interest rate changes. The main assumptions were as follows:
•
Floating rate assets and liabilities were repriced to the modelled benchmark yields at the repricing dates assuming
the unchanged margin compared to the last repricing.
•
Fixed rate assets and liabilities were repriced at the contractual maturity date.
•
As for liabilities with discretionary repricing feature by the Bank were assumed to be repriced with two-weeks
delay, assuming no change in the margin compared to the last repricing date.
•
Deposits with an interest rate lower than 0.3% even at high market rates were assumed to be unchanged for the
whole period.
The sensitivity of interest income to changes in BUBOR was analysed by assuming two interest rate path scenarios:
(1) BUBOR decreases gradually by 35 bps over the next year (probable scenario)
(2) BUBOR increases gradually by 100 bps over the next year (alternative scenario)
The net interest income in a one-year period after 1 January 2025 would be decreased by HUF 664 million (probable
scenario) and increased by HUF 1,850 million (alternative scenario) as a result of these simulation. A similar simulation
indicated HUF (2,800) million decrease (probable scenario) and HUF 296 million (alternative scenario) increase in the
Net interest income in a one-year period after 1 January 2024.
This effect is further enhanced by capital results HUF 960 million (for probable scenario) and HUF (1,596) million (for
alternative scenario) as at 31 December 2024, the comparative results were (HUF 429 million for probable scenario, HUF
(104) million for alternative scenario as at 31 December 2023) on the government bond portfolio held for hedging
(economic).
Furthermore, the effects of an instant 10bps parallel shift of the HUF, EUR and USD yield-curves on net interest income
over a one-year period and on the market value of the hedge government bond at fair value through other comprehensive
income portfolio booked against capital was analysed. The results of unfavorable shocks can be summarized as follows
(in HUF million):
31/12/2024
31/12/2023
Description
Effects to the
net interest
income
Effects to
capital
Effects to the
net interest
income
Effects to
capital
HUF (0.1%) parallel shift
(491)
273
(298)
14
HUF 0.1% parallel shift
488
(273)
298
(14)
EUR (0.1%) parallel shift
(3,868)
-
(4,409)
-
EUR 0.1% parallel shift
4,175
-
3,933
-
USD (0.1%) parallel shift
(82)
-
(102)
-
USD 0.1% parallel shift
65
-
112
-
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
695
NOTE 37:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
37.5. Market risk [continued]
37.5.4. Equity price sensitivity analysis
The following table shows the effect of the equity price sensitivity. The Group uses VaR calculation with 1 day holding
period and a 99% confidence level. The VaR methodology is a statistically defined, probability-based approach that takes
into account market volatilities as well as risk diversification by recognizing offsetting positions and correlations between
products and markets. The daily loss will not exceed the reported VaR number with 99% of probability.
The stress test assumes the largest price movement of the last year and calculates with it as the adverse direction. These
scenarios show the loss of the portfolio when all prices change with the maximum amount of the last year.
Description
31/12/2024
31/12/2023
VaR (99%, one day, HUF million)
9
10
Stress test (HUF million)
(52)
(103)
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
696
NOTE 37:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
37.6. Capital management
Capital management
The primary objective of the capital management of the Group is to ensure the prudent operation, the entire compliance
with the prescriptions of the regulator for a persistent business operation and maximising the shareholder value,
accompanied by an optimal financing structure.
The capital management of the Group members includes the management and evaluation of the shareholders` equity and
other types of funds available for hedging risks, to be recorded in the equity and all material risks to be covered by the
capital.
The basis of the capital management of the Group members in the short run is the continuous monitoring of their capital
position, in the long run the strategic and the business planning, which includes the monitoring and forecast of the capital
position.
The Group members maintain the capital adequacy required by the regulatory bodies and the planned risk taking mainly
by means of ensuring and developing their profitability. In the event that the planned risk level of a Group member
exceeded its Core and the previously raised Supplementary capital, it ensures the prudent operation by occasional
measures. A further tool in the capital management of the Bank is the dividend policy, and the transactions performed
with the treasury shares.
Capital adequacy on the basis of CRR consolidation
The Capital Requirements Directive package (CRDIV/CRR) transposes the new global standards on banking regulation
(known as the Basel III agreement) into the EU legal framework. The new rules are applied from 1 January 2014. They
set stronger prudential requirements for institutions, requiring them to keep sufficient capital reserves and liquidity. This
new framework makes institutions in the EU more solid and strengthens their capacity to adequately manage the risks
linked to their activities and absorb any losses they may incur in doing business.
The capital adequacy of the Group is supervised based on the financial statements data prepared in accordance with IFRS
applying the current directives, rulings and indicators from 1 January 2014.
For regulatory compliance the capital adequacy ratios according to regulatory scope of consolidation are relevant. The
Pillar3 Disclosure of OTP Group contains the capital adequacy ratios calculated under regulatory scope of consolidation.
The Group has entirely complied with the regulatory capital requirements both in the year ended 31 December 2024 and
2023.
The Group uses the standard method for determining the regulatory capital requirements of the credit risk and market
risk, and parallel to that, the base indicator method, and the advanced method (“AMA”) in case of the operational risk.
For international comparison purposes, the Group calculated the Regulatory capital based on CRR data as adopted by the
EU, and the consolidated Capital adequacy ratio based on this in accordance with the regulations of Basel III. The Capital
adequacy ratio of the Group (CRR) was 20.3%, the Regulatory capital was HUF 5,200,375 million and the Total
regulatory capital requirement was HUF 2,046,142 million as at 31 December 2024. The same ratios calculated as at 31
December 2023 were the following: 18.9%, HUF 4,475,381 million and HUF 1,896,022 million.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
697
NOTE 37:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
37.6. Capital management [continued]
Capital adequacy [continued]
Calculation on CRR basis (in HUF million)
31/12/2024
31/12/2023
Core capital (Tier 1) =
4,842,978
3,945,571
Common Equity Tier 1 (CET 1)
Issued capital
28,000
28,000
Reserves1
4,808,726
3,992,843
Fair value adjustments
(43,555)
(64,033)
Other capital components
287,847
92,443
Non-controlling interests
33,741
28,542
Treasury shares
(139,315)
(13,226)
Goodwill and other intangible assets
(220,998)
(188,894)
Other adjustments
88,532
69,896
Additional Tier 1 (AT1)
-
-
Supplementary capital (Tier 2)
357,397
529,810
Subordinated bonds and loans
345,063
500,555
Other issued capital components
-
-
Components recognized in T2 capital
issued by subsidiaries
12,334
29,255
Regulatory capital
5,200,375
4,475,381
Credit risk capital requirement
1,839,095
1,702,000
Market risk capital requirement
30,461
29,346
Operational risk capital requirement
176,586
164,676
Total requirement regulatory capital
2,046,142
1,896,022
Surplus capital
3,154,233
2,579,359
CET 1 ratio
18.90%
16.60%
Tier 1 ratio
18.90%
16.60%
Capital adequacy ratio
20.30%
18.90%
1 The dividend amount planned to pay out / paid out is deducted from reserves.
Basel III
The components of the Common Equity Tier 1 capital (CET 1) are the following: Issued capital, Reserves (Retained
earnings, Other reserves, Changes in the equity of subsidiaries, Net Profit for the year, Changes due to consolidation) Fair
value adjustments, Other capital components, (Revaluation reserves, Share based payments, Cash-flow hedges, Net
investment hedge in foreign operations), Non-controlling interest, Treasury shares, Goodwill and other Intangible assets,
other adjustments (due to prudential filters, due to deferred tax receivables, due to temporary regulations).
Supplementary capital (Tier 2): Subordinated loan capital, Supplementary loan capital, Other issued capital components,
Components recognized in T2 capital issued by subsidiaries.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
698
NOTE 37:
FINANCIAL RISK MANAGEMENT (in HUF mn) [continued]
37.6. Capital management [continued]
Resolution strategy of OTP Group
The National Bank of Hungary as the group-level resolution authority of OTP Group draw up the group resolution plan
for OTP in close cooperation with the national resolution authorities of the EU and the equivalent third country
subsidiaries in line with Section 7 of the Resolution Act (XXXVII of 2014 on the further development of the system of
institutions strengthening the security of the individual players of the financial intermediary system) implementing Article
12 of BRRD (2014/59/EU Directive). According to the plan the resolution strategy for OTP Group is the Multiple Point
of Entry Approach (MPE) which determines two intervention points in the Group in case of resolution: OTP Bank
(Hungary) and OTP banka d.d. (Slovenia).
OTP Bank’s Resolution Group covers entities included in the prudential scope of consolidation of OTP Bank without
OTP banka d.d. (Slovenia) and its subsidiaries, while OTP banka d.d.’s Resolution Group covers OTP banka d.d. and its
subsidiaries which is equivalent to the prudential scope of consolidation. For both resolution groups the preferred
resolution tool is the application of open-bank bail-in at the level of each of the resolution entities – OTP Bank Plc. and
OTP banka d.d. (Slovenia).
Having regard to the acquisition of the Slovenian Nova KBM d.d. (renamed as OTP banka d.d after the merger with
former OTP subsidiary SKB Bank in August 2024), the SPE strategy formerly determined for OTP Group as the preferred
resolution strategy has been altered as a result of the update of the resolution plan in October 2023. NKBM Group was
considered by the resolution authorities financially and operationally independent from the rest of the OTP Group,
therefore the MPE approach has been selected as the most suitable resolution strategy in respect of OTP Group.
Nevertheless, the MPE resolution strategy will be reviewed in the next update of the group-level resolution plan and for
this reason the resolution authorities monitor the degree of integration of OTP banka d.d. (Slovenia) into the OTP Group
as a result of the integration project.
MREL requirement of OTP Group
Pursuant to Section 62 (1) of the Resolution Act OTP Bank shall meet the minimum requirement for own funds and
eligible liabilities (MREL) on a consolidated basis at the level of the resolution group. The MNB establishes and updates
annually the MREL requirement on the basis of the Joint Decision of the Resolution College, which is operated jointly
with the resolution authorities of OTP Bank’s subsidiaries.
The consolidated MREL requirement of OTP Bank applicable in 2024 was 18.94% of the total risk exposure amount/risk
weighted assets (TREA/RWA) and 5.78% of the total exposure measure (TEM) of OTP Bank’s Resolution Group. From
13 January 2025, OTP Bank's consolidated MREL requirement is 18.6% of the TREA/RWA and 6.02% of the TEM of
OTP Bank’s Resolution Group. Subordination requirements are applicable to OTP Bank from 16 December 2024 that are
set at 13.5% of TREA/RWA, 5% of TEM and 8% of TLOF (total liabilities and own funds) of OTP Bank’s Resolution
Group which shall be met with own funds and subordinated eligible instruments. OTP Bank shall meet the combined
buffer requirement in addition to the consolidated MREL RWA requirement / MREL RWA subordination requirement.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
699
NOTE 38:
TRANSFER OF FINANCIAL INSTRUMENTS (in HUF mn)
Financial assets transferred but not derecognized
Transferred
assets
Associated
liabilities
Transferred
assets
Associated
liabilities
Carrying amount
Carrying amount
31/12/2024
31/12/2023
Financial assets at amortized cost
Debt securities
205,726
132,137
221,951
126,237
Total
205,726
132,137
221,951
126,237
As at 31 December 2024 and 2023, respectively, the Group had an obligation from repurchase agreements (repo liability)
of HUF 132,137 million and HUF 126,237 million respectively. Securities sold temporarily under repurchase agreements
will continue to be recognized in the Consolidated Statement of Financial Position of the Group in the appropriate
securities category. The related liability is measured at amortized cost in the Consolidated Statement of Financial Position
as “Repo liabilities”.
Financial assets transferred, derecognized with continuing involvement
Financial assets which would have been derecognized but would be represented the continuing involvement are not
recognized in the Consolidated Statement of Financial Position as at 31 December 2024 or as at 31 December 2023.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
700
NOTE 39:
OFF-BALANCE SHEET ITEMS AND DERIVATIVE FINANCIAL INSTRUMENTS (in HUF
mn)
In the normal course of business, the Group becomes a party to various financial transactions that are not reflected on the
Consolidated statement of financial position and are referred to as off-balance sheet financial instruments. The following
represent notional amounts of these off-balance sheet financial instruments, unless stated otherwise.
Contingent liabilities
31/12/2024
31/12/2023
Commitments to extend credit
5,693,803
4,784,943
Guarantees arising from banking activities
1,547,379
1,421,958
Factoring loan commitment
467,939
460,455
Confirmed letters of credit
41,120
61,997
Other
530,422
410,796
Contingent liabilities and commitments total
in accordance with IFRS 9
8,280,663
7,140,149
Legal disputes (disputed value)
115,918
88,750
Underwriting guarantees
8,768
29,915
Other
56,677
2,990
Contingent liabilities and commitments
total in accordance with IAS 37
181,363
121,655
Total
8,462,026
7,261,804
Legal disputes
At the balance sheet date, the Group was involved in various claims and legal proceedings of a nature considered normal
to its business. The amount of these claims and legal proceedings corresponds to the amount of claims and legal
proceedings in previous years.
The Group believes that the various asserted claims and litigations in which it is involved will not materially affect its
financial position, future operating results or cash-flows, although no assurance can be given with respect to the ultimate
outcome of any such claim or litigation. Provisions due to legal disputes were HUF 39,867 million as at 31 December
2024 and HUF 39,351 million as at 31 December 2023, respectively. (See Note 24.)
Commitments to extend credit, guarantees and letters of credit
The primary purpose of these instruments is to ensure that funds are available to a customer as required. Guarantees and
standby letters of credit, which represent irrevocable assurances that the Group will make payments in the event that a
customer cannot meet its obligations to third parties, carry the same credit risk as loans.
Documentary and commercial letters of credit, which are written undertakings by the Group on behalf of a customer
authorising a third party to draw drafts on the Group up to a stipulated amount under specific terms and conditions, are
collateralised by the underlying shipments of goods to which they relate and therefore carry less risk than a direct
borrowing.
Commitments to extend credit represent unused portions of authorisations to extend credit in the form of loans, guarantees
or letters of credit. With respect to credit risk on commitments to extend credit, the Group is potentially exposed to loss
in an amount equal to the total unused commitments. However, the likely amount of loss is less than the total unused
commitments since most commitments to extend credit are contingent upon customers maintaining specific credit
standards.
Guarantees, irrevocable letters of credit and undrawn loan commitments are subject to similar credit risk monitoring and
credit policies as utilised in the extension of loans. The Management of the Group believes the market risk associated
with guarantees, irrevocable letters of credit and undrawn loan commitments are minimal.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
701
NOTE 39:
OFF-BALANCE SHEET ITEMS AND DERIVATIVE FINANCIAL INSTRUMENTS (in HUF
mn) [continued]
Guarantees, payment undertakings arising from banking activities
Payment undertaking is a promise by the Group to assume responsibility for the debt obligation of a borrower if that
borrower defaults until a determined amount, until a determined date, in case of fulfilling conditions, without checking
the underlying transactions. The guarantee’s liability is joint and primary with the principal, in case of payment
undertaking, while the Group assumes the obligation derived from guarantee independently by the conditions established
by the Group. A guarantee is most typically required when the ability of the primary obligor to perform its obligations
under a contract is in question, or when there is some public or private interest which requires protection from the
consequences of the principal's default or delinquency.
A contract of guarantee is subject to the statute of frauds (or its equivalent local laws) which has maturity and is only
enforceable if recorded in writing and signed by the surety and the principal. This means that if the beneficiary has not
exercised his rights against the surety or guarantor by the deadline indicated, he automatically forfeits all his claims
against the guarantor or surety.
In the case of a simple surety, the beneficiary is obliged to seek recovery of the debt from the debtor, because as long as
the debt is recoverable from the debtor, the guarantor can refuse to pay, whereas in the case of a cash surety, the
beneficiary can also go to the guarantor immediately, there being no objection to enforcement.
Derivatives
The Group maintains strict control limits on net open derivative positions, that is the difference between purchase and
sale contracts, regarding both the amount and the term. At any time the amount subject to credit risk is limited to the
current fair value of instruments that are favourable to the Group (i.e. assets), which in relation to derivatives is only a
small fraction of the contract or notional values used to express the volume of instruments outstanding. This credit risk
exposure is managed as part of the overall lending limits with customers, together with potential exposures from market
movements. Collateral or other security is not usually obtained for credit risk exposures on these instruments, except for
trading with clients, where the Group in most of the cases requires margin deposits.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
702
NOTE 40:
SHARE-BASED PAYMENTS AND EMPLOYEE BENEFITS (in HUF mn)
The previously approved option program required a modification due to the introduction of the Bank Group Policy on
Payments accepted in resolution of Annual General Meeting regarding to the amendment of CRD III. Directives and Act
on Credit Institutions and Financial Enterprises.
Key management personnel affected by the Bank Group Policy receive compensation based on performance assessment
generally in the form of cash bonus and equity shares in a ratio of 50-50%. Assignment is based on OTP shares,
furthermore performance-based payments are deferred in accordance with the rules of Credit Institutions Act.
The Bank ensures the share-based payment part for the management personnel of the Group members.
During implementation of the Remuneration Policy of the Group appeared that in case of certain foreign subsidiaries it is
not possible to ensure the originally determined share-based payment because of legal reasons – incompatible with
relevant EU-directives –, therefore a decision was made to cancel the share-based payment in affected countries, and
virtual share-based payment – cash payment fixed to share price - was made from 2017. In case of foreign subsidiaries
virtual share-based payment was made uniformly from 2021 (in the case of payments related to 2021).
The quantity of usable shares for individuals calculated for settlement of share-based payment shall be determined as the
ratio of the amount of share-based payment and share price determined by Supervisory Board (until the end of 2014 by
Board of Directors).
The value of the share-based payment at the performance assessment is determined within 10 days by Supervisory Board
based on the average of the three previous trade day’s middle rate of OTP Bank’s equity shares fixed on the Budapest
Stock Exchange.
At the same time the conditions of discounted share-based payment are determined, and share-based payment shall contain
maximum HUF 6,000 discount at the assessment date, and earnings for the shares at the payment date is maximum HUF
12,000. Employee benefits are all forms of consideration given by an entity in exchange for service rendered by employees
or for the termination of employment. IAS 19 Employee Benefits shall be applied in accounting for all employee benefits,
except those to which IFRS 2 Share-based Payment applies.
The parameters for the share-based payment relating to ongoing years 2018-2020 by the Supervisory Board for periods
of each year as follows:
Year
Share purchasing at
a discounted price
Price of
remuneration
exchanged to
share
Share purchasing at
a discounted price
Price of
remuneration
exchanged to
share
Share purchasing at
a discounted price
Price of
remuneration
exchanged to
share
Exercise
price
Maximum
earnings
Exercise
price
Maximum
earnings
Exercise
price
Maximum
earnings
HUF per share
for the year 2018
for the year 2019
for the year 2020
2019
10,413
4,000
12,413
-
-
-
-
-
-
2020
10,413
4,000
12,413
9,553
4,000
11,553
-
-
-
2021
10,413
4,000
12,413
9,553
4,000
11,553
12,644
9,000
16,644
2022
10,913
4,000
12,413
9,553
4,000
11,553
12,644
8,000
16,644
2023
10,913
4,000
12,413
9,553
4,000
11,553
13,644
8,000
16,644
2024
10,913
4,000
12,413
9,553
4,000
11,553
13,644
8,000
16,644
2025
10,913
4,000
12,413
9,553
4,000
11,553
13,644
8,000
16,644
2026
-
-
-
9,553
4,000
11,553
13,644
8,000
16,644
2027
-
-
-
-
-
-
13,644
8,000
16,644
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
703
NOTE 40:
SHARE-BASED PAYMENTS AND EMPLOYEE BENEFITS (in HUF mn) [continued]
The parameters for the share-based payment relating to ongoing years 2021-2023 by the Supervisory Board for periods
of each year as follows:
Year
Share purchasing at
a discounted price
Price of
remuneration
exchanged to
share
Share purchasing at
a discounted price
Price of
remuneration
exchanged to
share
Share purchasing at
a discounted price
Price of
remuneration
exchanged to
share
Exercise
price
Maximum
earnings
Exercise
price
Maximum
earnings
Exercise
price
Maximum
earnings
HUF per share
for the year 2021
for the year 2022
for the year 2023
2022
5,912
6,000
8,912
-
-
-
-
-
-
2023
6,912
7,000
8,912
7,773
6,000
10,773
-
-
-
2024
6,912
8,000
8,912
8,773
7,000
10,773
14,486
12,000
17,486
2025
6,912
9,000
8,912
8,773
8,000
10,773
15,486
12,000
17,486
2026
6,912
10,000
8,912
8,773
9,000
10,773
16,486
12,000
17,486
2027
6,912
10,000
8,912
8,773
10,000
10,773
16,486
12,000
17,486
2028
6,912
10,000
8,912
8,773
10,000
10,773
16,486
12,000
17,486
2029
-
-
-
8,773
10,000
10,773
16,486
12,000
17,486
2030
-
-
-
-
-
-
16,486
12,000
17,486
1Parameters of benefits for year after 2023 due in 2030 only is applicable to foreign companies and for virtual benefits.
Relevant factors considered during measurement of fair value related to share-based payment as follows:
Year
Reference
price
Assumed
volatility
Risk-free interest rate (HUF)
1-year
2-year
3-year
4-year
5-year
6-year
7-year
2017
9,200
21.30%
0.10%
0.50%
0.70%
1.00%
1.30%
1.30%
1.30%
2018
10,064
26.00%
0.20%
0.60%
1.00%
1.30%
1.60%
1.90%
2.10%
2019
12,413
19.20%
0.20%
0.70%
0.90%
1.10%
1.30%
1.40%
1.60%
2020
11,553
33.60%
0.60%
0.40%
0.50%
0.60%
0.80%
0.90%
1.00%
2021
16,644
28.60%
1.00%
1.60%
1.80%
1.90%
2.00%
2.10%
2.10%
2022
8,912
42.60%
7.10%
7.90%
7.60%
7.30%
7.10%
7.00%
6.90%
2023
10,773
33.30%
13.20%
9.20%
8.20%
7.70%
7.30%
7.10%
6.90%
2024
17,485
22.10%
6.20%
5.80%
5.80%
5.90%
5.90%
6.00%
6.00%
Year
Expected dividends (HUF/Share)
Pricing model
1 -year
2-year
3-year
4-year
5-year
6-year
7-year
2017
219
219
252
290
334
384
442
Binomial
2018
219
219
219
219
219
219
219
Binomial
2019
252
290
333
383
440
507
583
Binomial
2020
219
252
290
333
383
440
507
Binomial
2021
371
321
357
393
432
475
523
Binomial
2022
452
497
547
601
661
728
800
Binomial
2023
300
330
363
399
439
483
531
Binomial
2024
714
786
864
951
1,046
1,150
1,265
Binomial
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
704
NOTE 40:
SHARE-BASED PAYMENTS AND EMPLOYEE BENEFITS (in HUF mn) [continued]
Based on parameters accepted by Supervisory Board relating to the year 2018 effective pieces are as follows as at 31
December 2024:
Approved
pieces of
shares
Exercised
until 31
December
2024
Weighted average
share price at the date
of exercise (in HUF)
Expired
pieces
Exercisable
as at 31
December
2024
Share purchasing period
started in 2019
82,854
82,854
13,843
-
-
Remuneration exchanged to share
provided in 2019
17,017
17,017
11,829
-
-
Share purchasing period
started in 2020
150,230
150,230
14,294
-
-
Remuneration exchanged to share
provided in 2020
33,024
33,024
11,897
-
-
Share purchasing period
started in 2021
73,799
73,799
16,314
-
-
Remuneration exchanged to share
provided in 2021
14,618
14,618
16,468
-
-
Share purchasing period
started in 2022
86,456
77,425
14,605
9,031
-
Remuneration exchanged to share
provided in 2022
13,858
13,858
8,529
-
-
Share purchasing period
started in 2023
45,155
45,155
14,736
-
-
Remuneration exchanged to share
provided in 2023
3,217
3,217
11,820
-
-
Remuneration exchanged to share
provided in 2024
864
864
17,888
-
-
Remuneration exchanged to share
applying in 2025
-
-
-
-
432
Based on parameters accepted by Supervisory Board relating to the year 2019 effective pieces are as follows as at 31
December 2024:
Approved
pieces of
shares
Exercised
until 31
December
2024
Weighted average
share price at the date
of exercise (in HUF)
Expired
pieces
Exercisable
as at 31
December
2024
Share purchasing period
started in 2020
91,403
91,403
12,218
-
-
Remuneration exchanged to share
provided in 2020
22,806
22,806
11,897
-
-
Share purchasing period
started in 2021
201,273
201,273
16,298
-
-
Remuneration exchanged to share
provided in 2021
30,834
30,834
17,618
-
-
Share purchasing period
started in 2022
107,760
101,897
13,771
5,863
-
Remuneration exchanged to share
provided in 2022
10,564
10,564
8,529
-
-
Share purchasing period
started in 2023
126,749
123,676
14,336
3,073
-
Remuneration exchanged to share
provided in 2023
13,427
13,427
11,674
-
-
Share purchasing period
started in 2024
31,262
31,262
17,618
-
-
Remuneration exchanged to share
provided in 2024
6,183
6,183
17,540
-
-
Remuneration exchanged to share
applying in 2025
-
-
-
-
1,000
Remuneration exchanged to share
applying in 2026
-
-
-
-
500
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
705
NOTE 40:
SHARE-BASED PAYMENTS AND EMPLOYEE BENEFITS (in HUF mn) [continued]
Based on parameters accepted by Supervisory Board relating to the year 2020 effective pieces are as follows as at 31
December 2024:
Approved
pieces of
shares
Exercised
until 31
December
2024
Weighted average
share price at the date
of exercise (in HUF)
Expired
pieces
Exercisable
as at 31
December
2024
Share purchasing period
started in 2021
41,098
14,142
17,997
26,956
-
Remuneration exchanged to share
provided in 2021
17,881
17,881
17,498
-
-
Share purchasing period
started in 2022
83,688
76,928
17,629
6,760
-
Remuneration exchanged to share
provided in 2022
15,232
15,111
8,529
121
-
Share purchasing period
started in 2023
47,275
45,755
19,805
1,520
-
Remuneration exchanged to share
provided in 2023
8,562
8,562
11,659
-
-
Share purchasing period
starting in 2024
49,974
38,371
20,867
-
11,603
Remuneration exchanged to share
applying in 2024
11,837
11,837
17,613
-
-
Share purchasing period
starting in 2025
-
-
-
-
13,080
Remuneration exchanged to share
applying in 2025
-
-
-
-
3,443
Remuneration exchanged to share
applying in 2026
-
-
-
-
680
Remuneration exchanged to share
applying in 2027
-
-
-
-
680
Based on parameters accepted by Supervisory Board relating to the year 2021 effective pieces are as follows as at 31
December 2024:
Approved
pieces of
shares
Exercised
until 31
December
2024
Weighted average
share price at the date
of exercise (in HUF)
Expired
pieces
Exercisable
as at 31
December
2024
Share purchasing period
started in 2022
60,018
59,776
10,122
242
-
Remuneration exchanged to share
provided in 2022
11,028
11,028
8,691
-
-
Share purchasing period
started in 2023
117,276
117,276
13,672
-
-
Remuneration exchanged to share
provided in 2023
10,824
10,824
11,534
-
-
Share purchasing period
started in 2024
50,402
49,201
17,848
-
1,201
Remuneration exchanged to share
provided in 2024
4,807
4,807
17,399
-
-
Share purchasing period
starting in 2025
-
-
-
-
54,262
Remuneration exchanged to share
applying in 2025
-
-
-
-
4,942
Share purchasing period
starting in 2026
-
-
-
-
58,155
Remuneration exchanged to share
applying in 2026
-
-
-
-
4,942
Share purchasing period
starting in 2027
-
-
-
-
25,305
Remuneration exchanged to share
applying in 2027
-
-
-
-
631
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
706
NOTE 40:
SHARE-BASED PAYMENTS AND EMPLOYEE BENEFITS (in HUF mn) [continued]
Based on parameters accepted by Supervisory Board relating to the year 2022 effective pieces are as follows as at 31
December 2024:
Approved
pieces of
shares
Exercised
until 31
December
2024
Weighted average
share price at the date
of exercise (in HUF)
Expired
pieces
Exercisable
as at 31
December
2024
Share purchasing period
started in 2023
57,412
57,364
13,484
48
-
Remuneration exchanged to share
provided in 2023
8,726
8,590
11,629
136
-
Share purchasing period
started in 2024
103,159
102,651
17,684
-
508
Remuneration exchanged to share
provided in 2024
3,769
3,769
17,399
-
-
Share purchasing period
starting in 2025
-
-
-
-
42,814
Remuneration exchanged to share
applying in 2025
-
-
-
-
3,993
Share purchasing period
starting in 2026
-
-
-
-
43,714
Remuneration exchanged to share
applying in 2026
-
-
-
-
3,993
Share purchasing period
starting in 2027
-
-
-
-
44,701
Remuneration exchanged to share
applying in 2027
-
-
-
-
3,993
Share purchasing period
starting in 2028
-
-
-
-
19,756
Based on parameters accepted by Supervisory Board relating to the year 2023 effective pieces are as follows as at 31
December 2024:
Approved
pieces of
shares
Exercised
until 31
December
2024
Weighted average
share price at the date
of exercise (in HUF)
Expired
pieces
Exercisable
as at 31
December
2024
Share purchasing period
started in 2024
164,371
96,566
20,731
1,124
66,681
Remuneration exchanged to share
provided in 2024
6,745
6,745
17,402
-
-
Share purchasing period
starting in 2025
-
-
-
-
166,280
Remuneration exchanged to share
applying in 2025
-
-
-
-
6,091
Share purchasing period
starting in 2026
-
-
-
-
71,160
Remuneration exchanged to share
applying in 2026
-
-
-
-
2,960
Share purchasing period
starting in 2027
-
-
-
-
81,415
Remuneration exchanged to share
applying in 2027
-
-
-
-
2,960
Share purchasing period
starting in 2028
-
-
-
-
87,315
Remuneration exchanged to share
applying in 2028
-
-
-
-
2,960
Share purchasing period
starting in 2029
-
-
-
-
39,324
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
707
NOTE 40:
SHARE-BASED PAYMENTS AND EMPLOYEE BENEFITS (in HUF mn) [continued]
Effective pieces relating to the periods starting in 2025-2029 settled during valuation of performance of year 2020-2023,
can be modified based on risk assessment and personal changes.
In connection with the share-based compensation for Board of Directors and connecting compensation, shares given as a
part of payments detailed above and for the year 2024 based on performance assessment accounted as equity-settled share-
based transactions, HUF 4,411 million and HUF 3,292 million was recognized as expense for the year ended 31 December
2024 and 2023, respectively.
Defined benefit plan
Defined benefit plan is post‑employment benefit plans other than defined contribution plan. The Group's net obligation
is calculated by estimating the amount of employee's future benefit based on their servicies for the current and prior
periods. The future value of benefit is being discounted to present value.
The Group has small number of plans and mainly in Bulgaria, Serbia, Montenegro, Croatia and Slovenia. These plans are
providing retirement benefits upon pension age as lump-sum payment based either on fixed amounts or certain months
of salary.
These plans are unfunded consequently there are no significant plan assets associated with these plans.
The movements of defined benefit obligation can be summarized as follows:
31/12/2024
31/12/2023
Balance as at 1 January
6,584
4,728
Increase due to acquisition
-
1,621
Current service cost
498
369
Interest cost
343
322
Actuarial losses / (gains) from changes in demographic
assumptions
5
(497)
Actuarial losses from changes in financial assumptions
471
844
Benefits paid
(619)
(279)
Past service cost
15
-
Other increase / (decrease)
180
(322)
Revaluation difference
463
(202)
Closing balance
7,940
6,584
Amounts recognized in profit and loss
31/12/2024
31/12/2023
Current service cost
498
369
Net interest expense
343
322
Past service cost
15
-
Actuarial loss
326
11
Other income
(487)
(340)
Total
695
362
Maturity analysis of the present value of defined
31/12/2024
31/12/2023
benefit obligations
Within one year
127
609
Within 5 years and over one year
1,237
2,015
Within 10 years and over 5 years
2,210
2,107
Over 10 years
1,688
1,853
Total present value
5,262
6,584
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
708
NOTE 40:
SHARE-BASED PAYMENTS AND EMPLOYEE BENEFITS (in HUF mn) [continued]
Defined benefit plan [continued]
Actuarial assumptions
31/12/2024
31/12/2023
Discount rate
2.75% - 8.00%
2.88% - 6.25%
Future salary increases
1.48% - 8.65%
1.28% - 8.50%
Inflation rate is also included into actuarial assumptions which ranges between 2.20% and 12.00%.
Since plan asset is not recognized in the Consolidated Financial Statements, the effect of the asset ceiling, the effect of
changes in foreign exchange rates and the return on plan assets, excluding amounts included in interest accounts are also
not recognized and therefore not presented.
OTP Group made an insignificant amount of contribution to the defined benefit plans during the year ended 31 December
2024 and 2023, respectively.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
709
NOTE 41:
RELATED PARTY TRANSACTIONS (in HUF mn)
The compensation of key management personnel, such as the members of the Board of Directors, members of the
Supervisory Board, key employees of the Bank and its major subsidiaries involved in the decision-making process in
accordance with the compensation categories defined in IAS 24 Related Party Disclosures, is summarised below:
Compensations
31/12/2024
31/12/2023
Short-term employee benefits
12,688
9,974
Share-based payment
4,350
2,173
Other long-term employee benefits
1,042
556
Termination benefits
178
126
Total
18,258
12,829
Share based compensations to the members of the Board of Directors, Supervisory Board or key employees of the Bank
and its major subsidiaries are detailed in Note 40 Share-based payments.
An analysis of payment to executives of the Group related to their activity in Board of Directors and Supervisory Board
is as follows:
31/12/2024
31/12/2023
Members of Board of Directors
4,773
3,225
Members of Supervisory Board
551
432
Total
5,324
3,657
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
710
NOTE 41:
RELATED PARTY TRANSACTIONS (in HUF mn) [continued]
Connections with related party (key management personnel and their close family member and companies) by which line of the consolidated statement of financial position and off-
balance sheet is presented:
31/12/2024
31/12/2023
Assets
Other related
parties
Associated
companies
Other
companies
Total
Other related
parties
Associated
companies
Other
companies
Total
Securities (net value)
614
18
-
632
608
52
-
660
Fair value adjustment of
derivative financial instruments
-
253
-
253
-
164
-
164
Loans at amortized cost (net value)
67,671
22,689
2,111
92,471
70,091
22,048
2,459
94,598
Finance lease receivable (net value)
-
23
-
23
-
47
-
47
Loans mandatorily at fair value through profit or loss
182
408
2,150
2,740
200
1,711
-
1,911
Total assets
68,467
23,391
4,261
96,119
70,899
24,022
2,459
97,380
Liabilities
Deposits from customers and loan liabilities
33,445
12,626
8,128
54,199
87,857
22,042
1,373
111,272
Total liabilities
33,445
12,626
8,128
54,199
87,857
22,042
1,373
111,272
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
711
NOTE 41:
RELATED PARTY TRANSACTIONS (in HUF mn) [continued]
Connections with related party (key management personnel and their close family member and companies) by which line of the consolidated statement of financial position and off-
balance sheet is presented [continued]:
31/12/2024
31/12/2023
Off-balance sheet items
Other related
parties
Associated
companies
Other
companies
Total
Other related
parties
Associated
companies
Other
companies
Total
Undrawn line of credit
54,572
50
1,850
56,472
64,900
50
1,910
66,860
Bank Guarantee
7,472
2,050
1,228
10,750
11,080
1,914
2,491
15,485
Commitments and guarantees given
34
-
-
34
40
-
-
40
Total off-balance sheet items
62,078
2,100
3,078
67,256
76,020
1,964
4,401
82,385
Statement of profit or loss
31/12/2024
31/12/2023
(turnover during the current period)
Interest income
2,654
2,448
Fees and commissions
352
164
Interest expense
(781)
(514)
Fees and commission expenses
(1,510)
(2,094)
Loss allowance / Provision
on loans, placements, for commitments and guarantees given
(270)
(86)
Operational costs
(4,989)
(4,093)
Net income from sale of assets
-
-
In the normal course of business, the Bank enters into other transactions with its unconsolidated subsidiaries of the Group, the amounts and volumes of which are not significant to
these Consolidated Financial Statements taken as a whole. Related party transactions were made on terms equivalent to those that prevail in arm’s length transactions and such terms
can be substantiated.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
712
NOTE 42:
ACQUISITION (in HUF mn)
Acquisition and consolidation of subsidiaries
In line with the sale and purchase agreement (two-step structure of purchase agreement) concluded on 12 December 2022
between OTP Bank and the Ministry of Economy and Finance of the Republic of Uzbekistan, the first step of the Ipoteka
Bank acquisition was completed on 13 June 2023. Consequently, OTP Bank became the majority shareholder of Ipoteka
Bank by acquiring a 73.71% stake and became indirect shareholder of Ipoteka Bank’s wholly-owned subsidiaries. In the
second step of the transaction, the shares that remained in the ownership of the Ministry will be bought three years after
the first step by purchasing further 25% (calculated at acquisition) of the shares owned by the seller. On the basis of
contractual conditions, different purchase price modifying factors can modify the second instalment of the purchase price.
In this regard, the amount of HUF 20,454 million in year 2024 and HUF 15,757 million in year 2023 compensation assets
were presented in the consolidated financial statement, which comes from the fact that the former owners of the acquired
company are contractually indemnifying the acquiring OTP Bank due to the acquired uncertainties.
As a result of the acquisition, OTP Group entered the Central Asian region, and is the first foreign bank to participate in
the privatization of the Uzbek banking sector.
On 31 May 2021, OTP Bank signed a share sale and purchase agreement on purchasing 100% shareholding of OTP
Luxembourg S.a.r.l. and its subsidiaries - Nova KBM d.d. and Aleja Finance d.o.o., (hereinafter “NKBM group”) which
are 80% owned by funds managed by affiliates of Apollo Global Management, Inc. and 20% by EBRD. The financial
closing of the transaction took place on 6 February 2023, after obtaining all the necessary regulatory approvals. The
acquisition of the bank is the most significant acquisition in the history of OTP Group.
The integration process of the two Slovenian subsidiaries, SKB banka purchased in 2019 and Nova KBM was completed
in October 2024.
On 27 September, 2023, Aranykalász Group became with 100% ownership the member of OTP Group through Portfolion
Zöld Magántőkealap. Aranykalász Group contains Aranykalász 1955. Mezőgazdasági Ltd., Aranymező 2001.
Mezőgazdasági Ltd., Agromag-Plusz Mezőgazdasági Ltd.
On 7 November 2023, Szekszárd Group engaged in agricultural activities became 100% owned by OTP Group through
Portfolion Zöld Magántőkealap. Szekszárd Group contains Szekszárdi Mezőgazdasági Plc. and Szajki Mezőgazdasági
Plc.
In the case of Aranykalász Group and Szekszárd Group, the Bank reestimated the purchase price allocation within 12
months and this resulted in a small change in these tables below. The changes are presented in a separate column as
“Adjustment”.
On 10 October 2022 OTP Fund Management Company and OTP banka Srbija a.d. signed a share sale and purchase
agreement on purchasing 100% shareholding of Ilirika DZU AD Beograd, a Serbian asset management company, with
the Slovenian companies Ilirika Fintrade d.o.o., Ilirika svetovanje d.o.o. and Ilirika d.d. The ownership proportion is 75
– 25%, de total consideration for the purchase of the shares was 93,8 million RSD. The financial closing of the transaction
took place on 11 July 2023.
In October 2023 the Subsidiary changed its name to OTP Invest AD Beograd. Through this acquisition OTP Group
entered the Serbian asset management market with only a few market competitors.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
713
NOTE 42:
ACQUISITION (in HUF mn) [continued]
The fair value of the assets and liabilities acquired is as follows:
JSCMB
'Ipoteka
Bank' (June
2023)
NKBM
group
(February
2023)
Aranykalász
group
(August
2023)
Adjust-
ment
Remeasured
Aranykalász
group (August
2023)
Szekszárd
group
(November
2023)
Adjust-
ment
Remeasured
Szekszárd group
(November 2023)
OTP Invest
(July 2023)
Total
Cash amounts and due from banks and
balances with the National Banks
(98,886)
(887,441)
(925)
(21)
(946)
(585)
-
(585)
(57)
(987,915)
Placements with other banks, repo receivables
(50,298)
(11,605)
-
-
-
-
-
-
-
(61,903)
Financial assets at fair value
through profit or loss
-
(11,167)
-
-
-
-
-
-
-
(11,167)
Securities at fair value through
other comprehensive income
(154)
(136,612)
-
-
-
-
-
-
-
(136,766)
Loans at amortized cost
(875,037)
(2,037,656)
-
-
-
-
-
-
-
(2,912,693)
Associates and other investments
(981)
(4,891)
(12)
-
(12)
(2,279)
-
(2,279)
-
(8,163)
Securities at amortized cost
(136,267)
(788,383)
-
-
-
-
-
-
-
(924,650)
Property and equipment
(27,187)
(20,199)
(2,852)
25
(2,827)
(1,434)
(2,764)
(4,198)
(1)
(54,412)
Intangible assets
(1,200)
(17,171)
-
-
-
(3)
-
(3)
(110)
(18,484)
Right-of-use assets
(1,920)
(1,941)
-
(743)
(743)
-
(1,116)
(1,116)
-
(5,720)
Investment properties
-
(9,910)
-
-
-
-
-
-
-
(9,910)
Derivative financial assets designated
as hedge accounting
-
(1,842)
-
-
-
-
-
-
-
(1,842)
Other assets
(31,533)
(50,941)
(11,294)
(783)
(12,077)
(10,502)
3,118
(7,384)
(6)
(101,941)
Total assets
(1,223,463)
(3,979,759)
(15,083)
(1,522)
(16,605)
(14,803)
(762)
(15,565)
(174)
(5,235,566)
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
714
NOTE 42:
ACQUISITION (in HUF mn) [continued]
The fair value of the assets and liabilities acquired is as follows [continued]:
JSCMB
'Ipoteka Bank'
(June 2023)
NKBM group
(February
2023)
Aranykalász
group
(August 2023)
Adjust-
ment
Remeasured
Aranykalász
group (August
2023)
Szekszárd
group
(November
2023)
Adjust
-ment
Remeasured
Szekszárd group
(November 2023)
OTP Invest
(July 2023)
Total
Amounts due to the banks, the National
Governments, deposits from the National
Banks and other banks and repo liabilities
571,792
69,398
300
-
300
990
-
990
-
642,480
Deposits from customers
309,898
3,250,141
-
-
-
-
-
-
188
3,560,227
Liabilities from issued securities
118,897
169,071
-
-
-
-
-
-
-
287,968
Derivative financial liabilities designated
as hedge accounting
-
2,982
-
-
-
-
-
-
-
2,982
Leasing liabilities
-
1,967
-
743
743
-
1,116
1,116
-
3,826
Other liabilities
27,681
51,157
1,415
(165)
1,250
768
1,252
2,020
7
82,115
Subordinated bonds and loans
12,098
32,916
-
-
-
-
-
-
-
45,014
Total liabilities
1,040,366
3,577,632
1,715
578
2,293
1,758
2,368
4,126
195
4,624,612
Net assets
(183,097)
(402,127)
(13,368)
(944)
(14,312)
(13,045)
1,606
(11,439)
21
(610,954)
JSCMB
'Ipoteka Bank'
(June 2023)
NKBM group
(February
2023)
Aranykalász
group (August
2023)
Adjust-
ment
Remeasured
Aranykalász
group (August
2023)
Szekszárd
group
(November
2023)
Adjust-
ment
Remeasured
Szekszárd group
(November 2023)
OTP Invest
(July 2023)
Total
Net assets total
(183,097)
(402,127)
(13,368)
-
(13,368)
(13,045)
1,606
(11,439)
21
(610,010)
Non-controlling interest1
3,149
-
-
-
-
-
-
-
3,149
Negative goodwill / (Goodwill)
93,891
104,470
-
-
-
(821)
(821)
(324)
197,216
Net cash
(86,057)
(297,657)
(13,368)
-
(13,368)
(13,045)
785
(12,260)
(303)
(409,645)
Cash acquired on purchase
98,886
887,441
925
-
925
585
-
585
57
987,894
Net cash paid for acquisition
12,829
589,784
(12,443)
-
(12,443)
(12,460)
785
(11,675)
(246)
578,249
Purchase price - part one
(83,347)
Purchase price - part two
(2,710)
Total
(86,057)
1Non-controlling interest was measured at its proportionate share of net assets of the acquiree.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
715
NOTE 42:
ACQUISITION (in HUF mn) [continued]
The fair value of the assets and liabilities acquired is as follows [continued]:
Breakdown of the acquired entity’s income, profit / loss in 2023 from the date of the acquisition:
Interest income
Net result
One-off
expense2
JSCMB 'Ipoteka Bank'
96,490
(52,760)
(40,060)
NKBM group
156,314
77,804
(10,010)
Aranykalász group
-
-
-
Szekszárd group
-
-
-
OTP Invest
1
(37)
-
Total
252,805
25,007
(50,070)
2The net result was decreased by the loss allowance on loans in accordance with IFRS 9 after the first day of the acquisition (Day 1).
Breakdown of the acquired entity’s income, profit / loss in 2023 if the Group would have acquired from the beginning of
year 2023:
Interest income
Net result
One-off
expense2
JSCMB 'Ipoteka Bank'
175,815
(70,215)
(40,060)
NKBM group
166,772
79,338
(10,010)
Aranykalász group
-
1,607
-
Szekszárd group
-
2,904
-
OTP Invest
2
(89)
-
Total
342,589
13,545
(50,070)
2The net result was decreased by the loss allowance on loans in accordance with IFRS 9 after the first day of the acquisition (Day 1).
With the acquisition the following shares were purchased:
Number of shares
Type
Voting rights
JSCMB 'Ipoteka Bank'
2,203,591,374,374
Common stock
73.7090%
JSCMB 'Ipoteka Bank'
59,197,658
Preferred dividend
0.0020%
Ipoteka Leasing LLC
60,000,000,000
Common stock
100.00%
IMKON Sugurta JSC
45,000,000,000
Business share
100.00%
Mortgage refinancing Company of Uzbekistan
20,000,000
Common stock
20.00%
OTP Luxembourg s.á.r.l.
2,771,440
Business share
100.00%
Nova Kreditna Banka Maribor d.d.
10,000,000
Common stock
100.00%
Telekom Slovenije, d.d.
11,938
Common stock
0.18%
Elektro Maribor d.d.
76,715
Common stock
0.23%
Pivka Perutninarstvo d.d.
486
Common stock
0.04%
Skupina Prva, Zavarovalniški Holding, d.d.
4,764
Preferred dividend
2.35%
Sava d.d.
496,851
Common stock
1.71%
VISA Inc. C
3,688
Preferred dividend
0.00%
VISA Inc. A
369
Preferred dividend
0.00%
Bodočnost Maribor d.o.o.
1
Business share
1.00%
Sklad Za Reševanje Bank
50,003,264
Business share
26.17%
SWIFT SCRL La Hulpe, Belgija
32
Business share
0.03%
Bankart d.o.o.
584,424
Business share
29.22%
Aleja Finance d.o.o.
500,000
Business share
100.00%
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
716
NOTE 42:
ACQUISITION (in HUF mn) [continued]
With the acquisition the following shares were purchased [continued]:
Number of shares
Type
Voting rights
Aranykalász 1955. Mezőgazdasági Ltd.
41,670,000
Business share
100.00%
Dél-borsodi Gazdák Ltd.
3,703,260
Business share
40.82%
"Egertej" Ltd.
4,274,600
Business share
28.12%
Aranymező 2001. Mezőgazdasági Ltd.
2,250,000
Business share
100.00%
Agromag-Plusz Mezőgazdasági Ltd.
28,650,000
Business share
98.34%
Szekszárdi Mezőgazdasági Plc.
52
Common stock
100.00%
Szajki Mezőgazdasági Plc.
659,859
Common stock
100.00%
Újberek Ltd.
4,800,000
Business share
100.00%
Sióvölgye Ltd.
156,580,000
Business share
100.00%
Orbánhegyi Szőlőbirtok Limited partnership
25,000
Business share
76.92%
Szekszárdi Liszt Pincészet Ltd.
30,000,000
Business share
100.00%
Iphygénia Ltd.
51,000,000
Business share
100.00%
ZA-Gamma Agro Ltd.
2,250,000
Business share
99.00%
GM Agrár Ltd.
3,000,000
Business share
100.00%
Szajkmenti Gazda Limited partnership
95,000
Business share
100.00%
Sióparti Gazda Limited partnership
5,000
Business share
87.50%
OTP invest AD Beograd
177,032
Common stock
100.00%
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
717
NOTE 43:
SIGNIFICANT SUBSIDIARIES AND ASSOCIATES (in HUF mn)
Investments in companies in which the Bank has a controlling interest are detailed below. They are fully consolidated companies and incorporated in Hungary unless otherwise stated.
Significant subsidiaries
Name
Ownership (Direct and
Indirect)
Activity
31/12/2024
31/12/2023
DSK Bank AD (Bulgaria)
99.92%
99.92%
commercial banking services
OTP Bank JSC (Ukraine)
100.00%
100.00%
commercial banking services
JSC “OTP Bank” (Russia)
97.92%
97.92%
commercial banking services
OTP banka d.d. (Croatia)
100.00%
100.00%
commercial banking services
OTP Bank Romania S.A. (Romania)
-
100.00%
commercial banking services
OTP banka Srbija a.d. Novi Sad (Serbia)
100.00%
100.00%
commercial banking services
Crnogorska komercijalna banka a.d. (Montenegro)
100.00%
100.00%
commercial banking services
Banka OTP Albania SHA (Albania)
100.00%
100.00%
commercial banking services
OTP Bank S.A. (Moldova)
98.26%
98.26%
commercial banking services
SKB Banka d.d. Ljubljana (Slovenia)
-
100.00%
commercial banking services
OTP banka d.d. (previously: Nova Kreditna Banka Maribor d.d.) (Slovenia)
100.00%
100.00%
commercial banking services
JSCMB 'Ipoteka Bank' (Uzbekistan)
79.82%
79.58%
commercial banking services
OTP Financing Malta Company Ltd. (Malta)
100.00%
100.00%
refinancing activities
OTP Holding Ltd. (Cyprus)
100.00%
100.00%
refinancing activities
OTP Factoring Ltd.
100.00%
100.00%
work-out
OTP Mortgage Bank Ltd.
100.00%
100.00%
mortgage lending
OTP Real Estate Ltd.
100.00%
100.00%
real estate management and development
Merkantil Bank Ltd.
100.00%
100.00%
finance lease
OTP Building Society Ltd.
100.00%
100.00%
housing savings and loan
OTP Fund Management Ltd.
100.00%
100.00%
fund management
Bank Center No. 1. Ltd.
100.00%
100.00%
real estate lease
OTP Funds Servicing and Consulting Ltd.
100.00%
100.00%
fund services
OTP Real Estate Leasing Ltd.
100.00%
100.00%
real estate leasing
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
718
NOTE 43:
SIGNIFICANT SUBSIDIARIES AND ASSOCIATES (in HUF mn) [continued]
Significant associates and joint ventures
The associated entities that are owned through venture capital funds are not detailed below neither for year 2024 nor for 2023, only the funds that own them are presented below.
PortfoLion funds are subsidiaries in the consolidated financial statements.
Summarized financial and non-financial information of associates which are accounted according to IAS 28 and in line with IFRS 9 as at 31 December 2024 is as follows:
List of associated entities (amounts in HUF
million)
Carrying
amount
Shareholder's
equity
Share
capital
Profit
after tax
Voting
right
Country /
Headquarter
Activity
PortfoLion Digital Venture Capital Fund I.
15,593
14,179
7,000
(7,479)
100.00%
Hungary /Budapest
Digital technology, solutions that strengthen the bank's innovation
capacity (e.g. big data, financial software, payment solutions,
blockchain etc.).
PortfoLion Regional Venture Capital Fund II.
15,672
15,511
17,847
(472)
49.88%
Hungary /Budapest
Investment in any industries and sectors, due to which international
expansion of Hungarian enterprises can be realized.
PortfoLion Partner Venture Capital Fund
30,661
70,262
60,421
5,031
30.56%
Hungary /Budapest
Financing of domestic or foreign takeover, capital increase or
merger in which the acquiring company is at least majority-owned
by Hungarians.
PortfoLion Digital Venture Capital Fund II.
6,374
6,516
7,270
(687)
100.00%
Hungary /Budapest
IT, digital technology, fintech
PortfoLion Green Venture Capital Fund
11
35,298
33,571
234
100.00%
Hungary /Budapest
Investing in companies engaged in agricultural activities, as well as
in food processing and agriculture-related areas.
Subtotal
68,311
OTP-DayOne Magvető Fund
648
2,947
1,271
23
22.00%
Hungary /Budapest
Trusts, funds and similar financial entities
D-ÉG Thermoset Ltd 'u.l.'
-
n.a.
1,045
n.a.
46.99%
Hungary /
Dunaújváros
Wholesale of hardware, plumbing and heating equipment and
supplies
Company for Cash Services AD
392
4,319
1,982
(333)
25.00%
Bulgaria / Sofia
Other financial service activities, except insurance and pension
funding
Bankart Procesiranje Placilnih Instrumentov
d.o.o.
7,219
11,403
658
1,182
43.06%
Ljubjana / Slovenia
Data processing, web hosting services
Subtotal
8,259
Total
76,570
There are no material investments in associates owned by equity funds below 50% voting right and without control.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
719
NOTE 43:
SIGNIFICANT SUBSIDIARIES AND ASSOCIATES (in HUF mn) [continued]
Significant associates and joint ventures [continued]
Summarized financial and non-financial information of associates which are accounted according to IAS 28 and in line with IFRS 9 as at 31 December 2023 is as follows:
List of associated entities (amounts in HUF
million)
Carrying
amount
Shareholder's
equity
Share
capital
Profit
after tax
Voting
right
Country /
Headquarter
Activity
PortfoLion Digital Venture Capital Fund I.
12,332
20,968
8,800
460
100.00%
Hungary /Budapest
Digital technology, solutions that strengthen the bank's innovation
capacity (e.g. big data, financial software, payment solutions,
blockchain etc.).
PortfoLion Regional Venture Capital Fund II.
12,733
13,381
15,245
288
49.88%
Hungary /Budapest
Investment in any industries and sectors, due to which international
expansion of Hungarian enterprises can be realized.
PortfoLion Partner Venture Capital Fund
27,201
64,269
60,421
119
30.56%
Hungary /Budapest
Financing of domestic or foreign takeover, capital increase or
merger in which the acquiring company is at least majority-owned
by Hungarians.
PortfoLion Digital Venture Capital Fund II.
3,941
5,681
5,800
14
100.00%
Hungary /Budapest
IT, digital technology, fintech
PortfoLion Green Venture Capital Fund
15
35,064
33,571
1,264
100.00%
Hungary /Budapest
Investing in companies engaged in agricultural activities, as well as
in food processing and agriculture-related areas.
Subtotal
56,222
OTP-DayOne Magvető Fund
280
2,954
1,271
308
22.00%
Hungary /Budapest
Trusts, funds and similar financial entities
D-ÉG Thermoset Ltd 'u.l.'
-
n.a.
1,045
n.a.
46.99%
Hungary /
Dunaújváros
Wholesale of hardware, plumbing and heating equipment and
supplies
Company for Cash Services AD
392
3,464
1,982
333
25.00%
Bulgaria / Sofia
Other financial service activities, except insurance and pension
funding
Bankart Procesiranje Placilnih Instrumentov
d.o.o.
7,219
9,265
658
1,182
43.06%
Ljubjana / Slovenia
Data processing, web hosting services
OTP Risk Fund I.
611
1,384
6,800
158
44.12%
Hungary /Budapest
Trusts, funds and similar financial entities
Mortgage Refinancing Company of
Uzbekistan
1,030
4,338
2,990
(615)
20.00%
Uzbekistan / Tashkent
Refinancing mortgage loans issued by banks and others credit
organizations.
Subtotal
9,532
Total
65,754
There are no material investments in associates owned by equity funds below 50% voting right and without control.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
720
NOTE 44:
TRUST ACTIVITIES (in HUF mn)
The Bank acts as a trustee for certain loans granted by companies or employers to their employees, mainly for housing
purposes. The ultimate risk for these loans rests with the party advancing the funds. As these loans and related funds are
not considered to be assets or liabilities of the Group, they have been excluded from the accompanying Consolidated
Statement of Financial Position.
31/12/2024
31/12/2023
The amount of loans managed by the Group as a trustee
37,412
37,402
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
721
NOTE 45:
CONCENTRATION OF ASSETS AND LIABILITIES
31/12/2024
31/12/2023
In the percentage of the total assets
Receivables from, or securities issued by
the Hungarian Government or the NBH
12.92%
13.32%
There were no other significant concentrations of the assets or liabilities of the Group either as at 31 December 2024 or
as at 31 December 2023.
The Group continuously provides the NBH with reports on the extent of dependency on large depositors as well as the
exposure of the biggest 50 depositors towards the Group.
Further to this obligatory reporting to the NBH, the Group pays particular attention on the exposure of its largest partners
and cares for maintaining a closer relationship with these partners in order to secure the stability of the level of deposits.
The organisational unit of the Bank in charge of partner-risk management analyses the biggest partners on a constant
basis and sets limits on the Bank’s and the Group’s exposure separately partner-by-partner. If necessary, it modifies
partner-limits in due course thereby reducing the room for manoeuvring of the Treasury and other business areas.
The Bank’s internal regulation (Limit-management regulation) controls risk management related to exposures of clients.
The Bank makes a difference between clients or clients who are economically connected with each other, partners,
partners operating in the same geographical region or in the same economic sector, exposures from customers. Limit-
management regulation includes a specific range provision system used by the Bank to control risk exposures. This
regulation has to be used by the Bank for its business (lending) risk-taking activity both in retail and corporate sector.
To specify credit risk limits Group strives their clients get an acceptable margin of risk based on their financial situation.
In the Group limit system has to be provided a lower-level decision-making delegation.
If a Group member takes risk against a client or group of clients (either inside the local economy or outside), the client
will be qualified as a group level risk and these limits will be specified at group level.
The validity period of this policy is 12 months. The limit shall be reviewed prior to the expiry date but at least once a year
- based on the relevant information required to limit calculations.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
722
NOTE 46:
EARNINGS PER SHARE
Consolidated Earnings per share attributable to the ordinary shares of the Group are determined by dividing consolidated
Net profit for the year attributable to ordinary shareholders, after the deduction of declared preference dividends, by the
weighted average number of ordinary shares outstanding during the year. Dilutive potential ordinary shares are deemed
to have been converted into ordinary shares.
Earnings per share from continuing
and discontinued operations
31/12/2024
31/12/2023
Consolidated profit after income tax for the period attributable
to ordinary shareholders (in HUF mn)
1,071,913
988,658
Weighted average number of ordinary shares outstanding
during the year for calculating basic EPS (number of share)
264,542,718
267,591,265
Basic Earnings per share (in HUF)
4,052
3,695
Consolidated profit after income tax for the period attributable
to ordinary shareholders (in HUF mn)
1,071,913
988,658
Modified weighted average number of
ordinary shares outstanding during the year
for calculating diluted EPS (number of share)
264,652,623
267,737,358
Diluted Earnings per share (in HUF)
4,050
3,693
Earnings per share from continuing operations
31/12/2024
31/12/2023
Consolidated profit after income tax for the period attributable
to ordinary shareholders (in HUF mn)
1,052,157
1,009,904
Weighted average number of ordinary shares outstanding
during the year for calculating basic EPS (number of share)
264,542,718
267,591,265
Basic Earnings per share (in HUF)
3,977
3,774
Consolidated profit after income tax for the period attributable
to ordinary shareholders (in HUF mn)
1,052,157
1,009,904
Modified weighted average number of
ordinary shares outstanding during the year
for calculating diluted EPS (number of share)
264,652,623
267,737,358
Diluted Earnings per share (in HUF)
3,976
3,772
Earnings per share from discontinued operations
31/12/2024
31/12/2023
Consolidated profit after income tax for the period attributable
to ordinary shareholders (in HUF mn)
19,756
(21,246)
Weighted average number of ordinary shares outstanding
during the year for calculating basic EPS (number of share)
264,542,718
267,591,265
Basic Earnings per share (in HUF)
75
(79)
Consolidated profit after income tax for the period attributable
to ordinary shareholders (in HUF mn)
19,756
(21,246)
Modified weighted average number of
ordinary shares outstanding during the year
for calculating diluted EPS (number of share)
264,652,623
267,737,358
Diluted Earnings per share (in HUF)
75
(79)
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
723
NOTE 46:
EARNINGS PER SHARE [continued]
31/12/2024
31/12/2023
Weighted average number of ordinary shares
280,000,010
280,000,010
Average number of Treasury shares
15,457,292
12,408,745
Weighted average number of ordinary shares outstanding
during the year for calculating basic EPS
264,542,718
267,591,265
Dilutive effects of options issued in accordance with the
remuneration policy and convertible into ordinary shares1
109,905
146,093
The modified weighted average number of ordinary shares
outstanding during the year for calculating diluted EPS
264,652,623
267,737,358
1 Both for the year 2024 and for the year 2023 the dilutive effect is in connection with the Remuneration Policy and the Management Option Program.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
724
NOTE 47:
NET GAIN OR LOSS REALIZED ON FINANCIAL INSTRUMENTS (in HUF mn)
31/12/2024
Net interest / similar
to interest gain and
loss
Net non-interest
gain and loss
Loss
allowance
Other Compre-
hensive Income
Cash, amounts due from banks and
balances with the National Banks
171,238
-
(740)
-
Placements with other banks
238,235
-
(1,303)
-
Repo receivables
20,336
-
75
-
Securities at amortized cost
352,733
(9,495)
(10,059)
-
Loans at amortized cost
1,582,749
39,569
(94,870)
-
Finance lease receivables
110,830
-
6,518
-
Other financial assets1
7,052
-
17
-
Financial assets at amortized cost total
2,483,173
30,074
(100,362)
-
Trading securities at fair value
through profit or loss
-
12,118
-
-
Non-trading instruments mandatorily
at fair value through profit or loss
1,465
6,043
-
-
Interest-bearing securities at fair value through
other comprehensive income
60,806
(1,477)
(29,848)
33,347
Non-interest-bearing instruments at fair value
through other comprehensive income
-
1,082
-
14,404
Loans mandatorily at fair value
through profit or loss
99,559
25,746
5,504
-
Financial assets at fair value total
161,830
43,512
(24,344)
47,751
Total result on financial assets
2,645,003
73,586
(124,706)
47,751
Amounts due to banks, the National
Governments, deposits from the
National Banks and other banks
(121,536)
-
-
-
Repo liabilities
(11,049)
-
-
-
Deposits from customers
(462,682)
477,930
-
-
Liabilities from issued securities
(157,008)
-
-
-
Leasing liabilities
(3,557)
-
-
-
Subordinated bonds and loans
(35,471)
-
-
-
Financial liabilities at amortized cost total
(791,303)
477,930
-
-
Financial liabilities designated
at fair value through profit or loss
(1,344)
(1,240)
-
-
Total result on financial liabilities
(792,647)
476,690
-
-
Derivative financial instruments1
(107,016)
12,004
-
-
Total result on financial instruments
1,745,340
562,280
(124,706)
47,751
1 Gains from other financial assets and derivative financial instruments recognized in net interest income as Income similar to interest income.
Current year change of derivative financial assets and liabilities held-for-trading and designated as hedge accounting by
types of results in the profit or loss
31/12/2024
Held-for-trading
Hedge accounting
Balance as at 1 January
13,141
(21,932)
Change in current period through p/l
712
75,875
on interest income/interest expense
34,595
(10,189)
on net results on derivative instruments
(122,489)
51,705
on revaluation difference
88,606
34,359
Realized result on closed deals /matured deals
24,077
(18,960)
Foreign currency translation difference
494
793
Closing balance
38,424
35,776
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
725
NOTE 47:
NET GAIN OR LOSS REALIZED ON FINANCIAL INSTRUMENTS (in HUF mn) [continued]
31/12/2023
Net interest / similar
to interest gain and
loss
Net non-interest
gain and loss
Loss
allowance
Other Compre-
hensive Income
Cash, amounts due from banks and
balances with the National Banks
354,208
-
1,060
-
Placements with other banks
187,436
-
1,455
-
Repo receivables
17,011
-
(371)
-
Securities at amortized cost
242,256
(18,716)
9,185
-
Loans at amortized cost
1,345,570
34,335
(149,822)
-
Finance lease receivables
100,749
-
1,656
-
Other financial assets1
6,942
-
1,333
-
Financial assets at amortized cost total
2,254,172
15,619
(135,504)
-
Trading securities at fair value
through profit or loss
-
7,713
-
-
Non-trading instruments mandatorily
at fair value through profit or loss
-
8,240
-
-
Interest-bearing securities at fair value through
other comprehensive income
55,320
(1,221)
(354)
76,954
Non-interest-bearing instruments at fair value
through other comprehensive income
-
430
-
1,465
Loans mandatorily at fair value
through profit or loss
92,117
96,082
(91)
-
Financial assets at fair value total
147,437
111,244
(445)
78,419
Total result on financial assets
2,401,609
126,863
(135,949)
78,419
Amounts due to banks, the National
Governments, deposits from the
National Banks and other banks
(74,338)
-
-
-
Repo liabilities
(40,398)
-
-
-
Deposits from customers
(484,398)
386,823
-
-
Liabilities from issued securities
(116,628)
-
-
-
Leasing liabilities
(2,970)
-
-
-
Subordinated bonds and loans
(32,565)
-
-
-
Financial liabilities at amortized cost total
(751,297)
386,823
-
-
Financial liabilities designated
at fair value through profit or loss
(1,433)
(4,542)
-
-
Total result on financial liabilities
(752,730)
382,281
-
-
Derivative financial instruments1
(262,173)
(12,760)
-
-
Total result on financial instruments
1,386,706
496,384
(135,949)
78,419
1 Gains from other financial assets and derivative financial instruments recognized in net interest income as Income similar to interest income.
Current year change of derivative financial assets and liabilities held for trading and designated as hedge accounting by
types of results in the profit or loss
31/12/2023
Held-for-trading
Hedge accounting
Balance as at 1 January
(109,265)
20,298
Change in current period through p/l
106,994
(44,576)
on interest income/interest expense
(27,506)
86,915
on net results on derivative instruments
66,774
(26,714)
on revaluation difference
67,726
(104,777)
Realized result on closed deals /matured deals
13,088
494
Increase due to acquisition
104
1,842
Assets held for sale
1,216
-
Foreign currency translation difference
1,004
10
Closing balance
13,141
(21,932)
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
726
NOTE 48:
FAIR VALUE OF FINANCIAL INSTRUMENTS (in HUF mn)
In determining the fair value of a financial asset or liability the Group uses the market price in the case of instruments
that are quoted on an active market. In most cases market price is not publicly available, so the Group has to make
assumptions or use valuation techniques to determine the fair value of a financial instrument. See Note 48.4. for more
information about fair value classes applied for financial assets and liabilities measured at fair value in these financial
statements.
To provide a reliable estimate of the fair value of those financial instruments that are originally measured at amortized
cost, the Group used the discounted cash-flow analyses (loans, placements with other banks, repo receivables, amounts
due to banks, repo liabilities, deposits from customers). The fair value of issued securities and subordinated bonds is
based on quoted prices (e.g. Reuters). Cash and amounts due from banks and balances with the National Banks represent
amounts available immediately thus the fair value equals to the cost.
The assumptions used when calculating the fair value of financial assets and liabilities when using valuation technique
are the following:
•
the discount rates are the risk-free rates related to the denomination currency adjusted by the appropriate risk
premium as of the end of the reporting period,
•
the contractual cash-flows are considered for the performing loans and for the non-performing loans, the
amortized cost less impairment is considered as fair value,
•
the future cash-flows for floating interest rate instruments are estimated from the yield curves as of the end of
the reporting period,
•
the fair value of the deposit which can be due in demand cannot be lower than the amount payable on demand.
Classes of assets and liabilities not measured at fair value in the Consolidated Statement of Financial Position, the income
approach was used to convert future cash-flows to a single current amount. Fair value of current assets is equal to carrying
amount, fair value of liabilities from issued securities and other bond-type classes of assets and liabilities not measured
at fair value measured based on Reuters market rates, and the fair value of other classes not measured at fair value of the
Consolidated Statement of Financial Position is measured at discounted cash-flow method. Fair value of loans, net of loss
allowance for loans measured at discount rate adjustment technique, the discount rate is derived from observed rates of
return for comparable assets or liabilities that are traded in the market.
Methods and significant assumptions used to determine fair value of the different levels of financial instruments:
-
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
-
Level 2: inputs other than quoted prices included within Level 1, that are observable for the asset or liability
either directly or indirectly.
-
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
Asset held for sale is valued at fair value less cost to sell, that is in this case equal to the sales price and would be classified
as Level 3 fair value.
Use of modified yield curve
Yield curves derived from Hungarian government bonds (“ÁKK curve”) have become distorted due to certain market
events, which means that real liquidity has concentrated on certain part of the yield curve. Therefore, a modified yield
curve - which is not observable on the market - has been used at the concerning fair value calculations. This yield curve
is based on the relevant yield curve points of the original ÁKK curve. Based on Management’s discretion fair value
calculated with modified yield curves can represent the perspective of market participants reliable at current market
conditions.
Modified yield curve was used for calculating fair value in case of subsidized personal loans represented in “Loans
mandatorily measured at fair value through profit or loss” line.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
727
NOTE 48:
FAIR VALUE OF FINANCIAL INSTRUMENTS (in HUF mn) [continued]
48.1. Fair value of financial assets and liabilities at amortized cost by level of the fair value hierarchy and their carrying amount
31/12/2024
Carrying amount
Fair value
Level 1
Level 2
Level 3
Cash, amounts due from banks and balances with the National Banks
6,079,012
6,080,255
4,964,693
1,115,562
-
Placements with other banks
1,891,901
1,907,253
220,867
1,461,918
224,468
Repo receivables
331,837
332,039
3,768
328,271
-
Securities at amortized cost
7,447,177
7,254,449
6,356,814
870,803
26,832
Loans at amortized cost
20,290,381
20,507,024
-
8,315
20,498,709
Finance lease receivables
1,511,477
1,564,724
-
365,783
1,198,941
Other financial assets
292,320
291,485
-
-
291,485
Total financial assets at amortized cost
37,844,105
37,937,229
11,546,142
4,150,652
22,240,435
Amounts due to the National Governments, to the National Banks and other banks
2,022,191
1,999,976
508,358
926,517
565,101
Repo liabilities
132,137
135,771
-
135,771
-
Deposits from customers1
31,666,398
31,616,807
-
16,752,706
14,864,101
Liabilities from issued securities
2,593,124
2,613,242
2,207,606
-
405,636
Leasing liabilities
82,109
83,601
-
259
83,342
Other financial liabilities
818,406
793,524
-
-
793,524
Subordinated bonds and loans
369,359
372,137
349,895
8,879
13,363
Total financial liabilities at amortized cost
37,683,724
37,615,058
3,065,859
17,824,132
16,725,067
31/12/2023
Carrying amount
Fair value
Level 1
Level 2
Level 3
Cash, amounts due from banks and balances with the National Banks
7,125,049
7,125,049
6,005,164
1,119,885
-
Placements with other banks
1,566,998
1,448,684
1,059,696
375,266
13,722
Repo receivables
223,884
223,884
-
223,884
-
Securities at amortized cost
5,249,272
5,184,729
4,478,411
640,591
65,727
Loans at amortized cost
17,676,533
17,723,130
-
1,219
17,721,911
Finance lease receivables
1,289,712
1,504,439
189,830
91,948
1,222,661
Other financial assets
282,400
282,400
-
-
282,400
Assets classified as held for sale
1,533,333
1,533,333
-
-
1,533,333
Total financial assets at amortized cost
34,947,181
35,025,648
11,733,101
2,452,793
20,839,754
Amounts due to the National Governments, to the National Banks and other banks
1,940,862
1,974,503
458,700
690,452
825,351
Repo liabilities
126,237
126,237
-
126,237
-
Deposits from customers1
28,332,431
28,295,214
-
10,459,658
17,835,556
Liabilities from issued securities
2,095,548
2,118,233
1,770,138
19,629
328,466
Leasing liabilities
76,313
76,313
-
-
76,313
Other financial liabilities
656,864
656,864
-
-
656,864
Subordinated bonds and loans
562,396
452,595
410,495
-
42,100
Liabilities directly associated with assets classified as held for sale
1,139,920
1,139,920
-
-
1,139,920
Total financial liabilities at amortized cost
34,930,571
34,839,879
2,639,333
11,295,976
20,904,570
1Deposit from customers includes the fair value changes on hedged deposits involved in portfolio hedge of interest rate risk.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
728
NOTE 48:
FAIR VALUE OF FINANCIAL INSTRUMENTS (in HUF mn) [continued]
48.2. Fair value of derivative instruments
The Group regularly enters into hedging transactions in order to decrease its financial risks. However some economically
hedging transaction do not meet the criteria to qualify as hedge accounting, therefore these transactions were accounted
for as derivatives held for trading.
The assessment of the hedge effectiveness (both for fair value hedges and cash flow hedges) to determine the economic
relationship between the hedged item and the hedging instrument is accomplished with prospective scenario analysis via
different rate shift scenarios of the relevant risk factor(s) of the hedged risk component(s). The fair value change of the
hedged item and the hedging instrument is compared in the different scenarios. Economic relationship is justified if the
change of the fair value of the hedged item and the hedging instrument are in the opposite direction and the absolute
changes are similar amounts. The hedge ratio is determined as the ratio of the notional of the hedged item and the notional
of the hedging instrument. The sources of hedge ineffectiveness are the not hedged risk components (e.g. change of cross
currency basis spreads in case of interest rate risk hedges), slight differences in maturity dates and interest payment dates
in case of fair value hedges, and differences between the carrying amount of the hedged item and the carrying amount of
the hedging instrument in case of FX hedges (e.g. caused by interest rate risk components in the fair value of the hedging
instrument).
The summary of the derivatives held for trading and derivatives designated as hedge accounting of the Group are as
follows:
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
729
NOTE 48:
FAIR VALUE OF FINANCIAL INSTRUMENTS (in HUF mn) [continued]
48.2. Fair value of derivative instruments [continued]
31/12/2024
31/12/2023
Before netting
Netting
After netting
Before netting
Netting
After netting
Assets
Liabilities
Assets
Liabilities
Assets
Liabilities
Assets
Liabilities
Held for trading derivative financial
instruments
Interest rate derivatives
Interest rate swaps
144,530
(123,151)
99,513
45,017
(23,638)
134,599
(117,778)
110,939
23,660
(6,839)
Cross currency interest rate swaps
10,472
(10,558)
-
10,472
(10,558)
8,644
(6,544)
-
8,644
(6,544)
OTC options
1,278
(1,281)
-
1,278
(1,281)
2,024
(2,033)
-
2,024
(2,033)
Forward rate agreement
219
(172)
219
-
47
-
(214)
-
-
(214)
Total interest rate derivatives (OTC derivatives)
156,499
(135,162)
99,732
56,767
(35,430)
145,267
(126,569)
110,939
34,328
(15,630)
Foreign exchange derivatives
Foreign exchange swaps
38,573
(49,720)
-
38,573
(49,720)
31,397
(32,382)
-
31,397
(32,382)
Foreign exchange forward contracts
17,051
(8,595)
-
17,051
(8,595)
7,101
(11,061)
-
7,101
(11,061)
OTC options
1,433
(825)
-
1,433
(825)
1,016
(871)
-
1,016
(871)
Foreign exchange spot conversion
180
(288)
-
180
(288)
170
(319)
-
170
(319)
Total foreign exchange derivatives
(OTC derivatives)
57,237
(59,428)
-
57,237
(59,428)
39,684
(44,633)
-
39,684
(44,633)
Equity stock and index derivatives
Commodity Swaps
10,472
(10,477)
-
10,472
(10,477)
32,336
(31,661)
-
32,336
(31,661)
Equity swaps
-
(1,194)
-
-
(1,194)
126
(3,826)
-
126
(3,826)
OTC derivatives total
10,472
(11,671)
-
10,472
(11,671)
32,462
(35,487)
-
32,462
(35,487)
Exchange traded futures and options
1,334
(728)
-
1,334
(728)
433
(451)
-
433
(451)
Total equity stock and index derivatives
11,806
(12,399)
-
11,806
(12,399)
32,895
(35,938)
-
32,895
(35,938)
Derivatives held for risk management
not designated in hedge
Interest rate swaps
49,053
(38,201)
37,433
11,620
(768)
64,288
(44,577)
22,237
42,051
(22,340)
Foreign exchange swaps
9,112
(4,995)
-
9,112
(4,995)
4,671
(19,546)
-
4,671
(19,546)
Cross currency interest rate swaps
5,971
(1,069)
-
5,971
(1,069)
-
(2,401)
-
-
(2,401)
Total derivatives held for risk
management not designated in hedge
64,136
(44,265)
37,433
26,703
(6,832)
68,959
(66,524)
22,237
46,722
(44,287)
Total held for trading derivative
financial instruments
289,678
(251,254)
137,165
152,513
(114,089)
286,805
(273,664)
133,176
153,629
(140,488)
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
730
NOTE 48:
FAIR VALUE OF FINANCIAL INSTRUMENTS (in HUF mn) [continued]
48.2. Fair value of derivative instruments [continued]
31/12/2024
31/12/2023
Micro hedge
Before netting
Netting
After netting
Before netting
Netting
After netting
Assets
Liabilities
Assets
Liabilities
Assets
Liabilities
Assets
Liabilities
Derivative financial instruments designated
as hedge accounting
Derivatives designated in cash flow hedges
Interest rate swaps
-
-
-
-
-
1,066
(1,066)
1,066
-
-
Total derivatives designated in cash flow hedges
-
-
-
-
-
1,066
(1,066)
1,066
-
-
Derivatives designated in fair value hedges
Interest rate swaps
41,859
(30,282)
19,957
21,902
(10,325)
42,347
(79,069)
25,130
17,217
(53,939)
Cross currency interest rate swaps
18,190
(4,280)
-
18,190
(4,280)
24,750
(10,009)
-
24,750
(10,009)
Total derivatives designated in
fair value hedges
60,049
(34,562)
19,957
40,092
(14,605)
67,097
(89,078)
25,130
41,967
(63,948)
Total derivatives held for risk management
(OTC derivatives) micro portfolio
60,049
(34,562)
19,957
40,092
(14,605)
68,163
(90,144)
26,196
41,967
(63,948)
31/12/2024
31/12/2023
Macro hedge
Before netting
Netting
After netting
Before netting
Netting
After netting
Assets
Liabilities
Assets
Liabilities
Assets
Liabilities
Assets
Liabilities
Derivative financial instruments designated
as hedge accounting
Derivatives designated in fair value hedges
Interest rate swaps
10,289
-
-
10,289
-
168
(119)
168
-
49
Total derivatives designated in
macro fair value hedges
10,289
-
-
10,289
-
168
(119)
168
-
49
Financial assets subject to offsetting, netting arrangement as at 31 December 2024
31/12/2024
Offsetting recognised on the balance sheet
Netting potential not recognized on the balance sheet
Assets not subject to
netting arrangements
Total assets
Maximum
exposure to risk
Gross
assets
before
offset
Offsetting
with gross
liabilities
Net assets
recognized on the
statement of
financial position
Financial
liabilities
Collateral
received
Assets after
consideration of
netting potential
Assets recognized on
the statement of
financial position
Recognized in
the statement of
financial position
After consideration
of netting potential
Derivative financial instruments
235,661
(157,122)
78,539
(39,854)
(77,022)
(38,337)
124,355
202,894
86,018
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
731
NOTE 48:
FAIR VALUE OF FINANCIAL INSTRUMENTS (in HUF mn) [continued]
48.2. Fair value of derivative instruments [continued]
Financial liabilities subject to offsetting, netting arrangement as at 31 December 2024
31/12/2024
Offsetting recognized on the balance sheet
Netting potential not recognized on the balance sheet
Liabilities not subject
to netting
arrangements
Total liabilities
Maximum
exposure to risk
Gross
liabilities
before offset
Offsetting
with gross
assets
Net liabilities
recognized on the
statement of
financial position
Financial
assets
Collateral
pledged
Liabilities after
consideration of
netting potential
Liabilities recognized
on the statement of
financial position
Recognized in
the statement of
financial position
After consideration
of netting potential
Derivative financial instruments
191,806
(157,122)
34,684
(39,854)
(41,981)
(47,151)
94,010
128,694
46,859
Financial assets subject to offsetting, netting arrangement as at 31 December 2023
31/12/2023
Offsetting recognized on the balance sheet
Netting potential not recognized on the balance sheet
Assets not subject to
netting arrangements
Total assets
Maximum
exposure to risk
Gross assets
before offset
Offsetting
with gross
liabilities
Net assets
recognized on the
statement of
financial position
Financial
liabilities
Collateral
received
Assets after
consideration of
netting potential
Assets recognized on
the statement of
financial position
Recognized in
the statement of
financial position
After consideration
of netting potential
Derivative financial instruments
324,446
(158,844)
165,602
(60,721)
(76,853)
28,028
29,994
195,596
58,022
Financial liabilities subject to offsetting, netting arrangement as at 31 December 2023
31/12/2023
Offsetting recognized on the balance sheet
Netting potential not recognized on the balance sheet
Liabilities not subject
to netting
arrangements
Total liabilities
Maximum
exposure to risk
Gross
liabilities
before offset
Offsetting
with gross
assets
Net liabilities
recognized on the
statement of
financial position
Financial
assets
Collateral
pledged
Liabilities after
consideration of
netting potential
Liabilities recognized
on the statement of
financial position
Recognized in
the statement of
financial position
After consideration
of netting potential
Derivative financial instruments
347,414
(158,844)
188,570
(60,721)
(103,563)
24,286
15,817
204,387
40,103
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
732
NOTE 48: FAIR VALUE OF FINANCIAL INSTRUMENTS (in HUF mn) [continued]
48.3. Types of hedge accounting
Interest rate risk management is centralized at the Group. Interest rate risk exposures in major currencies are managed at
OTP Headquarter on a consolidated level. Although risk exposures in local currencies are managed at subsidiary level,
the respective decisions are subject to Headquarter ALCO approval. Interest rate risk is measured by simulating NII and
EVE under different stress and plan scenarios, the established risk limits are described in „OTP Bank’s Group-Level
Regulations on the Management of Liquidity Risk and Interest Rate Risk of Banking Book”. The interest rate risk
management activity aims to stabilize NII within the approved risk limits.
The risk management objective of these hedge relationships is to mitigate the risk of clean fair value (i.e. excluding
accrued interest) change of MIRS loans due to the change of interest rate reference indices (BUBOR, EURIBOR, LIBOR,
etc.) of the respective currency.
The ineffective part of fair value hedge accounting is presented on Interest income / Interest expense in the Consolidated
Statement of Profit or Loss.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
733
NOTE 48: FAIR VALUE OF FINANCIAL INSTRUMENTS (in HUF mn) [continued]
48.3. Types of hedge accounting [continued]
Amount, timing and uncertainty of future cash flows – hedging instruments as at 31 December 2024 (in fx million)
Type of hedge
Type of risk
Type of instrument
Within one
month
Within three
months and
over one
month
Within one
year and over
three months
Within five
years and
over one year
More than
five years
Total
Micro hedge
Fair value
hedge
Interest rate
risk
Interest rate swap
HUF
Notional
(10,000)
(3,000)
(193,376)
221,893
(41,000)
(25,483)
Average Interest Rate (%)
12.20%
1.20%
(5.24%)
5.26%
4.20%
EUR
Notional
-
-
(439)
(2,657)
452
(2,644)
Average Interest Rate (%)
-
-
3.89%
3.17%
-
USD
Notional
-
-
-
(1,013)
47
(966)
Average Interest Rate (%)
-
-
-
3.77%
4.18%
JPY
Notional
-
-
4,500
-
-
4,500
Average Interest Rate (%)
-
-
0.22%
-
-
Fair value
hedge
Foreign
exchange &
Interest rate
risk
Cross currency interest rate
swap
EUR/HUF
Notional
-
1
2
6
9
18
Average Interest Rate (%)
(1.63%)
(1.69%)
(1.69%)
(1.76%)
(1.82%)
Average FX Rate
310.53
310.04
310.04
308.93
307.71
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
734
NOTE 48: FAIR VALUE OF FINANCIAL INSTRUMENTS (in HUF mn) [continued]
48.3. Types of hedge accounting [continued]
Amount, timing and uncertainty of future cash flows – hedging instruments as at 31 December 2024 (in fx million) [continued]
Type of hedge
Type of risk
Type of instrument
Within one
month
Within three
months and
over one
month
Within one
year and over
three months
Within five
years and
over one year
More than
five years
Total
Micro hedge
Fair value
hedge
Foreign
exchange risk
Cross currency interest rate
swap
EUR/HUF
Notional
-
-
191
1,474
-
1,665
Average FX Rate
-
426.83
379.97
383.10
-
RON/HUF
Notional
-
175
450
425
-
1,050
Average FX Rate
-
79.76
80.30
75.17
-
RUB/HUF
Notional
-
-
-
2,700
-
2,700
Average FX Rate
-
-
-
3.74
-
JPY/HUF
Notional
-
-
4,500
-
-
4,500
Average FX Rate
-
-
2.43
-
-
Type of hedge
Type of risk
Type of instrument
Within one
month
Within three
months and
over one
month
Within one
year and over
three months
Within five
years and
over one year
More than
five years
Total
Macro hedge
Fair value
hedge
Interest rate
risk
Interest rate swap
EUR
Notional
-
-
(345)
(1,205)
(170)
(1,720)
Average Interest Rate (%)
-
-
3.16%
2.75%
2.51%
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
735
NOTE 48: FAIR VALUE OF FINANCIAL INSTRUMENTS (in HUF mn) [continued]
48.3. Types of hedge accounting [continued]
Amount, timing and uncertainty of future cash flows – hedging instruments as at 31 December 2023 (in fx million)
Type of hedge
Type of risk
Type of instrument
Within one
month
Within three
months and
over one
month
Within one
year and over
three months
Within five
years and
over one year
More than
five years
Total
Micro hedge
Fair value
hedge
Interest rate
risk
Interest rate swap
HUF
Notional
-
-
(121,675)
(218,683)
(51,700)
(392,058)
Average Interest Rate (%)
-
-
5.10%
(3.24%)
4.72%
EUR
Notional
-
-
65
(461)
180
(216)
Average Interest Rate (%)
-
-
2.64%
4.80%
-
USD
Notional
30
45
-
(1,013)
47
(891)
Average Interest Rate (%)
2.10%
2.13%
-
3.77%
4.18%
JPY
Notional
-
-
-
4,500
-
4,500
Average Interest Rate (%)
-
-
-
0.22%
-
Fair value
hedge
Foreign
exchange &
Interest rate
risk
Cross currency interest rate
swap
EUR/HUF
Notional
-
1
2
8
10
21
Average Interest Rate (%)
(1.65%)
(1.69%)
(1.68%)
(1.73%)
(1.82%)
Average FX Rate
310.23
310.02
310.10
309.36
307.71
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
736
NOTE 48: FAIR VALUE OF FINANCIAL INSTRUMENTS (in HUF mn) [continued]
48.3. Types of hedge accounting [continued]
Amount, timing and uncertainty of future cash flows – hedging instruments as at 31 December 2023 (in fx million) [continued]
Type of hedge
Type of risk
Type of instrument
Within one
month
Within three
months and
over one
month
Within one
year and over
three months
Within five
years and
over one year
More than
five years
Total
Micro hedge
Fair value
hedge
Foreign
exchange risk
Cross currency interest rate
swap
EUR/HUF
Notional
-
175
250
1,167
500
2,092
Average FX Rate
363.88
356.12
359.11
383.36
381.11
RON/HUF
Notional
-
-
575
1,950
-
2,525
Average FX Rate
-
-
73.75
73.98
-
RUB/HUF
Notional
-
-
4,000
7,870
-
11,870
Average FX Rate
-
-
3.65
3.73
-
JPY/HUF
Notional
-
-
-
4,500
-
4,500
Average FX Rate
-
-
-
2.43
-
USD/HUF
Notional
-
-
143
-
-
143
Average FX Rate
-
357.16
357.16
-
-
Other
Interest rate swap
HUF
Notional
-
-
778
-
-
778
Type of hedge
Type of risk
Type of instrument
Within one
month
Within three
months and
over one
month
Within one
year and over
three months
Within five
years and
over one year
More than
five years
Total
Macro hedge
Fair value
hedge
Interest rate
risk
Interest rate swap
EUR
Notional
-
-
(60)
(240)
(120)
(420)
Average Interest Rate (%)
-
-
3.54%
2.61%
2.42%
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
737
NOTE 48: FAIR VALUE OF FINANCIAL INSTRUMENTS (in HUF mn) [continued]
48.3. Types of hedge accounting [continued]
As at 31 December 2024 is as follows:
Type of
hedge
Type of
instrument
Type of risk
Nominal amount
of the hedging
instrument
Carrying amount of the hedging instrument as at 31
December 2024
Line item in the consolidated
statement of financial position
where the hedging instrument
is located
Changes in fair value
used for calculating
hedge ineffectiveness
for the year ended as
at 31 December 2024
Micro
Before netting
Netting
After netting
hedge
Assets
Liabilities
Assets
Liabilities
Fair value
IRS
Interest rate
3,297,470
41,859
(30,282)
19,957
21,902
(10,325)
Derivative financial instruments
7,801
hedge
risk
designated as hedge
accounting
CCIRS
FX & IR risk
5,265
-
(1,764)
-
-
(1,764)
Derivative financial instruments
(859)
designated as hedge
accounting
CCIRS
FX risk
600,883
18,190
(2,516)
-
18,190
(2,516)
Derivative financial instruments
11,104
designated as hedge
accounting
Micro fair value hedges total
3,903,618
60,049
(34,562)
19,957
40,092
(14,605)
18,046
Type of
hedge
Type of
instrument
Type of risk
Nominal amount
of the hedging
instrument
Carrying amount of the hedging instrument as at 31
December 2024
Line item in the consolidated
statement of financial position
where the hedging instrument
is located
Changes in fair value
used for calculating
hedge ineffectiveness
for the year ended as
at 31 December 2024
Macro
Before netting
Netting
After netting
hedge
Assets
Liabilities
Assets
Liabilities
Fair value
IRS
Interest rate
705,355
10,289
-
-
10,289
-
Derivative financial instruments
3,875
hedge
risk
designated as hedge
accounting
Macro fair value hedges total
705,355
10,289
-
-
10,289
-
3,875
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
738
NOTE 48: FAIR VALUE OF FINANCIAL INSTRUMENTS (in HUF mn) [continued]
48.3. Types of hedge accounting [continued]
As at 31 December 2023 is as follows:
Type of
hedge
Type of
instrument
Type of risk
Nominal amount
of the hedging
instrument
Carrying amount of the hedging instrument as at 31
December 2023
Line item in the consolidated
statement of financial position
where the hedging instrument
is located
Changes in fair value
used for calculating
hedge ineffectiveness
for the year ended as
at 31 December 2023
Micro
Before netting
Netting
After netting
hedge
Assets
Liabilities
Assets
Liabilities
Fair value
IRS
Interest rate
2,448,226
43,305
(79,238)
26,196
17,109
(53,042)
Derivative financial instruments
10,642
hedge
risk
designated as hedge
accounting
CCIRS
FX & IR risk
6,394
-
(1,418)
-
-
(1,418)
Derivative financial instruments
(668)
designated as hedge
accounting
CCIRS
FX risk
1,009,180
24,750
(9,488)
-
24,750
(9,488)
Derivative financial instruments
38,146
designated as hedge
accounting
IRS
Other
778
108
-
-
108
-
Derivative financial instruments
1
designated as hedge
accounting
Micro fair value hedges total
3,464,578
68,163
(90,144)
26,196
41,967
(63,948)
48,121
Type of
hedge
Type of
instrument
Type of risk
Nominal amount
of the hedging
instrument
Carrying amount of the hedging instrument as at 31
December 2023
Line item in the consolidated
statement of financial position
where the hedging instrument
is located
Changes in fair value
used for calculating
hedge ineffectiveness
for the year ended as
at 31 December 2023
Macro
Before netting
Netting
After netting
hedge
Assets
Liabilities
Assets
Liabilities
Fair value
IRS
Interest rate
160,768
168
(119)
168
-
49
Derivative financial instruments
32
hedge
risk
designated as hedge
accounting
Macro fair value hedges total
160,768
168
(119)
168
-
49
32
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
739
NOTE 48: FAIR VALUE OF FINANCIAL INSTRUMENTS (in HUF mn) [continued]
48.3. Types of hedge accounting [continued]
As at 31 December 2024 is as follows:
Type of hedge
Type of risk
Carrying amount of the hedged
item as at 31 December 2024
Amount of fair value hedge adjustments on
the hedged item included in the carrying
amount of the hedged item for the year
ended 31 December 2024
Line item in the consolidated statement of
financial position in which the hedged item is
included
Assets
Liabilities
Assets
Liabilities
Micro hedge
Fair value hedge
Loans
Interest rate risk
180,000
‐
1,024
‐
Loans at amortized cost
Loans
Interest rate risk
‐
144,441
‐
(3,618)
Amounts due to banks, the National Governments,
deposits from the National Banks and other banks
Government bonds
Interest rate risk
481,715
‐
1,376
‐
Securities at amortized cost
Government bonds
Interest rate risk
290,270
‐
(20,342)
‐
Securities at fair value through
other comprehensive income
Other bonds
Interest rate risk
4,101
‐
(99)
‐
Securities at fair value through
other comprehensive income
Other bonds
Interest rate risk
‐
1,796,848
‐
43,723
Liabilities from issued securities
Other bonds
Interest rate risk
‐
249,936
‐
(3,474)
Subordinated bonds and loans
Loans
Foreign exchange &
Interest rate risk
3,499
‐
36
‐
Loans at amortized cost
Loans
Foreign exchange risk
678,845
‐
-
‐
Loans at amortized cost
Refinanced loans
Interest rate risk
‐
224,979
‐
4,948
Amounts due to banks, the National Governments,
deposits from the National Banks and other banks
Government bonds
Foreign exchange risk
11,307
‐
-
‐
Securities at fair value through
other comprehensive income
Government bonds
Foreign exchange risk
86,541
‐
-
‐
Securities at amortized cost
Other securities
Foreign exchange risk
‐
14,053
‐
-
Liabilities from issued securities
Micro fair value hedges total
1,736,278
2,430,257
(18,005)
41,579
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
740
NOTE 48: FAIR VALUE OF FINANCIAL INSTRUMENTS (in HUF mn) [continued]
48.3. Types of hedge accounting [continued]
As at 31 December 2024 is as follows [continued]:
Type of hedge
Type of risk
Carrying amount of the hedged
item as at 31 December 2024
Amount of fair value hedge adjustments on
the hedged item included in the carrying
amount of the hedged item for the year
ended 31 December 2024
Line item in the consolidated statement
of financial position in which the hedged
item is included
Macro hedge
Fair value hedge
Assets
Liabilities
Assets
Liabilities
Fair value changes of the hedged items
Customer deposits
Portfolio risk
-
719,517
-
8,209
in portfolio hedge of interest rate risk
Macro fair value hedges total
-
719,517
-
8,209
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
741
NOTE 48: FAIR VALUE OF FINANCIAL INSTRUMENTS (in HUF mn) [continued]
48.3. Types of hedge accounting [continued]
As at 31 December 2023 is as follows:
Type of hedge
Type of risk
Carrying amount of the hedged
item as at 31 December 2023
Amount of fair value hedge
adjustments on the hedged item
included in the carrying amount of
the hedged item for the year ended
31 December 2023
Line item in the consolidated statement of financial
position in which the hedged item is included
Assets
Liabilities
Assets
Liabilities
Micro hedge
Fair value hedge
Loans
Interest rate risk
26,839
-
(3,178)
-
Loans at amortized cost
Loans
Interest rate risk
-
143,857
-
(11,249)
Amounts due to banks, the National Governments,
deposits from the National Banks and other banks
Government bonds
Interest rate risk
164,229
-
7,808
-
Securities at amortized cost
Government bonds
Interest rate risk
806,018
-
28,001
-
Securities at fair value through
other comprehensive income
Other bonds
Interest rate risk
3,828
-
203
-
Securities at fair value through
other comprehensive income
Other bonds
Interest rate risk
-
730,971
-
31,398
Liabilities from issued securities
Other bonds
Interest rate risk
-
219,989
-
(157)
Subordinated bonds and loans
Loans
Foreign exchange &
Interest rate risk
3,266
-
(96)
-
Loans at amortized cost
Loans
Foreign exchange risk
949,447
-
-
-
Loans at amortized cost
Refinanced loans
Interest rate risk
-
213,864
-
13,460
Amounts due to banks, the National Governments,
deposits from the National Banks and other banks
Government bonds
Foreign exchange risk
10,986
-
-
-
Securities at fair value through
other comprehensive income
Government bonds
Foreign exchange risk
49,378
-
-
-
Securities at amortized cost
Other securities
Other risk
-
897
-
(39)
Liabilities from issued securities
Micro fair value hedges total
2,013,991
1,309,578
32,738
33,413
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
742
NOTE 48: FAIR VALUE OF FINANCIAL INSTRUMENTS (in HUF mn) [continued]
48.3. Types of hedge accounting [continued]
As at 31 December 2023 is as follows [continued]:
Type of hedge
Type of risk
Carrying amount of the hedged
item as at 31 December 2023
Amount of fair value hedge adjustments on
the hedged item included in the carrying
amount of the hedged item for the year
ended 31 December 2023
Line item in the consolidated statement
of financial position in which the hedged
item is included
Macro hedge
Fair value hedge
Assets
Liabilities
Assets
Liabilities
Fair value changes of the hedged items
Customer deposits
Portfolio risk
-
157,543
-
160
in portfolio hedge of interest rate risk
Macro fair value hedges total
-
157,543
-
160
Change in basis swap spread recognised in the consolidated other comprehensive income related fair value hedges as follows:
Type of risk
Carrying amount of the hedged item
Items recognized in the
consolidated other comprehensive
income for the year 2024
Change in the items recognized in
other comprehensive income for
the year 2024
Line item in the consolidated
statement of financial position in
which the hedged item is included
Assets
Liabilities
FX risk
678,846
-
11
(217)
Loans at amortised cost
FX risk
11,308
-
(51)
10
Securities at fair value through
other comprehensive income
FX risk
86,541
-
549
549
Securities at amortized cost
FX risk
-
14,053
16
16
Liabilities from issued securities
Total
776,695
14,053
525
358
Type of risk
Carrying amount of the hedged item
Items recognised in the
consolidated other comprehensive
income for the year 2023
Change in the items recognized in
other comprehensive income for
the year 2023
Line item in the consolidated
statement of financial position in
which the hedged item is included
Assets
Liabilities
FX risk
949,447
-
167
530
Loans at amortised cost
FX risk
10,986
-
(69)
-
Securities at fair value through
other comprehensive income
Total
960,433
-
98
530
On Group level there weren’t any cash-flow hedges for the year ended 31 December 2024 and 2023, respectively.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
743
NOTE 48: FAIR VALUE OF FINANCIAL INSTRUMENTS (in HUF mn) [continued]
48.3. Types of hedge accounting [continued]
Details of the Group's activities in relation to hedges of its net investment in EUR against foreign exchange movements are, as follows:
31/12/2024
Change in fair value of
hedged item for
ineffectiveness assessment
Translation difference
Balances remaining in the
Translation difference for hedge
accounting is no longer applied
Net assets of subsidiaries where the
investment is in EUR
-
168,230
63,997
Details of the EUR issued bonds used as hedging instruments and hedge effectiveness is as follows:
31/12/2024
Carrying amount
Changes in fair value of hedging instruments used for measuring hedge ineffectiveness
Notional amount
Liabilities
Total
Effective part
recognized in other
comprehensive income
Hedge ineffectiveness
recognized in statement of
profit or loss
Reclassification into
statement of profit
or loss
Eur issued bonds
410,090
410,090
(27,310)
(27,310)
-
-
The following table shows maturity of the hedging instruments:
31/12/2024
Less than 1
month
1 to 3 months
3 to 12 months
1 to 5 years
Over 5 years
Total
Eur issued bonds
-
-
-
410,090
-
410,090
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
744
NOTE 48: FAIR VALUE OF FINANCIAL INSTRUMENTS (in HUF mn) [continued]
48.3. Types of hedge accounting [continued]
Details of the Group's activities in relation to hedges of its net investment in EUR against foreign exchange movements are, as follows:
31/12/2023
Change in fair value of
hedged item for
ineffectiveness assessment
Translation difference
Balances remaining in the
Translation difference for hedge
accounting is no longer applied
Net assets of subsidiaries where the
investment is in EUR
-
69,188
(31,588)
Details of the EUR issued bonds used as hedging instruments and hedge effectiveness is as follows:
31/12/2023
Carrying amount
Changes in fair value of hedging instruments used for measuring hedge ineffectiveness
Notional amount
Liabilities
Total
Effective part
recognized in other
comprehensive income
Hedge ineffectiveness
recognized in statement
of profit or loss
Reclassification into
statement of profit or
loss
Eur issued bonds
382,780
382,780
(2,707)
(2,707)
-
-
The following table shows maturity of the hedging instruments:
31/12/2023
Less than 1
month
1 to 3 months
3 to 12 months
1 to 5 years
Over 5 years
Total
Eur issued bonds
-
-
-
382,780
-
382,780
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
745
NOTE 48:
FAIR VALUE OF FINANCIAL INSTRUMENTS (in HUF mn) [continued]
48.4. Fair value levels
The following table shows an analysis of financial instruments recorded at fair value by level of the fair value hierarchy:
31/12/2024
Total
Level 1
Level 2
Level 3
Financial assets at fair value through profit or loss
743,400
184,743
548,838
9,819
Trading securities at fair value through profit or loss
514,357
123,379
390,978
-
Positive fair value of derivative financial assets held for trading
152,513
1,336
151,177
-
Non-trading instruments mandatorily at fair value through profit or loss1
76,530
60,028
6,683
9,819
Interest-bearing securities at fair value through other comprehensive income2
1,622,824
1,156,908
297,759
168,157
Non-interest bearing instruments at fair value through other comprehensive income3
82,729
37,569
31,887
13,273
Loans mandatorily at fair value through profit or loss
1,559,781
-
-
1,559,781
Equity instruments measured at fair value4
68,311
68,311
Positive fair value of derivative financial assets designated as fair value hedge
50,381
-
50,381
-
Financial assets measured at fair value total
4,127,426
1,379,220
928,865
1,819,341
Financial liabilities designated at fair value through profit or loss
72,490
-
-
72,490
Negative fair value of held-for-trading derivative financial liabilities
114,089
728
112,162
1,199
Negative fair value of derivative financial liabilities designated as fair value hedge
14,605
-
14,605
-
Financial liabilities measured at fair value total
201,184
728
126,767
73,689
1 The portfolio in level 3 mainly includes Visa C shares, East West Venture Capital Fund and TCE Fund.
2 The portfolio in level 3 includes HUF 144,138 million Ukrainian and HUF 24,019 million Russian government bonds.
3 The portfolio in level 3 includes mainly Visa A preferred stock (in the book of OTP banka d.d. Croatia) and Borika AD (in the book of DSK Bank).
4 The detailed list of equity investments measured at fair value categorized in level 3 is presented in Note 43.
The fair value of investment properties is presented in Note 14 and they are categorized in level 3.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
746
NOTE 48:
FAIR VALUE OF FINANCIAL INSTRUMENTS (in HUF mn) [continued]
48.4. Fair value levels [continued]
The following table shows an analysis of financial instruments recorded at fair value by level of the fair value hierarchy:
31/12/2023
Total
Level 1
Level 2
Level 3
Financial assets at fair value through profit or loss
288,885
96,816
179,786
12,283
Trading securities at fair value through profit or loss
67,568
48,016
19,552
-
Positive fair value of derivative financial assets held for trading
153,629
433
153,196
-
Non-trading instruments mandatorily at fair value through profit or loss1
67,688
48,367
7,038
12,283
Interest-bearing securities at fair value through other comprehensive income2
1,540,980
800,168
634,396
106,416
Non-interest bearing instruments at fair value through other comprehensive income
60,481
23,809
30,029
6,643
Loans mandatorily at fair value through profit or loss
1,400,485
-
-
1,400,485
Equity instruments measured at fair value3
44,162
-
-
44,162
Positive fair value of derivative financial assets designated as fair value hedge
41,967
-
41,967
-
Financial assets measured at fair value total
3,376,960
920,793
886,178
1,569,989
Financial liabilities designated at fair value through profit or loss
70,707
-
-
70,707
Negative fair value of held-for-trading derivative financial liabilities
140,488
517
136,263
3,708
Negative fair value of derivative financial liabilities designated as fair value hedge
63,899
-
63,899
-
Financial liabilities measured at fair value total
275,094
517
200,162
74,415
1 The portfolio in level 3 mainly includes Visa C shares, East West Venture Capital Fund and TCE Fund.
2 The portfolio in level 3 includes HUF 78,355 million Ukrainian and HUF 22,452 million Russian government bonds.
3 The detailed list of equity investments measured at fair value categorized in level 3 is presented in Note 43.
The fair value of investment properties is presented in Note 14 and they are categorized in level 3.
Asset classified as held for sale is valued at fair value less cost to sell, that is in this case equal to the sales price and would be classified as Level 3 fair value.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
747
NOTE 48:
FAIR VALUE OF FINANCIAL INSTRUMENTS (in HUF mn) [continued]
48.4. Fair value levels [continued]
Movements in Level 3 financial instruments measured at fair value
The following table shows a reconciliation of the opening and closing amount of Level 3 financial assets and liabilities which are recorded at fair value:
31/12/2024
Opening
balance
Purchase / Issuance /
Disbursement (+)
Settlement /
Close / Sale (-)
FVA (+/-)
Transfer (+/-)
Fx effect /
Revaluation
Other
Closing
balance
Non-trading instruments mandatorily
at fair value through profit or loss
12,283
-
-
(1,794)
-
(209)
(461)
9,819
Interest-bearing securities at fair value
through other comprehensive income
106,416
90,917
(27,726)
(9,350)
-
1,978
5,922
168,157
Non-interest-bearing instruments at fair value
through other comprehensive income
6,643
1,763
(22)
-
989
1,919
1,981
13,273
Loans mandatorily at
fair value through profit or loss1
1,400,485
235,187
(104,638)
28,833
-
2
(88)
1,559,781
Equity instruments measured at fair value
44,162
18,976
(57)
2,797
-
2,433
-
68,311
Financial assets measured
at fair value total
1,569,989
346,843
(132,443)
20,486
989
6,123
7,354
1,819,341
Financial liabilities
designated at fair value
through profit or loss
70,707
-
(1,522)
2,000
-
-
1,305
72,490
Negative fair value of held-for-trading
derivative financial liabilities
3,708
-
-
(2,506)
-
(3)
-
1,199
Financial liabilities designated
at fair value total
74,415
-
(1,522)
(506)
-
(3)
1,305
73,689
1 HUF 5,504 million fair value adjustment resulting from risk factors and HUF 23,331 million adjustment resulting from market factors are included into FVA change for the current period at loans mandatorily measured at fair
value through profit or loss.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
748
NOTE 48:
FAIR VALUE OF FINANCIAL INSTRUMENTS (in HUF mn) [continued]
48.4. Fair value levels [continued]
Movements in Level 3 financial instruments measured at fair value [continued]
The following table shows a reconciliation of the opening and closing amount of Level 3 financial assets and liabilities which are recorded at fair value:
31/12/2023
Opening
balance
Purchase / Issuance /
Disbursement (+)
Settlement /
Close / Sale (-)
FVA (+/-)
Transfer (+/-)
Fx effect /
Revaluation
Other
Closing
balance
Non-trading instruments mandatorily
at fair value through profit or loss
11,988
-
(3)
(359)
39
(116)
734
12,283
Interest-bearing securities at fair value
through other comprehensive income
64,695
78,411
(21,594)
3,458
(2,143)
(2,838)
(13,573)
106,416
Non-interest-bearing instruments at fair value
through other comprehensive income
9,745
-
(2)
-
(2,704)
(541)
145
6,643
Loans mandatorily at
fair value through profit or loss1
1,247,414
154,902
(96,390)
91,575
394
11
2,579
1,400,485
Equity instruments measured at fair value
42,558
5,782
(4,769)
498
-
93
-
44,162
Financial assets measured
at fair value total
1,376,400
239,095
(122,758)
95,172
(4,414)
(3,391)
(10,115)
1,569,989
Financial liabilities
designated at fair value
through profit or loss
54,191
-
(1,332)
4,543
-
-
13,305
70,707
Negative fair value of held-for-trading
derivative financial liabilities
650
-
-
3,050
-
-
8
3,708
Financial liabilities designated
fair value total
54,841
-
(1,332)
7,593
-
-
13,313
74,415
1 HUF (91) million fair value adjustment resulting from risk factors and HUF 93,581 million adjustment resulting from market factors are included into FVA change for the current period at loans mandatorily measured at fair
value through profit or loss.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
749
NOTE 48:
FAIR VALUE OF FINANCIAL INSTRUMENTS (in HUF mn) [continued]
48.4. Fair value levels [continued]
Valuation techniques on Level 2 instruments
The fair value of Level 2 instruments is calculated by discounting their expected interest and capital cash flows. Discounting is done with the respective swap curve of each currency.
Valuation techniques and sensitivity analysis on Level 3 instruments
Sensitivity analysis is performed on products with significant unobservable inputs (Level 3) to generate a range of reasonably possible alternative valuations. The sensitivity
methodologies applied take account of the nature of the valuation techniques used, as well as the availability and reliability of observable proxy and historical date and the impact of
using alternative models.
The calculation is based on a range or spread data of reliable reference source or a scenario based on relevant market analysis alongside the impact of using alternative models.
Sensitivities are calculated without reflecting the impact of any diversification in the portfolio.
Unobservable inputs used in measuring fair value
Type of financial instrument
Presentation in the Statement of Financial Position
Valuation technique
Significant
unobservable
input
Range of estimates for
unobservable input
VISA C shares
Financial assets at fair value through profit or loss
Market approach combined
Illiquidity
+ 12% / (12%)
with expert judgement.
MFB refinanced loans
Loans mandatorily at fair value through profit or loss
Discounted cash flow model
Probability of
default
+ 20% / (20)%
Subsidized personal loans
Loans mandatorily at fair value through profit or loss
Discounted cash flow model
Probability of
default
+ 20% / (20)%
Subsidized personal loans
Loans mandatorily at fair value through profit or loss
Discounted cash flow model
Operational costs
+20% / (20)%
Subsidized personal loans
Loans mandatorily at fair value through profit or loss
Discounted cash flow model
Demography
Change in the cash flow
estimation + 5% /(5)%
Ministry of Finance of Russia
Securities at fair value through other comprehensive income
Discounted cash flow model
Credit risk
+15% / (15)%
Ministry of Finance of Ukraine
Securities at fair value through other comprehensive income
Discounted cash flow model
Credit risk
+1% / (1)%
Subsidized mortgage loan for families "CSOK"
Loans mandatorily at fair value through profit or loss
Discounted cash flow model
Probability of
default
+20% / (20)%
Subsidized mortgage loan for families "CSOK"
Loans mandatorily at fair value through profit or loss
Discounted cash flow model
Operational costs
+20% / (20)%
Subsidized mortgage loan for families "CSOK"
Loans mandatorily at fair value through profit or loss
Discounted cash flow model
Demography
Change in the cash flow
estimation + 5% /(5)%
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
750
NOTE 48:
FAIR VALUE OF FINANCIAL INSTRUMENTS (in HUF mn) [continued]
48.4. Fair value levels [continued]
The effect of unobservable inputs on fair value measurement
Although the Group believes that its estimates of fair value are appropriate, the use of different methodologies or assumptions could lead to different measurements of fair value. For
fair value measurements in Level 3 changing the assumptions used to reasonably possible alternative assumptions would have the following effects.
31/12/2024
Presentation in the Statement of Financial
Position
Unobservable inputs
Book value
Fair values
Effect on profit and loss
Favourable
Unfavourable
Favourable
Unfavourable
VISA C shares
Financial assets at fair value through profit or loss
Illiquidity
3,304
3,700
2,908
396
(396)
MFB refinanced loans
Loans mandatorily at fair value through profit or loss
Probability of default
15,094
15,663
14,525
569
(569)
Subsidised personal loans
Loans mandatorily at fair value through profit or loss
Probability of default
980,378
980,991
979,766
613
(612)
Subsidised personal loans
Loans mandatorily at fair value through profit or loss
Operational costs
980,378
987,263
973,579
6,885
(6,799)
Subsidised personal loans
Loans mandatorily at fair value through profit or loss
Demography
980,378
981,238
979,693
860
(685)
Russian government bonds
Securities at fair value through
other comprehensive income
Credit risk
24,019
34,777
13,261
10,758
(10,758)
Ukrainian government bonds
Securities at fair value through
other comprehensive income
Credit risk
144,138
146,217
142,104
2,079
(2,034)
Subsidized mortgage loan for
families "CSOK"
Loans mandatorily at fair value through profit or loss
Probability of default
558,812
559,071
558,553
259
(259)
Subsidized mortgage loan for
families "CSOK"
Loans mandatorily at fair value through profit or loss
Operational costs
558,812
565,807
552,001
6,995
(6,811)
Subsidized mortgage loan for
families "CSOK"
Loans mandatorily at fair value through profit or loss
Demography
110,042
110,236
109,663
194
(379)
Total
4,355,355
4,384,963
4,326,053
29,608
(29,302)
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
751
NOTE 48:
FAIR VALUE OF FINANCIAL INSTRUMENTS (in HUF mn) [continued]
48.4. Fair value levels [continued]
The effect of unobservable inputs on fair value measurement [continued]
31/12/2023
Presentation in the Statement of Financial
Position
Unobservable
Book value
Fair values
Effect on profit and loss
Favourable
Unfavourable
Favourable
Unfavourable
VISA C shares
Financial assets at fair value through profit or loss
Illiquidity
10,301
11,538
9,065
1,237
(1,236)
MFB refinanced loans
Loans mandatorily at fair value through profit or loss
Probability of default
19,154
19,499
18,809
345
(345)
Subsidised personal loans
Loans mandatorily at fair value through profit or loss
Probability of default
911,190
913,292
909,097
2,102
(2,093)
Subsidised personal loans
Loans mandatorily at fair value through profit or loss
Operational costs
911,190
916,712
905,728
5,522
(5,462)
Subsidised personal loans
Loans mandatorily at fair value through profit or loss
Demography
911,190
911,939
910,577
749
(613)
Russian government bonds
Securities at fair value through
other comprehensive income
Credit risk
22,452
27,909
16,995
5,457
(5,457)
Ukrainian government bonds
Securities at fair value through
other comprehensive income
Credit risk
78,355
79,138
77,572
783
(783)
Subsidized mortgage loan for
families "CSOK"
Loans mandatorily at fair value through profit or loss
Probability of default
463,926
464,170
463,682
244
(244)
Subsidized mortgage loan for
families "CSOK"
Loans mandatorily at fair value through profit or loss
Operational costs
463,926
470,864
457,215
6,938
(6,711)
Total
3,791,684
3,815,061
3,768,740
23,377
(22,944)
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
752
NOTE 48:
FAIR VALUE OF FINANCIAL INSTRUMENTS (in HUF mn) [continued]
48.4. Fair value levels [continued]
The effect of unobservable inputs on fair value measurement [continued]
The favourable and unfavourable effects of using reasonably possible alternative assumptions for the valuation of Visa C
shares have been calculated by modifying the discount rate used for the valuation by +/-12% as being the best estimates
of the management as at 31 December 2024 and 31 December 2023, respectively.
In the case of Hungarian Development Bank (“MFB”) refinancing loans and subsidised personal loans the Bank calculated
the favourable and unfavourable effects of using reasonably possible alternative assumptions by modifying the rates of
probability of default by +/- 20% as one of the most significant unobservable inputs.
In case of subsidised personal loans operational cost and factors related to demography are considered as unobservable
inputs to the applied fair value calculation model in addition to credit risk.
The Bank calculated the favourable and unfavourable effects of using reasonably possible alternative assumptions by
modifying the rates of operational costs by +/- 20% as one of the most significant unobservable inputs.
In case of subsidised personal loans cash flow estimation are based on assumption related to the future number of
childbirths performed by the debtors both in the current and the comparative period. According to the assumptions used
in comparative period 15% of the debtors will not fulfill the conditions of the subsidy determined by the government after
5 years (“breach of conditions”), thereby debtors will be obliged to pay back the interest subsidy given in advance.
Furthermore, in this case subsidised loans are converted to loans provided based on market conditions. Loans are prepaid
by the government as part of the subsidy after the second and the third childbirth following the signatory of the loan
contract. The Bank calculated the favourable and unfavourable effects of using reasonably possible alternative
assumptions by modifying the demographical assumption of breach of conditions by +/- 5% as the most significant
unobservable input in the cash flow estimation.
Since 2022 the Bank has used a new and more detailed model for cash flow calculations of the subsidised personal loans.
The new model uses more scenarios compared to the previous one. These scenarios based on the above-mentioned events
(child births after signatory and breach of conditions) and also the event of divorce. The model uses public statistical
information for these events to estimate. The Bank calculated the favourable and unfavourable effects of using reasonably
possible alternative assumptions by modifying the demographical assumption of future child births by +/-5% as one of
the most significant unobservable inputs in the cash flow estimation.
The favourable and unfavourable effects of using reasonably possible alternative assumptions for the valuation of FVOCI
securities have been calculated by modifying the discount rate used for the valuation by +/-15% and +/-1% as being the
best estimates of the management as at 31 December 2024 and 31 December 2023, respectively.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
753
NOTE 49:
SEGMENT REPORTING BY BUSINESS AND GEOGRAPHICAL SEGMENTS (in HUF mn)
The Group distinguishes business and geographical segments. The report on the base of the business and geographical
segments is reported below.
The reportable segments of the Group on the base of IFRS 8 are as the follows:
OTP Core Hungary, Merkantil Group, Asset Management subsidiaries, Other subsidiaries, Bulgaria, Croatia, Slovenia,
Romania, Serbia, Ukraine, Russia, Montenegro, Albania, Moldova, Uzbekistan. Although Romanian segment was
classified as discontinued operation from 2023 in these consolidated financial statements, segment reporting contained it
as a separate segment because – in line with the structure of the financial statements monitored by the management (Stock
Exchange Report) – the Romanian operation was presented in a way as if it was classified as continuing operation. The
Romanian segment was deconsolidated in July 2024.
OTP Core is an economic unit for measuring the result of core business activity of the Group in Hungary. Financials for
OTP Core are calculated from the partially Consolidated Financial Statements of the companies engaged in the Group’s
underlying banking operation in Hungary. These companies include OTP Bank Hungary Plc, OTP Mortgage Bank Ltd.,
OTP Building Society Ltd., OTP Factoring Ltd., OTP Financial Point Ltd., and companies providing intragroup financing:
OTP Bank Employee Stock Ownership Plan Organization was included from the fourth quarter of 2016; OTP Card
Factory Ltd., OTP Facility Management Llc., Monicomp Ltd. and OTP Real Estate Lease Ltd. were included from the
first quarter of 2017 (from the first quarter of 2019 OTP Real Estate Lease Ltd. was eliminated from OTP Core); OTP
Mobile Service Llc., OTP Ingatlanpont Llc. were included from the first quarter of 2019, OTP Ecosystem Ltd. (previous
name: OTP eBIZ Ltd. it was eliminated from the first quarter of 2023) from the first quarter of 2020; OTP Home Solutions
Ltd. was included from the second quarter of 2021; Bajor-Polár Center, Real Estate Management Ltd., CIL Babér Ltd.,
Bank Center No. 1. Ltd. and MFM Project Investment and Development Ltd. were included from the first quarter of 2024.
In the fourth quarter of 2024, MFM Project Investment and Development Ltd and Bajor-Polár Center Real Estate
Management Ltd merged into Bank Center No. 1. Investment and Development Ltd. At the same time OTP Facility
Management Ltd., which was already part of OTP Core before 2024, merged into CIL Babér Ltd.
The statement of financial position of Ipoteka Bank in Uzbekistan was consolidated from June 2023. The profit
contribution of Ipoteka Bank was recognized in the consolidated profit or loss from the third quarter of 2023.
The results of foreign factoring companies (OTP Factoring Ukraine LLC, OTP Factoring Bulgaria LLC (it was merged
into DSK Bank EAD in the second quarter of 2023), OTP Factoring Serbia d.o.o., and OTP Debt Collection d.o.o., as
well as the foreign leasing companies are included into the relevant foreign bank’s segment.
The Other subsidiaries include, among others: OTP Real Estate Ltd., OTP Life Annuity Ltd, OTP Funds Servicing and
Consulting Ltd.
The reportable business and geographical segments of the Group are those components where:
-
separated income and expenses, assets and liabilities can be identified and assignable to the segments,
-
transactions between the different segments were eliminated,
-
the main decisive board of the Group regularly controls the operating results,
-
separated financial information is available.
In accordance with the management’s decision, the scope of adjustment items presented in the stock exchange report on
consolidated level changed from the first quarter of 2024.
According to the methodology applied until the end of 2023 (hereinafter: old methodology), in 2023 the following
adjustment items were carved out of the regular profit or loss accounts of individual segments, with after tax amount:
dividends and net cash transfers, goodwill/investment impairment charges, special tax on financial institutions, expected
one-off effect of the interest rate cap for certain loans in Hungary and Serbia, effect of the winding up of Sberbank
Hungary, effect of acquisitions, result of the treasury share swap agreement, and impairments on Russian government
bonds at OTP Core and DSK Bank.
According to the methodology applied from 2024 onwards (hereinafter: new methodology), only the following adjustment
items are carved out and presented on consolidated level, with after tax amount: goodwill impairment, and the direct
effect of acquisitions. Starting from 2024, the direct effect of acquisitions includes only three items: badwill and initial
risk cost related to acquisitions, and the gain or loss on the sale of a subsidiary. Under the old methodology, the effect of
acquisitions line included further acquisition-related items, such as integration costs, and customer base value
amortization.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
754
NOTE 49:
SEGMENT REPORTING BY BUSINESS AND GEOGRAPHICAL SEGMENTS (in HUF mn)
[continued]
From the third quarter of 2024, a materiality threshold was introduced: the relevant items are presented amongst
adjustments only if the given item exceeds 10% of the quarterly consolidated profit after tax.
Under the new methodology, items previously presented as adjustments are now presented in the relevant geographical
or business segment where they occurred (e.g. the special banking taxes in Hungary are presented partly within OTP Core
and partly within Merkantil Group segment).
For the sake of comparability, in the report the relevant consolidated tables are presented in accordance with both the old
and the new methodologies for the comparative year 2024.
This change in methodology does not affect the consolidated and separate statements of financial position, as, according
to both the old and the new methodologies, the adjustment items affect only the profit and loss statement and the relevant
performance indicators calculated from the profit and loss lines concerned, but not the statement of financial position.
Explanation to the segments in the following table below:
3; 4; 6: The segments distinguished on geographical basis contain banks in given country and sometimes other financial
institutions (like leasing or factoring companies) or other companies. The income generated in the given segments arise
mainly from providing financial services like: collecting deposits, granting loans, leasing and treasury activities, payment
and investment services and other financial services.
7: Merkantil Group conducts leasing activities in Hungary, with its source of income being provided leasing services
(financing cars and production equipment).
8: Incomes arising in this segment is mainly fee income of fund management companies in Hungary, Bulgaria, Serbia,
Ukraine (and in Romania until its sale in October 2024) based on their assets in investment funds or other managed assets.
9: The activities of other Hungarian and foreign subsidiaries are very divergent, so their income also originates from
different sources. The main part of the income in the Other subsidiaries segment comes from the activities of OTP Funds
Servicing and Consulting, OTP Real Estate, OTP Real Estate Investment Fund Management and PortfoLion Funds.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
755
NOTE 49:
SEGMENT REPORTING BY BUSINESS AND GEOGRAPHICAL SEGMENTS (in HUF mn) [continued]
Information regarding the Group’s reportable segments is presented below:
As at 31 December 2024
Main components of the consolidated statement of profit or loss in HUF million
OTP Group - in the
consolidated statement of
profit or loss - structure of
accounting reports
Adjustments on the
accounting in Recognized
Income
OTP Group - in the
consolidated statement of
profit or loss - structure of
management reports
a
b
1=a+b
Profit after income tax for the year from continued and
discontinued operations
1,076,140
1,076,140
Profit after income tax for the year from discontinued operations
19,756
(19,756)
-
Profit after income tax for the year from continued operations
1,056,384
(19,756)
1,076,140
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
756
NOTE 49:
SEGMENT REPORTING BY BUSINESS AND GEOGRAPHICAL SEGMENTS (in HUF mn) [continued]
Information regarding the Group’s reportable segments is presented below [continued]:
As at 31 December 2024 [continued]
Main components of the consolidated statement of profit or
loss in HUF million
OTP Group - in the
consolidated statement
of profit or loss -
structure of accounting
reports
Adjustments
on the
accounting in
Recognized
Income
OTP Group - in the
consolidated
statement of profit or
loss - structure of
management reports
Hungarian segment and
other foreign
subsidiaries not reported
in "Foreign bank
segment" subtotal
(without adjustments)
Foreign banks in
EU subtotal
(without
adjustments)
Foreign banks
not in EU
subtotal (without
adjustments)
Eliminations
and
adjustments
a
b
1=a+b; 1=2+3+4+5
2
3
4
5
Consolidated adjusted profit after income tax for the year
1,056,384
19,756
1,076,140
329,404
377,840
352,890
16,006
Profit before income tax
1,309,824
77,059
1,386,883
444,289
451,825
474,758
16,011
Adjusted operating profit
1,473,088
81,958
1,555,046
506,499
484,669
556,876
7,002
Adjusted total income
2,685,862
(42,287)
2,643,575
1,011,558
800,524
836,445
(4,952)
Adjusted net interest income
1,745,340
37,264
1,782,604
606,919
590,060
586,644
(1,019)
Adjusted net profit
from fees and commissions
842,655
(297,024)
545,631
266,889
169,474
110,547
(1,279)
Adjusted other net non-interest income
97,867
217,473
315,340
137,750
40,990
139,254
(2,654)
Adjusted other administrative expenses
(1,212,774)
124,245
(1,088,529)
(505,059)
(315,855)
(279,569)
11,954
Personnel expenses
(550,175)
(14,199)
(564,374)
(239,952)
(164,036)
(161,276)
890
Depreciation and amortization
(134,293)
15,665
(118,628)
(65,943)
(25,781)
(26,480)
(424)
Other general expenses
(528,306)
122,779
(405,527)
(199,164)
(126,038)
(91,813)
11,488
Gains from derecognition of
financial assets at amortized cost
(14,409)
84
(14,325)
(10,717)
2,982
(6,586)
(4)
Modification loss
(13,193)
-
(13,193)
(10,891)
(7)
(2,294)
(1)
Total risk costs
(135,662)
(4,983)
(140,645)
(40,602)
(35,819)
(73,238)
9,014
Adjusted loss allowance on
financial assets and liabilities
(without the effect of revaluation of FX)
(109,142)
37,128
(72,014)
13,439
(24,332)
(61,700)
579
Goodwill impairment
-
-
-
-
-
-
-
Other impairment (adjustment)
(26,520)
(42,111)
(68,631)
(54,041)
(11,487)
(11,538)
8,435
from this: Adjusted impairment under IAS 36
(9,056)
1,745
(7,311)
(7,013)
159
(8)
(449)
Income tax
(253,440)
(57,303)
(310,743)
(114,885)
(73,985)
(121,868)
(5)
-
-
-
Total Assets
43,419,128
-
43,419,128
21,069,530
17,566,160
10,574,190
(5,790,752)
Total Liabilities
38,299,115
-
38,299,115
17,428,696
15,253,492
9,113,844
(3,496,917)
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
757
NOTE 49:
SEGMENT REPORTING BY BUSINESS AND GEOGRAPHICAL SEGMENTS (in HUF mn) [continued]
Information regarding the Group’s reportable segments is presented below [continued]:
As at 31 December 2024 [continued]
Main components of the consolidated statement of profit or loss
in HUF million [continued]
Hungarian segment and other
foreign subsidiaries not
reported in "Foreign bank
segment" subtotal (without
adjustments)
OTP CORE
(Hungary)
Merkantil
Group
(Hungary)
Asset
Management
subsidiaries
Other
subsidiaries
2=6+…+9
6
7
8
9
Consolidated adjusted profit after income tax for the year
329,404
270,386
10,841
24,747
23,430
Profit before income tax
444,289
374,636
14,569
27,361
27,723
Adjusted operating profit
506,499
434,843
11,794
27,296
32,566
Adjusted total income
1,011,558
877,922
27,237
34,103
72,296
Adjusted net interest income
606,919
578,001
24,052
82
4,784
Adjusted net profit
from fees and commissions
266,889
219,505
669
31,491
15,224
Adjusted other net non-interest income
137,750
80,416
2,516
2,530
52,288
Adjusted other administrative expenses
(505,059)
(443,079)
(15,443)
(6,807)
(39,730)
Personnel expenses
(239,952)
(212,184)
(7,883)
(4,373)
(15,512)
Depreciation and amortization
(65,943)
(58,437)
(2,199)
(157)
(5,150)
Other general expenses
(199,164)
(172,458)
(5,361)
(2,277)
(19,068)
Gains from derecognition of
financial assets at amortized cost
(10,717)
(10,972)
255
-
-
Modification loss
(10,891)
(10,367)
(524)
-
-
Total risk costs
(40,602)
(38,868)
3,044
65
(4,843)
Adjusted loss allowance on
financial assets and liabilities
(without the effect of revaluation of FX)
13,439
10,805
3,067
13
(446)
Goodwill impairment
-
-
-
-
-
Other impairment (adjustment)
(54,041)
(49,673)
(23)
52
(4,397)
from this: Adjusted impairment under IAS 36
(7,013)
(5,161)
-
(7)
(1,845)
Income tax
(114,885)
(104,250)
(3,728)
(2,614)
(4,293)
Total Assets
21,069,530
19,288,046
1,009,625
46,117
725,742
Total Liabilities
17,428,696
16,234,215
943,022
15,261
236,198
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
758
NOTE 49:
SEGMENT REPORTING BY BUSINESS AND GEOGRAPHICAL SEGMENTS (in HUF mn) [continued]
Information regarding the Group’s reportable segments is presented below [continued]:
As at 31 December 2024 [continued]
Main components of the consolidated statement of profit or loss in
HUF million [continued]
Foreign banks in EU
subtotal (without
adjustments)
DSK Bank AD
(Bulgaria)
OTP banka d.d.
(Croatia)
OTP banka d.d.
(Slovenia)
OTP Bank
Romania S.A.
(Romania)
3=10+…+13
10
11
12
13
Consolidated adjusted profit after income tax for the year
377,840
200,764
61,743
113,283
2,050
Profit before income tax
451,825
234,156
75,418
137,571
4,680
Adjusted operating profit
484,669
255,204
73,593
146,283
9,589
Adjusted total income
800,524
375,365
138,875
252,418
33,866
Adjusted net interest income
590,060
267,411
105,300
190,303
27,046
Adjusted net profit
from fees and commissions
169,474
83,724
28,923
53,756
3,071
Adjusted other net non-interest income
40,990
24,230
4,652
8,359
3,749
Adjusted other administrative expenses
(315,855)
(120,161)
(65,282)
(106,135)
(24,277)
Personnel expenses
(164,036)
(58,893)
(34,888)
(56,259)
(13,996)
Depreciation and amortization
(25,781)
(10,672)
(5,845)
(7,580)
(1,684)
Other general expenses
(126,038)
(50,596)
(24,549)
(42,296)
(8,597)
Gains from derecognition of
financial assets at amortized cost
2,982
585
3,642
(1,329)
84
Modification loss
(7)
-
-
(7)
-
Total risk costs
(35,819)
(21,633)
(1,817)
(7,376)
(4,993)
Adjusted loss allowance on
financial assets and liabilities
(without the effect of revaluation of FX)
(24,332)
(18,600)
6,793
(7,728)
(4,797)
Goodwill impairment
-
-
-
-
-
Other impairment (adjustment)
(11,487)
(3,033)
(8,610)
352
(196)
from this: Adjusted impairment under IAS 36
159
165
(6)
-
-
Income tax
(73,985)
(33,392)
(13,675)
(24,288)
(2,630)
Total Assets
17,566,160
7,674,660
3,784,532
6,106,968
-
Total Liabilities
15,253,492
6,623,233
3,300,816
5,329,443
-
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
759
NOTE 49:
SEGMENT REPORTING BY BUSINESS AND GEOGRAPHICAL SEGMENTS (in HUF mn) [continued]
Information regarding the Group’s reportable segments is presented below [continued]:
As at 31 December 2024 [continued]
Main components of the consolidated statement of profit or loss in
HUF million [continued]
Foreign banks not
in EU subtotal
(without
adjustments)
OTP banka
Srbija a.d.
(Serbia)
OTP Bank
JSC
(Ukraine)
JSC "OTP
Bank" (Russia)
and Touch
Bank
Crnogorska
komercijalna
banka a.d.
(Montenegro)
Banka OTP
Albania SHA
(Albania)
OTP Bank
S.A.
(Moldova)
JSCMB
Ipoteka Bank
(Uzbekistan)
4=14+…+20
14
15
16
17
18
19
20
Consolidated adjusted profit after income tax for the year
352,890
66,496
41,179
136,946
24,195
19,687
11,493
52,894
Profit before income tax
474,758
77,469
72,842
195,535
28,580
23,450
13,039
63,843
Adjusted operating profit
556,876
95,477
68,415
252,216
27,170
23,146
12,414
78,038
Adjusted total income
836,445
153,565
101,605
343,619
45,661
40,048
26,179
125,768
Adjusted net interest income
586,644
116,621
89,894
187,070
35,460
33,531
15,353
108,715
Adjusted net profit
from fees and commissions
110,547
21,726
7,769
55,095
9,729
4,243
2,483
9,502
Adjusted other net non-interest income
139,254
15,218
3,942
101,454
472
2,274
8,343
7,551
Adjusted other administrative expenses
(279,569)
(58,088)
(33,190)
(91,403)
(18,491)
(16,902)
(13,765)
(47,730)
Personnel expenses
(161,276)
(29,216)
(19,960)
(55,292)
(8,668)
(6,962)
(8,007)
(33,171)
Depreciation and amortization
(26,480)
(4,941)
(2,808)
(8,505)
(2,193)
(2,152)
(1,417)
(4,464)
Other general expenses
(91,813)
(23,931)
(10,422)
(27,606)
(7,630)
(7,788)
(4,341)
(10,095)
Gains from derecognition of
financial assets at amortized cost
(6,586)
(84)
204
283
(29)
(1,328)
(228)
(5,404)
Modification loss
(2,294)
(2,164)
(134)
-
4
-
-
-
Total risk costs
(73,238)
(15,760)
4,357
(56,964)
1,435
1,632
853
(8,791)
Adjusted loss allowance on
financial assets and liabilities
(without the effect of revaluation of FX)
(61,700)
(13,615)
9,052
(55,172)
1,973
1,328
802
(6,068)
Goodwill impairment
-
-
-
-
-
-
-
-
Other impairment (adjustment)
(11,538)
(2,145)
(4,695)
(1,792)
(538)
304
51
(2,723)
from this: Adjusted impairment under IAS 36
(8)
(36)
-
-
-
-
28
-
Income tax
(121,868)
(10,973)
(31,663)
(58,589)
(4,385)
(3,763)
(1,546)
(10,949)
Total Assets
10,574,190
3,483,775
1,186,801
2,370,967
776,370
791,495
455,246
1,509,536
Total Liabilities
9,113,844
3,047,166
981,096
2,072,180
654,980
676,846
386,192
1,295,384
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
760
NOTE 49:
SEGMENT REPORTING BY BUSINESS AND GEOGRAPHICAL SEGMENTS (in HUF mn) [continued]
Information regarding the Group’s reportable segments is presented below according to the NEW methodology [continued]:
As at 31 December 2023
Main components of the consolidated statement of profit or loss in HUF million
OTP Group - in the
consolidated statement of
profit or loss - structure of
accounting reports
Adjustments on the
accounting in Recognized
Income
OTP Group - in the
consolidated statement of
profit or loss - structure of
management reports
a
b
1=a+b
Profit after income tax for the year from continued and
discontinued operations
990,459
990,459
Profit after income tax for the year from discontinued operations
(21,246)
21,246
-
Profit after income tax for the year from continued operations
1,011,705
21,246
990,459
Adjustments (total)
85,507
85,507
Effect of acquisition (after income tax)
85,507
85,507
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
761
NOTE 49:
SEGMENT REPORTING BY BUSINESS AND GEOGRAPHICAL SEGMENTS (in HUF mn) [continued]
Information regarding the Group’s reportable segments is presented below according to the NEW methodology [continued]:
As at 31 December 2023 [continued]
Main components of the consolidated statement of profit or loss
in HUF million
OTP Group - in the
consolidated statement
of profit or loss -
structure of accounting
reports
Adjustments
on the
accounting in
Recognized
Income
OTP Group - in the
consolidated
statement of profit or
loss - structure of
management reports
Hungarian segment and
other foreign
subsidiaries not reported
in "Foreign bank
segment" subtotal
(without adjustments)
Foreign banks in
EU subtotal
(without
adjustments)
Foreign banks
not in EU
subtotal
(without
adjustments)
Eliminations
and
adjustments
a
b
1=a+b; 1=2+3+4+5
2
3
4
5
Consolidated adjusted profit after income tax for the year
1,011,705
(106,753)
904,952
297,338
383,980
230,959
(7,325)
Profit before income tax
1,201,183
(21,959)
1,179,224
434,423
427,854
323,542
(6,595)
Adjusted operating profit
1,365,111
(80,678)
1,284,433
457,799
434,851
398,769
(6,986)
Adjusted total income
2,439,448
(175,218)
2,264,230
931,929
726,750
627,569
(22,018)
Adjusted net interest income
1,386,706
75,144
1,461,850
474,616
538,796
446,302
2,136
Adjusted net profit
from fees and commissions
691,993
(213,875)
478,118
241,178
149,074
88,999
(1,133)
Adjusted other net non-interest income
360,749
(36,487)
324,262
216,135
38,880
92,268
(23,021)
Adjusted other administrative expenses
(1,074,337)
94,540
(979,797)
(474,130)
(291,899)
(228,800)
15,032
Personnel expenses
(478,696)
(27,769)
(506,465)
(229,991)
(150,979)
(126,364)
869
Depreciation and amortization
(111,996)
11,538
(100,458)
(52,018)
(26,088)
(21,817)
(535)
Other general expenses
(483,645)
110,771
(372,874)
(192,121)
(114,832)
(80,619)
14,698
Gains from derecognition of
financial assets at amortized cost
(17,182)
6,624
(10,558)
(20,137)
8,010
1,572
(3)
Modification loss
(38,141)
36,909
(1,232)
(27)
4
(1,209)
-
Total risk costs
(108,605)
15,186
(93,419)
(3,212)
(15,011)
(75,590)
394
Adjusted loss allowance on
financial assets and liabilities
(without the effect of revaluation of FX)
(79,281)
857
(78,424)
(12,149)
(4,235)
(62,230)
190
Goodwill impairment
-
-
-
-
-
-
-
Other impairment (adjustment)
(29,324)
14,329
(14,995)
8,937
(10,776)
(13,360)
204
from this: adjusted impairment under IAS 36
(5,216)
3,566
(1,650)
(439)
(1,046)
(130)
(35)
Income tax
(189,478)
(84,794)
(274,272)
(137,085)
(43,874)
(92,583)
(730)
Total Assets
38,075,811
1,533,333
39,609,144
20,253,197
17,227,907
8,331,503
(6,203,463)
Total Liabilities
34,374,431
1,139,920
35,514,351
17,276,859
15,071,974
7,128,153
(3,962,635)
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
762
NOTE 49:
SEGMENT REPORTING BY BUSINESS AND GEOGRAPHICAL SEGMENTS (in HUF mn) [continued]
Information regarding the Group’s reportable segments is presented below according to the NEW methodology [continued]:
As at 31 December 2023 [continued]
Main components of the consolidated statement of profit or loss
in HUF million [continued]
Hungarian segment and other
foreign subsidiaries not
reported in "Foreign bank
segment" subtotal (without
adjustments)
OTP CORE
(Hungary)
Merkantil
Group
(Hungary)
Asset
Management
subsidiaries
Other
subsidiaries
2=6+…+9
6
7
8
9
Consolidated adjusted profit after income tax for the year
297,338
233,871
6,647
19,860
36,960
Profit before income tax
434,423
359,862
10,507
22,376
41,678
Adjusted operating profit
457,799
380,027
14,396
22,425
40,951
Adjusted total income
931,929
793,953
27,442
29,051
81,483
Adjusted net interest income
474,616
432,651
26,257
52
15,656
Adjusted net profit
from fees and commissions
241,178
197,341
759
27,056
16,022
Adjusted other net non-interest income
216,135
163,961
426
1,943
49,805
Adjusted other administrative expenses
(474,130)
(413,926)
(13,046)
(6,626)
(40,532)
Personnel expenses
(229,991)
(205,223)
(6,658)
(4,437)
(13,673)
Depreciation and amortization
(52,018)
(44,745)
(1,648)
(195)
(5,430)
Other general expenses
(192,121)
(163,958)
(4,740)
(1,994)
(21,429)
Gains from derecognition of
financial assets at amortized cost
(20,137)
(20,690)
553
-
-
Modification loss
(27)
-
(27)
-
-
Total risk costs
(3,212)
525
(4,415)
(49)
727
Adjusted loss allowance on
financial assets and liabilities
(without the effect of revaluation of FX)
(12,149)
(9,558)
(4,393)
(39)
1,841
Goodwill impairment
-
-
-
-
-
Other impairment (adjustment)
8,937
10,083
(22)
(10)
(1,114)
from this: adjusted impairment under IAS 36
(439)
(1,816)
(4)
-
1,381
Income tax
(137,085)
(125,991)
(3,860)
(2,516)
(4,718)
Total Assets
20,253,197
18,459,423
930,761
42,031
820,982
Total Liabilities
17,276,859
16,087,459
869,524
11,609
308,267
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
763
NOTE 49:
SEGMENT REPORTING BY BUSINESS AND GEOGRAPHICAL SEGMENTS (in HUF mn) [continued]
Information regarding the Group’s reportable segments is presented below according to the NEW methodology [continued]:
As at 31 December 2023 [continued]
Main components of the consolidated statement of profit or loss in
HUF million [continued]
Foreign banks in EU
subtotal (without
adjustments)
DSK Bank AD
(Bulgaria)
OTP banka d.d.
(Croatia)
SKB Banka and
Nova KBM d.d.
(Slovenia)
OTP Bank
Romania S.A.
(Romania)
3=10+…+13
10
11
12
13
Consolidated adjusted profit after income tax for the year
383,980
198,182
53,334
112,343
20,121
Profit before income tax
427,854
219,485
65,120
119,569
23,680
Adjusted operating profit
434,851
216,102
66,117
131,637
20,995
Adjusted total income
726,750
316,105
123,133
218,877
68,635
Adjusted net interest income
538,796
226,693
91,117
167,121
53,865
Adjusted net profit
from fees and commissions
149,074
72,366
25,661
46,028
5,019
Adjusted other net non-interest income
38,880
17,046
6,355
5,728
9,751
Adjusted other administrative expenses
(291,899)
(100,003)
(57,016)
(87,240)
(47,640)
Personnel expenses
(150,979)
(47,720)
(29,235)
(47,716)
(26,308)
Depreciation and amortization
(26,088)
(9,116)
(5,592)
(7,351)
(4,029)
Other general expenses
(114,832)
(43,167)
(22,189)
(32,173)
(17,303)
Gains from derecognition of
financial assets at amortized cost
8,010
1,638
-
(251)
6,623
Modification loss
4
-
-
4
-
Total risk costs
(15,011)
1,745
(997)
(11,821)
(3,938)
Adjusted loss allowance on
financial assets and liabilities
(without the effect of revaluation of FX)
(4,235)
1,141
721
(2,245)
(3,852)
Goodwill impairment
-
-
-
-
-
Other impairment (adjustment)
(10,776)
604
(1,718)
(9,576)
(86)
from this: adjusted impairment under IAS 36
(1,046)
(838)
(25)
(9)
(174)
Income tax
(43,874)
(21,303)
(11,786)
(7,226)
(3,559)
Total Assets
17,227,907
6,456,668
3,278,199
5,892,803
1,600,237
Total Liabilities
15,071,974
5,566,481
2,874,712
5,223,180
1,407,601
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
764
NOTE 49:
SEGMENT REPORTING BY BUSINESS AND GEOGRAPHICAL SEGMENTS (in HUF mn) [continued]
Information regarding the Group’s reportable segments is presented below according to the NEW methodology [continued]:
As at 31 December 2023 [continued]
Main components of the consolidated statement of profit or loss in
HUF million [continued]
Foreign banks not
in EU subtotal
(without
adjustments)
OTP banka
Srbija a.d.
(Serbia)
OTP Bank
JSC
(Ukraine)
JSC "OTP
Bank" (Russia)
and Touch
Bank
Crnogorska
komercijalna
banka a.d.
(Montenegro)
Banka OTP
Albania SHA
(Albania)
OTP Bank
S.A.
(Moldova)
JSCMB
Ipoteka Bank
(Uzbekistan)
4=14+…+20
14
15
16
17
18
19
20
Consolidated adjusted profit after income tax for the year
230,959
58,211
44,909
95,675
21,359
11,603
14,624
(15,422)
Profit before income tax
323,542
67,354
82,083
130,181
25,220
14,074
16,671
(12,041)
Adjusted operating profit
398,769
81,179
78,019
149,307
23,019
13,750
13,352
40,143
Adjusted total income
627,569
132,149
108,854
223,654
38,425
33,123
25,275
66,089
Adjusted net interest income
446,302
103,730
93,450
122,084
29,771
27,912
16,349
53,006
Adjusted net profit
from fees and commissions
88,999
18,419
10,837
40,831
7,797
3,465
2,389
5,261
Adjusted other net non-interest income
92,268
10,000
4,567
60,739
857
1,746
6,537
7,822
Adjusted other administrative expenses
(228,800)
(50,970)
(30,835)
(74,347)
(15,406)
(19,373)
(11,923)
(25,946)
Personnel expenses
(126,364)
(25,710)
(18,046)
(45,063)
(7,299)
(6,610)
(7,013)
(16,623)
Depreciation and amortization
(21,817)
(4,547)
(2,472)
(8,660)
(1,838)
(1,494)
(1,234)
(1,572)
Other general expenses
(80,619)
(20,713)
(10,317)
(20,624)
(6,269)
(11,269)
(3,676)
(7,751)
Gains from derecognition of
financial assets at amortized cost
1,572
53
328
1,487
932
(219)
(1,009)
-
Modification loss
(1,209)
-
(1,239)
-
30
-
-
-
Total risk costs
(75,590)
(13,878)
4,975
(20,613)
1,239
543
4,328
(52,184)
Adjusted loss allowance on
financial assets and liabilities
(without the effect of revaluation of FX)
(62,230)
(11,085)
11,565
(17,765)
1,967
327
4,115
(51,354)
Goodwill impairment
-
-
-
-
-
-
-
-
Other impairment (adjustment)
(13,360)
(2,793)
(6,590)
(2,848)
(728)
216
213
(830)
from this: adjusted impairment under IAS 36
(130)
(93)
-
-
-
-
(37)
-
Income tax
(92,583)
(9,143)
(37,174)
(34,506)
(3,861)
(2,471)
(2,047)
(3,381)
Total Assets
8,331,503
2,874,794
1,036,912
1,470,796
663,676
669,765
428,192
1,187,368
Total Liabilities
7,128,153
2,506,449
879,824
1,196,279
550,672
588,663
364,839
1,041,427
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
765
NOTE 49:
SEGMENT REPORTING BY BUSINESS AND GEOGRAPHICAL SEGMENTS (in HUF mn) [continued]
Information regarding the Group’s reportable segments is presented below according to the OLD methodology [continued]:
As at 31 December 2023 [continued]
Main components of the consolidated statement of profit or loss in HUF million
OTP Group - in the
consolidated statement of
profit or loss - structure of
accounting reports
Adjustments on the
accounting in Recognized
Income
OTP Group - in the
consolidated statement of
profit or loss - structure of
management reports
a
b
1=a+b
Profit after income tax for the year from continued and
discontinued operations
990,459
990,459
Profit after income tax for the year from discontinued operations
(21,246)
21,246
-
Profit after income tax for the year from continued operations
1,011,705
21,246
990,459
Adjustments (total)
(18,123)
(18,123)
Dividends and net cash transfers (after income tax)
(1,911)
(1,911)
Goodwill /investment impairment (after income tax)
(3,919)
(3,919)
Special tax on financial institutions (after income tax)
(62,551)
(62,551)
Effect of acquisition (after income tax)
64,887
64,887
Result of the treasury share swap agreement
at OTP Core (after income tax)
10,680
10,680
Loss allowance on Russian government bonds at OTP Core and DSK Bank
(after income tax)
(2,799)
(2,799)
Effect of the winding up of Sberbank Hungary (after income tax)
10,388
10,388
Expected one-off effect of the extension of the interest rate cap
for certain retail loans in Hungary (after income tax)
(32,898)
(32,898)
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
766
NOTE 49:
SEGMENT REPORTING BY BUSINESS AND GEOGRAPHICAL SEGMENTS (in HUF mn) [continued]
Information regarding the Group’s reportable segments is presented below according to the OLD methodology [continued]:
As at 31 December 2023 [continued]
Main components of the consolidated statement of profit or loss
in HUF million
OTP Group - in the
consolidated statement
of profit or loss -
structure of accounting
reports
Adjustments
on the
accounting in
Recognized
Income
OTP Group - in the
consolidated
statement of profit or
loss - structure of
management reports
Hungarian segment and
other foreign
subsidiaries not reported
in "Foreign bank
segment" subtotal
(without adjustments)
Foreign banks in
EU subtotal
(without
adjustments)
Foreign banks
not in EU
subtotal
(without
adjustments)
Eliminations
and
adjustments
a
b
1=a+b; 1=2+3+4+5
2
3
4
5
Consolidated adjusted profit after income tax for the year
1,011,705
(3,123)
1,008,582
364,621
404,779
238,565
617
Profit before income tax
1,201,183
21,145
1,222,328
437,074
450,536
333,369
1,349
Adjusted operating profit
1,365,111
(85,737)
1,279,374
432,460
445,671
400,279
964
Adjusted total income
2,439,448
(196,339)
2,243,109
903,559
730,860
622,761
(14,071)
Adjusted net interest income
1,386,706
72,988
1,459,694
474,616
543,257
439,685
2,136
Adjusted net profit
from fees and commissions
691,993
(213,847)
478,146
240,942
149,074
89,263
(1,133)
Adjusted other net non-interest income
360,749
(55,480)
305,269
188,001
38,529
93,813
(15,074)
Adjusted other administrative expenses
(1,074,337)
110,602
(963,735)
(471,099)
(285,189)
(222,482)
15,035
Personnel expenses
(478,696)
(25,263)
(503,959)
(229,992)
(149,674)
(125,163)
870
Depreciation and amortization
(111,996)
16,435
(95,561)
(52,017)
(22,271)
(20,738)
(535)
Other general expenses
(483,645)
119,430
(364,215)
(189,090)
(113,244)
(76,581)
14,700
Gains from derecognition of
financial assets at amortized cost
(17,182)
6,624
(10,558)
(20,137)
8,261
1,572
(254)
Modification loss
(38,141)
36,909
(1,232)
(27)
-
(1,209)
4
Total risk costs
(108,605)
63,349
(45,256)
24,778
(3,396)
(67,273)
635
Adjusted loss allowance on
financial assets and liabilities
(without the effect of revaluation of FX)
(79,281)
37,766
(41,515)
16,023
(4,475)
(53,493)
430
Goodwill impairment
-
-
-
-
-
-
-
Other impairment (adjustment)
(29,324)
25,583
(3,741)
8,755
1,079
(13,780)
205
from this: adjusted impairment under IAS 36
(5,216)
3,566
(1,650)
(452)
(1,037)
(130)
(31)
Income tax
(189,478)
(24,268)
(213,746)
(72,453)
(45,757)
(94,804)
(732)
Total Assets
38,075,811
1,533,333
39,609,144
20,253,197
17,227,907
8,331,503
(6,203,463)
Total Liabilities
34,374,431
1,139,920
35,514,351
17,276,859
15,071,959
7,128,153
(3,962,620)
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
767
NOTE 49:
SEGMENT REPORTING BY BUSINESS AND GEOGRAPHICAL SEGMENTS (in HUF mn) [continued]
Information regarding the Group’s reportable segments is presented below according to the OLD methodology [continued]:
As at 31 December 2023 [continued]
Main components of the consolidated statement of profit or loss
in HUF million [continued]
Hungarian segment and other
foreign subsidiaries not
reported in "Foreign bank
segment" subtotal (without
adjustments)
OTP CORE
(Hungary)
Merkantil
Group
(Hungary)
Asset
Management
subsidiaries
Other
subsidiaries
2=6+…+9
6
7
8
9
Consolidated adjusted profit after income tax for the year
364,621
302,936
10,266
19,860
31,559
Profit before income tax
437,074
366,502
11,949
22,376
36,247
Adjusted operating profit
432,460
360,132
14,382
22,425
35,521
Adjusted total income
903,559
771,037
27,428
29,051
76,043
Adjusted net interest income
474,616
432,651
26,257
52
15,656
Adjusted net profit
from fees and commissions
240,942
197,104
759
27,056
16,023
Adjusted other net non-interest income
188,001
141,282
412
1,943
44,364
Adjusted other administrative expenses
(471,099)
(410,905)
(13,046)
(6,626)
(40,522)
Personnel expenses
(229,992)
(205,223)
(6,658)
(4,437)
(13,674)
Depreciation and amortization
(52,017)
(44,745)
(1,648)
(195)
(5,429)
Other general expenses
(189,090)
(160,937)
(4,740)
(1,994)
(21,419)
Gains from derecognition of
financial assets at amortized cost
(20,137)
(20,690)
553
-
-
Modification loss
(27)
-
(27)
-
-
Total risk costs
24,778
27,060
(2,959)
(49)
726
Adjusted loss allowance on
financial assets and liabilities
(without the effect of revaluation of FX)
16,023
16,977
(2,756)
(39)
1,841
Goodwill impairment
-
-
-
-
-
Other impairment (adjustment)
8,755
10,083
(203)
(10)
(1,115)
from this: adjusted impairment under IAS 36
(452)
(1,816)
(4)
-
1,368
Income tax
(72,453)
(63,566)
(1,683)
(2,516)
(4,688)
Total Assets
20,253,197
18,459,423
930,761
42,031
820,982
Total Liabilities
17,276,859
16,087,459
869,524
11,609
308,267
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
768
NOTE 49:
SEGMENT REPORTING BY BUSINESS AND GEOGRAPHICAL SEGMENTS (in HUF mn) [continued]
Information regarding the Group’s reportable segments is presented below according to the OLD methodology [continued]:
As at 31 December 2023 [continued]
Main components of the consolidated statement of profit or loss in
HUF million [continued]
Foreign banks in EU
subtotal (without
adjustments)
DSK Bank AD
(Bulgaria)
OTP banka d.d.
(Croatia)
SKB Banka and
Nova KBM d.d.
(Slovenia)
OTP Bank
Romania S.A.
(Romania)
3=10+…+13
10
11
12
13
Consolidated adjusted profit after income tax for the year
404,779
201,991
53,960
128,729
20,099
Profit before income tax
450,536
223,731
65,746
137,401
23,658
Adjusted operating profit
445,671
217,238
66,743
140,717
20,973
Adjusted total income
730,860
315,980
122,952
223,315
68,613
Adjusted net interest income
543,257
226,693
90,996
171,703
53,865
Adjusted net profit
from fees and commissions
149,074
72,366
25,661
46,028
5,019
Adjusted other net non-interest income
38,529
16,921
6,295
5,584
9,729
Adjusted other administrative expenses
(285,189)
(98,742)
(56,209)
(82,598)
(47,640)
Personnel expenses
(149,674)
(47,720)
(29,235)
(46,411)
(26,308)
Depreciation and amortization
(22,271)
(7,855)
(4,785)
(5,602)
(4,029)
Other general expenses
(113,244)
(43,167)
(22,189)
(30,585)
(17,303)
Gains from derecognition of
financial assets at amortized cost
8,261
1,638
-
-
6,623
Modification loss
-
-
-
-
-
Total risk costs
(3,396)
4,855
(997)
(3,316)
(3,938)
Adjusted loss allowance on
financial assets and liabilities
(without the effect of revaluation of FX)
(4,475)
1,141
721
(2,485)
(3,852)
Goodwill impairment
-
-
-
-
-
Other impairment (adjustment)
1,079
3,714
(1,718)
(831)
(86)
from this: adjusted impairment under IAS 36
(1,037)
(838)
(25)
-
(174)
Income tax
(45,757)
(21,740)
(11,786)
(8,672)
(3,559)
Total Assets
17,227,907
6,456,668
3,278,199
5,892,803
1,600,237
Total Liabilities
15,071,959
5,566,481
2,874,712
5,223,180
1,407,586
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
769
NOTE 49:
SEGMENT REPORTING BY BUSINESS AND GEOGRAPHICAL SEGMENTS (in HUF mn) [continued]
Information regarding the Group’s reportable segments is presented below according to the OLD methodology [continued]:
As at 31 December 2023 [continued]
Main components of the consolidated statement of profit or loss in
HUF million [continued]
Foreign banks not
in EU subtotal
(without
adjustments)
OTP banka
Srbija a.d.
(Serbia)
OTP Bank
JSC
(Ukraine)
JSC "OTP
Bank" (Russia)
and Touch
Bank
Crnogorska
komercijalna
banka a.d.
(Montenegro)
Banka OTP
Albania SHA
(Albania)
OTP Bank
S.A.
(Moldova)
JSCMB
Ipoteka Bank
(Uzbekistan)
4=14+…+20
14
15
16
17
18
19
20
Consolidated adjusted profit after income tax for the year
238,565
68,025
45,184
95,666
21,814
15,033
14,700
(21,857)
Profit before income tax
333,369
78,646
82,358
130,172
25,737
18,173
16,759
(18,476)
Adjusted operating profit
400,279
83,734
78,294
149,298
23,536
18,269
13,440
33,708
Adjusted total income
622,761
133,591
108,854
223,645
38,362
33,387
25,268
59,654
Adjusted net interest income
439,685
104,050
93,450
122,084
29,717
27,912
16,349
46,123
Adjusted net profit
from fees and commissions
89,263
18,419
10,837
40,831
7,797
3,729
2,389
5,261
Adjusted other net non-interest income
93,813
11,122
4,567
60,730
848
1,746
6,530
8,270
Adjusted other administrative expenses
(222,482)
(49,857)
(30,560)
(74,347)
(14,826)
(15,118)
(11,828)
(25,946)
Personnel expenses
(125,163)
(25,710)
(18,046)
(45,063)
(6,910)
(5,798)
(7,013)
(16,623)
Depreciation and amortization
(20,738)
(3,661)
(2,472)
(8,660)
(1,645)
(1,494)
(1,234)
(1,572)
Other general expenses
(76,581)
(20,486)
(10,042)
(20,624)
(6,271)
(7,826)
(3,581)
(7,751)
Gains from derecognition of
financial assets at amortized cost
1,572
53
328
1,487
932
(219)
(1,009)
-
Modification loss
(1,209)
-
(1,239)
-
30
-
-
-
Total risk costs
(67,273)
(5,141)
4,975
(20,613)
1,239
123
4,328
(52,184)
Adjusted loss allowance on
financial assets and liabilities
(without the effect of revaluation of FX)
(53,493)
(2,348)
11,565
(17,765)
1,967
327
4,115
(51,354)
Goodwill impairment
-
-
-
-
-
-
-
-
Other impairment (adjustment)
(13,780)
(2,793)
(6,590)
(2,848)
(728)
(204)
213
(830)
from this: adjusted impairment under IAS 36
(130)
(93)
-
-
-
-
(37)
-
Income tax
(94,804)
(10,621)
(37,174)
(34,506)
(3,923)
(3,140)
(2,059)
(3,381)
Total Assets
8,331,503
2,874,794
1,036,912
1,470,796
663,676
669,765
428,192
1,187,368
Total Liabilities
7,128,153
2,506,449
879,824
1,196,279
550,672
588,663
364,839
1,041,427
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
770
NOTE 50:
DISCONTINUED OPERATIONS (in HUF mn)
On 9 February 2024 OTP Bank announced the signing of the share sale and purchase agreement to sell its Romanian
operation. As a result of this, according to IFRS 5, until the final closure of the sale and as comparative period for the end
of 2023 the Romanian operation was presented on a separate line as assets /liabilities held for sale in the consolidated
statement of financial position and as discontinued operation in the consolidated profit or loss.
As for the consolidated profit or loss, the Romanian contribution for the end of year 2023 was shown separately from the
result of continuing operation, on the “Net gain / (loss) from discontinued operations” line, that is the particular profit or
loss lines in the ‘continuing operations’ section don’t incorporate the contribution from the Romanian subsidiaries.
The result from discontinued operations for the year 2024 was HUF 19,756 million, which was allocated in the
consolidated profit or loss under the same line as previous year "Net gain / (loss) from discontinued operations" and
consisted of:
- The contribution of the Romanian subsidiaries to the Group's result amounted to HUF 8,871 million.
- The combined effect of the gain on sale, the reclassification of exchange differences to profit or loss and other income
items recognized in the Group's books amounted to HUF 10,885 million.
The negative impact of the translation difference removed from the consolidated statement of comprehensive income was
HUF 18,166 million.
The selling price is EUR 347.5 million which is smaller than the net asset value of the to be sold subsidiaries recognized
in the consolidated accounts, accordingly the transaction resulted in a negative profit or loss impact of HUF 55.9 billion
(before tax) on consolidated level, which has already been booked in the fourth quarter of 2023.
The Romanian segment of the Group which was classified as discontinued operation includes the following companies:
OTP Bank Romania S.A., OTP Asset Management SAI S.A., OTP Leasing Romania IFN S.A., OTP Factoring SRL, SC
Favo Consultanta SRL, SC Aloha Buzz SRL, SC Tezaur Cont SRL.
The major classes of assets and liabilities comprising the assets classified as held for sale and liabilities directly associated
with assets classified as held for sale are as follows:
31/12/2023
Cash, amounts due from banks and balances with the National
Banks
199,587
Placements with other banks
8,147
Financial assets at fair value through profit or loss
2,090
Securities at fair value through other comprehensive income
39,430
Securities at amortized cost
226,427
Loans at amortized cost
1,013,582
Finance lease receivables
67,068
Associates and other investments
236
Property and equipment
10,313
Intangible assets and goodwill
3,848
Right-of-use assets
4,299
Investment properties
40
Deferred tax assets
224
Current income tax receivables
55
Other assets
13,927
TOTAL ASSETS
1,589,273
Amounts due to banks, the National Governments,
deposits from the National Banks and other banks
1,764
Deposits from customers
1,095,853
Derivative financial liabilities held for trading
311
Leasing liabilities
4,348
Deferred tax liabilities
912
Current income tax payable
1,865
Provisions
9,006
Other liabilities
25,861
TOTAL LIABILITIES
1,139,920
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
771
NOTE 50:
DISCONTINUED OPERATIONS (in HUF mn) [continued]
The results of discontinued operations, which have been separated on line “Net Gain / (Loss) from discontinued
operations” in the consolidated statement of profit or loss, were as follows:
Year ended 31
December 2024
Year ended 31
December 2023
Interest income calculated using the effective interest method
54,388
103,321
Income similar to interest income
4,055
15,252
Interest income and income similar to interest income
58,443
118,573
Interest expense
(24,810)
(50,513)
NET INTEREST INCOME
33,633
68,060
Loss allowance on loans, placements, amounts due from banks
and on repo receivables
(3,789)
(6,779)
Release of loss allowance on securities
at fair value through other comprehensive income and
on securities at amortized cost
72
235
(Provision) / Release of provision for commitments and
guarantees given
(1,012)
2,931
Risk cost total
(4,729)
(3,613)
NET INTEREST INCOME AFTER RISK COST
28,904
64,447
Gain from derecognition
of financial assets at amortized cost
85
6,624
Income from fees and commissions
9,800
22,351
Expense from fees and commissions
(2,977)
(7,036)
Net profit from fees and commissions
6,823
15,315
Foreign exchange result, net
(1,705)
(11,397)
(Loss) / Gain on securities, net
(12)
37
Fair value adjustment on financial instruments
measured at fair value through profit or loss
36
157
Net results on derivative instruments and hedge relationships
1,811
11,526
Profit from associates
124
22
Other operating income
370
409
Other operating expenses
(570)
(1,105)
Net operating income / (expense)
54
(351)
Personnel expenses
(14,133)
(26,571)
Depreciation and amortization
(2,676)
(5,998)
Other general expenses
(8,867)
(15,197)
Other administrative expenses
(25,676)
(47,766)
PROFIT BEFORE INCOME TAX
10,190
38,269
Income tax expense
(1,319)
(3,575)
PROFIT AFTER INCOME TAX FOR THE PERIOD
8,871
34,694
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
772
NOTE 51:
SIGNIFICANT EVENTS DURING THE YEAR ENDED 31 DECEMBER 2024
1) Term Note Program
See details in Note 21.
2) OTP Bank is selling its Romanian operations
On 30 July 2024, the financial closing of the sale and purchase transaction with Banca Transilvania S.A. took place, as a
result of which Banca Transilvania S.A. acquired 100% of the direct and indirect shares in OTP Bank Romania S.A., the
Romanian subsidiary bank of OTP Group. As part of the transaction, OTP Group also sold OTP Leasing Romania IFN
S.A. to Banca Transilvania Group. The closing of the sale of OTP Asset Management S.A.I. S.A. took place in October
2024 after the relevant regulatory approvals had arrived. Consequently, starting from the third quarter in 2024 the
consolidated financial statements no longer include the contribution from the Romanian segment.
See details in Note 50 Assets classified as held for sale and discontinued operations.
3) Merger of the two Slovenian banks
On 22 August, 2024 the two members of the banking group in Slovenia, Nova KBM d.d. and SKB banka d.d - after all
the necessary regulatory approvals - successfully completed the legal merger, and continues to operate under one brand
name, OTP banka d.d.. Following this, the operational merger was also successfully completed.
4) Significant regulatory changes in Hungary
About the prolongation of deadline of interest rate cap, voluntary interest rate cap on newly granted loans, amending the
previously laid down methodology of windfall tax calculation, family support schemes and economic stimulation
measures, capital regulation please see details in Note 4.
5) Risk relating to the Russian-Ukrainian armed conflict
In 2022 Russia launched a still ongoing war against Ukraine. Many countries, as well as the European Union imposed
sanctions due to the armed conflict on Russia and Russian businesses and citizens. Russia responded to these sanctions
with similar measures.
The war and the international sanctions influence the business and economic activities significantly all around the world.
There are a number of factors associated with the Russian-Ukrainian war and the international sanctions as well as their
impact on global economies that could have a material adverse effect on (among other things) the profitability, capital
and liquidity of financial institutions such as the OTP Group.
The war and the international sanctions cause significant economic damage to the affected parties and in addition they
cause disruptions in the global economic processes, and they have negative impact – inter alia – on energy and grain
markets, the global transport routes and international trade as well as on tourism.
OTP Group continues to monitor the situation closely. The OTP Group's ability to conduct business may be adversely
affected by disruptions and restrictions to its infrastructure, business processes and technology services. This may cause
significant customer detriment, costs to reimburse losses incurred by the OTP Group’s customers, and reputational
damage.
Furthermore, the OTP Group relies on models to support a broad range of business and risk management activities,
including informing business decisions and strategies, measuring and limiting risk, valuing exposures, conducting stress
testing and assessing capital adequacy. Models are, by their nature, imperfect and incomplete representations of reality
because they rely on assumptions and inputs, and as such assumptions may later potentially prove to be incorrect, this can
affect the accuracy of their outputs. This may be exacerbated when dealing with unprecedented scenarios, such as the
Russian-Ukrainian war and the international sanctions, due to the lack of reliable historical reference points and data.
Any and all such events mentioned above could have a material adverse effect on the OTP Group’s business, financial
condition, results of operations, prospects, liquidity, capital position and credit ratings, as well as on the OTP Group’s
customers, employees and suppliers.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
773
NOTE 52:
POST BALANCE SHEET EVENTS
Summary of economic policy measures made and other relevant regulatory changes as post-balance sheet events
Hungary
• On 13 January 2025 OTP Bank’s share buyback program approved by the central bank on 22 August 2024 reached
its maximum available amount of HUF 60 billion.
• On 24 January 2025 the Bank got another approval from the Hungarian National Bank to repurchase own shares in
the amount of HUF 60 billion. The available amount was exhausted on 10 February 2025.
• About the consolidated MREL requirement amount and rules of OTP Group please see Note 37.6 in more details.
• On 30 January Tier 2 notes have been issued in the aggregate nominal amount of USD 750 million. The notes carry
an annual coupon of 7.3% due semi-annually. The tenor was 10.5NC5.5, i.e. in the period between five and five and
a half years the bonds can be redeemed on any day. The notes were listed on the Luxembourg Stock Exchange.
• On 7 February the EUR 500 million Fixed to Floating Rate Perpetual Subordinated Notes have been redeemed and
the principal amount, together with accrued and unpaid interest was paid to the holders of the Notes.
• On 17 February OTP Bank announced the redemption of its EUR 650,000,000 7.350 per cent. Senior Preferred Fixed-
to-Floating Callable Notes due 2026 with the optional redemption date of 4 March 2025.
• As of end of February, the banking sector related key initiatives of the 'New Economic Policy Action Plan' launched
by government decree 1311/2024 (X. 21.), are as follows (based on the communication of the Government and
submitted bills):
o From 1 January 2025, minimum wage increased by 9%. For 2026 and 2027 further 13% and 14% hikes have been
agreed as part of the three-year wage agreement, assuming that economic growth and inflation will be in line with
the expectations.
o From 2 January 2025 the Workers’ Loan Program is available at Hungarian banks. The loan is designed for young
people aged 17-25 who are not eligible for student loans and who are employed in Hungary for at least 20 hours a
week, or entrepreneurs who have an average income and undertake to work or run a business in Hungary for a
minimum of five years. The maximum amount of the interest-free, free use, state-guaranteed loan facility is HUF
4 million, with a term of 10 years. The scheme also provides support for childbearing, with repayments suspended
for two years following the birth of the first and second child, and half of the current debt waived for the second
child and the full debt waived after the third one.
o From 1 January 2025, in case of green loans the loan-to-value limit was increased to 90%, furthermore the
payment-to-income limit was increased to 60% regardless of the income.
o On 1 January 2025, the home renovation program was reintroduced to support families in towns with less than
5,000 residents, covering up to 50% of labor- and material costs with a cap of HUF 3 million. Those who have
already availed themselves of the 2021-2022 home renovation subsidy are only eligible to utilize the new subsidy
up to the amount of the HUF 3 million that remains unused at that time. From 1 February 2025, a state subsidized
home renovation mortgage loan with a client interest rate of 3% and with up to HUF 6 million loan amount is
available to finance investment costs.
o In 2025, voluntary pension fund savings can be used free of tax for housing loan repayments, repayment of secured
loans, and modernization or renovation of existing homes. The total amount of voluntary pension savings could
be utilized, but only up to the balance available as of 30 September 2024.
o From 1 January 2025, monthly HUF 150,000 fringe benefit can be paid to the employees under the age of 35 in
order to support housing expenses (home rental or loan installment) above the current preferential upper limit of
HUF 450,000 per year.
o Half of the accumulated amount on SZÉP Cards can be used for home renovation in 2025.
o Between 1 April and 31 October 2025, based on the individual decision of the participating banks, 5% interest rate
cap will be available for under 35 years old, first-time home buyers for newly granted green housing loans, with
properties under 60 square meter and price lower than HUF 1.2 million per square meter. The rate cap will be
applied in the first 5 years of the loan, the product has neither disbursement nor credit assessment fees.
IFRS (CONSOLIDATED)
INTEGRATED ANNUAL REPORT 2024
774
NOTE 52:
POST BALANCE SHEET EVENTS [continued]
Summary of economic policy measures made and other relevant regulatory changes as post-balance sheet events
[continued]
o From 6 January 2025, as part of the Demján Sándor program, export stimulating loan and leasing structures are
available in the total sum of HUF 400 billion, partly refinanced by EXIM Hungary. Some of the products are also
available for enterprises planning to start export activities in the future.
o The interest rate of certain products under the Széchenyi Card Program MAX+ scheme was significantly reduced
for contracts concluded after 1 March 2025: the interest rate on investment loans (Agricultural Investment Loan,
Investment Loan) and the leasing scheme was reduced to 3%, while the interest rate on the Széchenyi Card
Overdraft MAX+ (including the Tourism Card) and the Liquidity Loan was reduced to 4.5%. The uniform 0.5 pp
reduction in client interest rates was facilitated by the burden sharing of KAVOSZ Ltd. (0.1 pp) and the banking
sector (0.4 pp). The investment loans with the exceptionally favorable interest rate of the “GREEN” sub-structure
are an exception to this, which are still available to businesses with a rate of 1.5%.
• Changes in the economic policy leadership:
o As of 31 December 2024, pursuant to Act LXXXVI of 2024, the Ministry of Finance ceased to exist by merging
into the Ministry of National Economy. Minister Márton Nagy remained in office unchanged as head of the
Ministry of National Economy.
o As of 4 March 2025, the President of the Republic appointed Mihály Varga, the former Minister of Finance, to
head the National Bank of Hungary.
• Based on preliminary data published by the Central Statistical Office on 30 January 2025, the performance of the
Hungarian economy increased by 0.5% q-o-q and 0.4% y-o-y in the fourth quarter. With this, the annual growth in
2024 was 0.6%. The average inflation in 2024 was 3.7%.
• The Financial Stability Council of the Hungarian National Bank announced an extension to the central bank's green
capital requirement relief programs for credit institutions. The deadline for these programs was extended by one year,
until the end of December 2026. The decision on whether to grant further annual extensions will be made based on a
professional indicator system. Additionally, from 31 January 2025, the range of exposures that can be included in the
discount program was further expanded.
Moldova
• On 10 January 2025, the National bank of Moldova raised the base interest rate by 200 basis points, from 3.6% to
5.6%.
• On 5 February 2025, the National Bank of Moldova further raised the base rate by 90 basis points to 6.5%.
Ukraine
• According to the announcement on 6 January 2025, the European Bank for Reconstruction and Development (EBRD)
will be supporting the lending activities of OTP's subsidiary bank in Ukraine through a scheme that facilitates the
sharing of portfolio risk. The risk-sharing instrument will enable the Ukrainian subsidiary to provide new financing
to the local private business sector, amounting to EUR 200 million. The credit risks of these enterprises will be covered
by the scheme, with the coverage amounting to 50 percent of the outstanding debt.
• On 23 January 2025, the National Bank of Ukraine raised the policy rate by 100 basis points to 14.5%.
Slovenia
• On 30 January 2025, ECB cut the policy rate by 25 basis points from 3.00% to 2.75%.
An event, that occurred in January 2025 regarding an item reported in the Group’s books as a receivable from lending
activities, was identified by the Group as a post-balance sheet event. The Group believes that the event has no retrospective
effect for 2024 concerning stage classification, therefore the Group did not change the stage 2 classification of the affected
receivable as of 31 December 2024. However, given that the Group obtained additional information regarding the
circumstances that previously justified the stage 2 classification, the Group recognized an additional HUF 13.9 billion
impairment loss for the receivable in the stage 2 category for 2024.
INTEGRATED ANNUAL REPORT 2024
775
ANNEX TO SUSTAINABILITY REPORT
ANNEX
INTEGRATED ANNUAL REPORT 2024
776
RESPONSIBLE BANKING PROGRESS STATEMENT FOR PRB SIGNATORIES – OTP BANK 20241
Principle 1
Alignment
Principle 2
Impact & Target Setting
Principle 3
Clients & Customers
OTP Group’s commitment to sustainability
OTP Group is dedicated to enabling the transition to a
sustainable future and contributing to the positive development
of society. The Group aspires to take a leading regional role in
financing a fair and gradual transition to a low-carbon economy,
offering responsible solutions to build a sustainable future.
Stability and sustainability are fundamental pillars of OTP
Group's corporate strategy. Our corporate responsibility strategy
outlines the Bank’s principles, goals, and priorities concerning
sustainability and social responsibility.
The
Group’s
long-term
commitment
to
sustainability,
transparency, and ethical operations is reflected through stable
management, responsible governance, and a commitment to
being a responsible employer and active societal participant. Our
objective is to provide responsible and fair financial services that
are tailored to customer needs while fostering open, trust-based
cooperation with stakeholders and minimizing negative
environmental impacts.
The sustainability strategy of OTP Group is built on three pillars:
responsible service provider, responsible employer, and
responsible social actor.
Alignment with frameworks and goals
OTP Group strives to be a regional leader in financing the fair
and gradual transition to a low-carbon economy. Our
sustainability efforts are aligned with key international
frameworks, including the UNEP FI Principles for Responsible
Banking (PRB), the United Nations Sustainable Development
Goals (SDGs), and the European Union’s Green Deal.
OTP Group’s sustainability initiatives
OTP Bank’s PRB impact analysis identified climate change
mitigation and financial health & inclusion as target setting areas
under PRB. In 2024, OTP Group conducted the first Double
Materiality Assessment (DMA) aligned with the requirements in
the European Sustainability Reporting Standards (ESRS). This
assessment utilized the UNEP FI Portfolio Impact Analysis Tool.
The DMA identified climate change (mitigation and adaptation)
and access to quality information and access to financial
products and services as material. Therefore, climate change
mitigation and financial health&inclusion remain priority areas for
target setting under PRB, due to the 2024 assessment.
In pursuit of our climate change mitigation actions, we have
disclosed the current scope and status of OTP Group’s climate-
target setting plan per ESRS E1 in the 2024 OTP Group
Sustainability Statement.
Climate Change
OTP Group has set two primary goals related to climate change:
1. portfolio-specific GHG emission reduction target:
o OTP Group aims to reduce its financed GHG emissions
(Scope 3) by 2030, based on the IEA's Net Zero 2050
scenarios and national decarbonization plans.
o The target includes relative reduction goals for financed
Scope 1-2 emissions, aiming for a 29.8% decrease from the
2023 base year, and absolute reduction targets derived
from these relative goals.
2. Green Lending Goal
o OTP Group plans to build a green loan portfolio worth HUF
1,500 billion by 2025.
Safety, Security, and Ethical Operations
At OTP Group, safe and secure operations are of utmost
importance. We continuously assess and manage risks that could
impact our operations and implement robust protections against
fraud attempts.
When developing products and ensuring service accessibility, we
strictly adhere to ethical standards and consumer protection
regulations. Our goal is to provide modern, high-quality, and fair
services that meet customer needs. We are dedicated to our
customers' financial well-being by offering products that align with
their real needs and financial capabilities.
Given the complexity of financial products and services, clear and
effective communication is essential. OTP Group is committed to
maintaining transparent and understandable communication
practices to help customers make informed decisions.
Green Lending
OTP Group actively integrates green lending into its business
strategy, aiming to ensure that any client from any sector can
access loans under green conditions, provided they have a green
or sustainable goal. The development and maturity of this
approach vary based on the country, industry, and customer
segment.
The key sectors targeted by the Group’s green portfolio include:
o Energy: financing renewable energy production, distribution,
storage, and related loan purposes,
o Real estate: supporting the construction and purchase of
green properties, as well as financing building renovations
that lead to significant energy improvements,
o Transportation: promoting electro-mobility initiatives.
By focusing on these sectors, OTP Group aims to support the
transition to a low-carbon economy while fostering sustainable
development through responsible financing.
1 This Progress Statement has been prepared following the guidance provided by the Principles for Responsible Banking (PRB)
ANNEX
INTEGRATED ANNUAL REPORT 2024
777
Principle 1
Alignment
Principle 2
Impact & Target Setting
Principle 3
Clients & Customers
The Group regularly evaluates its activities to ensure alignment
with the climate targets set by the Paris Agreement, reaffirming
its commitment to a low-carbon economy. We are committed to
sustainable growth and social improvement, gradually aligning
our activities transparently and responsibly.
Financial Health&Inclusion
OTP Group prioritizes responsible marketing and financial
education, ensuring that customers receive clear and accurate
information about products and services.
Key initiatives include:
o Expanding digital accessibility to financial products
o Improving customer financial literacy
o Supporting disadvantaged groups through initiatives such
as the Social Lab, which focuses on Financial Health &
Inclusion
References and other relevant links:
https://www.otpgroup.info/sustainability/strategy
https://www.otpgroup.info/static/sw/file/OTPGroup_ESG_app
roach.pdf
Integrated Annual Report 2024 (page 156; 159; 160; 165)
References and other relevant links:
https://www.otpgroup.info/sustainability/strategy
https://www.otpgroup.info/static/sw/file/OTPGroup_ESG_app
roach.pdf
https://www.otpbank.hu/static/portal/sw/file/Group_remunerati
on_guidelines_20210416.pdf
https://www.otpgroup.info/static/sw/file/OTP_Group_Environ
mental_and_Social_Risk_Management_Framework.pdf
Integrated Annual Report 2024 (page 167, 243, 248)
References and other relevant links:
https://www.otpgroup.info/sustainability/responsible-service-
provider
Integrated Annual Report 2024 (page 285)
ANNEX
INTEGRATED ANNUAL REPORT 2024
778
Principle 4
Stakeholders
Principle 5
Governance & Culture
Principle 6
Transparency & Accountability
We continually engage with a wide range of stakeholders,
including
shareholders,
customers,
employees,
regulatory
authorities, business partners, NGOs, employee representatives,
and external ESG expert groups. These engagements serve
commercial, informational, and policy-related purposes, allowing
us to gather insights and address material issues such as climate
stability, biodiversity, circularity, financial inclusion, health, and
human rights.
As part of our double materiality assessment, we consult affected
stakeholders or their representatives to understand the impact of
our business activities. Insights from these consultations, along
with due diligence processes, ongoing stakeholder engagement,
and regulatory guidelines, inform our methodology, assessment
updates,
sustainability
reporting,
strategic
planning,
and
operational practices.
We view stakeholders as groups and individuals who directly or
indirectly influence, or are influenced by, our business operations.
We maintain an ongoing dialogue about our societal role, products
and services, business performance, and other relevant matters.
Transparent Operations and Ethical Business Conduct
At OTP Group, transparent operations and ethical business
conduct are of the highest priority. Our key objectives include
ensuring legal compliance, mitigating risks, and effectively
enforcing business, ethical, and internal controls. Adhering to
ethical norms and principles not only guarantees legal
compliance but also fosters trust, cooperation, and fairness
within the organization.
The corporate culture at OTP Group is defined by long-term
thinking, a responsible mindset, and a commitment to
sustainability. At the same time, OTP Bank remains conscious
of its legal obligation to maintain the profitable operation of OTP
Bank and OTP Group for the benefit of depositors, shareholders,
and investors. Balancing responsibility and profitability is
essential, and these aspects must interact harmoniously.
Through the operation of the corporate group, OTP Bank pays
special attention to transparency, regulation and the definition of
internal responsibilities to meet a wide range of environmental,
social, and regulatory expectations.
ESG Governance
OTP Bank's ESG organization was established by the decision
of the Board of Directors in 2021. The ESG Committee and ESG
Sub-Committee were incorporated as standing committees in
the Organizational and Operational Regulation. Responsibilities,
tasks, and reporting obligations for the relevant organizational
units and departments have been clearly defined.
Sustainability-related incentives for members covered by the
Remuneration Policy are linked to the achievement of
institutional
and
individual
objectives
within
a two-tier
performance measurement system, evaluated separately on a
scale of 0-100%.
In 2023, targeted ESG training was provided to the executive
and strategic-level leaders of the Banking Group, whereby nearly
360 leaders of OTP Group received the e-learning tailored for
the target group. The training covered the general basics of ESG,
legal and regulatory requirements, business aspects, risk
management, human resources topics, and the necessity of
avoiding greenwashing.
OTP Group publishes its consolidated Sustainability statement,
aligned with the Corporate Sustainability Reporting Directive
(CSRD) and the European Sustainability Reporting Standards
(ESRS) in the 2024 OTP Group Integrated Annual Report.
To ensure reliability, the contents of the report have been
independently assured by E&Y, confirming adherence to
established regulatory standards and the accuracy of the
reported sustainability data.
In addition, detailed and segmented ESG data is presented in
supplemental background materials, in Analyst table.
ANNEX
INTEGRATED ANNUAL REPORT 2024
779
Principle 4
Stakeholders
Principle 5
Governance & Culture
Principle 6
Transparency & Accountability
References and other relevant links:
https://www.otpgroup.info/sustainability/strategy
https://www.otpgroup.info/static/sw/file/OTPGroup_ESG_app
roach.pdf
Integrated Annual Report 2024 (page 166)
References and other relevant links:
https://www.otpgroup.info/sustainability/strategy
https://www.otpgroup.info/static/sw/file/OTPGroup_ESG_app
roach.pdf
https://www.otpbank.hu/static/portal/sw/file/Group_remunerati
on_guidelines_20210416.pdf
https://www.otpgroup.info/static/sw/file/OTP_Group_Environ
mental_and_Social_Risk_Management_Framework.pdf
Integrated Annual Report 2024 (page 306)
References and other relevant links:
https://www.otpgroup.info/sustainability/responsible-service-
provider
https://www.otpgroup.info/investor-relations/reports
Integrated Annual Report 2024 (page 356)