|Key People||Chairman and CEO Sándor Csányi|
OTP Bank is the dominant financial institution in Hungary and in 2008 its stock made up almost one third of the total value of the blue-chip BUX index on the Budapest Stock Exchange. However, the expansionary bank recently suffered an earnings blow in the global financial crisis and concerns about the economy in regional counries where OTP operates.
OTP Bank was formed in 1949 under Hungary's previous Communist government as the Országos Takarékpénztár, or National Savings Bank - a nation-wide, state-owned financial institution providing retail-level banking services. It became an independent company in 1990 with share capital of 23 billion Hungarian forints and began entering share-holder ownership in 1995 with its first IPO on the Budapest Stock Exchange (BSE), leaving the state with a single, so-called 'golden' share. OTP Bank and Hungarian oil giant MOL Rt are easily the two most liquid listings on the Budapest Stock Exchange and in 2008 OTP's traded strock formed almost 29% of the total value of the benchmark index BUX.
Since then, OTP Bank has expanded rapidly throughout eastern Europe and currently has operations in seven regional contries. However, some or even all of these ventures could ultimately prove a drag on OTP Bank's future performance in the fallout from the global financial crisis. OTP recently suffered a 97% fall in Q4 2008 profits, in part because of large goodwill writedowns on it Ukrainian and Serbian operations, plus there are serious concerns about economic conditions in Russia and Romania, where OPT also has banks.
According to its 2007 annual report, OTP Bank's major banking offshoots in eastern Europe included the following financial institutions:
- Bulgaria: DSK Bank
- Croatia: OTP banka Hrvatska
- Montenegro: CKB
- Russia: Investsberbank
- Romania: OTP Bank Romania
- Serbia: OTP banka Srbija
- Slovakia: OTP Banka Slovensko
- Ukraine: CJSC OTP Bank
Sándor Csányi has been OTP Bank Chairman & CEO since 1992 after spending six years at senior posts in two rival Hungarian banks, Magyar Hitel Bank and K&H Bank. Prior to that he worked in Hungarian state ministries and spent his final three years of public service as department head at the agriculture ministries following stints at the Revenue Directorate and the Secretariat of the Ministry of Finance. He is a 1974 graduate of the College of Finance and Accounting specialising in business administration and a 1990 graduate of the Budapest University of Economics.
OTP Bank's net income is expected to drop by more than half in 2009 but should start picking up again in 2010, according to a recent report by investment bank ING, Hungarian finance magazine Portfolio recently reported. Further depreciation of the region's currencies is viewed as a significant risk factor for OTP Banks in future, ING noted.
- History. OTP Bank.
- Hungary's OTP Bank Q4 net profit falls 97 percent. Reuters.
- Message from the Chairman and Chief Executive Officer. OTP Bank 2007 Annual Report.
- Senior management of OTP Bank and executive members of the Board of Directors. OTP Bank.
- ANALYST VIEW - ING cuts Hungary OTP target price, keeps ‘Buy' tag. Portfolio.