Half year ended June 30, 2021, IFRS consolidated

OTP BANK PLC.

CONSOLIDATED FINANCIAL STATEMENTS

IN ACCORDANCE WITH

INTERNATIONAL FINANCIAL REPORTING

STANDARDS AS ADOPTED BY THE EUROPEAN UNION

FOR THE SIX-MONTH PERIOD ENDED

30 JUNE 2021

	Table of Contents
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (UNAUDITED) AS
AT 30 JUNE 2021.................................................................................................................................................	4
CONSOLIDATED STATEMENT OF PROFIT OR LOSS (UNAUDITED) FOR THE
SIX-MONTHPERIOD ENDED 30 JUNE 2021.......................................................................................................	5
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)
FOR THE SIX-MONTHPERIOD ENDED 30 JUNE 2021 .......................................................................................	6
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED) FOR
THE SIX-MONTHPERIOD ENDED 30 JUNE 2021...............................................................................................	7
CONSOLIDATED STATEMENT OF CASH-FLOWS (UNAUDITED) FOR THE
SIX-MONTHPERIOD ENDED 30 JUNE 2021.......................................................................................................	8
NOTE 1:	ORGANIZATION AND BASIS OF CONSOLIDATED FINANCIAL STATEMENTS...................................	10
1.1.	General information	10
1.2.	Basis of Accounting	10
NOTE 2:	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ...........................................................................	12
2.1.	Basis of Presentation	12
2.2.	Foreign currency translation	12
2.3.	Principles of consolidation	13
2.4.	Accounting for acquisitions	13
2.5.	Securities at amortized cost	14
2.6.	Financial assets at fair value through profit or loss	14
2.7.	Hedge accounting	16
2.8.	Offsetting	17
2.9.	Embedded derivatives	17
2.10. Securities at fair value through other comprehensive income	17
2.11. Loans, placements with other banks, repo receivables and loss allowance for loan and placements and
	repo receivable losses	18
2.12. Modified assets	19
2.12. Purchased or originated credit impaired financial assets	19
2.14. Loss allowance	20
2.15. Sale and repurchase agreements, security lending	22
2.16. Associates and other investments	22
2.17. Property and equipment, Intangible assets	23
2.18. Inventories	23
2.19. Financial liabilities	24
2.20. Leases	24
2.21. Investment properties	25
2.22. Share capital	25
2.23. Treasury shares	25
2.24. Non-current assets held-for-sale and discontinued operations	26
2.25. Interest income and income similar to interest income and interest expense	26
2.26. Fees and Commissions	26
2.27. Dividend income	27
2.28. Income tax	27
2.29. Banking tax	27

2.30.	Off-balance sheet commitments and contingent liabilities	27
2.31.	Share-based payment	28
2.32.	Employee benefits	28
2.33.	Consolidated Statement of Cash-flows	28
2.34.	Segment reporting	28
2.35.	Comparative figures	28
NOTE 3:	SIGNIFICANT ACCOUNTING ESTIMATES AND DECISIONS IN THE APPLICATION OF
	ACCOUNTING POLICIES ................................................................................................................................	32
3.1.	Loss allowances on financial instruments exposed to credit risk	32
3.2.	Valuation of instruments without direct quotations	32
3.3.	Provisions	32
3.4.	Impairment on goodwill	33
3.5.	Business model	33
NOTE 4:	IMPACT OF CORONA VIRUS ( COVID-19) ..................................................................................................	34
NOTE 5: CASH, AMOUNTS DUE FROM BANKS AND BALANCES WITH THE NATIONAL BANKS (in
	HUF mn) .............................................................................................................................................................	39
NOTE 6:	PLACEMENTS WITH OTHER BANKS, NET OF LOSS ALLOWANCE FOR PLACEMENTS (in HUF
	mn) ......................................................................................................................................................................	39
NOTE 7:	REPO RECEIVABLES (in HUF mn) .................................................................................................................	40
NOTE 8:	FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (in HUF mn) ...............................	41
NOTE 9:	SECURITIES AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME (in HUF mn) ............	44
NOTE 10: SECURITIES AT AMORTIZED COST (in HUF mn) .......................................................................................	46
NOTE 11: LOANS AT AMORTIZED COST AND AT FAIR VALUE (in HUF mn) ........................................................	48
NOTE 12: A SSOCIATES AND OTHER INVESTMENTS (in HUF mn) ..........................................................................	50
NOTE 13: PROPERTY, EQUIPMENT AND INTANGIBLE ASSETS (in HUF mn).........................................................	51
NOTE 14: INVESTMENT PROPERTIES (in HUF mn)......................................................................................................	58
NOTE 15: POSITIVE FAIR VALUE OF DERIVATIVE FINANCIAL ASSETS DESIGNATED AS HEDGE
	ACCOUNTING (in HUF mn) .............................................................................................................................	60
NOTE 16: OTHER ASSETS (in HUF mn)...........................................................................................................................	60
NOTE 17: AMOUNTS DUE TO BANKS, THE NATIONAL GOVERNMENTS, DEPOSITS FROM THE
	NATIONAL BANKS AND OTHER BANKS (in HUF mn) ..............................................................................	61
NOTE 18: REPO LIABILITIES (in HUF mn) .....................................................................................................................	62
NOTE 19: FINANCIAL LIABILITIES DESIGNATED AT FAIR VALUE THROUGH PROFIT OR LOSS (in
	HUF mn) .............................................................................................................................................................	62
NOTE 20: DEPOSITS FROM CUSTOMERS (in HUF mn) ................................................................................................	63
NOTE 21: LIABILITIES FROM ISSUED SECURITIES (in HUF mn) ..............................................................................	64
NOTE 22: DERIVATIVE FINANCIAL LIABILITIES HELD FOR TRADING (in HUF mn) ..........................................	68
NOTE 23: NEGATIVE FAIR VALUE OF DERIVATIVE FINANCIAL LIABILITIES DESIGNATED AS HEDGE
	ACCOUNTING (in HUF mn) .............................................................................................................................	68
NOTE 24: OTHER LIABILITIES (in HUF mn) ..................................................................................................................	68
NOTE 25: SUBORDINATED BONDS AND LOANS (in HUF mn) ..................................................................................	70
NOTE 26: SHARE CAPITAL (in HUF mn).........................................................................................................................	71
NOTE 27: RETAINED EARNINGS AND RESERVES (in HUF mn) ................................................................................	72
NOTE 28: TREASURY SHARES (in HUF mn) ..................................................................................................................	75
NOTE 29: NON-CONTROLLING INTEREST (in HUF mn).............................................................................................	75
NOTE 30: INTEREST INCOME, INCOME SIMILAR TO INTEREST INCOME AND EXPENSE (in HUF mn) ..........	76
NOTE 31: LOSS ALLOWANCES / IMPAIRMENT AND PROVISIONS (in HUF mn) ...................................................	77
NOTE 32: NET PROFIT FROM FEES AND COMMISSIONS (in HUF mn).....................................................................	78
NOTE 33: OTHER OPERATING INCOME AND EXPENSES AND OTHER ADMINISTRATIVE EXPENSES (in
	HUF mn) .............................................................................................................................................................	80

NOTE 34: INCOME TAXES (in HUF mn) ..........................................................................................................................	82
NOTE 35: LEASE (in HUF mn) ..........................................................................................................................................	84
NOTE 36: FINANCIAL RISK MANAGEMENT (in HUF mn) .........................................................................................	87
36.1. Credit risk	87
36.2. Maturity analysis of assets, liabilities and liquidity risk	102
36.3. Net foreign currency position and foreign currency risk	107
36.4. Interest rate risk management	107
36.5. Market risk	112
36.6. Capital management	115
NOTE 37: RECLASSIFICATION AND TRANSFER OF FINANCIAL INSTRUMENTS (in HUF mn) ........................	117
NOTE 38: OFF-BALANCE SHEET ITEMS AND DERIVATIVE FINANCIAL INSTRUMENTS (in HUF mn)...........	118
NOTE 39: SHARE-BASED PAYMENTS AND EMPLOYEE BENEFITS (in HUF mn).................................................	119
NOTE 40: RELATED PARTY TRANSACTIONS (in HUF mn) ......................................................................................	125
NOTE 41: SIGNIFICANT SUBSIDIARIES AND ASSOCIATES (in HUF mn) ..............................................................	128
NOTE 42: TRUST ACTIVITIES (in HUF mn) ..................................................................................................................	130
NOTE 43: CONCENTRATION OF ASSETS AND LIABILITIES ...................................................................................	131
NOTE 44: EARNINGS PER SHARE (in HUF mn) ..........................................................................................................	131
NOTE 45: NET GAIN OR LOSS REALIZED ON FINANCIAL INSTRUMENTS (in HUF mn)....................................	133
NOTE 46: FAIR VALUE OF FINANCIAL INSTRUMENTS (in HUF mn) .....................................................................	135
NOTE 47: SEGMENT REPORTING BY BUSINESS AND GEOGRAPHICAL SEGMENTS (in HUF mn) ................	150
NOTE 48: DISCONTINUED OPERATIONS (in HUF mn) ..............................................................................................	154
NOTE 49: SIGNIFICANT EVENTS DURING THE SIX-MONTH PERIOD ENDED 30 JUNE 2021............................	155
NOTE 50: POST BALANCE SHEET EVENTS ................................................................................................................	155

OTP BANK PLC.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION (UNAUDITED) AS AT 30 JUNE 2021

(in HUF mn)

	Note	30/06/2021	31/12/2020	30/06/2020
Cash, amounts due from banks and balances with the National Banks	5.	1,983,486	2,432,312	2,129,281
Placements with other banks, net of loss allowance for placements	6.	1,727,059	1,148,743	930,148
Repo receivables	7.	107,849	190,849	52,244
Financial assets at fair value through profit or loss	8.	234,797	234,007	275,426
Securities at fair value through other comprehensive income	9.	2,128,320	2,136,709	1,906,502
Securities at amortized cost	10.	3,232,248	2,624,920	2,369,970
Loans at amortized cost and
mandatorily at fair value through profit or loss	11.	12,958,928	12,477,447	11,639,228
Finance lease receivables	35.	1,107,012	1,051,140	1,023,345
Associates and other investments	12.	40,028	52,443	26,881
Property and equipment	13.	388,331	322,766	320,757
Intangible assets and goodwill	13.	230,446	239,004	242,170
Right-of-use assets	35.	42,697	46,283	47,987
Investment properties	14.	40,766	38,601	36,835
Derivative financial assets designated as hedge accounting	15.	13,034	6,820	12,389
Deferred tax assets	34.	21,605	22,317	29,869
Current income tax receivables	34.	35,218	38,936	36,938
Other assets	16.	253,078	266,474	243,743
Assets classified as held for sale / discontinued operations	48.	5,821	6,070	466,441
TOTAL ASSETS		24,550,723	23,335,841	21,790,154
Amounts due to banks, the National Governments,
deposits from the National Banks and other banks	17.	1,606,883	1,185,315	1,000,580
Repo liabilities	18.	275,942	117,991	122,091
Financial liabilities designated at fair value through profit or loss	19.	31,804	34,131	29,265
Deposits from customers	20.	18,258,676	17,890,863	16,231,927
Liabilities from issued securities	21.	497,045	464,213	401,829
Derivative financial liabilities held for trading	22.	84,389	104,823	159,339
Derivative financial liabilities designated as hedge accounting	23.	2,193	11,341	14,080
Leasing liabilities	35.	44,817	48,451	50,038
Deferred tax liabilities	34.	22,356	25,990	26,825
Current income tax payable	34.	42,144	27,684	50,304
Other liabilities	24.	714,905	607,737	683,298
Subordinated bonds and loans	25.	267,378	274,704	271,478
Liabilities directly associated with assets classified as held for sale /
discontinued operations	48.	5,268	5,486	368,837
TOTAL LIABILITIES		21,853,800	20,798,729	19,409,891
Share capital	26.	28,000	28,000	28,000
Retained earnings and reserves	27.	2,768,248	2,629,076	2,449,135
Treasury shares	28.	(104,055)	(124,080)	(101,305)
Non-controlling interest	29.	4,730	4,116	4,433
TOTAL SHAREHOLDERS' EQUITY		2,696,923	2,537,112	2,380,263
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY		24,550,723	23,335,841	21,790,154

The accompanying notes to consolidated financial statements on pages 10 to 156 form an integral part of these Consolidated Financial	4
Statements prepared in accordance with International Financial Reporting Standards as adopted by EU.