OTP Bank : Relevant information of the consolidated and separate financial statements for the year ended 2020 of OTP Bank Plc.

Strategy and Finance Division Investor Relations & DCM

Reference number: IR-017/2021

25 March 2021

Relevant information of the consolidated and separate financial statements for the year ended 2020

In accordance with subsection 3 of section 3:272 of Act V of 2013 on Civil Code, regarding to the announced 16 April 2021 decision making of the Board of Directors acting in the competency of the Annual General Meeting the Board of Directors of the OTP Bank Plc. releases the relevant information of the consolidated and separate financial statements prepared in accordance with International Financial Reporting Standards for the year ended 2020, and the report on relevant information of the Board of Directors and the Supervisory Board hereunder.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

(in HUF mn)

2020 2019

Cash, amounts due from banks and balances with the National Banks	2,432,312	1,784,378
Placements with other banks, net of loss allowance for placements	1,148,743	342,922
Repo receivables	190,849	67,157
Financial assets at fair value through profit or loss	234,007	251,990
Securities at fair value through other comprehensive income	2,136,709	2,426,779
Securities at amortized cost	2,624,920	1,968,072
Loans at amortized cost and mandatorily at fair value through profit or
loss	12,477,447	10,909,799
Finance lease receivables	1,051,140	969,263
Associates and other investments	52,443	20,822
Property and equipment	322,766	320,430
Intangible assets and goodwill	239,004	242,219
Right-of-use assets	46,283	52,950
Investment properties	38,601	41,560
Derivative financial assets designated as hedge accounting	6,820	7,463
Deferred tax assets	22,317	26,543
Current income tax receivables	38,936	12,769
Other assets	266,474	214,580
Assets classified as held for sale / discontinued operations	6,070	462,071
TOTAL ASSETS	23,335,841	20,121,767
Amounts due to banks, the National Governments,
deposits from the National Banks and other banks	1,185,315	812,911
Repo liabilities	117,991	488
Financial liabilities designated at fair value through profit or loss	34,131	30,862
Deposits from customers	17,890,863	15,171,308
Liabilities from issued securities	464,213	393,167
Derivative financial liabilities held for trading	104,823	86,743
Derivative financial liabilities designated as hedge accounting	11,341	10,709
Leasing liabilities	48,451	54,194
Deferred tax liabilities	25,990	29,195
Current income tax payable	27,684	35,928
Other liabilities	607,737	592,540
Subordinated bonds and loans	274,704	249,938
Liabilities directly associated with assets classified as held for sale /
discontinued operations	5,486	362,496
TOTAL LIABILITIES	20,798,729	17,830,479
Share capital	28,000	28,000
Retained earnings and reserves	2,629,076	2,319,263
Treasury shares	(124,080)	(60,931)
Non-controlling interest	4,116	4,956
TOTAL SHAREHOLDERS' EQUITY	2,537,112	2,291,288
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	23,335,841	20,121,767

CONSOLIDATED STATEMENT OF PROFIT OR LOSS

(in HUF mn)

2020	2019
Interest income calculated using the effective interest method	841,901	762,639
Income similar to interest income	135,986	133,497
Interest income and income similar to interest income	977,887	896,136
Interest expense	(195,216)	(197,095)
NET INTEREST INCOME	782,671	699,041
Loss allowance on loans, placements and on repo receivables	(200,315)	(44,605)
from this: gain / (loss) from derecognition of impaired financial assets	1,978	(15,137)
Change in the fair value attributable to changes in the credit risk of loans
mandatorily measured at fair value through profit of loss	(3,262)	(4,376)
(Loss allowance) / Release of loss allowance on securities
at fair value through other comprehensive income and
on securities at amortized cost	(7,309)	9
Provision for commitments and guarantees given	(8,662)	(7,995)
Release of impairment of assets subject to
operating lease and of investment properties	878	280
Risk cost total	(218,670)	(56,687)
NET INTEREST INCOME AFTER RISK COST	564,001	642,354
Income from fees and commissions	486,529	447,084
Expense from fees and commissions	(88,896)	(72,903)
Net profit from fees and commissions	397,633	374,181
Foreign exchange gains, net	19,204	6,782
Gains on securities, net	16,106	11,611
from this: gain from derecognition of securities at amortized cost	1,402	714
Loss on financial assets /liabilities measured at fair value
through profit or loss	(2,396)	(849)
Dividend income	527	7,955
Other operating income	33,461	111,093
Other operating expense	(39,447)	(44,758)
Net operating income	27,455	91,834
Personnel expenses	(308,642)	(276,754)
Depreciation and amortization	(92,761)	(77,048)
Goodwill impairment	-	(4,887)
Other general expenses	(306,264)	(282,528)
Other administrative expenses	(707,667)	(641,217)
PROFIT BEFORE INCOME TAX	281,422	467,152
Income tax expense	(27,376)	(49,902)
NET PROFIT FOR THE YEAR FROM CONTINUING OPERATIONS	254,046	417,250
From this, attributable to:
Non-controlling interest	220	341
Owners of the company	253,826	416,909
DISCONTINUED OPERATIONS
Gains from disposal of subsidiary classified as held for sale	199	-
Gains / (Loss) from discontinued operations	5,391	(4,668)
PROFIT FROM CONTINUING AND
DISCOUNTINUED OPERATION	259,636	412,582
Earnings per share (in HUF)
From continuing operations
Basic	982	1,594
Diluted	982	1,593
From continuing and discontinued operations
Basic	1,004	1,576
Diluted	1,003	1,575

CONTINUING OPERATIONS

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

(in HUF mn)

2020

2019

NET PROFIT FOR THE YEAR	259,636	412,582
Items that may be reclassified subsequently to profit or
loss:
Fair value adjustment of securities at fair value
through other comprehensive income	(3,175)	26,164
Deferred tax related to fair value adjustment of securities
at fair value through other comprehensive income	918	(2,915)
Derivative financial instruments designated as cash flow
hedge	(2)	11
Net investment hedge in foreign operations	(9,440)	(2,776)
Deferred tax related to net investment hedge
in foreign operations	849	250
Foreign currency translation difference	68,593	79,440
Items that will not be reclassified subsequently to profit
or loss:
Fair value changes of equity instruments at fair value
through other comprehensive income	(2,890)	7,619
Deferred tax related to equity instruments at
fair value through other comprehensive income	383	(644)
Remeasurement of net defined benefit asset / (liability)	143	(173)
Deferred tax related to remeasurement of net defined
benefit asset / (liability)	1	12
Subtotal	55,380	106,988
NET COMPREHENSIVE INCOME	315,016	519,570
From this, attributable to:
Non-controlling interest	(223)	768
Owners of the company	315,239	518,802

SEPARATE STATEMENT OF FINANCIAL POSITION

(in HUF mn)

Cash, amounts due from banks and balances with the National Bank of Hungary Placements with other banks, net of allowance for placement losses Repo receivables Financial assets at fair value through profit or loss Financial assets at fair value through other comprehensive income Securities at amortised cost Loans at amortised cost and mandatorily measured at fair value through profit or loss Investments in subsidiaries Property and equipment Intangible assets Right of use assets Investments properties Current tax assets Derivative financial assets designated as hedge accounting relationships Other assets	2020 2019 579,120 1,535,884 183,364 160,483 289,686 1,560,142 45,539 172,229 911,950 1,485,977 2,007,692 1,447,224 3,898,697 3,315,069 1,548,972 1,542,538 77,974 77,754 57,639 53,282 13,479 13,607 1,936 2,381 593 -6,817 16,677 169,794 116,699
TOTAL ASSETS 11,154,394 10,138,804
Amounts due to banks and deposits from the National Bank of Hungary and other banks 766,977 738,054 Repo liabilities Deposits from customers Leasing liabilities 109,612 462,621 7,895,735 6,573,550 14,106 13,660 Liabilities from issued securities 28,435 43,284 Financial liabilities at fair value through profit or loss Derivative financial liabilities designated as held for trading 25,902 28,861 99,987 83,088 Derivative financial liabilities designated as hedge accounting relationships Deferred tax liabilities 3,104 10,023 3,062 5,875 Current tax liabilities Other liabilities Subordinated bonds and loans - 2,896 224,897 243,780 304,243 279,394
TOTAL LIABILITIES 9,476,060 8,485,086
Share capital Retained earnings and reserves Treasury shares 28,000 1,697,133 (46,799) 28,000 1,628,354 (2,636)
TOTAL SHAREHOLDERS' EQUITY 1,678,334 1,653,718
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 11,154,394 10,138,804

2019

289,686

1,560,142

45,539

172,229

1,485,977

1,447,224

3,315,069

1,542,538

77,754

53,282

13,607

2,381 -

16,677

116,699

10,138,804

738,054

462,621

6,573,550

13,660

43,284

28,861

83,088

10,023

5,875

2,896

243,780

279,394

8,485,086

28,000 1,628,354

(2,636)

1,653,718 10,138,804

SEPARATE STATEMENT OF PROFIT OR LOSS

(in HUF mn)

2020	2019
239,633	235,679
81,663	88,217
321,296	323,896
(99,630)	(119,384)
221,666	204,512
(61,310)	(29,056)
(3,638)	(19,831)
(1,848)	401
(3,202)	(5,794)
(405)	(5,432)
(66,765)	(39,881)
154,901	164,631
(17,358)	-
259,781	248,954
(40,750)	(35,591)
219,031	213,363
(4,518)	3,288
17,955	8,188
360	714
(671)	1,260
7,057	4,715
60,973	78,887
7,900	7,505
(28,064)	26,515
60,632	130,358
Personnel expenses	(118,498)	(115,035)
Depreciation and amortization	(38,948)	(29,925)
Other general expenses	(166,514)	(160,198)
OTHER ADMINISTRATIVE EXPENSES	(323,960)	(305,158)
PROFIT BEFORE INCOME TAX	93,246	203,194
Income tax	(772)	(9,840)
NET PROFIT FOR THE YEAR	92,474	193,354
Earnings per share (in HUF)
Basic	333	691
Diluted	333	691

NET OPERATING INCOME

Interest income calculated using the effective interest method Income similar to interest income

Interest income and similar to interest income

Interest expense

NET INTEREST INCOME

Loss allowance on loan, placement and repo receivables losses from this: loss from derecognition of loans at amortised cost

Loss allowance / (Release of loss allowance) on securities at fair value through other comprehensive income and on securities at amortised cost

Provision for loan commitments and financial guarantees given Change in the fair value attributable to changes in the credit risk of loans mandatorily measured at fair value through profit of loss

Risk cost total

NET INTEREST INCOME AFTER RISK COST

MODIFICATION LOSS

Income from fees and commissions Expenses from fees and commissions

NET PROFIT FROM FEES AND COMMISSIONS

Foreign exchange (losses) and gains

Gains on securities, net from this: gain from derecognition of securities at amortised cost

(Losses) / Gains on financial instruments at fair value through profit or loss

Gains on derivative instruments, net Dividend income

Other operating income Other operating expenses

SEPARATE STATEMENT OF COMPREHENSIVE INCOME

(in HUF mn)

2020

2019

NET PROFIT FOR THE YEAR

92,474 193,354

Items that may be reclassified subsequently to profit or loss:

Fair value adjustment of debt instruments at fair value through other comprehensive income

(14,459) 16,732

Deferred tax (9%) related to debt instruments at fair value through other comprehensive income

1,262

(1,332)

(Losses) / Gains on separated currency spread of financial instruments designated as hedging instrument

(1,526) 367

Deferred tax (9%) related to separated currency spread of financial instruments designated as hedging instrument

137 (33)

(Losses) / Gains on derivative financial instruments designated as cash flow hedge

(296) 2,086

Deferred tax (9%) related to derivative financial instruments designated as cash flow hedge

27 (188)

Items that will not be reclassified to profit or loss:

Fair value adjustment of equity instruments at fair value through other comprehensive income

(3,275) 3,867

Deferred tax (9%) related to equity instruments at fair value through other comprehensive income

310 (348)

Other comprehensive income total

(17,820) 21,151

NET COMPREHENSIVE INCOME

74,654

214,505

The written documents the Board of Directors acting in the competency of the Annual General Meeting shall be available for inspection by the shareholders from 25 of March 2021 at the Budapest Branch Office of OTP Bank (H-1051 Budapest V. Deák Ferenc u. 7-9.) and on the website of the Budapest Stock Exchange (www.bet.hu), on the website operated by the National Bank of Hungary (www.kozzetetelek.hu) and of the Bank

(www.otpbank.hu).

Board of Directors of OTP Bank Plc.