March 2, 2018 / 6:07 AM / 8 months ago

BRIEF-OTP Bank posts record profit in 2017, sees more acquisitions in 2018

March 2 (Reuters) - OTP Bank says in Q4 earnings report:

* POSTS Q4 NET PROFIT OF 68.5 BILLION FORINTS (FCAST 61.6 BILLION), UP FROM 26.5 BILLION IN Q4 2016

* TOTAL 2017 NET PROFIT HIGHEST EVER AT 281.3 BILLION FORINTS ($1.1 BLN)

* SAYS Q4 RESULTS HIGHER THAN EXPECTED AS REVENUE, INTEREST INCOME EACH UP 3 PERCENT, ORGANIC LOAN BOOK GROWTH CONTINUES AND ONE-OFFS BOOST BOTTOM LINE

* NET INTEREST INCOME HUF 140.5 BLN, UP 3 PCT Q/Q, 6 PCT Y/Y

* INCOME FROM FEES HUF 58.1 BLN, UP 20 PCT Y/Y

* RETURN ON EQUITY 16.9 PCT IN Q4, 18.5 PCT IN FY 2017 VS 15.4 PCT IN FY 2016

* AS MARGIN SQUEEZE CONTINUES, NET INTEREST MARGIN COULD DECLINE BY 10-15 BASIS POINTS in 2018 FROM END-2017 4.38 PCT

* LOAN BOOK EXPANDS BY 23 PCT Y/Y IN Q4, DEPOSITS GROW BY 21 PCT Y/Y

* OTP SAYS SEES “REALISTIC CHANCE” TO COMPLETE FURTHER ACQUISITIONS IN 2018, TO USE ACCUMULATING CAPITAL TO THAT END

* EXPECTS LOAN GROWTH OF AROUND 10 PCT IN 2018, NOT INCLUDING POTENTIAL ACQUISITIONS, ESPECIALLY DUE TO HOUSEHOLD LENDING GROWTH

* NON-PERFORMING LOAN RATE 9.2 PCT VS 14.7 PCT IN Q4 2016

* RISK COSTS 45.7 BLN IN FY 2017 VS 93.2 BLN IN 2016

* EVEN AS NON-PERFORMING LOAN RATE IS EXPECTED TO FALL FURTHER IN 2018, TOTAL RISK COSTS COULD RISE AS LOAN BOOK GROWS

* OPERATING COSTS COULD RISE BY 6 PCT IN 2018, REFLECTING WAGE GROWTH AND DIGITALISATION COSTS, EXCLUDING POTENTIAL COSTS DUE TO ACQUISITIONS

* CAPITAL ADEQUACY RATIO 14.6 PCT, TIER 1 (BASEL) RATE 12.7 PCT Source text for Eikon: (bit.ly/2FdoylV) Further company coverage: ($1 = 255.2300 forints) (Reporting by Marton Dunai; Editing by Biju Dwarakanath)

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