Hungary's OTP Bank to establish ESG strategy by 2022

Hungarian lender OTP Bank Nyrt. intends to develop an environmental, social and governance strategy and go carbon neutral by 2022.

The bank announced the plans after reporting a third-quarter consolidated post-tax profit of 120.17 billion forints, up 6% from the year-ago 113.57 billion forints. It forms part of a goal for ESG to become "business as usual" from 2025, Green Program Director Gergely Pókos said.

OTP intends by 2022 to have a corporate green credit portfolio worth 150 billion Hungarian forints and a retail green credit portfolio worth 80 billion forints. These figures will rise to 1 trillion forints and 500 billion forints, respectively, by 2025. It also plans to have green products in all segments by the midpoint of the decade.

For the nine months ended Sept. 30, the bank's post-tax profit rose year over year to 335.32 billion forints from 188.17 billion forints. It has set aside 64.6 billion forints for dividends to be paid out after 2021.

Loans under moratorium

The Hungarian government has extended payment moratorium introduced during the onset of the coronavirus crisis for certain eligible clients until June 30, 2022. OTP booked a one-off 2 billion forints charge in the third quarter relating to the extension.

The bank has reported a steady decline in loans under moratorium at its core Hungary unit since the second quarter of 2020. During the third quarter, loans under moratorium stood at 1.286 trillion forints, 24% of the total loan portfolio. Corporate loans under moratorium came in at 281 billion forints, while retail loans under moratorium totaled 1.005 trillion forints.

As of Nov. 5, US$1 was equivalent to 310.57 Hungarian forints.