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Lower loan loss provisions boost OTP Bank's Q1 profit

OTP Bank Nyrt. reported first-quarter consolidated net profit attributable to owners of 64.97 billion Hungarian forints, up 23% from 52.80 billion forints in the year-ago period, helped by a 70% decline in loan loss provision expenses.

Unadjusted EPS came in at 248 forints, compared to 202 forints a year earlier. Return on equity for the quarter was 16.2%, compared to the year-ago 15.0%.

Net interest income rose on a yearly basis to 145.00 billion forints from 135.08 billion forints. Net profit from fees and commissions also increased over the period to 64.46 billion forints from 58.57 billion forints.

Provisions for impairment on loans and placement losses in the quarter narrowed year over year to 3.48 billion forints from 11.74 billion forints. The bank also booked gains on derivative instruments of 976 million forints, compared to losses of 263 million forints in the first quarter of 2017.

The group's Basel III common equity Tier 1 ratio was 15.0% at the end of March, compared to 12.7% at 2017-end and 16.0% a year earlier. The IFRS consolidated Basel III capital adequacy ratio was 16.9% at March-end, compared to 14.6% at the end of 2017 and 18.5% a year earlier.

As of May 10, US$1 was equivalent to 264.41 Hungarian forints.