Russian division of EU bank posts USD172 million incomes

12/21/2023 7:19:00 AM

(MENAFN) In a recent financial disclosure, OTP bank Russia, the Russian subsidiary of Hungary's OTP Bank, has revealed a robust performance, posting a net profit of 15.6 billion rubles (USD172.2 million) in the first nine months of 2023, according to Russian Accounting Standards (RAS). The positive financial results have prompted the subsidiary to declare interim dividends amounting to 2.8 billion rubles (USD30.9 million) for January-September 2023, as disclosed in the bank's filing published on Tuesday.

The dividends will be paid to the Hungary-based parent company, OTP Bank, following special permission granted by the Central Bank of Russia. In October, OTP Bank Russia's shareholders had already decided to distribute dividends totaling 10.6 billion rubles (USD117 million) from profits for the first half of the year and retained earnings from previous periods.

While the financial achievements of OTP Bank Russia are notable, the institution has been navigating geopolitical challenges, particularly concerning its status in Ukraine. In May, the Ukrainian National Corruption Prevention Agency designated OTP as an "international sponsor of war" due to alleged preferential lending terms provided by the bank to the Russian military.

This designation led to OTP Bank being blacklisted in Ukraine until early October, when it agreed to reverse the decision amid criticism from certain European Union countries.
OTP Bank, known as Central Europe's largest independent lender, also ranks among the 50 largest banks in Russia. Despite geopolitical tensions, the bank's Ukrainian division maintains approximately USD507 million in assets, contributing to the diverse portfolio of the OTP Group.

Notably, Russian business constitutes around 3 percent of the OTP Group's total assets, according to the lender's data.

The financial success of OTP Bank Russia amidst geopolitical complexities underscores the resilience and adaptability of financial institutions operating in challenging environments. The declaration of dividends and the bank's continued regional presence highlight the delicate balance that financial entities must strike between economic interests, geopolitical considerations, and adherence to international norms. As tensions persist, the performance of banks like OTP Bank Russia provides insights into the broader economic implications of geopolitical dynamics on the financial sector.

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