Strategy

OTP Group’s business strategy remains focused on the maximization of shareholder
value through the development of the most efficient, retail-focused universal bank in CEE.
The objective of the Group is to achieve an outstanding financial performance in European terms.

The Group endeavours to offer customised services, constantly being improved to meet the needs of its costumers, through the further strengthening of its innovative skills.

In order to create value it is essential to rationalise operational processes and to improve operational and cost efficiency of the members of the Group. Synergy effects within the subsidiaries can be achieved by harmonised developments and integration of several activities within the Hungarian and the international group.

Highly qualified human resource is indispensable to achieve OTP Bank's and the Group's objectives. Therefore the creation and sustainment of a well-prepared sales-oriented and loyal administrative workforce is of outstanding importance in the Bank's strategy just as the creation of personalised careers in order to keep talented professionals.

As a response to the scarce of liquidity in the second half of 2008, OTP Group realigned its strategy in more important areas like mid-term Group strategy, in terms of products offered to clients, and adjusted its business (primarily lending) activity:

  • Regarding the mid-term Group strategy, OTP Bank started to apply the strategic markets vs. portfolio investments approach (geographically), while in the course of 2008, divestment of some subsidiaries came into question. The consequence of this differentiation is that management and other Group-level resources will be allocated with special focus on strategic markets which are considered as markets with higher growth potential in mid-term, and OTP Bank Plc. has strong competencies and market positions in that strategic markets.
  • In terms of products, the Bank put more focus on high return portfolios and channelled resources towards higher margin products – as a part of this approach, retail focus was strengthened: The Bank made a deliberate decision in 1Q 2008 to cut back corporate lending in Hungary with a purpose to reallocate liquidity sources to higher-margin retail business.
  • There were significant changes in the traditionally conservative lending activity from October 2008, as a result of the global financial market’s turmoil. The Bank’s willingness to lend eased off (to adjust to the new challenges after (primarily FX-) liquidity dried up), credit standards became stricter, the offered range of products changed according to the customers’ demand (for example, demand for foreign currency based loans was deliberately channelled to local currency based loans to mitigate customer’s risk exposure to FX rate changes). The Bank paid particular attention to deposit collection because of difficulties in funding: besides successful deposit collection campaigns the successful retail bond issues in Hungary have to be emphasized. After the strong and sudden deposit withdrawals in several countries in the OTP Universe in CEE region (due to the system-wide decrease of confidence for example in Ukraine, Russia and Montenegro), the Bank could reach a turnaround of deposit withdrawals in most cases by raising offered deposit rates and promote its extreme high Group-level capital adequacy ratio.