Hungary’s leading lender eyes new acquisition in region and Central Asia, and the bank has the resources thanks to record earnings, CEO Sandor Csanyi told Bloomberg.

OTP made its first expansion outside of Europe in 2023, buying Uzbek Ipoteka Bank and has signalled further acquisitions in the region, confirmed by the 70-year-old bank leader in the interview. This is just the beginning, according to Csanyi, who said that the lender is exploring potential targets in Azerbaijan, Georgia, and Kazakhstan.

The bank is exploring the possibility of increasing its market share in Ukraine, however, he ruled out entering the Polish market until the long-running foreign currency loan dispute is resolved. This is a major risk for banks, he added.

Since 2016, OTP has acquired 11 banks in the region and the Balkans and as a result, its assets have swelled to over €100bn, making it a major European player.

In four countries, it is the market leader. In addition to making acquisitions, OTP is also considering raising its dividend. Bloomberg estimates that the bank could raise dividend payout from $240mn in 2023 to $290mn.

OTP booked HUF779bn (€2.0bn) in net profit in January-September 2023, up 77% y/y in Q3 and foreign units accounted for two-thirds of net profit, up 24pp from the previous year.

OTP shares edged lower on December 11 to finish on the BSE at HUF14,750, but it is trading at a two-year-high. The company looks solid both technically and fundamentally. In the past weeks, major banks have raised their projections for the bank, given its strong earnings potential.

Societe General lifted its 12-month target from HUF13,000 to HUF18,250. HSBC has the highest target price among analysts, with HUF23,150. OTP shares have risen 48% year-to-date.