June 11, 2020 / 2:45 PM / 25 days ago

BRIEF-OTP Bank says crisis made it more aggressive to expand in eastern Europe

June 11 (Reuters) - Hungary’s OTP Bank says in emailed reply to Reuters questions

* PANDEMIC SITUATION PROMPTED IT TO LOOK AT POTENTIAL TAKEOVER TARGETS EVEN MORE AGGRESSIVELY IN CEE REGION

* OUTSTANDING CAPITAL AND LIQUIDITY POSITION ALLOWS IT TO TAKE ON ROLE OF REGIONAL CONSOLIDATOR AMID CRISIS

* IN SOME COUNTRIES, ESPECIALLY HIGH-RISK ONES LIKE RUSSIA AND UKRAINE, IT TIGHTENED LENDING STANDARDS

* UTILISATION OF DIGITAL PLATFORMS SPIKED DURING CRISIS, WITH 10% GROWTH IN DIGITAL CUSTOMERS AND 20% GROWTH IN TRANSFERS COMPARED TO PRE-CRISIS LEVELS

* IF THOSE DIGITAL UTILISATION RATES PROVE LASTING THAT WILL BENEFIT THE COST STRUCTURE OF THE BANK

* OTP WAS PREPARED FOR DIGITAL SPIKE SO IT LED TO NO SIGNIFICANT RISE IN COSTS

* COST STRUCTURE WAS IMPACTED BY CRISIS BOTH POSITIVELY, WITH LOWER MARKETING COSTS AND LOWER WAGE GROWTH, AND NEGATIVELY, VIA PANDEMIC COUNTERMEASURES

* LOAN REPAYMENT MORATORIUMS EXIST IN ALL OF THE GROUPS’ COUNTRIES EXCEPT UKRAINE, WITH VARYING EFFECT

* FOREIGN SUBSIDIARIES SEE SIGNIFICANTLY LOWER PARTICIPATION AND RESULTING NEGATIVE IMPACT FROM MORATORIUMS

* REVENUE EFFECT FROM MORATORIUMS NOT SIGNIFICANT

* OTP REITERATES: MANAGEMENT EXPECTS FALLING RISK COSTS FOR THE REST OF THE YEAR

* IN HUNGARY, RISING SHORT-TERM INTEREST RATES SHOULD BENEFIT REVENUE IN 2020, WHILE IN OTHER COUNTRIES INTEREST RATES STILL UNDER PRESSURE

* EXPECTS RECESSION IN EASTERN EUROPE TO BE MILDER THAN IN WESTERN EUROPE, EXPECTS POTENTIALLY FAST RECOVERY Further company coverage: (Reporting by Marton Dunai)

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