The board of OTP Bank, Hungary's biggest commercial lender, has decided to split the roles of chairman and CEO effective May 1, chairman-CEO Sandor Csanyi told shareholders at the AGM on April 24, where shareholders approved a record HUF270bn (€670mn) dividend payout, or HUF964.29 per share, translating to a dividend yield of 3.6%.

After 33 years at the helm, Csanyi is stepping down as chief executive and the post will be filled by his son, Peter Csanyi, deputy CEO of the digital division, and member of the board.

Under his leadership, OTP grew from a domestic lender into a regional heavyweight active in 11 countries, with €106bn in assets and 17mn customers.

Peter Csanyi began his career in 2006 at Merrill Lynch’s London office, working on corporate finance projects for financial institutions. He joined Deutsche Bank’s London office between 2007 and 2011, as an analyst and later as a financial advisor in corporate finance. Before joining OTP nine years ago, he worked for consulting firm McKinsey on banking projects as a senior consultant.

Speaking at a press conference after the AGM, Sandor Csanyi said he would continue to be in charge of strategy,  including acquisitions and senior appointments, while operational work would be shifted to his son.

OTP has begun preparing for this transition of power at the operative level for years. Responding to media questions about criticisms of dynasty-building, the 72-year-old veteran businessman said his son had demonstrated his capabilities as chair of the Executive Steering Committee, established in 2023 to oversee operational decisions.

Outlining his strategies, Peter Csanyi said he would make only minor adjustments to OTP's highly successful strategy. His focus would be on speeding up operational decision-making and reinforcing the bank's leading position in Hungary, as well as building synergies between subsidiaries. 

Sandor Csanyi told the quorum that OTP had closed its "most successful year ever" in 2024, achieving "outstanding" profitability, while maintaining an extraordinarily stable capital position and continuing as market leader in the region.

OTP acquired 14 banks in the last ten years and 26 in its history and is a market leader in five countries. OTP's balance sheet has tripled and its loan book quadrupled since 2014, he added.

Last year, ROE reached 23.5%, with CET1 ratio at 18.9%, and the cost-to-income ratio improved to a historical low of 41.3%.

Adjusted after-tax profit of the Hungarian operation rose 16% to HUF270bn, driven by growth in retail loan sectors, where OTP maintains market leadership in mortgages, personal loans, and deposits. The bank is also shifting focus toward sustainability, with green loan volumes rising by 57% in 2024.

Consolidated after-tax profit came to HUF1.07 trillion, the highest on record, 70% of which was generated by foreign subsidiaries.

OTP’s chairman-CEO noted the decision to remain in Russia had been strategically beneficial, with dividends amounting to $500mn in recent years.

Csanyi said lending was restarting in Ukraine and was up 20% in 2024. He added that OTP's group-level exposure in Russia and Ukraine had fallen from 14% of the net loan book in 2014 to 6% at the end of 2024.

He said it was a good decision in the short and mid-term to pull out of the Romanian market but OTP could return to the region's biggest banking market later "with a bigger presence". Until then, it plans to launch cross-border financial services in the country. 

Speaking at the AGM with Prime Minister Viktor Orbán present in the front row, Csanyi highlighted that Hungary’s "special banking sector burdens" were the highest in Europe. The levies are set to increase to HUF263bn in 2025, up from HUF172bn, including HUF176bn in transaction duty. He mentioned that OTP would pass most of these costs on to clients, but cautioned that this could lead to the bank losing customers to other financial service providers such as Revolut, which are not subject to the transaction duty.  

The National Bank has approved a share buyback programme of HUF150bn for 2025, Csanyi added.

For 2025, management expects a slight improvement in the operating environment. Organic growth in lending could exceed last year's 9% growth, net interest margin could be close to last year's 4.28%, risk profile could be similar to last year, but ROE could come in lower than 23.8% in 2024

Speaking after Sandor Csanyi's presentation of the 2024 figures, Orban acknowledged the outstanding role OTP Bank plays in Hungary, calling the lender a "jewel of the national economy."

OTP Bank shares rose on Friday after Patria Finance, parent of K&H Equities, issued a bullish note on Hungary’s largest lender, raising its target price from HUF24,200 to HUF29,000 while maintaining a 'buy' recommendation. The revised valuation implies nearly 10% upside from current levels.