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Predrag Mihajlović, Executive Board President And CEO At OTP Banka Srbija

High-end, Trustworthy And Reliable

We create value through our distinctive approach, which places the client at the centre of everything we do at OTP banka. Whether providing capital to fund growth or refinancing debt, we offer solutions that support the right capital structure to meet companies’ short- and long-term financing needs

By working in partnership with our clients, we help provide a full range of solutions to meet their ongoing needs, including liquidity management, but also structured finance. With our regional presence in 11 countries, OTP Group helps clients grow internationally ~ says OTP banka Srbija Executive Board President and CEO Predrag Mihajlović, speaking in this CorD Magazine interview.

It has been precisely a year since the merger of OTP banka and Vojvođanska banka? What are your impressions and takeaways?

– I can highlight a few takeaways: integration has been done smoothly, without neglecting business targets and daily business operations. The aligning of different corporate cultures is still ongoing; this is not something that can be done with an integration date. The cultures may have differed, but focus and hard work were equally represented at both banks, resulting in the creation of not only a bigger bank, but a more efficient and better one. This is proven by our business results for both 2021 and Q1 2022.

Today, OTP banka is the no.1 creditor on the Serbian market, both in retail and corporate, holding a leading position in factoring, e-commerce and leasing services, with an extensive footprint of 170 branches in 91 cities across the country. The secret of our successful merger and business results lies in the great teamwork coming from teams in Belgrade, Novi Sad and Budapest. The fact that it was mostly done during the pandemic, under quite challenging circumstances, brings additional value to our success.

What would you highlight among business results?

In 2021, which was undoubtedly one of the most demanding years for the banking market, we managed to achieve excellent business results, with over €228 million in revenue and high profitability of €68 million, which is almost seven times higher than the preceding year. An historic result was also recorded in factoring, where turnover of €400 million strengthened OTP’s long-term status as a leader in this field. We have continued in the same direction in 2022 and generated income of €57.7 million, while our assets stand at €5.78 billion, representing an increase in net assets of €521.8 million compared to the first quarter of 2021. When it comes to loans, OTP banka recorded nearly €4.5 billion in Q1 2022, representing an increase of 13.5%, and we thus retained first place on the Serbian market, with a share of 17.5%. Our housing loans stand at a billion euros, with a market share of 21.9% in Q1, and a surge has also been recorded in terms of cash loans, which have reached a value of 1.1 billion euros and thereby represent a high market share of 20.3%. Our OTP Leasing maintained its leading position on the market in Q1 2022 as well, with an increase in new production of 17.4% y-o-y, and total financing of €24.4 million in new placements, which represents a 20.2% market share in new production. We are also quite satisfied with the results of life insurance service provider OTP Osiguranje and the synergy it has formed with the Bank.

We are witnessing banking consolidation and it seems the competition is quite strong, especially in the corporate segment. What do you think distinguishes OTP banka’s approach to corporate clients?

– We can say that loan demand in Serbia is growing, and investment lending in particular, both in the retail and corporate sectors, which means that banks are keeping pace with market demands. The consolidation of banks has generally enabled them to financially support significantly larger projects than was previously the case. It is important to emphasise that banks’ possibilities depend significantly on their access to long-term sources of financing, so the financing period is in line with the economic life of the actual investment. We continued our excellent results in the corporate segment in Q1 2022, recording growth of 16.2%, with €2.4 billion y-o-y. In this way, OTP banka continues to be ranked number one, with a 16.6% market share in corporate lending. As such, we have clients from all industries, from entrepreneurs and SMEs, to large domestic and multinational companies.

I would say that we create value through our distinctive approach, which places the client at the centre of everything we do at OTP banka. Whether providing capital to fund growth or refinance debt, we offer solutions that support the right capital structure to meet companies’ short- and long-term financing needs. By working in partnership with our clients, we help provide a full range of solutions to meet their ongoing needs, including liquidity management, but also structured finance. Through coordinated business lines and proven expertise, OTP banka provides a full range of innovative solutions adapted to clients’ needs, such as traditional and specialised financing, payment operations, cash management, access to treasury services, capital markets and financial advisory services, as well as securities services.

Our goal, as a leader in corporate and retail lending, is to actively participate in building a sustainable future and to be an example of environmentally responsible business

We have been the market’s top bank in factoring services since 2013, with the largest market share, and we continued along the same path in 2022, with an increase exceeding 30% in production.

The Euromoney Awards for Excellence 2021 awarded OTP as the best bank in CEE, while Global Finance recently awarded OTP banka as the best bank for SMEs and the best private banking bank in the CEE region. This recognition confirmed our efforts to create a leading bank in these segments in particular, and the fact that we received this award for results achieved during the pandemic and the process of integrating the two banks makes it even more valuable. Ever since the establishment of our private banking operations in 2004, which was in fact the first private banking setup in Serbia, we have managed to successfully secure our presence in this segment and ensure we are perceived by clients as a high-end, trustworthy and reliable banking institution. We today have two premises dedicated to private banking, in Belgrade and in Novi Sad.

Bearing in mind that our readers are diplomats and people from international companies, does OTP banka have special services or forms of cooperation with them?

– Yes, we devote special attention to clients who are non-residents in Serbia, including foreign offices, diplomatic missions, international companies and their employees. Our long and fruitful cooperation with embassies and diplomatic missions and their staff is something we are proud of, as it requires the special expertise of our employees in branches and different departments in headquarters where they have a single point of contact for daily business with the Bank.

It seems that OTP banka is a true green bank?

– Absolutely, in every sense. Green is our colour and our philosophy of doing business and everyday life. I am very proud of our strategic focus on the green transition and all activities, especially the results we achieved with the Generator Zero project focused on reducing the carbon footprint. That is one of our most important and largest projects, which we’ve been implementing with the same enthusiasm for five years and which deals with current topics through each new edition, resulting in ever-more innovative solutions. Our goal, as a leader in corporate and retail lending, is to actively participate in building a sustainable future and to be an example of environmentally responsible business. The very recent Grand Prix 2022 Award for our CSR is confirmation that we are on the right track.

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