Hungary OTP Bank Deputy CEO Speder resigns - KBC

Hungary's largest commercial bank OTP Bank has announced on Tuesday the resignation of Deputy CEO Zoltán Spéder effective 8 January. His successor is economist László Urbán, who has been working in the financial sector since 1995. KBC Securities said a negative market reaction to Spéder's departure could be expected as he was a key figure on the management team.

“Spéder was viewed by the market as having held close control OTP Bank's operations, responsible for the bank's budget and delivering on the closely watched management guidance (currently for a net profit HUF 222bn for 2007 versus a consensus estimate of HUF 210bn). His departure could raise some doubt about the bank's ability to deliver on the targets he set," Marta Czajkowska said.

Given OTP Bank's rapid expansion via acquisitions in the CEE region over the past year and the need to integrate new international subsidiaries, management capacity has become an important issue.

Spéder's successor will likely need time to gain the credibility that he had earned with investors, she added.

“We maintain our positive view on the OTP Bank's fundamentals and relative valuation, trading on a 2007F P/E of 11.2x versus a CEE sector average of 16.7x and the FTSE 300 Eurobanks index at 11.8x."

Czajkowska said she acknowledged the macro risks were high in Hungary but she continued to see OTP Bank as “very attractive on valuation grounds" and in the long-term, the recent weakness would be seen as buying opportunity.

Source: portfolio.hu