Hungarian retail bank OTP posted a 25.5 percent rise in fourth-quarter net profit and said it expected 2008 net profit to grow more than 10 percent, driven by its Russian and Ukrainian units, Reuters reports.

"Despite the difficulties on global financial markets, we think our profit can still grow this year, by around 10 percent," Chairman and Chief Executive Sandor Csanyi told a news conference.

OTP sees 2008 net profit at its Russian unit, which it is developing aggressively, rising by around 50 percent, and 30 percent in Ukraine. It said 2008 profit at home, its biggest market, would remain broadly flat.

The targets do not include acquisitions although the bank remained on the lookout for new takeover opportunities, particularly in the former Soviet Union.

"The plans are based on unchanged corporate structure. That doesn't mean we don't plan any acquisitions but those are still only plans ... and we can modify numbers when they materialise," Chief Financial Officer Laszlo Urban said.

Csanyi said the bank maintained its 2010 pre-tax profit target of 2 billion euros ($2.92 billion) but said this was conditional on acquisitions.

"I still think that this target is still achievable in 2010 ... With the sale of (insurance arm) Garancia, we now have more resources in our hands to fund expansion," Csanyi said.
At 1016 GMT, OTP stock was almost flat at 7,844 forints.

In Hungary, 2008 net profit would be dragged down by two one-off items; a 13 billion Hungarian forint ($72.68 million) cut in government home loan subsidies and an accounting regulation change which increases tax obligations by 9 billion forints.

The bank expects its return on equity, a key indicator of profitability, to shrink slightly from last year's 24.7 percent but sees its cost-to-income ratio at 55 percent from 59.1 percent in 2007.

The bank expects lending to grow by around 25 percent on big lending expansion at foreign units, while domestic lending growth is seen at around 5 percent.

The bank sees a 10 percent growth in deposits in 2008 on the back of its rapid expansion abroad.
Fourth quarter net profit rose to 50.93 billion forints from 40.57 billion a year earlier on the back of a 33 percent rise in net interest income excluding swaps and a 48 percent rise in non-interest income.

Analysts' average forecast for net profit was 52.5 billion forints, according to a Reuters poll.
The fourth-quarter numbers brings OTP's full-year net profit to 207.88 billion forints, within reach of its full-year 2007 target of 211.6 billion.