OTP Bank has stated that Dr. László Urbán will be appointed as new deputy CEO responsible for the Strategic and Financial Division of the bank – including the supervision of investor relations – from January 15, 2007. This appointment is a subject to the necessary permissions.
Dr. László Urbán, economist, has been working in the financial sector since 1995. He worked in Washington in the World Bank, and later he became the Planning and Controlling Director of ABN-AMRO Hungary. Between 1998-2000, he worked as Deputy-CEO of Postabank; between 2000-2005 he was responsible for global product development at Citigroup New York; and from 2005, he has been a Director of the National Bank of Hungary.
Our view: This appointment comes as a result of the resignation of Dr. Zoltán Spéder, whose sudden departure was reported to be due to personal family reasons. Despite the broad experience of Dr. László Urbán, replacing Dr Speder will not be an easy task and Urbán will likely need time to gain the credibility that the previous CFO had earned with investors.
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. We acknowledge the macro risks are high in Hungary but we continue to see OTP Bank as very attractive on valuation grounds and in the long-term, the recent weakness will be seen as buying opportunity.