UNDERSTAND THE ENTITY AND ITS ENVIRONMENT

Business strategy and operations

Business Operations

The major products are finance lease contracts granted to corporate and retail customers for the following
leasing objectives:
- car lease & related services
- trucks for transport and equipments for construction
- sundry equipments for wood, plastic and metal processing, IT and medical equipments

Industry matters and laws & regulations

Industry matters and trends

Macroeconomic view

Romania recorded a trade deficit of EUR 7.58 billion in the first seven months of 2018, up by EUR 766
million or 11% compared to the same period of 2017. The exports reached EUR 39.9 billion in the same
period, up 10.4% year-on-year, while imports totaled EUR 47.5 billion, up 10.5% yoy. In July, the exports
reached EUR 5.9 billion, up 12.9% compared to July 2017, and the imports increased by 15.4%, to EUR
7.17 billion. The trade deficit in July thus reached EUR 1.27 billion, according to data from the National
Statistics Institute (INS).

Inflation had a slight increase during the second semester of the year, reaching 5.1% in August 2018. As
per NBR, the inflation is expected to end 2018 around 3.5%.

General information

1. Operational Leasing

Due to an investigation, which began in December 2017, made by Competition Council, we were unable
to provide information about the operational leasing market in 2018.

2. Financial Leasing

The financial leasing market closed in 2017 with a volume of total funds of 2.2 billion Euros. This is due to
a raise in funding for autos with 24%, up to 648 million Euros till the end of September 2017. In 2018 is
expected a raise with 10% for the financial leasing funding. SME represent almost 90% of the total
number of clients financial leasing institutions have. The top 3 players in the market are: UniCredit
Leasing, Impuls Leasing, BCR Leasing.

Regarding the evolution of industry in 2018, the prognosis of the president of ALB Romania indicates an
evolution of 10% up to 15% this year. “Our estimation is a realistic one, because we are on a sustainable
trend, crossing a period of economic growth and the financial leasing market is under its actual potential. A
normalized market could outrun 3 mld. Euros, an amount which, in my opinion, represents the potential we
should reach” said Bogdan Speteanu.
In present, the financial leasing market represents 1% of Romania’s GDP

“The reason why the Romanian market is underdeveloped is because we are focusing on financing cars,
but no substantial amounts were present in financing equipment. The target for 2020 is to raise the
proportion of financial leasing market in GDP to 2%. Anyway, if the car market is raising, we are too.” said
Liviu Serban, managing partner of Idea Leasing.

Sources:
https://floteauto.ro/autoturismele-noile-vedete-ale-leasingului-financiar/
https://romaniaonline.info/consiliul-concurentei-investigheaza-25-de-banci-ifn-uri-si-societati-de-leasing-
pentru-intelegeri-anticoncurentiale/

Laws & regulations

Preparation and presentation of financial statements:

Financial statements are prepared in accordance with:

- The Accounting Law no. 82/1991 republished ("Law 82");

- Accounting Regulations in accordance with the European Directives, approved by Order of the National
Bank of Romania no. 27/2011 ("Order 27/2011"); and
- Regulation of the National Bank of Romania no. 5/2012 regarding classification of loans and
investments, as well as establishment, adjustment and use of specific credit risk provisions, applicable to
entities reporting to the National Bank of Romania, other than credit institutions ("Regulation no 5/2012"
updated).

The Company sends periodically reports to supervision authority, National Bank of Romania, as required
by legislation in force, e.g.: solvency report, liquidity, own funds.

The company is subject to taxes imposed based on the Romanian legislation. The level of income tax is
16%. Income tax is assessed based on the fiscal profit calculated based on the Romanian profit tax
legislation. Differences arisen in the caring value of assets and liabilities under different reporting
frameworks. Such temporary differences give rise to deferred taxes which are treated in accordance with
IAS 12.

The company has to report on a quarterly basis the Group Reporting Packages prepared in accordance
with IFRS. Starting with 1 January 2018, OLR adopted the new standard in respect of ECL, IFRS 9, with
impact on the OB as of 1 Jan 2018.

Ownership and governance structures

Merkantil Bank Ungaria 40,0077269353%

OTP Bank România SA 59,9922730647%

Related party relationships and transactions

- OTP Bank Romania SA
- OTP Financing Netherlands B.V.
- OTP Financing Malta Company LTD
- OTP Factoring SRL
- Markantil Bank ZRT
Annual evolution of the company

https://membri.listafirme.ro/otp-leasing-romania-ifn-sa-21956480/

https://membri.listafirme.ro/otp-leasing-romania-ifn-sa-21956480/
Company’s statistics vs. the national average in Romania

Fiscal value

Net profit

Number of employees
Company’s statistics vs. the average in industry

Fiscal value

Net profit

Number of employees
News about the company

Steliana Moraru, OTP Leasing: Gradul scazut de predictibilitate si un flux constant de schimbari
franeaza dezvoltarea in piata de leasing - 10.09.2018
https://www.wall-street.ro/articol/Finante-Banci/234376/steliana-moraru-otp-leasing-predictibilitate-
schimbari-franeaza-dezvoltarea-piata-de-leasing.html#gref

Rezolutii 2019
https://www.otp-leasing.ro/Rezolutii-2019/