OTP Bank Could Be Removed from Ukrainian Blacklist

Hungary Today 2023.08.23.

For months now, OTP Bank has been on the list of international companies supporting the war in Ukraine, compiled by the Ukrainian National Agency on Corruption Prevention (NACP). The Hungarian financial institution could be removed from the list, Agia Zagrebelska, an NACP leader, hinted in a statement at the end of the week. The head of the agency confirmed earlier claims that the problem with OTP is that it provides preferential loans to Russian soldiers who are taking part in the operations in Ukraine. According to the Ukrainians, this could be interpreted as direct financing of the aggressor country – reports Világgazdaság.

Agia Zagrebelska added that their staff, Ukrainian diplomats, the Hungarian government, and OTP Bank have discussed the matter, and she hopes that Hungary’s largest commercial bank will soon announce that it will stop providing preferential loans to Russian army soldiers.

In addition, the NACP expects the Sándor Csányi-led financial institution to present to them its plan to withdraw from the Russian market, a condition they insist on, but if it is met, they will “gladly take OTP off their list.”

OTP Being on Ukraine's War Sponsors List Is a Disgrace, Says Foreign Minister

Hungarian OTP Bank is on the list because the Ukrainian authorities say it continues to cooperate with Russia.Continue reading

The agency added OTP to its list of war sponsors on May 4 because of its activities in Russia and its recognition of the two breakaway eastern Ukrainian provinces.

Fact

The list of international war sponsors was compiled by Ukraine’s National Agency on Corruption Prevention. OTP Bank is on the list because the Ukrainian authorities say the bank continues to cooperate with Russia. One of the arguments is that according to information available on financial results, the Russian subsidiary bank of OTP “made a profit of 113 million roubels in 2020, and paid a colossal amount to the aggressor country’s budget – about 190 million roubels in income tax.” The anti-corruption agency says that “as it became known from the mass media, the bank also provides preferential credit terms to the Russian military.” However, as Hungarian constitutional lawyer Zoltán Lomnici Jr. pointed out, OTP does not lend to members of the armed forces of the Russian Federation, preferentially or otherwise, and its activities comply with the terms of international sanctions.

Investors, however, do not seem bothered about what list OTP Bank is on or not. They have been buying the bank’s shares persistently this week, pushing the OTP share price to a high not seen since February.

The Hungarian government has indicated in several forums that it is fully behind the Hungarian financial institution. In the second quarter, the Russian subsidiary bank made a profit after tax of 7.9 billion roubles (EUR 77.4 M). There is no new information from the Hungarian bank on the future of the stake. As indicated in their flash report:

“…the principle of continuity will be applied in case of both the Russian and the Ukrainian subsidiaries, while management will continue to explore all strategic options for the Russian operation, however, an October 2022 presidential decree prohibits the sale of foreign-owned banks.”

Featured image: Facebook/SHOPMARK