OTP Bank, Hungary’s biggest commercial lender, said they are weighing a possible withdrawal from the Russian market, economic news site Portfolio reports.
“Our Russian subsidiary is operating fully in compliance with the international sanctions,” OTP Bank, one of the largest banking groups in Central and Eastern Europe, said in a statement released on Friday.
Thus, the banking group is winding down corporate lending in Russia, no longer investing in Russian government securities, and has suspended trading in such securities across the international operations of OTP Group. “OTP Bank Plc does not provide financing to its subsidiary in Russia,” the lender added.
“We are constantly considering whether further changes are needed regarding OTP Group’s presence in Russia. We are considering all possible scenarios. Among these we are analyzing the conditions and consequences of a possible withdrawal from the Russian market,” OTP announced.
OTP also articulated its support for its bank in Ukraine in their statement.
“OTP Group is supporting Ukraine using all means available to us. We are working under wartime conditions to keep the country’s financial infrastructure, and thereby the economy as a whole, operational. In addition to maintaining the operations of our subsidiary in Ukraine, we are contributing to the management of the crisis with the support of millions of euros, material donations, the collection of hundreds of thousands of euros worth of humanitarian donations among our employees and clients, and the accommodation and care of 160 refugees,” the bank said.
The announcement marks a sharp shift for the future of the Russian subsidiary. At the beginning of March, when presenting the OTP Group’s annual report for 2021, Sándor Csányi, CEO of OTP, said that the bank has a future in both Ukraine and Russia, with expectations to be able to operate in the long term. The only problem Csányi mentioned was the lack of dollar liquidity in Russia.
Portfolio recalled that Ukrainian Foreign Minister Dmitry Kuleba recently called on a number of large companies to leave the Russian market, and for governments and consumers to boycott them. Among the Western companies mentioned by the minister was OTP Bank.
According to Kuleba international companies should leave the Russian market for both moral and pragmatic reasons.
Featured photo by Noémi Bruzák/MTI