Bloomberg: Hungary’s OTP Bank considers a full Russia exit as regulators review its purchase of Baltic lender Luminor

Filed 2h ago · Via Meduza · The Buffoon Desk

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Kevin MacLeod · incompetech.com · CC BY 4.0

Photo: Christophe Licoppe / European Union · CC BY 4.0 · via Wikimedia Commons

Hungary's OTP Bank is reportedly considering a full exit from Russia, where it has kept operating since the full-scale invasion of Ukraine. The reconsideration coincides with regulatory scrutiny of OTP's planned purchase of Baltic lender Luminor, a deal that would expand the group into Estonia, Latvia and Lithuania and grow its assets by more than 10%.

OTP's own chief executive admits a sale of the Russian business is currently 'virtually impossible,' with owners likely to recoup only 5% of its value and any buyer needing approval from both the Kremlin and European authorities. OTP is a small player in Russia's banking market at 0.4% of assets, but its profits there have jumped more than fivefold since 2021, to $635 million, while the bank moved roughly $880 million in dividends out of the country.

Bloomberg found Gazprom-linked and Russian state-connected clients among OTP's Russian customer base, along with a contract naming the sanctioned Tsargrad Society, though no confirmed violation or completed transfer. European Central Bank and Estonian regulators are due to rule on the Luminor deal in the coming weeks.

The full dispatch is available from the source below.

✒ FROM THE EDITORIAL DESK

A bank staying put in Russia for twenty years is one thing, but watching its profits there quintuple since the invasion and only now murmuring about an exit, right as regulators start asking questions about a Baltic purchase, has the timing of a man suddenly finding religion when the tax auditor calls. The 5% fire-sale price tells you who actually holds the leverage here. Nobody should mistake this for a moral awakening; it's a business reviewing its exposure to scrutiny, not its exposure to Moscow.

Source: Read the original at Meduza → Scored: Spy Glass · Kevin MacLeod · CC BY 4.0

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