OTP Group head Péter Csányi told Bloomberg that the Hungarian group is reviewing its strategy in Russia because of plans to expand abroad. According to him, selling the Russian asset is now practically impossible: its owners would receive only 5% of the price, and the buyer would have to satisfy both the Kremlin and European authorities.
In July, OTP agreed to buy Luminor Bank from funds managed by Blackstone and DNB. The deal is expected to take the group into the markets of Estonia, Latvia, and Lithuania and increase its assets by more than 10%.
Bloomberg пишет that regulators in the Baltic states are closely examining OTP’s presence in Russia. In the coming weeks, the European Central Bank (ECB) and Estonia’s banking regulator are due to issue their decisions.
The publication also found among OTP’s clients in Russia companies linked to Gazprom and Russian state structures, but it recorded no violations by the bank. One client received money from the History of the Fatherland foundation, whose board is headed by the director of Russia’s Foreign Intelligence Service, Sergey Naryshkin.
The documents also mention the Tsargrad Society, which was placed under sanctions by the US and the UK in 2022. According to the contract, Konstantin Malofeev intended to transfer 33.5 million rubles to it into an account at OTP, but Bloomberg could not confirm that the transfer took place. The bank has been operating in Russia for about 20 years and has continued to operate there since the start of the full-scale war. After 2021, the profit of its Russian division increased more than fivefold and reached $635 million, and over the past few years OTP has taken about $880 million out of Russia in the form of dividends. The bank explains the growth in income by the difficulty of processing international payments: OTP allows clients to transfer money abroad in different currencies, including euros, but does not process dollar transactions. The company says that all euro payments between Russia, EU countries, and the UK are checked for sanctions compliance at the head office in Budapest. In the Russian market, OTP accounts for 0.4% of banking assets, noticeably less than UniCredit and Raiffeisen.
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