Hungary’s OTP Bank is assessing options to withdraw from the Russian market as regulatory bodies evaluate its ongoing regional presence during its proposed acquisition of Baltic lender Luminor Bank, reported Bloomberg.
The Budapest-headquartered group remains among several European lenders maintaining a presence in Russia following the 2022 invasion of Ukraine.
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Its proposed takeover of Luminor represents the group’s largest transaction to date, intended to increase its reach across the euro area.
However, the transaction faces regulatory hurdles, with financial authorities in Latvia and Lithuania expressing reservations, and Estonia’s Finance Minister Jurgen Ligi characterising the bank’s Russian footprint as a “moral disgrace.”
Records obtained by Bloomberg show client activity over the last four years involving subsidiaries of Gazprom PJSC as well as contractors serving entities linked to Russian foreign intelligence.
The documentation does not demonstrate any legal violations by the bank.
In a statement to Bloomberg, OTP Group CEO Peter Csanyi said: “Given its strategic interest in the Baltics and the limited progress in upstreaming additional dividends from Russia over the past year, OTP has begun reviewing its Russia-related strategy, including a potential full exit from Russia.
“The review is expected to conclude by the end of the year, and its outcome should maximise long-term shareholder value with particular regard to the success of the Group’s international expansion strategy.”
OTP said that after the conflict began, it suspended commercial lending, retrieved internal financing from the country, and redirected its local division almost entirely toward retail consumer finance.
It also processes European trade settlements for Western enterprises that continue to operate locally, citing its position as a reliable European Union institution.
Divestment remains challenging because domestic rules require banks to process rouble settlements and maintain accounts, while local mandates restrict asset sale returns to approximately 5% of market valuation, the news publication noted.
“At present, a sale is virtually impossible,” the bank said.
Reacting to this, OTP said although it entered the country two decades ago, it reduced its local branch network by 40% and headcount by 25%.
In contrast, the bank expanded its loan book in Ukraine by 35% during 2025.
Estonia’s financial supervisory authority, Finantsinspektsioon, confirmed it is evaluating the lender’s Russian operations as part of the acquisition process.
“OTP Group’s business in Russia raises serious questions and would be one of the key issues in the assessment of a potential acquisition of Luminor,” it said in an emailed statement to Bloomberg.
In February this year, Citi completed the sale of its former Russian subsidiary, AO Citibank, to Renaissance Capital, marking the bank’s full withdrawal from Russia.
Meanwhile, in April, ING called off the planned disposal of ING Bank (Eurasia) JSC to Global Development JSC.
The bank said it ended the agreement after concluding there was no credible prospect of the purchaser securing the required clearances.
In May, UniCredit signed a non-binding term sheet covering the disposal of part of its Russian subsidiary, AO Bank.
