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April 28, 2022

Ukraine pushing OTP Bank to sell Russian unit, says CEO

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The Ukrainian government is pressurising Hungary-based OTP Bank to sell its Russian unit, Reuters reported citing private broadcaster InfoRadio.

In an interview to InfoRadio, OTP Bank CEO Sandor Csanyi said: “We are under enormous pressure over Russia to sell our bank there or shut down our operation like many Western European companies have done.”

In the wake of the ongoing Russia-Ukraine war, the Hungary-based banking group has decided to wind down its operations in Russia. 

OTP Bank is also exploring the possibility of exiting the Russian market.

Earlier this month, the bank’s chief had said that the bank would offload its Russian business if there was a buyer. 

OTP is said to be a leading banking group in Central and Eastern Europe. Its business in Russia and Ukraine accounted for 15.8% of the profit last year.

The banking group has faced no such pressure in Hungary, Csanyi noted. 

“In this regard, we are mainly cautioned by the Ukrainian government on a regular basis, by leaders of various rankings,” he added. 

OTP has a significant presence in Russia, therefore it is “very hard” to sell the Russian unit, which is valued at around €500m, Csanyi said, adding that, the group would “strongly consider” exiting the Russian market if it receives a desirable bid. 

“When I say desirable I mean a not too onerous loss. But I would rather not give any tips to anyone on what is acceptable for us,” he explained. 

Meanwhile, it is believed that Ukraine is working on a new law to levy higher tax rates on firms with exposure to Russia. 

Csanyi said: “We are not making decisions only because we are under pressure. We will wait for the appropriate moment. We can stay put for years if needed, but we are also prepared to sell (the Russian unit) in a week.”

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