OTP Bank Strives for Fair Cooperation with New Gov't

OTP Bank, Hungary's biggest commercial lender, strives for fair cooperation with the Tisza government, which is in the interest of both the Hungarian economy and businesses; the bank's activity will not decline in Hungary, chairman of the board, Sándor Csányi said at the bank's annual general assembly.

OTP's management will soon hold consultations with the new government on issues affecting the bank sector, he added.

Although the government program and the identity of the government members are not fully known, Sándor Csányi said, he expressed hope that the market's confidence is well-founded and will remain. The release of the frozen EU funds is important for restarting the economy, he added. Sándor Csányi does not expect to see a rapid elimination of the banking taxes, but expects individual government interventions to cease and the special taxes to disappear sooner or later.

Addressing the AGM, the chairman said market reactions have been clearly positive so far. He thanked central bank governor Mihaly Varga, who was present at the AGM, for the cautious, considered monetary policy, and said: "I think this is a positive environment."

"What we know so far about the minister of economy or the finance minister is encouraging, suggesting that professionals with appropriate experience will be appointed to the area that concerns us," the chairman of OTP said.

Sándor Csányi said the bank projects a growing economic environment in the region this year. It left the March forecast unchanged, projecting a 15% organic growth rate of the performing loan portfolio year-on-year, adjusted for exchange rates. The net interest margin could be around 4.34%, similar to last year's, and the operating cost/revenue ratio could exceed the 41.7% in 2025. The risk profile and the lending risk ratio should be similar to last year's. Return on equity could be lower than the 21.6% in 2025 due to the expected decreasing leverage, he said. He described the forint-euro exchange rate as favourable, adding that the bank's market value also increased.