2024-05-29 16:50:43
Hungary’s central financial institution on Wednesday requested OTP Financial institution to additional cut back its publicity to Russia and take plenty of precautionary measures that will likely be repeatedly monitored by Hungary’s monetary supervisory authority.
Central Europe’s largest impartial lender has progressively diminished its footprint in Russia since Moscow’s invasion of neighboring Ukraine in February 2022, though its publicity stays the third largest amongst European banks, behind Raiffeisen Financial institution and UniCredit, in line with a rating by Morningstar DBRS.
Hungary’s central financial institution stated that dangers could come up in relation to Russian OTP exercise and cost transactions as a result of Western sanctions imposed on Russia in addition to variations between Russian and European Union guidelines on banning on cash laundering, terrorist financing and compliance measures.
“The compliance division of the mother or father financial institution ought to set up and repeatedly replace a set of standards permitted by the overall administration of OTP Financial institution relating to worldwide cost transactions which might be thought of to contain an appropriate stage of danger for the group”, the central financial institution declares.
The central financial institution additionally stated that OTP ought to cut back its inventory of company loans in Russia, preserve its inventory of private loans secure and cut back its inventory of private deposits.
“These measures may help be sure that the banking group continues to function in a secure, worthwhile and dependable method,” the central financial institution stated. She additionally requested OTP to develop an motion plan permitted by its board of administrators and report repeatedly on its implementation.
OTP stated the implementation of the Hungarian central financial institution’s suggestions wouldn’t have an effect on its group-level administration prospects for 2024.
“Based mostly on information for the primary quarter of 2024, the share of the native credit score market of the Russian subsidiary of the OTP group is barely 0.14%, and its share in the entire OTP group is 4.2% based mostly on complete belongings,” the financial institution. stated in a press release.
OTP says its inventory of enterprise loans in Russia has fallen by 85% because the begin of 2022, whereas the dimensions of its department community in Russia has fallen by 39%.
“OTP Group has already considerably restricted its worldwide cost providers to and from Russia,” the financial institution stated. “As a part of this, for instance, it fully canceled its providers associated to shopper transactions in US {dollars} associated to Russia. (Reporting by Gergely Szakacs in Budapest Enhancing by Anna Wlodarczak-Semczuk Enhancing by Timothy Heritage, Richard Chang and Matthew Lewis )
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