Hungary: Orban takes a swipe at OTP
New FX mortgage scheme; Government plans state bank
|Friends no longer? OTP’s CEO Sandor Csanyi with PM Victor Orban in 2010|
Hungary’s government is again taking aim at the banking sector, designing a fresh scheme to aid borrowers with foreign-currency-denominated mortgages, starting from January 1. Amid plans for a state-owned lender to challenge OTP Bank’s domestic dominance, a party official also used colourful language to attack Sandor Csanyi, OTP’s powerful CEO, in August. Hungary’s ruling party, Fidesz, which faces an election next spring, apparently wants to see more competition in the banking sector to spur lending and to give relief to voters that have outstanding foreign-currency mortgages totalling over $8 billion, roughly 6% of GDP.
Bank-bashing has been a favoured tool, as the government tries to deflect criticisms of its unorthodox policy mix. But antagonism between banks and the cabinet has risen, and the head of the country’s largest lender – hitherto considered an ally – appears to have come into the government’s sights.
“Fidesz is definitely now looking at Csanyi as an enemy, mainly as it cannot control him,” says a prominent figure in Hungarian finance.
In late July, Csanyi spooked the market by selling the bulk of his personal OTP share portfolio – worth around Ft10 billion ($43.6