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Banking

Hungary’s OTP calls for tax reduction to help banks weather the coronavirus crisis

Loan growth can return to double digits in second half of 2020, says deputy chief executive.

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Emerging Europe’s largest home-grown banking group has called for a reduction in taxes to help lenders weather the Covid-19 crisis. Laszlo Wolf, deputy chief executive of Hungary’s OTP Bank, says policymakers should try to keep “a reasonable balance” when introducing measures such as payment holidays.

“It is of great importance to support the players of the real economy, while at the same time observing the impact of such steps on the banking system,” he says. “Any extra burden that would be potentially put on banks’ shoulders should be compensated by tax reliefs, especially in countries where there are special taxes levied on banks.”

For OTP that means above all Hungary, which still accounts for around 50% of group assets even after a recent regional expansion spree.

Toughest measures

Hungary’s Fidesz government, led by Viktor Orban, has announced the toughest measures of any central and eastern European (CEE) country to combat the Covid-19 crisis, including sweeping emergency powers and the introduction of a moratorium on all loan payments until the end of the year.




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