Csányi responds to rumors, warns of distrust of Hungary

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OTP Bank CEO Sándor Csányi responded to a wave of rumors regarding the state of his health and possible dissatisfaction with the Orbán government which had been triggered by his selloff of over 2 million OTP shares valued at €36 million last week. 

In denying reports of his resignation in Magyar Nemzet among other media outlets, Csányi stated at a press conference that he is “fully recovered” from his February heart surgery, feels “stronger than before” the operation and “could run marathon if I wanted to.”

Csányi stood by prior reports which stated that he would be reinvesting his stock-sale earnings in his farming businesses, and explained that he had planned the selloff for some time: He might have sold at least some shares as far back as last autumn, claimed Csányi, and the OTP CEO mentioned that he had told his broker to sell once the stock price dropped to a given value. And because of share prices last week “it was time to make the move now.” The selloff was therefore not to be interpreted as any sort of signal to the Orbán administration regarding the foreign currency-based mortgage relief plans under discussion or the government’s own recent investments in Takarékbank.

Seeking to reassure those with doubts about OTP’s future, Csányi said that “OTP remains a strong bank; its capitalization is high as is its liquidity reserves” and that the bank “will survive the government’s mortgage-relief plans.” However, he also warned that losses incurred by OTP could “increase distrust [toward Hungary] and reduce banks’ ability to attract capital.”

According to an MTI report, “Depending on the method and scope of the [mortgage loan relief] scheme, analysts expect the new burden on banks to be anywhere between HUF 80 billion [€270.1 million] and more than HUF 1 trillion [€3.38 billion].”

Csányi’s message appeared to assuage some doubts, at least in the short term: By the end of trading yesterday, OTP shares had gained 2.5% on the Budapest Stock Exchange, its first increase in a week.

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