OTP banking on loss of HUF 147 bln due to FX law

Telco

As a result of new legislation on FX loans, passed by the parliament last Friday, Hungary’s OTP Bank said it is expecting to lose as much as HUF 147 bln. 

The bank said it expects to pay out as much as HUF 27 bln to debtors who incurred losses due to foreign exchange fluctuations – and a further HUF 120 bln in compensation for unilateral contract modifications.

The legislation, approved on Friday, states that the practice of banks charging currency spread was illegitimate, and such charges have to be repaid to debtors. Regarding one-sided contract modifications, the government declared them to be void, unless the banks can prove in court that the modifications were legal.

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