OTP to face bigger FX loans compensation costs
OTP could face bigger losses than expected, as a result of the National Bank of Hungary’s (MNB) recently published guidelines on calculating refunds to be paid back under the borrowers’ relief legislation. OTP could pay off as much as HUF 219 bln to borrowers, and not HUF 147 bln as it had earlier estimated, the bank said yesterday.
The new law requires banks to compensate foreign-currency borrowers. Although banks are allowed to make calculations and submit them to the Central Bank for approval, MNB recently issued guidelines for calculating the refunds.
According to the central bank’s methodology, OTP should pay off a total of HUF 42 bln to borrowers, and not HUF 27 bln, for exchange rate fluctuations applied on the loans. The law also compels banks to compensate customers for unilateral changes in contracts. New MNB’s guidelines could cost OTP HUF 177 bln, instead of the estimated HUF 110-120 bln.
OTP has reacted by saying it "cannot agree to such an interpretation".
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