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Csányi’s OTP selloff: Rumors fly, rift with Orbán theorized

The plot thickens in the Sándor Csányi story, as a Reuters piece making the international rounds describes the OTP CEO as “one of a select group of people who know what Prime Minister Viktor Orbán is thinking” while holding Csányi and his selling of €36 million in OTP stock nearly single-handedly responsible for the market “flinching” last week.

Said flinch has thus far resulted in a hit of 12.6% to the stock’s value, with Austrian, German and Italian banks with outlets in Hungary also felt the pinch.  

OTP officials announced yesterday that Csányi’s Bonitas 2002 company sold a further 650,000 shares in OTP via two transactions on Friday beyond the nearly 334,000 shares Bonitas and Csányi had dumped earlier that day. The shares were worth a combined HUF 10.5 billion according to calculations from Econews.

OTP announced that Bonitas had sold the first wave of 333,876 shares at an average price of HUF 4,227 per share and another 316,124 shares at an average price of HUF 4,519 per share on Friday.

In the transaction previously announced, Bonitas 2002 sold 1.35 million OTP Bank shares at an average price of HUF 4,617, while Csányi sold 342,818 shares at an average price of HUF 4,668. The transactions reduced Bonitas’ holding in OTP to 500,000 shares, or about 0.18% of all OTP shares, and Csányi’s direct holding to just 10,000 shares.

An official statement informed that Csányi intended to use his earnings from the sales to fund his farming operations in Hungary. Local newspaper Magyar Nemzet had surmised that Csányi was preparing to resign his position, but OTP officials released a statement on Sunday refuting this claim.  

Analysts first foresaw oncoming problems early last week, when Deputy Prime Minister Tibor Navracsics appeared on Hungarian television and revealed that the government was considering legislation that could modify the conditions of private foreign currency loans to help indebted households.

The short-term result of Navracsics’ comments was the hit to the bank’s stock on the BSE beginning last Wednesday: “Sentiment is negative on stock markets today but the bigger driver was the comments by [Navracsics on forex loans],” Erste Bank analyst József Miró told Reuters at that time. “The market does not know what exactly will happen – These comments boost uncertainty.”

Yet today’s Reuters report resurrects the local media’s idea that Csányi has in fact been considering leaving OTP for a short while at least – the only question may be whether the incipient forex-loan plan was the last straw. Noting recent “signs of tension” between Csányi and members of the Orbán administration – including one interview in which Chief of Staff János Lázár likened him to an “octopus” with hands in everything economic – Reuters presses home Magyar Nemzet’s questions raised about Csányi’s health, as corroborated by sources speaking under condition of anonymity. The sources said that Csányi “has thought about resigning the CEO post and remaining chairman in the future, but not any time soon.” 

At least one media outlet says retirement may not be necessary for Csányi to have his feelings known (and thusly affect the market): Wrote Napi Gazdaság editor-in-chief Tamás Korányi, “A leading banker who holds a stake in his bank rarely goes to the streets to protest. He resigns, or, perhaps out of loyalty to the other stockholders, he sells. In a market economy, a stronger signal can hardly be sent.” 

– With contributions from Gergő Rácz