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Competition Office launches procedures against banks on suspicion of cartel activity

Hungary’s Competition Office (GVH) on Wednesday said it launched procedures against OTP Bank, Erste Bank Hungary, MKB Bank, Raiffeisen Bank, CIB Bank, Unicredit Bank Hungary and Fundamenta-Lakaskassza on suspicion of cartel activity.

GVH started the procedures with unannounced investigations at the banks’ headquarters.

The procedures were initiated after GVH found a number of big Hungarian lenders raised interest rates on home mortgages by 50bp-200bp or introduced new products with higher rates in the period after September 22, 2011, which suggested a coordinated action.

"According to the content of the suspected document, the aforementioned commercial banks offered higher interest products and restricted access to lower interest products with relation to the early foreign currency-denominated loan scheme," GVH said.

A government scheme launched in September allows the full early repayment of foreign currency-denominated mortgages at discounted exchange rates. Banks must cover the difference between the discounted rate and market rates.

Information obtained by GVH suggests a similar agreement was made between the commercial banks and home savings bank Fundamenta-Lakaskassza, the office said.

The launch of the procedures does not mean the companies have broken anti-trust laws, GVH said.

GVH has six months to complete the procedures, but may extend the period twice, by a period of six months each time.