The financial market brought down OTP Bank Romania; the Hungarian bank’s market share remained insignificant, below 2%

Bucharest, 24.05.2023 – The bad news about Hungary continues.
After the isolation, until the exclusion from the Visegrad Group, the strained relations with Brussels, the economic recession that the country entered, now it is the turn of OTP Bank, the “flower” of Hungarian finance, to run into difficulties.
The most recent is the decision from the beginning of this month, of the National Agency for the Prevention of Corruption in Ukraine. This Kiev-based institution classified OTP Bank as an international war sponsor due to its continued presence in Russia. Hungarian officials reacted, saying they would block EU financial aid to Ukraine. Brussels does not accept Budapest’s position at all.
On the other hand, for several days, the rumor has been circulating in the Romanian financial environment that OTP Bank Romania is for sale due to the stagnation of its business in the country.
The management of OTP does not see any opportunity to significantly increase the market share of the branch in Romania
OTP Bank Romania is for sale, the Hungarian parent company announced. Bank officials estimate that finding a buyer could take several months and signing the contract within a year. Customers will not be affected by all this, OTP promises.
The Hungarian bank has been present on the Romanian market for two decades. At the end of 2022, its assets amounted to 19.9 billion lei, an increase of 8% compared to December 2021. OTP Bank is the 10th largest domestic financial institution in Romania, with a market share that close to 2%.
OTP is probably leaving Romania because management does not see a realistic opportunity to significantly increase its market share. Over the years, OTP has acquired two rivals, RoBank and Millennium Bank, but no further acquisitions are on the horizon. In 2017, it tried to acquire Banca Româneasca, but was refused by the National Bank of Romania (BNR). In 2020, he was interested in Garanti BBVA Romania, but nothing of this intention was realized.
The Hungarian banking group aimed, when it entered the Romanian market, to obtain a share of at least 10 percent. Sándor Csányi, CEO of OTP Bank, said at an event in 2017 that Romania was targeting a market share of 7-8%, but the bank fell well below this percentage. OTP could not grow organically, remaining at a market share below 2%.
The share capital of the branch in Romania is HUF 174 billion (almost 450 million Euro), which means that if OTP sells its Romanian branch at book value, that is what it can get from the potential buyer. The potential purchase price is reduced by OTP Romania’s small market share. In addition, the prices of European banks have decreased significantly in recent years, due to the international situation.
The Hungarian bank has been present on the Romanian market for two decades.