Head of Biggest Hungarian Bank to Stay in Job

    The Wall Street Journal
    By The Wall Street Journal
    • By Margit Feher

    MTI Tamas Kovacs
    OTP Bank Chairman and CEO Sandor Csanyi at Wednesday’s briefing

    BUDAPEST–Hungary’s richest man Sandor Csanyi, the chief executive and chairman of Hungary’s biggest bank by assets and market share OTP Nyrt. denied Wednesday recent reports that he would resign, saying he’s more alive and kicking after his heart surgery in February than before.Hungarian national daily Magyar Nemzet, which is seen close to the governing Fidesz party, said in its online edition Sunday without naming its sources that Mr. Csanyi was reducing his stake in OTP last week in preparation for retirement after the heart surgery.

    “I have fully recovered, I feel stronger than before surgery,” a sun-burnt Mr. Csanyi said at a press conference. He confirmed he will use the proceeds from the OTP stake sale to finance investments at his various companies engaged in the farm sector.

    Mr. Csanyi sold 2.34 million OTP shares last week to a total market value of 10.6 billion forints ($47.2 million), leaving him with 500,000 shares in indirect and a further 10,000 shares in direct ownership.

    Political commentators took Magyar Nemzet’s report as the government handing Mr. Csanyi a silk rope—an indication that it’s time for him to concentrate on the soccer federation he also heads, his farm businesses and wine making, instead of banking.

    Financial markets interpreted Mr. Csanyi’s selling down most of his sizable OTP stake as an indication that the well-connected banker, who is often seen on television attending soccer matches in the company of Prime Minister Viktor Orban, may have knowledge of an upcoming government plan to help foreign-currency mortgage holders further. The government has already put into place several schemes to help households with costly mortgages tied to the euro and the Swiss franc, a major factor making the banking business unprofitable in Hungary in recent years.

    Mr. Csanyi denied market rumors that the government’s latest plan, details of which are sketchy, was behind his decision to sell down his stake.

    “I know Orban, he wouldn’t get scared,” he said. “This is for him as if I were throwing paper planes at him.”

    The government hasn’t consulted him about its new forex mortgage relief plan, the country’s top banker said.

    If as radical as previous schemes, the new plan will “increase uncertainty in the banking sector further and decrease further the attractiveness of the sector to attract capital,” he said.

    Foreign-currency mortgages used to be popular in Hungary prior to the global financial crisis as they were cheaper than loans in the local currency. With the appreciation of the euro and the Swiss franc against the forint, these loans have become pricy to service. In a recent interview, Mr. Orban identified those loans as one of the biggest issues for the government to sort out.

    The bank sector has offered the government several schemes already “but banks have various clients and they have to eye the interest of the depositors and those borrowing in forints, too,” Mr. Csanyi said.

    “I do understand that [some] people have got into impossible situations. But banks have become a tool of political marketing–only they are blamed and it gets forgotten that forex mortgage borrowers have also had some good times,” he said.

    The existing foreign-currency mortgages need to be eliminated, Economy Minister Mihaly Varga said Wednesday, adding that he will start talks with the banks about the timing and the means on Thursday.

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