Hungarian OTP Bank eyes expansion in Ukraine with major acquisition
Ukraine’s government is ready to privatise two state-owned banks, opening doors for potential investors. Hungary’s OTP Bank, which already boasts several branches and ATMs in Ukraine, is eager to seize the opportunity. Notably, just a few months ago, OTP Bank found itself embroiled in controversy, featuring on the Zelenskyy regime’s roster of international war sponsors. This placement ignited heated diplomatic tensions between the two nations.
The Ukrainian government is ready to sell out two state-owned banks. Yuriy Draganchuk, Deputy Minister of Finance for European Integration, said that foreign investors expressed keen interest in buying up two state-owned banks, the Ukrgasbank and the Sens Bank. And Ukraine is prepared to facilitate the transactions.
Reports from the Ukrainian economic publication, Ekonomicheskaia Pravda (EP), indicate strong interest from Western investors in acquiring the Ukrainian banks. Among them, OTP Bank emerges as a potential buyer for Sens Bank.
According to Dragon Capital, the cost of these state-owned financial entities falls within the range of HUF 57-115 billion (EUR 147-297 million). However, the former proprietors of Sens Bank have lodged a legal claim demanding USD 1 billion for its nationalisation, a dispute that remains unresolved as reported by portfolio.hu.
EP wrote that provided the transaction was successful, OTP would merge OTP Ukraine and Sens Bank. As a result, they would create the fourth biggest bank in Ukraine, following the Privatbank, the Oschadbank and the Ukreximbank.
OTP Bank’s recent departure from Romania
Central Europe’s leading bank announced last week that they would leave Romania, citing limitations on expansion opportunities in the region. Speculation suggests this strategic move may align with its ambitions in Ukraine, a significantly larger market. As we previously reported, OTP Bank is set to sell their Romanian assets to Banca Transilvania for EUR 350 million, providing ample resources to facilitate the acquisition of Sens Bank and bolster its presence in the war-torn country.
The timing of these developments could feature prominently in the upcoming summit between Hungarian PM Viktor Orbán and Ukrainian President Zelenskyy. Their foreign ministers engaged in discussions during a recent meeting in Ukraine’s Transcarpathia region, likely laying the groundwork for high-level talks. Reflecting on these diplomatic efforts, Foreign Minister Péter Szijjártó acknowledged that “encouraging progress has been made to restore an atmosphere of trust between Hungary and Ukraine, though the road ahead is long and much work will need to be done”.
OTP Bank had been featured on the list of war sponsors compiled by the Ukrainian government for months. Eventually, Kyiv removed the Hungarian financial institution last October, following diplomatic sparring between the Hungarian and Ukrainian governments.
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