Despite being previously listed as an international sponsor of war by Kyiv, Hungary’s OTP Bank Group has shown interest in acquiring the Ukrainian government-owned Sense Bank, according to a February 12 report by Ukrainska Pravda, which cited anonymous sources with knowledge of the potential acquisition discussions.
Several weeks prior, Yurii Drahanchuk, Ukraine’s Deputy Finance Minister, indicated that foreign investors had expressed interest in purchasing Sense Bank alongside Ukrgasbank, another state-run bank.
In 2023, Sense Bank and Ukrgasbank ranked within the top ten most profitable Ukrainian banks. Following sanctions against its owner, Russian oligarch Mikhail Fridman, Sense Bank, previously a branch of Fridman’s Alfa-Bank, was nationalized in summer 2023. On the other hand, Ukrgasbank has been an established commercial bank since 1993.
The largest commercial bank in Hungary, OTP Bank, also a key service provider in the financial realm across Central and Eastern Europe, is the possible buyer of Sense Bank.
OTP Bank’s continued operations in both Ukraine and Russia present a controversial aspect to the possible takeover, as noted by Ukrainska Pravda.
In May of the previous year, OTP Bank was declared an “international sponsor of war” by the National Agency on Corruption Prevention of Ukraine, which became a pretext for Hungary to obstruct EU defense assistance for Ukraine.
October 2023 saw the provisional removal of OTP Bank from said list by Ukraine, aiming to unlock blocked EU assistance worth 500 million euros (approximately $538 million). However, Budapest demanded further assurances to prevent OTP’s potential relisting.
A fruition of this speculated deal could potentially raise OTP Bank’s Ukrainian branch to the stature of the country’s fourth-largest by net assets, trailing behind PrivatBank, Oschadbank, and Ukreximbank, as per Ukrainska Pravda’s analysis.
When approached by Ukrainska Pravda, the Ukrainian arm of OTP Bank declined to comment on the group’s intentions. The Ukrainian Finance Ministry, too, did not immediately respond to a comment request.
FAQ Section
What is OTP Bank Group?
OTP Bank Group is the largest commercial bank in Hungary, operating extensively in Central and Eastern Europe, including markets in Ukraine and Russia.
Why is OTP Bank Group’s interest in purchasing Sense Bank controversial?
The controversy lies in OTP Bank’s operations in Russia and its past designation as an “international sponsor of war” by Ukraine, which could complicate its acquisition of the Ukrainian state-owned Sense Bank.
What could be the impact of OTP Bank acquiring Sense Bank?
If the acquisition occurs, OTP Bank’s Ukrainian branch could become the fourth-largest bank by net assets in Ukraine.
Conclusion Section
The potential acquisition of Ukraine’s Sense Bank by Hungary’s OTP Bank Group has drawn attention in the banking sector, given the Hungarian bank’s continued presence in Russia and previous tensions with Ukraine’s government. While the deal may boost OTP Bank’s position in Ukraine’s banking landscape, it remains subject to scrutiny due to geopolitical sensitivities. The outcome of these discussions is yet to be determined, as official comments from the involved parties are not currently available.
Note: We, TheUBJ, do not create the news content displayed here. Our AI news feed technology compiles stories from a variety of internet sources; however, we do not claim ownership or authorship of the shared news content. For reference, the original source is here.