The review, which the bank says should be completed by the end of the year, comes as OTP seeks to buy the Baltic lender Luminor in the largest deal in its history. Estonia's financial regulator said OTP's Russian business raises "serious questions" and will be a key factor in assessing the transaction.
Bloomberg reported the plans after reviewing documents. According to the agency, clients of Russian OTP included companies under Gazprom's control, as well as firms that provided services to organizations linked to the Foreign Intelligence Service (SVR).
The largest known episode involves internal Gazprom correspondence from April and May discussing a "payment scheme" through the Serbian distributor Yugorosgaz, 75% owned by Gazprom, and the Kaliningrad-based Rosingaz. The money could have moved from a Yugorosgaz account at OTP Serbia to an account held by the concern's structure at the Serbian state bank Banka Poštanska Štedionica. The documents contain no evidence that the scheme was carried out.
In 2022, according to The Bell, Yugorosgaz discussed transferring 4.3 million euros in dividends to Gazprom, with the corresponding SWIFT entry moving between OTP Bank Serbia and Gazprombank via OTP in Budapest.
In September 2022, Konstantin Malofeyev, the "Orthodox oligarch" already under US and UK sanctions, was due to transfer 33.5 million rubles to the account of his Tsargrad Society at OTP's Moscow branch. Whether the transfer took place is unknown. Also, according to Bloomberg, in June the company Phoenix was due to receive 55,600 rubles from the federal state enterprise Yasen, which manages property belonging to the SVR.
No sanctions violations were found in the documents. OTP Group chief executive Peter Csányi told the agency that the bank had begun reviewing its Russia strategy, including the possibility of a full exit. The bank notes that selling the Russian business is currently "practically impossible," and that about $880 million in dividends has been withdrawn during its time operating in Russia.
After Bloomberg's publication, the bank's shares in Budapest fell by almost 4%.
According to The Bell, while the Russian unit accounts for 0.4% of the assets in Russia's banking system, OTP's role as a financial channel for dealings with Europe is considerably larger: the Russian subsidiary is the twentieth-largest bank in Russia by assets and one of the few not under direct US sanctions, and its regulator is Hungary's central bank rather than the ECB.
In September, Hungary expelled ten Russian diplomats for the first time since the start of the full-scale war. Foreign Minister Anita Orban said they had engaged in activity "unacceptable for diplomats."