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OTP Bank Rallies for 7th Day as Hungary Scraps Central Bank Tax

OTP Bank Nyrt. (OTP), Hungary’s largest lender, rallied for a seventh day as the government scrapped a tax plan that was an obstacle to obtaining aid from the International Monetary Fund and as European stocks climbed.

The shares rose 1 percent to 4,129 forint by 11:12 a.m. in Budapest, extending their seven-day advance to 8.7 percent. The benchmark BUX stock index added 0.3 percent.

The Cabinet will impose a levy on cash withdrawals from next year, raise more than previously planned by taxing transactions at the state treasury and delay a pay increase for teachers to keep the budget deficit within 3 percent of gross domestic product, Economy Minister Gyorgy Matolcsy said at a press conference in Budapest today. The measures will help the Cabinet forgo a tax on central bank deals which threatened to further delay the aid from the IMF which Hungary requested 11 months ago.

“The proposed package is a positive surprise compared to earlier expectations and may provide basis for further loan negotiations,” Eszter Gargyan, a Budapest-based economist at Citigroup Inc., wrote in an e-mailed report, adding that implementation risks were “high.”

European stocks climbed, with the Stoxx Europe 600 Index heading for its first weekly gain in three, before a report that may show U.S. payrolls expanded at a faster pace last month.

To contact the reporter on this story: Andras Gergely in Budapest at agergely@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net

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