OTP Climbs to 18-Month High on Bank Tax Plans: Budapest Mover
OTP Bank Nyrt., Hungary’s largest lender, rose to the highest in more than 18 months after the government said it was preparing a “significant” reduction in bank levies.
The shares advanced 0.9 percent to close at 4,920 forint in Budapest, the highest level since August 2011. The benchmark BUX stock index, in which OTP has the highest weighting at 34 percent, gained 0.8 percent.
The government would give the tax break in exchange for commercial banks boosting loan provision, ruling party vice president Lajos Kosa said in a TV2 interview today. The government is in “informal” talks with commercial banks on a deal that would give cuts as incentives for helping the economy emerge from recession, Gyula Pleschinger, state secretary at the Economy Ministry, said on MR1-Kossuth public radio over the weekend.
“OTP may be the biggest beneficiary of the government plan,” Gergely Gabler, a Budapest-based analyst at broker Equilor Befektetesi Zrt., wrote in a research report today.
The government has introduced a special levy on lenders, taxed financial transactions such as cash withdrawals and forced banks to take losses on foreign-currency loans since coming to power in 2010.
While the news on the tax breaks is favorable, banks can already make some deductions under “very strict” conditions, Erste Group Bank AG said in a report today.
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