OTP Advances Sixth Day on Forex Loan Relief Plan: Budapest Mover

OTP Bank Nyrt., Hungary’s largest lender, recorded the biggest six-day gain in four months on speculation steps to support foreign-currency mortgage holders will pose a smaller threat to lenders’ earnings than expected.

The shares rose 1.5 percent to 4,780 forint by close in Budapest, extending their advance in the past six trading sessions to 9.3 percent. The benchmark BUX stock index, in which OTP has the biggest weighting at 33 percent, gained 0.2 percent.

Lawmakers yesterday approved legislation that expanded a program allowing temporary loan repayment at fixed exchange rates. The state will provide a conditional guarantee for the loans if the lenders forgive a part of the amount depending upon collateral value, according to an amendment of the bill introduced before its passage.

After the amendment, “the loan plan is still light-years better than what the market had dreaded,” Zsolt Balasy, a Budapest-based analyst at MKB Bank Zrt., a unit of Bayerische Landesbank, wrote in an e-mailed report today.

Raiffeisen Bank International AG (RBI), one of OTP’s competitors, expects “virtually no impact” on loan-loss provisions from the mortgage relief measures, Susanne Langer, a Vienna-based spokeswoman for the lender, said by phone today. The plan may lower Raiffeisen’s Hungarian interest income by 1 percent at the most, Langer said.

Any further help needs to safeguard financial stability and banking operations, Economy Minister Mihaly Varga said in an interview at his office in Budapest yesterday. The cabinet may accept proposals from the Hungarian Banking Association if the majority of borrowers support them, Varga said.

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

To contact the editor responsible for this story: Wojciech Moskwa at wmoskwa@bloomberg.net

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