OTP Climbs 2nd Day as Citigroup Raises to Buy: Budapest Mover

OTP Bank Nyrt., Hungary’s largest lender, advanced for a second day after Citigroup Inc. raised its recommendation for the stock to buy from sell.

Citigroup lifted its target price to 5,460 from 3,950 forint, according to an e-mailed report from London-based analysts Simon Nellis and Stefan Nedialkov. The shares added as much as 1.6 percent and closed 0.2 percent higher at 4,550 forint, extending gains this month to 6.2 percent. The benchmark BUX stock index, in which OTP has the biggest weighting at 31 percent, was little changed at 18,062.89.

The “worst is over” for OTP in terms of provisions set aside for bad loans, the analysts said. Citigroup raised its earnings forecast for OTP by 6 percent for this year and 12 percent in 2014, citing lower provisions and “better costs.”

OTP expects to expand credit and see risk costs decline as bad loan formation slows, Chief Financial Officer Laszlo Bencsik said last month.

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