"OTP Bank, the largest commercial bank in Hungary, has on Tuesday denied previous press reports that insurer AXA was looking to acquire a 10% stake in the bank. Chairman-CEO Sándor Csányi also said that he wanted to sell OTP's insurance arm, OTP Garancia, while speculation was that AXA could forge a strategic alliance with OTP Garancia.On the sidelines of a conference organised by financial market watchdog PSZÁF, Csányi said AXA had no intention to buy 10% of OTP.
"This is not true, not a word about that," he said.
He added that there were four international groups that made it to the second round of OTP's sale of its insurer unit, but AXA was not among them, while it did submit a bid in the first round, in which 10 companies took part.
Csányi said OTP wanted to sell 100% of the profitable insurer as turning it into an international insurer within the group would require major investment, while OTP could use the proceedings from the sale more efficiently.
Csányi also said that the sub-prime mortgage market crisis in the United States came in handy for the Hungarian banking market, since it was quickly approaching a loan-to-value (LTV) ratio of 90% and conditions on the valuation side have also eased. He noted, however, that the sub-prime crisis was far from being over. In fact, it has not even started yet, he noted.
"Further problems can be expected. We have information about a top 10 bank in the world which has got near bankruptcy," he added.
He stressed that the woes induced by the sub-prime crisis do not affect OTP.
“Earlier I was discontent many times that our treasury was not overly sophisticated in regional comparison, [...] now it is a positive feaure."
Source: Portfolio Online Finanncial Journal
07.11.2007