Hungary’s OTP Bank, which has agreed to acquire Baltic banking group Luminor, says it has been unable to find a legally, morally and economically acceptable way to exit Russia, where it continues to serve about 2 million customers more than four years after Moscow’s full-scale invasion of Ukraine.
OTP announced Monday that it had signed an agreement to acquire Luminor, the Baltic region’s third-largest banking group, from a consortium of private equity funds managed by Blackstone and Norway’s DNB Bank. The transaction remains subject to regulatory approvals and other customary closing conditions.
The Budapest-based lender operates in 11 countries, including Russia through its subsidiary JSC OTP Bank. According to the bank, it has about 2 million active customers in Russia, where it holds a roughly 0.3% share of the banking market and operates at about 800 locations.
Responding to questions from LRT, OTP said it had explored ways to leave the Russian market after the war began but concluded that no viable solution existed.
“As with other Western banks, we have not been able to find a solution that is simultaneously legally, morally and economically acceptable,” the bank said in a statement.
OTP argued that selling its Russian business under current conditions would require accepting a price equivalent to only about 5% of its market value, effectively handing valuable assets to the Russian economy.
The bank said it has sought to reduce its exposure by halting new capital injections into its Russian subsidiary, ending group financing and repatriating a significant share of capital through dividend payments. It added that it complies with all applicable international sanctions and local legal requirements.
OTP also noted that it continues to operate in Ukraine, where it says it remains an important lender and has supported the country’s economy and humanitarian efforts throughout the war.
The bank’s continued presence in Russia has previously drawn scrutiny. Its Russian subsidiary has promoted itself as one of the country’s leading employers and has participated in business events, including the St Petersburg International Economic Forum, a flagship gathering backed by Russian President Vladimir Putin.
Luminor sought to reassure customers that the ownership change will have no immediate impact.
“The transaction will be completed only after the required regulatory approvals are obtained and other closing conditions are met. Until then, Luminor and OTP will continue operating independently,” Luminor Lithuania spokeswoman Birutė Eimontaitė said.
She added that customers would see no changes to their banking services, contracts or day-to-day relationship with the lender during the acquisition process.
OTP Group serves more than 17.5 million customers across Central and Eastern Europe. The bank said the acquisition would strengthen its position in the region while marking its entry into the Baltic market. Following the deal, eurozone operations are expected to account for about half of the group’s net loan portfolio, up from 42%, while total assets would increase by about 13%, according to the company.
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