Hungary OTP Bank would survive any new fx loan measure -CEO
* Sudden conversion of fx mortgages would inflict big losses on banks
* Banks, government in talks about possible new relief for borrowers
* OTP chief slams populism exploiting forex mortgage issue
BUDAPEST, Sept 2 (Reuters) - Hungary's OTP Bank would have to bear a loss of around 300 billion forints ($1.32 bln)if all foreign currency mortgages were converted into forints in one go, but the bank would survive that, its chief executive said on Monday.
OTP Chairman and Chief Executive Sandor Csanyi reiterated in an interview with private channel ATV that Hungary's biggest bank would survive any kind of new government measure to help foreign currency mortgage holders but that a drastic measure could undermine the banking system.
The Hungarian government is in talks with commercial banks about a new scheme to help households burdened with foreign currency mortgages.
The country's mostly foreign-owned banks, which had feared the new programme could inflict further big losses on them, presented their own proposals to the government last week. The ruling Fidesz party is expected to discuss ways to help forex loan holders at its meeting later this week.
"If we converted all foreign currency loans into forints here and now, then the bank sector's total loss would be around ... 950 billion forints and we would have to bear around 300 billion of that," Csanyi told ATV on Monday.
"OTP will survive whatever solution is chosen," he added.
He did not specify the exchange rate that served as a basis for his estimate.
The central bank last week proposed gradual conversion and forgiving part of principal payments at an annual cost of up to 40 billion forints ($180 million), which would spread the burden over several years. No decision has been made on the plan yet.
The government said it wanted to see a fall in monthly repayments on the loans and a solution that would eliminate the exchange rate risk if possible.
Once-popular foreign currency mortgages have turned into a nightmare for many Hungarians with housing loans mainly in Swiss francs, as their repayments have surged. The government, eyeing elections, wants to help borrowers.
But Csanyi said politicians should also consider the fact that there are 640,000 households with forint-denominated mortgages along with the half a million foreign currency mortgage holders, and only one in 10 households in Hungary has a foreign currency mortgage.
"I think they lose ... more votes than they win with the campaign supporting foreign currency loan holders," he said.
He also said the bank-bashing campaign of politicians was damaging to the economy and hurt the country's ability to attract foreign capital.
"I think populism has reached such a level in these banking matters that its damaging effect is quite obvious to everybody," he said. ($1 = 227.880 Hungarian Forints) (Reporting by Krisztina Than; Editing by Peter Cooney)