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Hungary's OTP Bank outlines hit from new loans legislation
July 21, 2014 / 6:22 AM / in 3 years

Hungary's OTP Bank outlines hit from new loans legislation

BUDAPEST, July 21 (Reuters) - Hungary-based OTP Bank’s mortgage unit said on Monday that new legislation on unilateral loan contract changes that took effect last week could cost nearly 68.6 billion forints ($300.4 million), adding it was exploring ways of legal remedy.

“OTP Mortgage Bank Ltd continues to uphold its stance that in its lending practices it has always fully complied with the effective legal provisions and regulations,” the bank said in a statement.

The law was drafted by Prime Minister Viktor Orban’s government as part of efforts to cut borrowers’ repayments, mostly on foreign currency loans but also in forint debt.

OTP said another provision in the law, affecting exchange rate spreads in forex loans, would cut its pretax profit by 6.7 billion forints, which it planned to book in the second quarter. ($1 = 228.39 Hungarian Forints) (Reporting by Gergely Szakacs; Editing by David Holmes)

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