Hungary’s leading bank, OTP, could become a very attractive takeover target to Austria’s Erste Bank
Hungary’s leading bank, OTP, could become a very attractive takeover target to Austria’s Erste Bank. Erste keeps OTP on pitch of Top Picks list, and left electricity distributor DEMASZ, plastics maker Pannonplast and drugs producer EGIS on the list as well.
For Erste, the current valuation of OTP is very alluring despite planned introduction of the tax on income from subsidised mortgage loans, the increased tax rate and potentially slower than expected growth of the loan portfolio.
Erste considers that the HUF is still fragile and would expect further rate hikes, but it sees as positive that the Hungarian government is finally facing the trouble by enacting austerity measures. They note that it is less positive that the Hungarian government intends to solve problems almost exclusively through higher income.