Geronimo!

OTP Bank President-CEO Sándor Csányi.

OTP Bank President-CEO Sándor Csányi.

Last Thursday and Friday (July 18 and 19), OTP Bank President-CEO Sándor Csányi sold over 82 percent of the 3.85 million shares that he owned in the bank either directly or indirectly through his investment and consulting company Bonitás 2002. OTP Bank told the Hungarian News Agency on Friday that Csányi had sold the shares in order to raise capital to finance investments in his Hungarian agribusinesses. 

While it is likely true that Csányi intends to channel the 10.8 billion forints (36.75 million euros) in revenue from the sale of the OTP Bank shares into the food companies operating within his Bonafarm Group, it is certain that the timing of his sale is connected to Deputy Prime Minister Tibor Navracsics’s statement last Tuesday (July 16) evening that the government is considering new legislation that would make it possible to retroactively modify foreign-currency-denominated loan contracts. Such a measure would represent another major blow to Hungary’s banking sector, which is already reeling under the weight of previous steps the government has taken to help Hungarians repay forex loans as well as its tax on the total assets of banks and other financial institutions (see Orbán Government Measures to Reduce Household Foreign-Currency Debt).

Citing unnamed sources, the online edition of the pro-government daily newspaper Magyar Nemzet reported on Sunday (July 21) that Csányi had decided to sell his shares in OTP Bank and retire as the bank’s chief executive officer due to a heart condition. OTP’s press director categorically denied that Csányi is preparing to leave his post at the head of the bank. 

The Magyar Nemzet report presumably represents an attempt on the part of the Orbán government to muddle the reality that its statist interventions in the domestic financial market have finally prompted Csányi to liquidate all but a nominal portion of his direct and indirect stake in OTP Bank before further potential declines in its share value. 

Sándor Csányi, the richest person in Hungary, has taken his money and bailed out of the country’s banking sector in order to seek safe haven in the food industry, which the government has not yet attempted to exploit for its own political purposes. He is the second Hungarian tycoon, after Sándor Demján (Hungary’s fifth richest citizen), to since the beginning of the summer explicitly or implicitly protest the Orbán administration’s heavy-handed interference in the free market. Their discontent may signal wider unrest among major Hungarian capitalists, who have until now largely tolerated the anti-capitalist actions of the government in the hope that they represented temporary crisis-management measures rather than manifestations of its fundamental political ideology.

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