Lithuania questions Hungary's OTP bid for Baltic bank Luminor over Russian operations

By Andrius Sytas

VILNIUS, July 21 (Reuters) - Lithuania's central bank said on Tuesday that Hungary's OTP Bank's operations in Russia raise "legitimate questions" about its planned acquisition of Luminor Bank, the third-largest lender in the Baltics region.

OTP said late on Monday that it had agreed to buy Luminor Bank, subject to regulatory approvals.

Estonian-registered Luminor has significant operations in Lithuania and Latvia.

"Lithuania's central bank has not received any documents for the planned transaction... yet the fact that the group is operating in Russia raises legitimate questions," a spokesperson for the central bank, Lithuania's banking regulator, said in an emailed response to a Reuters query.

Lithuanian and Latvian regulators will be consulted by the European Central Bank and the Estonian banking regulator as they rule on the deal, the spokesperson said.

Luminor's total assets stood at €15.9 billion ($18.14 billion) in 2025, OTP said on Monday.

UNABLE TO EXIT RUSSIA

European Union and NATO members Estonia, Latvia and Lithuania have been fierce supporters of Ukraine and critics of Russia.

OTP says on its website that it tried to exit Russia after Russia's full-scale invasion of Ukraine in 2022, but was "unable to do so due to the changed regulatory environment".

"Our activities in Russia are also focused on compliance with local and international law," the bank says on its website. It said it stopped lending to companies after the outbreak of the war.

"We also strive to comply with the applicable sanctions rules as strictly as possible in our payment services and have built numerous safeguards into our processes to filter out any potential sanctions violations based on verifiable information," the bank said.

The Russian subsidiary paid €460 million in dividends in 2023-2024.

($1 = 0.8767 euros)

(Reporting by Andrius Sytas; Editing by Susan Fenton)