OTP Bank, Hungary's biggest commercial lender, closed the acquisition of a 73.71% stake in Uzbekistan's Ipoteka Bank from the state on June 13. With the transaction, OTP has become the first foreign lender to participate in the privatisation of Uzbekistan's banking sector, the bank said in a statement. 

In the next step of the transaction, the remaining shares of Ipoteka Bank held by the Uzbekistan's Ministry of Economy and Finance will be purchased in three years.

OTP did not disclose the purchase price.

OTP's first transaction in Central Asia opens a new chapter in the group's history,  said Chairman and CEO Sandor Csanyi, adding that political and economic reforms implemented in the country show an exemplary commitment to the development of an increasingly open and competitive market economy.

The combination of Ipoteka Bank's local experience and the knowledge accumulated by the OTP Group through 23 acquisitions in 11 countries will further strengthen the bank's outstanding position, he noted.

Ipoteka Bank is Uzbekistan's fifth-largest lender, with a cc 8% market share based on total assets and it has 1.5mn clients and a"significant corporate clientele". Its loan book grew at an average annual rate of 20% over the past three years, while its deposit stock climbed at an average annual rate of 24%.

The bank is a market leader in mortgage lending and achieved €100mn in earnings last year. Management expects that figure to double in 2023 due to one-off positive impacts of the consolidation.

The initial announcement of OTP's intentions to expand in the region was made in March 2021, coinciding with Prime Minister Viktor Orban's official visit to the country. Following the meeting, Minister of Foreign Affairs and Trade Peter Szijjarto revealed that OTP could become the first foreign bank to take part in the privatisation of the Uzbek banking system. The transaction suffered delays due to the Ukraine war.  

OTP agreed to acquire close to 97% of Ipoteka Bank under a contract signed in December 2022.

Hungary’s OTP is reaping the benefits of foreign acquisitions. The net profit of bank’s core unit in Hungary plunged in in Q1 2023, whereas the contribution of foreign units reached a record 69%.