By Margit Feher
BUDAPEST--Hungary's competition authority Wednesday levied its
highest ever fine in a cartel case against the country's largest
banks, saying they had discouraged home owners with a
foreign-currency mortgage from taking part in a program aimed at
reducing their loans.
GVH said it had used emails and the banks' internal documents to
establish that the banks had coordinated their actions between
September 2011 and January 2012 to deter mortgage borrowers'
participation in a scheme that was aimed at lowering the burdens of
home-owners with foreign-currency loans.
Under the scheme, borrowers could pay back their
foreign-currency mortgage in full and at a discounted exchange rate
favorable for them. Banks were to book the arising losses.
GVH fined 11 Hungarian banks a total of 9.49 billion forints
($43.1 million), with the largest amount--HUF3.92 billion--being
levied on the country's biggest lender OTP Bank Nyrt. (OTP.BU). OTP
said the fine is unfounded and will take legal action.
The local units of Austria's Erste Group Bank AG (EBS.VI),
Belgium's KBC Bank (KBC.BT) and Italy's Intesa Sanpaolo SpA
(ISP.MI) were fined HUF1.73 billion, HUF983.3 million and HUF835.4
million, respectively. Erste Bank said "its strategy related to
final loan repayments was not aligned with other banks, no business
secrets were shared and no overall plan was agreed with other
banks."
It fined MKB Bank Zrt.--the Hungarian unit of Germany's
Bayerische Landesbank AG--HUF783 million. Budapest Bank Zrt., a
unit of U.S. banking group GE Money Bank, was fined HUF283.5
million and Raiffeisen Bank Zrt., an arm of Raiffeisen
International AG (RBI.VI) of Austria, was hit with a HUF583.6
million charge. The local arm of UniCredit SpA (UCG.MI) was fined
HUF306.3 million.
Citibank Zrt., a unit of Citigroup (C) and partly state-owned
savings cooperative Magyar Takarekszovetkezeti Bank Zrt. and UCB
Ingatlanhitel Zrt. were also fined.
Foreign-currency mortgages were popular in Hungary before the
debt crisis, when they were cheaper than borrowing in the local
currency. The government has been trying to establish schemes to
lower those borrowers' burdens since their debt payments have
sometimes doubled due to the weakening of the forint.
Write to Margit Feher at margit.feher@wsj.com