Updated 1:40pm with reaction from OTP Bank

The Hungarian bank touted as the frontrunner to take over from HSBC in Malta was turned down as a client by HSBC last year, citing “reputational risk”.

Informed sources told Times of Malta that HSBC in London was approached by OTP, Hungary’s largest bank, in April 2024 for its help in issuing bonds on the international market.

Following internal due diligence, HSBC rejected the request, citing multiple concerns about the reputational risk of taking on OTP as a client.

Ultimately, HSBC deemed that the transaction was beyond the bank’s “risk appetite”.

Among other concerns, the due diligence flagged the bank’s ongoing operations in Russia and links between OTP chair and CEO Sándor Csányi and Russian President Vladimir Putin.

Putin was the honorary president of the International Judo Federation, with Csányi as his vice-president, until the former was stripped of the title following Russia’s invasion of Ukraine. Csányi has since replaced Putin as the organisation’s honorary president.

In the summer of 2022, OTP had said that it would be willing to exit the Russian market if a serious buyer came along but a Putin-signed decree blocking the sale of western banks complicated matters. OTP still operates in Russia to this day, posting a post-tax profit of some €350m last year.

HSBC’s previous reluctance to take OTP on as a client raises questions over why it is now entertaining an offer from the same bank to take over its Maltese operation.

In practice, HSBC Malta has no influence on the negotiations, with the sale handled entirely by its majority shareholder, HSBC Continental Europe.

‘Completely unfounded’: OTP responds to claims

When contacted by Times of Malta, a spokesperson for OTP denied that reputational concerns had played a part in any business dealings with HSBC.

“This information is completely unfounded. The relationship between OTP and HSBC is excellent and not overshadowed by reputational concerns,” the spokesperson said.

Questions sent to HSBC Continental Europe remained unanswered at the time of writing.

Last month, Times of Malta exclusively revealed that OTP has emerged as one of the favourites to buy out HSBC’s operations in Malta.

The bank remains a major player across Eastern Europe, with over 17 million customers across 11 countries.

Vladimir Putin with International Judo Federation president Marius Vizer (right) and then-honorary vice-president Sándor Csányi (left) in 2019. Photo: President of Russia

OTP Bank reacts to story

After the story was published on Wednesday, OTP sent in a reaction, saying it needed to correct "untrue facts that portray OTP Bank in a false light" and that it wanted to reduce its reputational damage. It said:

“As stated by OTP Group in writing in advance in response to the question of Times of Malta, the case described in the title and the article did not take place.

The last time OTP Bank sent a Request for Proposal to HSBC for a potential bond issuance was in 2023. HSBC responded with an offer, the offer was submitted on 9 June 2023 at 3:41 pm.

Since then, until now, OTP has not sent an invitation to bid to HSBC.

Contrary to what is stated in this article, there was no call for bids in April 2024. There was one in May 2024, but HSBC did not receive an invitation, as it has not received one in 2024 or 2025 at all.

According to our information, a group of local entrepreneurs seeking to buy HSBC's bank in Malta is behind the misinformation campaign against the OTP Group based on false information, and unfortunately some senior government executives are also partners in this smear campaign.

The OTP Group is investigating what legal action it can take to prevent further press attacks on its reputation.”

Russia controversy

OTP had courted controversy in 2023, after the bank was placed on a list of “international sponsors of war” by Ukraine’s National Anti-Corruption Agency, due to its ongoing presence in Russia.

OTP was eventually removed from the list, following a diplomatic standoff between Ukrainian and Hungarian authorities, with the latter threatening to veto Russian sanctions and Ukraine aid.

In a letter to Times of Malta, OTP argued that its inclusion on the list was down to reasons that were “repeatedly and effectively refuted and proven to be completely false”.

It said the bank maintains “a clear and firm distance from politics and personal entanglements”, rejecting the suggestion that it maintains “any relationship with political actors that deviates from accepted western standards”.

The news of OTP’s interest prompted a quick reaction from Finance Minister Clyde Caruana, who warned that Malta needs to safeguard its reputation, with the country still reeling from the effects of greylisting.

Caruana also appeared not to be keen on the prospect of HSBC being taken over by local buyers, saying that the market needs more, not less, competition.

There are believed to be at least two local bids on the table.

APS had publicly confirmed its interest in striking a deal late last year. More recently, Times of Malta revealed that a group of top local businesses had bandied together to submit a bid.