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Hungary to remove state subsidies for home savings bank deposits

Hungary will stop providing state subsidies for home savings bank deposits as the scheme is too costly and inefficient, Reuters reported Oct. 16.

The move could affect lenders that sell subsidized savings products like OTP Bank Nyrt. and Fundamenta-Lakáskassza Lakás-takarékpénztár Zrt., the report said. OTP Bank CEO Sándor Csányi said the move is unlikely to significantly affect the bank's profits.

Meanwhile, Fundamenta, which is Hungary's biggest home savings bank, could suffer a blow from the new legislation, which was approved Oct. 16. Fundamenta CEO Tátrai Bernadett reportedly said the move "creates market constraints, but that is not necessarily negative as it forces everyone to reconsider [strategies]."