Latvian Security Service Warned Officials About OTP Bank's Russia Operations Last Year

The State Security Service (VDD) last year drew the attention of Latvia's highest state officials to identified risks associated with the continued operations of Hungarian bank OTP Bank's subsidiary in Russia following the aggressor's invasion of Ukraine. VDD confirmed to LETA that in March 2025 it sent a classified letter to senior officials, and in April 2025 also to the Bank of Latvia.

The service collected and assessed information after reports emerged that OTP Bank was interested in acquiring Luminor Bank, which operates in the Baltic states. VDD declined further comment on the letter's content due to its classified nature.

The decision on OTP Bank's potential acquisition of Luminor Bank rests with the European Central Bank (ECB) and the Bank of Estonia, in consultation with regulators from other countries where Luminor operates. The Bank of Latvia noted that the transaction is currently only an intention, which regulators will scrutinize. Luminor Bank is registered in Estonia with branches in Latvia and Lithuania.

OTP Bank's 2025 financial report shows that its Russian subsidiary's profit increased by 47.5% to €557.6 million, while assets in Russia reached €9.16 billion (up 40%). Rating agencies Moody's and S&P upgraded OTP Bank's ratings last year, though S&P changed the outlook from stable to negative.

Luminor Bank is the third largest financial service provider in the Baltics, posting a €158 million profit in 2025 with an 8.6% return on equity. In Latvia, it is the fourth largest bank by assets.