History and general introduction
Mortgage Bank Ltd. (“OMB” or the “Bank”) was established by OTP Bank Plc. (“OTP
Bank”) on 15 May 2001 as a fully owned subsidiary under Act XXX of 1997 on
mortgage credit institutions and mortgage bonds (the Mortgage Credit
and Act CXII of 1996 on credit institutions and financial enterprises (the Credit Institutions
Act). The Bank was
registered in Hungary by the Court of Registration on 9 October 2001.
The operating permit of the Bank was issued
on 10 January 2002 by the Hungarian Financial Supervisory Authority (the “HFSA”) and OMB started business activities on 1 February
2002. The Bank operates exclusively in Hungary as a specialised credit
institution in the corporate form of a private company limited by shares.
The development of the legislation in
respect of mortgage lending and the expansion of the system of state subsidies
in Hungary provided an opportunity for new mortgage credit institutions to
enter the market and to compete for home loans by offering such loans at
favourable interest rates financed through funds raised from subsidised
mortgage bond issues. This was OTP Mortgage Bank’s primary sphere of operation.
OTP Bank established the Mortgage Bank as a vehicle through which the OTP Bank
Group could effectively penetrate the developing mortgage lending market in
Hungary and with the view of diversifying the product portfolio of the Group.
Following its establishment, the Bank became an active participant in the
emerging mortgage bond market.
OMB‘s lending activity is financed
through the issuance of mortgage bonds. The Hungarian Forint denominated
mortgage bonds are issued under domestic issuance programmes from the year of
foundation. The Bank entered the international covered bond markets in December
2004 with the establishment of its Euro Mortgage Securities Programme
in order to finance its foreign currency denominated mortgage loan portfolio.
Bank employs limited number of staff at its head office and relies on the huge
branch network (approximately 380 branches) of OTP Bank engaged in the housing
loan business. At 30 June 2011 the number of employees was 38.
at 31 December 2010, the issued share capital of OMB was HUF 27 billion, which
comprised 270,000 registered ordinary shares each with a nominal value of HUF
100,000. 100% of the shares are owned by OTP Bank. Due to the high volatility
in the relevant exchange rates, OTP Bank decided to grant a CHF 15 million
subordinated loan to the Bank on 30 January 2009 with a term of eight years in
order to strengthen its capital position.