July 4, 2013 / 1:12 PM / 6 years ago

Hungarian court rules in favour of OTP in fx loan case

BUDAPEST, July 4 (Reuters) - Hungary’s supreme court, the Kuria, ruled on Thursday in favour of OTP Bank, declaring that a foreign currency loan contract disputed by one of the bank’s debtors was valid in what may be seen as a test case on such loans.

The case is the first in which a decision was made by the highest court of the central European country where hundreds of thousands of households took out loans in Swiss francs and euros before the 2008 global crisis.

Their debt costs have soared due to a plunge in the forint and the surge of the Swiss franc in the past five years.

The Kuria, which is now effectively the country’s supreme court, ruled that the 2006 loan contract between the bank and the debtor remained valid.

Last month Hungary’s financial watchdog PSZAF warned the Kuria against passing a blanket ruling on lawsuits launched by foreign-currency debtors against their banks, saying it could undermine the financial system.

OTP shares were up 3.8 percent at 4,775 forints at 1300 GMT, outperforming the broader market which was up 1.3 percent. (Reporting by Marton Dunai/Krisztina Than; editing by Ron Askew)

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