Hungary will investigate possible cartel activity on the household mortgage market by seven banks

Hungary will investigate possible cartel activity on the household mortgage market by seven banks, the Competition Authority said.

The investigation was initiated against OTP Bank Nyrt., Fundamenta-Lakaskassza Zrt. and the local units of Erste Group Bank AG, Raiffeisen Bank International AG, Intesa Sanpaolo SpA, UniCredit SpA and Bayerische Landesbank, according to an e- mailed statement today. The authority said it conducted unannounced inspections at some of the banks.

The lenders raised interest rates “significantly” on household mortgage loans and introduced new products with higher rates from Sept. 22, three days after Hungarian lawmakers approved a plan that forced banks to accept exchange rate risk on the early repayment of foreign currency mortgages, the Competition Authority said.

“The probable explanation for the simultaneous increase is an agreement amongst banks,” the authority said, citing information it has received. “The supposed agreement was that banks offer products with higher interest rates and limit access to lower interest-rate products in connection with the early repayment of foreign currency loans.”

OTP weakened 0.7 percent to 3,000 forint at the 5 p.m. close of trading in Budapest, extending this year’s loss to 40 percent.