Battered by Sanctions and Shareholder Exits, Is End Nigh for Russian ‘Spy Bank’ in Hungary?

This was then followed on February 25 by some ominous-sounding comments from Orban's chief of staff, Gergely Gulyas, who in response to journalist enquiries about the viability of the IIB admitted that "it's in an extremely difficult situation [and] I don't know if it's possible to save the bank."

On February 27, the independent Hungarian news outlet Hvg.hu, citing internal IIB documents obtained through the anonymous hack, said a senior IIB executive had warned in a letter to the bank's management in mid-December that the bank could soon face insolvency. The assets of the IIB had been frozen by Euroclear - a Belgium-based financial services company that specialises in settling domestic and cross-border securities transactions - after the Russian invasion. In the letter, the executive predicted "such a severe deficit for the first quarter of this year that even the sale of the loan portfolio would not be enough to make up for it".

Indeed, the leaked documents purportedly show the bank had already begun casting around for help. According to another letter, the veracity of which hvg.hu could not attest to, the Hungarian minister of economic development, Marton Nagy, who represents Hungary on the board of the IIB, lobbied the Belgian finance minister to unfreeze the assets last autumn. But the bank's hopes were promptly dashed when, in another letter seen by hvg.hu, the Belgian Finance Ministry dismissed the request, arguing that board members were believed to be connected to the Russian government, hence are subject to the European sanctions.

Hungarian Minister of Foreign Affairs and Trade Peter Szijjarto (R) and Nikolay Kosov, Chairman of the Board of International Investment Bank (IIB), are seen during their meeting in Ibis Styles Budapest...