Hungary-Based OTP Bank PLC Upgraded To 'BBB/A-2' Due To Improved Industry Risk; Outlook Stable

Following our review of Hungary's banking sector risks, we think that the system has successfully resolved many of its past shortcomings. In particular, we see an improvement in the systemwide funding profile, since banks are now financing lending primarily with customer deposits and there is increasing evidence of access to external capital markets. Thanks to its strong retail franchise in Hungary and its superior credit standing in a local context, we believe OTP Bank PLC's credit quality directly benefits from these structural improvements. We are raising our long and short-term ratings on OTP Bank PLC to 'BBB/A-2' from 'BBB-/A-3' and affirming the 'BBB/A-2' resolution counterparty ratings. The outlook is stable because we expect the group will continue on its growth

...January 27, 2020 - Following our review of Hungary's banking sector risks, we think that the system has successfully resolved many of its past shortcomings. - In particular, we see an improvement in the systemwide funding profile, since banks are now financing lending primarily with customer deposits and there is increasing evidence of access to external capital markets. - Thanks to its strong retail franchise in Hungary and its superior credit standing in a local context, we believe OTP Bank PLC's credit quality directly benefits from these structural improvements. - We are raising our long and short-term ratings on OTP Bank PLC to '###/A-2' from '###-/A-3' and affirming the '###/A-2' resolution counterparty ratings. - The outlook is stable because we expect the group will continue on its growth path with a sufficient capital buffer to cover the risks of expansion, given good retained earnings generation. FRANKFURT (S&P Global Ratings) Jan. 27, 2020--S&P Global Ratings raised its long...

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