Hungary-Based OTP Bank Ratings Affirmed Despite Escalating Ukraine Conflict; Outlook Remains Stable

Russia's military intervention in Ukraine will have negative market implications for foreign banks in both countries following the imposition of unprecedented international sanctions and the disruption to the financial system. We expect OTP Bank to experience a material worsening of its asset quality in both countries possibly with some reduction in capitalization, but we think it will demonstrate resilience. We therefore revised down our assessment of the bank's stand-alone credit profile (SACP) to 'bbb' from 'bbb+'. At the same time, we affirmed our 'BBB' long-term and 'A-2' short-term issuer credit ratings. The stable outlook reflects our view that over the next 12 to 24 months the bank will withstand additional fallout from the escalating Russia-Ukraine conflict, not least given its

...March 3, 2022 - Russia's military intervention in Ukraine will have negative market implications for foreign banks in both countries following the imposition of unprecedented international sanctions and the disruption to the financial system. - We expect OTP Bank to experience a material worsening of its asset quality in both countries possibly with some reduction in capitalization, but we think it will demonstrate resilience. - We therefore revised down our assessment of the bank's stand-alone credit profile (SACP) to '###' from '###+'. At the same time, we affirmed our '###' long-term and 'A-2' short-term issuer credit ratings. - The stable outlook reflects our view that over the next 12 to 24 months the bank will withstand additional fallout from the escalating Russia-Ukraine conflict, not least given its otherwise good earnings generation across the broader central and eastern Europe (CEE) region. FRANKFURT (S&P Global Ratings) March 3, 2022--S&P Global Ratings today affirmed its '###'...

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