Hungary's OTP Bank PLC Upgraded And MTB Magyar Takarekszovetkezeti Bank Affirmed; BICRA Group Revised To '5'

We see a sustained improvement in Hungarian banks' funding profiles due to strong deposit growth amid increasing wealth levels, a lower reliance on funding from foreign parents, and increasing signs of access to external capital markets. We also think that the increasing track record of effective regulatory measures and banks' sustained prudency in lending standards, relatively robust margins, and decreasing share of higher risk loans have contributed to an overall reduction of risk in the Hungarian banking system. The Banking Industry Country Risk Assessment (BICRA) for Hungary has been revised to group '5' from '6', and the anchor for domestically focused Hungarian banks is now 'bbb-' versus 'bb+'. We are raising our long- and short-term issuer credit ratings on OTP

...January 27, 2020 - We see a sustained improvement in Hungarian banks' funding profiles due to strong deposit growth amid increasing wealth levels, a lower reliance on funding from foreign parents, and increasing signs of access to external capital markets. - We also think that the increasing track record of effective regulatory measures and banks' sustained prudency in lending standards, relatively robust margins, and decreasing share of higher risk loans have contributed to an overall reduction of risk in the Hungarian banking system. - The Banking Industry Country Risk Assessment (BICRA) for Hungary has been revised to group '5' from '6', and the anchor for domestically focused Hungarian banks is now '###-' versus '##+'. - We are raising our long- and short-term issuer credit ratings on OTP Bank PLC and its core subsidiary OTP Mortgage Bank to '###/A-2' from '###-/A-3'. The outlook is stable. We are affirming the '###/A-2' resolution counterparty ratings. - We are affirming our '##/B'...

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