Dominant retail market position in Hungary Solid domestic retail deposit base High share of granular collateralized homeowner loans High systemic importance in Hungary, and liquidity support by public authorities OTP's asset quality and earnings are likely, in our view, to show continued material deterioration over the next two years Worsening economic and industry conditions in more risky central and eastern European (CEE) markets where OTP operates Heightened credit risk from rapid loan growth, unseasoned foreign operations, and significant domestic foreign currency lending Moderate capitalization and tightened financial flexibility The ratings on Hungary-based OTP Bank Rt. reflect its strong and relatively reliable domestic retail business model and franchise, particularly its solid granular retail deposit base, and leading position in collateralized housing
