The ratings on OTP Bank PLC are supported by its strong domestic retail franchise, particularly its solid granular retail deposit base, and leading position in residential mortgage loans. OTP's earnings and business diversification in the area of consumer, small and midsize enterprise financing, and in certain parts of Central and Eastern Europe (CEE) are also positive for the ratings. The ratings also benefit from OTP's strong pre-provisioning earnings, which in our view have helped it steer through the crisis. Constraining rating factors include OTP's ongoing asset quality and earnings pressure. OTP is exposed to heightened credit risk from its pre-crisis, rapidly expanded loan portfolios, particularly its foreign currency-denominated domestic mortgages and those in some of its Eastern European subsidiaries. We
