The ratings on Hungary-based OTP Mortgage Bank (OTPMB) are equal to those on its parent OTP Bank Rt. (OTP; BBB+/Negative/A-2) because of the bank's core strategic status and close organizational and operational integration with its parent. The ratings also reflect the bank's leading position in mortgage lending in the Republic of Hungary (foreign and local currency BBB+/Negative/A-2). These positive rating factors are somewhat offset by high credit risks stemming from rapid loan growth, significant foreign currency lending, low profitability, and moderate capitalization. OTPMB is a wholly owned subsidiary of OTP, specializing in refinancing residential mortgages originated by its parent. It is the largest mortgage operation in Hungary with €5.2 billion in mortgage loans at the end of June 2008, which
