S&P Affirms OTP Rating, Revises Outlook to Negative

Ratings

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S&P Global Ratings on Tuesday affirmed OTP Bank's "BBB" long-term issuer credit rating, but revised the outlook on the rating to negative from stable, after taking similar action with Hungary's sovereign rating.

On Friday, S&P revised its outlook for Hungary's "BBB" sovereign rating to negative from stable because of external risks, including potential cuts to European Union funding and reduced gas flows,
"could weigh on the country's growth prospects and endanger post-pandemic fiscal consolidation".

"We continue to cap our issuer credit rating on OTP Bank at the level of our foreign currency sovereign ratings on Hungary, because we doubt that the bank would have sufficient capital resources to absorb a hypothetical sovereign default scenario," S&P said on Tuesday.

"We could downgrade OTP Bank by one notch within the next 24 months if we take a similar action on the sovereign," it added.

OTP Bank is Hungary's biggest commercial lender.

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