Moody's downgrades OTP Bank Russia

Ratings

Moody's Investors Service announced today that it downgraded the long-term foreign and local-currency deposit ratings of OTP Bank Russia from Ba2 to Ba3. 

Moody's took rating action on the Russian subsidiary of OTP Bank, Hungary's largest commercial lender, due to its "asset quality deterioration" and its first-half losses, a consequence of growing credit costs.

"The rating action reflects Moody's expectation that the bank's asset quality might deteriorate further over the next 12-18 months, putting pressure on the bank's profitability; and pressure on the bank's capitalization will develop because additional provisioning charges will persist," the ratings agency said.

The negative outlook on OTP Bank Russia's long-term ratings could become stable again if the bank improves its profitability and asset quality metrics, as well as maintains adequate capital levels, Moody's noted. Possible negative impacts on the rating include continued loss-making performance caused by further asset quality erosion, a further deterioration in the bank's capitalization or a downgrade of parent OTP Bank, the Service added.

ADVERTISEMENT

European e-commerce soars during pandemic - study Analysis

European e-commerce soars during pandemic - study

Lawmakers approve 2022 budget Parliament

Lawmakers approve 2022 budget

Duncan Graham reelected as BCCH president Appointments

Duncan Graham reelected as BCCH president

Budapest launches revamped coupon card for visitors City

Budapest launches revamped coupon card for visitors

SUPPORT THE BUDAPEST BUSINESS JOURNAL

Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.