Moody’s upgrades OTP Bank

Moody's Investors Service said it upgraded OTP Bank NyRt's long-term and short-term local-currency deposit ratings to Baa2/Prime-2 from Baa3/Prime-3.

The bank's Baa3/Prime-3 long-term and short-term foreign-currency deposit ratings, constrained by the respective country ceiling for Hungary, were affirmed.

The outlook on OTP Bank's local-currency deposit rating was changed to stable from positive, while on the foreign-currency deposit rating the outlook remains stable.

Concurrently, the agency upgraded the bank's baseline credit assessment (BCA) and adjusted BCA to ba1 from ba2 and its junior subordinated debt rating to Ba3(hyb) from B1(hyb). The long-term and short-term Baa2(cr)/Prime-2(cr) counterparty risk assessments were affirmed.

Moody’s said the upgrade of OTP Bank's local-currency deposit ratings was driven by: (a) The upgrade of the bank's BCA and adjusted BCA to ba1 from ba2; (b) maintaining two notches of rating uplift from Moody's Advanced Loss Given Failure (LGF) analysis; and (c) maintaining the agency’s assumptions of moderate support from the government of Hungary (Baa3 stable), which nevertheless results in no further uplift at the current sovereign rating level.

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