S&P: OTP Bank on watch

Standard & Poor's said it placed the BBB- and A-3 long- and short-term counterparty credit ratings on OTP Bank plc, and its core subsidiary OTP Mortgage Bank, on CreditWatch with negative implications.

The CreditWatch placement follows the same recent action on the Republic of Hungary, S&P said.

A more unpredictable policy environment, stemming from a weakening of oversight institutions and some budgetary revenue decisions, will impede economic growth and government finances, the agency said.

The ratings are supported by the bank's strong domestic retail franchise and leading position in residential mortgage loans, the agency said.

Negative rating factors include OTP's deteriorating asset quality and earnings pressure, S&P said.

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