HUNGARIAN BANK OTP'S RATING CONFIRMED BY MOODY'S
The international rating agency Moody's confirmed on Wednesday (May 14) the A2 rating of the Hungarian bank OTP and the B2 rating of the Bulgarian DSK Bank, after Hungary's financial institution was picked up as preferred buyer of the DSK Bank. The rating agency points out that with the acquisition of the Bulgarian bank OTP continues its expansion into Central and Eastern Europe, and underlines that the deal is of a much larger scale than the purchase of the Slovakian Investicna a Rozvojova Banka (IRB) in end-2001 against EUR16MN.Moody's notes that under the terms of the agreement OTP will pay EUR311MN for DSK Bank and that it undertakes to invest another EUR300MN in the Bulgarian credit institution over the next three years. The rating analysts point out that OTP should create appropriate conditions for the growth of DSK Bank and increasing of its competitiveness. Moody's underlines that the Hungarians' ability to cut down DSK Bank's expenses and streamline its info systems and branch network will be of a major importance for the deal's success. The agency notes that OTP itself has not demonstrated very efficient investments in its own technological development and the reduction of its expenses. According to the financial experts' estimates, the Bulgarian credit institution could considerably contribute to the aggregate profitability of the Hungarian bank group in the future. OTP's consolidated net profit for 2002 and the first quarter of 2003 is expected to cover the price, paid by the Bulgarian bank. OTP has stable positions on the Hungarian bank market.