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London - Moody's confirms OTP Bank (Ukraine) at Ba2; negative outlook

December 20, 2011 | Moody's Investors Service

London, 20 December 2011 -- Moody's Investors Service has today confirmed
Ba2 long-term local currency deposit rating of OTP Bank (Ukraine) (OTBU) with negative outlook. The D- Bank's Financial Strength Rating with stable outlook, the B3 long-term foreign currency deposit rating with negative outlook and Not-Prime short-term local and foreign currency deposit ratings remained unchanged, Aa1.ua National Scale deposit Rating remained unchanged as well but carries no specific outlook.



This rating action concludes the review for possible downgrade initiated on 29 November 2011.

RATINGS RATIONALE

According to Moody's, today's confirmation of OTPU's local currency deposit rating with negative outlook follows Moody's recent announcement that it has confirmed the standalone bank financial strength rating
(BFSR) of OTPU's parent - OTP Bank (Hungary) at D+ (mapping to Ba1 on the long-term scale), with a negative outlook.

For detailed rating consideration leading to confirmation of BFSR of D+ with negative outlook of OTP Bank (Hungary) BFSR please refer to www.moodys.com.

The negative outlook on the long-term rating reflects Moody's opinion that the Ba2 ratings of OTPU would be affected by a one-notch downgrade of the parent's standalone BFSR, which also carries a negative outlook.

OTPU's Ba2 deposit ratings incorporate a high probability of parental support from OTP Bank (Hungary), and consequently receive a one-notch uplift from the bank's Ba3 standalone rating (BCA). Moody's assessment of a high probability of parental support is based on (i) the significant operational integration, (ii) strong strategic fit of OTP with OTP Bank Group, as Ukraine is one of three strategic foreign markets for the group, and (iii) the parent's demonstrated willingness to provide ongoing capital and liquidity support when needed.

PRINCIPAL METHODOLOGIES

The methodologies used in this rating were Bank Financial Strength
Ratings: Global Methodology published in February 2007, and Incorporation of Joint-Default Analysis into Moody's Bank Ratings: A Refined Methodology published in March 2007. Please see the Credit Policy page on www.moodys.com for a copy of these methodologies.

Headquartered in Kyiv, Ukraine, as of 31 December 2010 OTP reported total audited IFRS assets of UAH25 billion (US$ 3.1 billion) and net income of
UAH344 million (US$43.2 million).

REGULATORY DISCLOSURES

For ratings issued on a program, series or category/class of debt, this announcement provides relevant regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides relevant regulatory disclosures in relation to the rating action on the support provider and in relation to each particular rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides relevant regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

The rating has been disclosed to the rated entity or its designated
agent(s) and issued with no amendment resulting from that disclosure.

Information sources used to prepare the rating are the following :
parties involved in the ratings, public information, and confidential and proprietary Moody's Investors Service information.

Moody's considers the quality of information available on the rated entity, obligation or credit satisfactory for the purposes of issuing a rating.

Moody's adopts all necessary measures so that the information it uses in assigning a rating is of sufficient quality and from sources Moody's considers to be reliable including, when appropriate, independent third-party sources. However, Moody's is not an auditor and cannot in every instance independently verify or validate information received in the rating process.

Moody's Investors Service may have provided Ancillary or Other Permissible
Service(s) to the rated entity or its related third parties within the two years preceding the credit rating action. Please see the special report "Ancillary or other permissible services provided to entities rated by MIS's EU credit rating agencies" on the ratings disclosure page on our website www.moodys.com for further information.

Please see the ratings disclosure page on www.moodys.com for general disclosure on potential conflicts of interests.

Please see Moody's Rating Symbols and Definitions on the Rating Process page on www.moodys.com for further information on the meaning of each rating category and the definition of default and recovery.

Please see the ratings disclosure page on www.moodys.com for information on (A) MCO's major shareholders (above 5%) and for (B) further information regarding certain affiliations that may exist between directors of MCO and rated entities as well as (C) the names of entities that hold ratings from MIS that have also publicly reported to the SEC an ownership interest in MCO of more than 5%. A member of the board of directors of this rated entity may also be a member of the board of directors of a shareholder of Moody's Corporation; however, Moody's has not independently verified this matter.

Please see Moody's Rating Symbols and Definitions on the Rating Process page on www.moodys.com for further information on the meaning of each rating category and the definition of default and recovery.

Please see ratings tab on the issuer/entity page on www.moodys.com for the last rating action and the rating history. The date on which some ratings were first released goes back to a time before Moody's ratings were fully digitized and accurate data may not be available.
Consequently, Moody's provides a date that it believes is the most reliable and accurate based on the information that is available to it.
Please see the ratings disclosure page on our website www.moodys.com for further information.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Company: OTP Bank (Ukraine)

Full company namePublic Joint-Stock Company OTP Bank
Country of riskUkraine
IndustryBanks

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