Investment in OTP Mortgage Bank covered bonds

Country:

Hungary

Project number:

48989

Business sector:

Financial institutions

Notice type:

Private

Environmental category:

FI

Target board date:

08 Feb 2017

Status:

Signed

PSD disclosed:

02 Mar 2017

Project Description

Investment of up to HUF 40 billion (approx. EUR 130 million), in any case up to 20% of the size of each issuance, in series of HUF denominated covered bonds to be issued by OTP Mortgage Bank ("OTP MB") over a period of 3 years on the Hungarian capital market.

Project Objectives

The covered bond transaction will support OTP MB to access medium- to long-term funding outside OTP Group and to comply with the mortgage funding adequacy ratio introduced by the National Bank of Hungary ("NBH") with the objective to improve the maturity mismatch between HUF-denominated assets and liabilities in the banking sector.

Transition Impact

The Project will contribute to the resilience of the financial sector in Hungary by (i) revitalising the Hungarian covered bond market and (ii) supporting the NBH initiative to strengthen banks' balance sheets through reduction of the asset - liability maturity mismatch in the banking sector, where long term mortgage assets are predominantly funded by very short-term deposits and additionally (iii) improving the environment for mortgage funding.

Client Information

OTP MORTGAGE BANK CJSC

OTP MB is a mortgage bank established in May 2001 under the Hungarian legislation. It is 100% owned subsidiary by OTP Bank Plc., the largest bank in Hungary, holding close to one-fifth of total banking assets in the country.

EBRD Finance Summary

HUF 40,000,000,000.00

Up to HUF 40 billion (approx. EUR 130 million).

Total Project Cost

HUF 40,000,000,000.00

Up to HUF 300 billion (approx. EUR 975 million).

Environmental and Social Summary

Category FI. OTP Mortgage Bank is a new client, but EBRD has a good track record of projects being implemented by OTP Bank and other OTP Group's subsidiaries in line with the Bank's Environmental and Social requirements. Due diligence has involved the completion of a detailed Environment, Health and Safety (EHSS) questionnaire by OTP MB, and subsequent review of this information by the Bank. Due diligence also included a review of OTP Group's performance on previous Projects with the Bank. Due diligence identified that the current Project will have little environmental or social risk associated with its implementation. OTP MB will be required to comply with the EBRD's Performance Requirements 2, 4 and 9.

Technical Cooperation

None.

Company Contact Information

Tamás Soós, OTP Mortgage Bank, Treasury & Issuance
soos.tamas@otpjzb.hu
+36 1 354 7473
+36 1 354 7482
www.otpjzb.hu

OTP Jelzálogbank, 1051 Budapest, Nádor utca 21, Hungary

Business opportunities

For business opportunities or procurement, contact the client company.

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Text of the PIP

Project Complaint Mechanism (PCM)

The EBRD has established the Project Complaint Mechanism (PCM) to provide an opportunity for an independent review of complaints from one or more individuals or from organisations concerning projects financed by the Bank which are alleged to have caused, or likely to cause, harm.

Project Complaint Mechanism

Any complaint under the PCM must be filed in accordance with the timeframes prescribed in the PCM Rules of Procedure. You may contact the PCM Officer (at pcm@ebrd.com) for assistance if you are uncertain as to the eligibility of your complaint.