OTP Bank Hungary (f. P Nemo II, Bail-in Senior Bond)

Overview
Project Summary Document
Environmental and Social Documentation
Procurement
Complaints

Overview

The EBRD invested € 75 million in a green senior preferred bond issued by OTP Bank, as part of its total issuance of € EUR 400 million. This is the first green Minimum Requirement for own funds and Eligible Liabilities (MREL)-eligible instrument issued by OTP Bank since the introduction of the EU's Bank recovery and resolution directive (BRRD) and new MREL guidelines. The senior preferred bond has a 3-year maturity, is callable after two years and is listed on the Luxembourg Stock Exchange.

Project ID 52484

Status Complete

Location

Regional

Business Sector

Financial Institutions

Notice Type

Private

Project timeline

Exploratory
Passed Concept Review
Passed Structure Review
Passed Final Review
Board Approved
Signed
Implementing
Completed

Company Contact Information

Gábor Fazekas
FazekasGa@otpbank.hu
+ 36 1 288 75 36
+ 36 1 298-4896
https://www.otpbank.hu

Project ID 52484

Status Complete

Location

Regional

Business Sector

Financial Institutions

Notice Type

Private

Approval Date

16 Sep 2020

Disclosure date

10 Jul 2022

OTP Bank Hungary (f. P Nemo II, Bail-in Senior Bond) (Hungarian) (PDF, 0.29MB)

Project description

Project objectives

With this investment, the EBRD is seeking to support the resilience of the largest bank in Hungary and one of the important regional banks across central and southeastern Europe by contributing to its successful issuance of a new instrument type and the expansion of its MREL-eligible funding base, in line with the regulatory requirements introduced in Hungary.

The EBRD's participation contributed to the mobilization of local and foreign institutional investors and supported OTP Bank in successfully placing the bonds.

Transition impact

ETI Score:63

project will contribute to the "Resilient" transition quality by promoting the capital market development in Hungary and contributing to the introduction of new instruments such as Senior Preferred bonds and in doing so helping strengthen the regulatory funding base of a systemically important bank in Hungary and a key regional banking group.

Moreover, the project contributes to the "Green" transition quality by supporting the Bank's Green Economy Transition ("GET") approach in Hungary via OTP Bank, issuing a green bond in line with the ICMA Green Bond Principles.

Client information

OTP BANK NYRT

OTP Bank Nyrt. is the largest bank in Hungary, with an estimated 28 per cent market share by domestic assets and one of the important regional market players, actively operating in central and southeastern Europe regions. OTP Group operates in 11 countries and serves around 16 million customers. The bank is listed on the Budapest Stock Exchange and is rated BBB/Baa1 (S&P/Moody's).

EBRD Finance Summary

EUR 60,000,000.00

€ 75,000,000

Total project cost

EUR 75,000,000.00

€ 400,000,000

Environmental & Social Summary

For this transaction, OTP Bank will be required to comply with PRs 2, 4 & 9; adhere to the appropriate the EBRD's E&S Procedures; and submit Annual Environmental and Social Reports (AESRs) to the Bank.

Company Contact Information

Gábor Fazekas
FazekasGa@otpbank.hu
+ 36 1 288 75 36
+ 36 1 298-4896
https://www.otpbank.hu

PSD last updated

10 Jul 2022

Understanding transition

Further information regarding the EBRD’s approach to measuring transition impact is available here.

Business opportunities

For business opportunities or procurement, contact the client company.

For business opportunities with the EBRD (not related to procurement) contact:

Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

For state-sector projects, visit EBRD Procurement:

Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

Specific enquiries can be made using the EBRD Enquiries form.

Environmental and Social Policy (ESP)

The ESP and its associated Environmental and Social Requirements (ESRs) set out the ways in which the EBRD implements its commitment to promoting “environmentally sound and sustainable development”. The ESP and the ESRs include specific provisions for clients to comply with the applicable requirements of national laws on public information and consultation, and to establish a grievance mechanism to receive and facilitate resolution of stakeholders’ concerns and grievances, in particular, about the environmental and social (E&S) performance of the client and the project. Proportionate to the nature and scale of a project’s environmental and social risks and impacts, the EBRD also requires its clients to disclose information, as appropriate, about the risks and impacts of projects or to undertake meaningful consultation with stakeholders and consider and respond to their feedback.

More information on the EBRD’s practices in this regard is set out in the ESP.

Integrity and compliance

The EBRD's Office of the Chief Compliance Officer (OCCO) promotes good governance and ensures that the highest standards of integrity are applied to all of the Bank's activities in accordance with international best practice. Integrity due diligence is conducted on all Bank clients to ensure that projects do not present unacceptable integrity or reputational risks to the Bank. The EBRD believes that identifying and resolving issues in the project assessment and approval stages is the most effective means of ensuring the integrity of Bank transactions. OCCO plays a key role in these protective efforts andhelps to monitor integrity risks in projects post-investment.

OCCO is further responsible for investigating allegations of fraud, corruption and misconduct in EBRD-financed projects. Anyone, either within or outside the Bank, who suspects fraud or corruption should submit a written report to the Chief Compliance Officer by email to compliance@ebrd.com. OCCO will follow-up all matters reported. It will review all matters reported. Reports can be made in any language of the Bank or of the Bank's countries of operation. The information provided must be made in good faith.

Access to Information Policy (AIP)

The AIP, which entered into force on 1 January 2025, sets out how the EBRD discloses information and consults with its stakeholders to promote better awareness and understanding of its strategies, policies and operations. Please visit the Access to Information Policy page to find out what information is available from the EBRD website.

Specific requests for information can be made using the EBRD enquiries form.

Independent Project Accountability Mechanism (IPAM)

If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (for example, through the client’s project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).

IPAM independently reviews project issues that are believed to have caused (or to be likely to cause) harm. The purpose of the mechanism is: to support dialogue between project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its Environmental and Social Policy or the project-specific provisions of its Access to Information Policy; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.

Please visit the Independent Project Accountability Mechanism webpage to find out more about IPAM and its mandate and how to submit a Request for review. Alternatively, contact IPAM by email at ipam@ebrd.com for guidance and more information on IPAM and how to submit a request.

Environmental and Social Documentation is not available for this project.

Selected procurement notices related to this project may be shown below. Further procurement opportunities related to this and other projects, if available, maybe be viewed in the EBRD Procurement Portal.

The EBRD's Environmental and Social Policy (ESP), Access to Information policy (AIP) and Project Accountability Policy (PAP) enable sound and sustainable development in its projects. The Independent Project Accountability Mechanism (IPAM) deals with complaints about environmental, social and disclosure matters related to the Bank’s investments.

No complaints about this project have been made so far.

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OTP Bank Hungary (f. P Nemo II, Bail-in Senior Bond)

Overview

Project timeline

Company Contact Information

Project description

Project objectives

Transition impact

Client information

EBRD Finance Summary

Total project cost

Environmental & Social Summary

Company Contact Information

PSD last updated

Understanding transition

Business opportunities

General enquiries

Environmental and Social Policy (ESP)

Integrity and compliance

Access to Information Policy (AIP)

Independent Project Accountability Mechanism (IPAM)