OTP Bank NyRt. Update to credit analysis. Exhibit 1 Rating Scorecard - Key financial ratios 5% 1.8% 0% -5% CLIENT SERVICES

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1 CREDIT OPINION 1 September 18 OTP Bank NyRt Update to credit analysis Update Summary OTP Bank NyRt's (OTP) Baa/Prime- local-currency deposit ratings incorporate (1) the bank's standalone Baseline Credit Assessment (BCA); () two notches of rating uplift from the results of our Advanced Loss Given Failure (LGF) analysis. Our assumptions of moderate support from the Government of Hungary (Baa stable) results in no further uplift at the current sovereign rating level. The bank s Counterparty Risk (CR) Assessment is Baa(cr)/Prime-(cr) and its Counterparty Risk Ratings (CRRs) are Baa1/Prime-. RATINGS OTP Bank NyRt Domicile Hungary Long Term CRR Baa1 Type LT Counterparty Risk Rating - Fgn Curr Long Term Deposit Baa Type LT Bank Deposits - Fgn Curr Outlook Stable Please see the ratings section at the end of this report for more information. The ratings and outlook shown reflect information as of the publication date. OTP's BCA reflects the bank's geographically diversified footprint across countries in Central and Eastern Europe (CEE), which leads to a weighted Macro Profile of Moderate-. The bank's asset risk is elevated with a large, although declining, stock of nonperforming loans (NPLs), which, however, benefit from a strong coverage. OTP's key strength is its adequate risk-absorption capacity, as reflected in (1) the bank's resilient capitalisation, and () the recovery in its earnings-generation capacity over the past two years. Furthermore, the BCA incorporates the bank's good funding and liquidity. Exhibit 1 Rating Scorecard - Key financial ratios OTP Bank NyRt (BCA: ) Median -rated banks 45% Contacts 55% 4% Solvency Factors Carola Schuler MD-Banking carola.schuler@moodys.com 45% 5% % 5% 5% % 5% 15% 15% 1% 5% 1.% 14.8% 6.% 41.5% Funding Structure: Market Funds/ Tangible Banking Assets Liquid Resources: Liquid Banking Assets/Tangible Banking Assets Americas Asia Pacific Japan EMEA % 1.8% % -5% CLIENT SERVICES Liquidity Factors Arif Bekiroglu AVP-Analyst arif.bekiroglu@moodys.com -5% Asset Risk: Problem Loans/ Gross Loans Capital: Tangible Common Equity/Risk-Weighted Assets Solvency Factors (LHS) Profitability: Net Income/ Tangible Assets Liquidity Factors (RHS) Source: Moody's Financial Metrics

2 Credit strengths» Satisfactory capital adequacy and good leverage despite expected modest decline due to growth» Historically good revenue generation, although prone to volatility because of exposure to weaker regions» Good liquidity, as reflected in its ample liquid assets providing funding flexibility for subsidiaries Credit challenges» Large stock of legacy NPLs, although declining and benefiting from a high level of coverage» Material exposure to countries with a significantly weaker operating environment than Hungary, which elevates tail risk Outlook The outlook on OTP's Baa long-term local-currency deposit rating is stable, reflecting our expectation that upward and downward pressure on the ratings will be balanced over the next 18 months. The foreign-currency deposit rating is constrained by Hungary's country ceiling of Baa and, as a result, its outlook is stable as well. Factors that could lead to an upgrade OTP's local-currency deposit rating could experience upward pressure because of (1) an upgrade of the bank's BCA, or () an increase in the uplift resulting from our LGF analysis. The bank's BCA could be upgraded in the event of a further material improvement in asset quality while preserving adequate capitalisation and good profitability. A higher BCA will result in an upgrade of the bank's local-currency deposit and subordinated debt ratings. Additionally, alterations to OTP's liability structure may change the notches of uplift provided by our Advanced LGF analysis and lead to higher notching from the bank's Adjusted BCA, thereby improving the local-currency deposit rating. The Baa foreign-currency deposit rating will be upgraded if the country's foreign-currency deposit ceiling is raised. Factors that could lead to a downgrade OTP's ratings could experience negative pressure from (1) a downgrade of its BCA, or () a reduction in the rating uplift provided by our Advanced LGF analysis. The bank's BCA could experience downward pressure because of (1) a lower average Macro Profile of the group, driven by increasing exposure to countries with significantly weaker operating environments than Hungary; and () a material erosion of the bank's capital or a significant deterioration in its asset quality. Changes in OTP's liability structure may change the notches of uplift provided by our Advanced LGF analysis and lead to lower notching from the bank's Adjusted BCA, thereby hurting the local-currency deposit rating. The foreign-currency deposit rating would be hurt by the downgrade of the Hungarian government rating and, in turn, by a lowering of the country's foreign-currency deposit ceiling. This publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on for the most updated credit rating action information and rating history. 1 September 18

3 Key indicators Exhibit OTP Bank NyRt (Consolidated Financials) [1] Total Assets (HUF billion) Total Assets (EUR million) Total Assets (USD million) Tangible Common Equity (HUF billion) Tangible Common Equity (EUR million) Tangible Common Equity (USD million) Problem Loans / Gross Loans (%) Tangible Common Equity / Risk Weighted Assets (%) Problem Loans / (Tangible Common Equity + Loan Loss Reserve) (%) Net Interest Margin (%) PPI / Average RWA (%) Net Income / Tangible Assets (%) Cost / Income Ratio (%) Market Funds / Tangible Banking Assets (%) Liquid Banking Assets / Tangible Banking Assets (%) Gross Loans / Due to Customers (%) ,1 4,185 5,41 1,567 4,761 5, ,189 4,518 51,56 1,47 4,6 5, ,8 6,88 8,75 1,,956 4, ,718,918 6,844 1,9,89, CAGR/Avg. 1,97 4,74 4,41 1,6,65 4, [1] All figures and ratios are adjusted using Moody's standard adjustments. [] Basel III - fully-loaded or transitional phase-in; IFRS. [] May include rounding differences due to scale of reported amounts. [4] Compound Annual Growth Rate (%) based on time period presented for the latest accounting regime. [5] Simple average of periods presented for the latest accounting regime. [6] Simple average of Basel III periods presented. Source: Moody's Financial Metrics Profile With reported total assets of HUF14,1 billion ( 4 billion) as of June 18 and significant geographical diversification, OTP Bank NyRt (OTP) is Hungary s largest banking group. As of the end of June 18, around half of the group's consolidated assets were outside of Hungary. The group is active in nine countries and has leading market positions in Hungary, Bulgaria and Montenegro. Furthermore, following the purchase of Croatian Splitska Banka d.d. in December 16, the bank's market share by total assets in Croatia increased to 11.6% from 4%. In Russia, it is a relatively large consumer lender. The group has continuously developed its retail business and, as of June 18, around 61% of its loans were retail, half of which were mortgages. For its core domestic market in Hungary, OTP reported a market share of 5% of total assets and 6% of deposits as of June 18. The bank has been successful in defending its position as the dominant bank in the Hungarian retail market, with a market share of 7% in retail deposits. On August, OTP Bank NyRt announced that its Bulgarian subsidiary DSK Bank EAD had agreed to acquire 99.74% of Societe Generale Expressbank AD, Societe Generale's (A1/A1 stable, baa) Bulgarian subsidiary. Additionally, OTP announced an agreement to purchase an 88.89% stake in Banka Societe Generale Albania SH. A., Societe Generale's Albanian subsidiary. We believe this is credit positive because it will provide new growth and business diversification opportunities and reduce the group's exposure to more volatile regions. Detailed credit considerations OTP s Moderate- Macro Profile reflects its business mix in CEE and CIS countries OTP s credit profile is driven by its operations in selected CEE and the Commonwealth of Independent States (CIS) countries, with its Hungarian domestic exposure accounting for around 51% of the group s total assets as of June 18. These operations have distinct characteristics: the Hungarian and other CEE activities, especially in Bulgaria, are likely to contribute more predictable and satisfactory earnings, while OTP s Russian and Ukraine operations are more volatile and may represent a key challenge for the group s performance. Given the dominance of Hungary in OTP s business mix, the country s Macro Profile of Moderate- is a key factor in the group s overall assigned Macro Profile. Among countries where OTP s subsidiaries operate, we attribute a Macro Profile of Strong- to Slovakia and Weak+ to Russia and Very Weak to Ukraine. Overall, this results in a weighted Moderate- Macro Profile for OTP. Given OTP's 1 September 18

4 consideration to expand its operations in CEE and CIS countries, its current Macro Profile may experience downward pressure if the group's presence in countries with weaker operating environments increase. We expect the benign economic conditions in Hungary, Bulgaria (Macro Profile of Moderate-), Romania (Moderate-) and most other CEE countries where OTP has subsidiaries to support the group s performance over the next 18 months. In addition, we expect OTP s performance to continue to improve as operating environments in Russia and Ukraine improve due to positive economic growths. Large stock of legacy NPLs, although declining and benefiting from a high level of coverage We expect an improving trend in OTP's asset quality and maintenance of the good level of problem loan coverage and, therefore, assign an Asset Risk score of b1, two notches higher than the Macro-Adjusted score. OTP's reported NPLs, defined as all loans 9+ days past due, declined to 8.1% of gross loans as of the end of June 18 from 9.% as of year-end 17 and 14.6% as of year-end 16. The decline in the bank's NPL ratio was driven by a reduction in its NPL stock in most markets, most notably in Hungary and Romania. Benign economic conditions in the CEE will likely support the ongoing reduction in the NPLs in these countries. In Russia and Ukraine, we expect asset-quality pressure to ease as economic conditions improve from previously weak levels. In the group s home market of Hungary, the NPL ratio stood at 5.5% as of the end of June 18, down from 6.4% and 9.8% as of yearend 17 and 16, respectively. In Ukraine, the bank's NPL ratio declined to 1.6% as of the end of June 18 from 6.4% as of yearend 17, mainly driven by sales and write-offs, whereas in Russia, the ratio declined to 15.% from 15.8% over the same period. The asset risk arising from such high levels of NPLs in Russia and Ukraine are eased by sizeable loan-loss reserves relative to NPLs of 14% and 18%, respectively, in each country. The total cash coverage of NPLs for the group remained good at 11% as of the end of June 18, up from 99% as of year-end 17. Over the next 18 months, we expect loan-loss provisioning expenses for the group to stabilise at around 1% of the gross loans, mainly driven by a moderate rise/normalisation in credit costs in Hungary after some reversal of reserves in 16 and 17. Satisfactory capital adequacy and good leverage to moderate because of growth We expect the bank s capital adequacy to moderate to lower levels over the next few years because of planned balance-sheet growth. To reflect this expectation, we have assigned a Capital score of, down by one notch from the bank's Macro-Adjusted score. The bank s current level of capitalisation is satisfactory for its risk profile and has proved resilient to highly adverse conditions. As of the June 18, Moody's-adjusted Tier 1 capital over risk-weighted assets(rwa) was 1.4% (17: 1.6%) and Tangible Common Equity/ RWA was 14.8% (17: 14.%). The buffer for other systemically important institutions for OTP is at 1% for 18 and will increase annually by 5 basis points until it reaches % in. We view the nominal leverage of OTP as good, with its reported Tier 1/Total Assets (TA) strong at 9.6% and TCE/TA at 11.8% as of H1 18. Given the different currency composition of the balance sheet and varying leverage levels of the subsidiaries, group capitalisation is sensitive to exchange-rate fluctuations, elevating tail risk, but we believe the current leverage levels provides a good loss-absorption buffer. Balance-sheet growth will be underpinned by management's acquisitive strategy. Having said that, the recent acquisition plan in Bulgaria and Albania should reduce capital levels modestly initially until growth gains momentum in these regions. Historically good revenue generation, although prone to volatility because of exposure to weaker regions In the next 18 months, we expect OTP's profitability to remain relatively stable, supported by stabilisation in its revenue as lending growth continues and provisioning and operating expenses remain contained. As a result, we assign a baa score for Profitability, in line with the Macro-Adjusted score. OTP has a good earnings-generation ability, because of its dominant position and high, although modestly declining, net interest margin in Hungary and even higher net interest margin in some of its foreign markets. The bank s net income as of the end of June 4 1 September 18

5 18 amounted to HUF155 billion, up 16% from that in the year-earlier period. The bank's reported return on assets was.% (annualised) as of the end of June 18, broadly in line with that in the year-earlier period. This significant improvement in profitability was mainly driven by a 5% annual decline in loan-loss provisions (LLP), a 9% growth in fee and commission income and a 7% growth in net interest income on the back of a sizeable decline in interest expenses, which was more than %. We expect the low LLP to normalise over the two-year horizon as recoveries from legacy NPLs moderate and new credits register impairments as they age. As of the end of June 18, the bank was profitable in most CEE countries, with the exception of Slovakia, which suffered a marginal loss in H1 18. According to OTP, the group s two largest CEE operations in Hungary and Bulgaria reported net incomes of HUF95 billion and HUF4 billion, respectively. As of the end of June 18, OTP s Russian and Ukrainian operations reported a combined net profit of HUF4.1 billion, owing mainly to rising revenue and a reduction in LLP in Ukraine. Overall good deposit base and liquidity buffers providing inter-group funding flexibility to the subsidiaries and to their growth aspirations We believe that OTP has a good liquidity profile, reflected in its low market reliance and ample liquid assets. We view OTP's funding profile as a credit strength for the bank. The assigned Funding score for OTP of baa, one notch below the Macro-Adjusted score, is based on the group's consolidated market funding ratio and takes into account the expected increase in market fund reliance as the loan book grows. OTP's funding remains primarily based on deposits, which accounted for 87% of its total liabilities as of the end of June 18. Overall, the OTP group reported a sound loan-to-deposit (LTD) ratio of 78% as of the end of June 18. At the group level, around 7% of deposits are from retail clients and small and medium-sized enterprises, with the remainder from less granular corporate and small and medium-sized enterprise customers, which we consider to be more volatile and confidence sensitive compared with retail deposits. Our assessment also takes into account the funding and liquidity positions of the parent bank and its main subsidiaries, as well as liquid assets within the group which have much improved from few years earlier. Large subsidiaries of the bank as in Bulgaria and Croatia (15% and 14% of total assets) are self-funded with gross loan to deposits (LTD) at 8%. However, as of 17, OTP Romania and Russia (4%-5% each of group assets) have high, although largely stable gross LTD ratios at 158% and 15%, respectively in recent years thought much improved from earlier. The Romanian entity is most reliant on intergroup funding, which however falls very comfortably within intragroup lending limits of max 5% of regulatory consolidated total capital under Basel III rules. Furthermore, OTP Group is supplementing its funding through OTP's mortgage covered bonds (Baa1) via its subsidiary OTP Jelzalogbank Zrt. (OTP Mortgage Bank) (Baa stable) and is increasingly placing it with external parties because of the regulatory requirement to finance at least 15% of their outstanding mortgage loans through covered bonds, with this requirement to rise to % as of October 18,. We consider the group to have a good level of Liquid Resources and assigned a score of baa, adjusted one notch downward from its Macro-Adjusted score, because we expect a gradual decline in the liquidity resources owing to loan-book growth. The bank has a strong liquidity buffer, which accounted for 4% of its total assets as of the end of June 18, (41% as of year-end 17), mostly in the form of cash held at the National Bank of Hungary and investments in Hungarian government bonds. Support and structural considerations LGF analysis OTP is subject to the European Union (EU) Bank Recovery and Resolution Directive, which we consider to be an operational resolution regime. Therefore, in accordance with our methodology for rating banks globally, we apply our Advanced LGF analysis, which takes into consideration the risks faced by the different debt and deposit classes across the liability structure if the bank enters resolution. We assume a residual tangible common equity of % and post-failure losses of 8% of tangible banking assets, a 5% runoff in junior wholesale deposits and a 5% runoff in preferred deposits, and assign a 5% probability to deposits being preferred to senior unsecured debt, and 6% (EU average) of junior deposits over total deposits. These are in line with our standard assumptions. We exclude from our balance sheet at-failure deposits and assets related to foreign subsidiaries, which are outside the scope of Hungarian authorities. 5 1 September 18

6 We believe that OTP's deposits are likely to face a very low loss given failure, because of the loss absorption provided by the volume of deposits, and limited senior and subordinated debt. This results in a Preliminary Rating Assessment of baa, two notches above the bank's Adjusted BCA of. Government support considerations We believe there is a moderate probability of government support for OTP's rated wholesale deposits in the event of its failure. This probability reflects the fact that OTP is the largest bank in Hungary, which may lead the government to intervene to prevent a systemic crisis and, as a result, shield its creditors from disruptive losses. Set against the above-mentioned conditions, the Bank Recovery and Resolution Directive restricts the ability of the government to provide such support, even if it was willing to do so, requiring losses to be imposed on even senior creditors and large depositors under many circumstances. Our government support assessment does not, however, translate into additional notching for the bank s deposit ratings because OTP s baa Preliminary Rating Assessment is already higher than the level of the sovereign rating. In our view, the likelihood of government support for the bank's subordinated debt, as well as junior subordinated debt, is low and, therefore, these ratings do not include any related rating uplift. Counterparty Risk Ratings (CRRs) CRRs are opinions of the ability of entities to honour the uncollateralised portion of non-debt counterparty financial liabilities (CRR liabilities) and also reflect the expected financial losses in the event such liabilities are not honoured. CRR liabilities typically relate to transactions with unrelated parties. CRRs are distinct from ratings assigned to senior unsecured debt instruments and from issuer ratings because they reflect the fact that, in a resolution, CRR liabilities might benefit from preferential treatment compared with senior unsecured debt. Examples of CRR liabilities include the uncollateralised portion of payables arising from derivatives transactions and the uncollateralised portion of liabilities under sale and repurchase agreements. OTP's CRRs are positioned at Baa1/P- The bank s CRRs are positioned three notches above the Adjusted BCA of, reflecting the extremely low loss given failure stemming from a high volume of subordinated instruments. Counterparty Risk (CR) Assessment CR Assessments are opinions of how counterparty obligations are likely to be treated if a bank fails and are distinct from debt and deposit ratings in that they (1) consider only the risk of default rather than both the likelihood of default and the expected financial loss, and () apply to counterparty obligations and contractual commitments rather than debt or deposit instruments. The CR Assessment is an opinion of the counterparty risk related to a bank's covered bonds, contractual performance obligations (servicing), derivatives (for example, swaps), letters of credit, guarantees and liquidity financing. OTP's CR Assessment is positioned at Baa(cr)/P-(cr) The CR Assessment is two notches above the bank's Adjusted BCA. The CR Assessment is driven by the seniority of the counterparty obligations and the volume of liabilities subordinated to them under our Advanced LGF framework. About Moody's Bank Scorecard Our scorecard is designed to capture, express and explain in summary form our Rating Committee's judgement. When read in conjunction with our research, a fulsome presentation of our judgement is expressed. As a result, the output of our scorecard may materially differ from that suggested by raw data alone (though it has been calibrated to avoid the frequent need for strong divergence). The scorecard output and the individual scores are discussed in rating committees and may be adjusted up or down to reflect conditions specific to each rated entity. 6 1 September 18

7 Rating methodology and scorecard factors Exhibit OTP Bank NyRt Macro Factors Weighted Macro Profile Moderate - Factor Historic Ratio Initial Score Expected Trend Assigned Score Key driver #1 Key driver # Solvency Asset Risk Problem Loans / Gross Loans 1.% b b1 Collateral and provisioning coverage Long-run loss performance Capital TCE / RWA 14.8% baa Expected trend Profitability Net Income / Tangible Assets 1.8% baa baa Expected trend Combined Solvency Score Liquidity Funding Structure Market Funds / Tangible Banking Assets 6.% baa baa Expected trend Liquid Resources Liquid Banking Assets / Tangible Banking Assets ba ba 41.5% baa baa Expected trend Combined Liquidity Score Financial Profile Business Diversification Opacity and Complexity Corporate Behavior Total Qualitative Adjustments Sovereign or Affiliate constraint: Scorecard Calculated BCA range Assigned BCA Affiliate Support notching Adjusted BCA baa Balance Sheet in-scope (HUF million),8,756 5,459,156 4,9,775 1,419,81 1, ,48 47,45 8,48,6 Other liabilities Deposits Preferred deposits Junior Deposits Senior unsecured bank debt Junior subordinated bank debt Equity Total Tangible Banking Assets 7 1% 1 September 18 Extent of market funding reliance baa Baa baa-ba % in-scope 8.4% 66.% 49.% 17.%.4%.1%.% 1% at-failure (HUF million),895,59 4,9,,87,787 1,64,55 1, ,48 47,45 8,48,6 % at-failure 5.1% 59.4% 46.5% 1.9%.4%.1%.% 1%

8 Debt class Counterparty Risk Rating Counterparty Risk Assessment Deposits Junior subordinated bank debt Instrument class De Jure waterfall De Facto waterfall Notching LGF Assigned Additional Preliminary LGF notching Rating Instrument Sub- Instrument SubDe Jure De Facto Notching Guidance notching Assessment volume + ordination volume + ordination vs. subordination subordination Adjusted BCA baa1 baa (cr) 5.1% 5.5% baa 5.1%.% 5.1%.% ba (hyb) Loss Given Failure notching Counterparty Risk Rating Counterparty Risk Assessment Deposits Junior subordinated bank debt Additional Preliminary Rating Notching Assessment baa1 baa (cr) baa ba (hyb) Government Support notching Local Currency Rating Baa1 Baa (cr) Baa -- Foreign Currency Rating Baa1 -Baa Ba (hyb) [1] Where dashes are shown for a particular factor (or sub-factor), the score is based on non-public information. Source: Moody's Financial Metrics Ratings Exhibit 4 Category OTP BANK NYRT Outlook Counterparty Risk Rating Bank Deposits -Fgn Curr Bank Deposits -Dom Curr Baseline Credit Assessment Adjusted Baseline Credit Assessment Counterparty Risk Assessment Jr Subordinate Moody's Rating Stable Baa1/P- Baa/P- Baa/P- Baa(cr)/P-(cr) Ba (hyb) OTP JELZALOGBANK ZRT. (OTP MORTGAGE BANK) Outlook Counterparty Risk Rating Counterparty Risk Assessment Bkd Issuer Rating -Dom Curr Stable Baa1/P- Baa(cr)/P-(cr) Baa Source: Moody's Investors Service 8 1 September 18

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10 CLIENT SERVICES 1 Americas Asia Pacific Japan EMEA September 18