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OTP Bank provides you 

with a series of products that facilitate the protection from foreign exchange risk and the growth of your business. 

Cash operation and foreign exchange risk management products

FX SPOT transactions

OTP Bank Romania offers negotiated foreign exchange rates for foreign exchanges starting from EUR 5,000. At the same time the bank gives access to real-time foreign exchange quotes through the OTP Trader online trading platform.

 

FX Forward transactions

These are foreign exchange transactions settled at a later date. They allow you to freeze a foreign exchange rate, reducing the risk arising from the volatility of foreign exchange quotes and thereby enabling a more effective planning of cash flows.

 

FX Swap transactions

If you have funds in different currencies, this type of transactions allows you to temporarily convert from a currency to another without exposure to foreign exchange risk. FX Swap transactions mean buying (selling) a currency at a pre-specified rate and simultaneously selling (buying) the same currency at a future date to the same counterparty at a foreign exchange rate set at the start of the transaction.

 

Call options

If you are a company you can access this product to hedge the foreign exchange risk caused by an increase in foreign exchange rate and to protect your future cash flows. The CALL option is the derivative by which you have the right, but not the obligation, to buy a particular foreign currency amount at a pre-specified foreign exchange rate (strike price) at a later date, called the expiry date. In order to enjoy this right, you will have to pay a premium on the transaction date.

 

PUT options

These products are designed to hedge your foreign exchange risk caused by a decrease in foreign exchange rate and to protect your future cash flows. The PUT option is the derivative by which you have the right, but not the obligation, to sell a particular foreign currency amount at a pre-specified foreign exchange rate (strike price) at a later date, called the expiry date. In order to enjoy this right, you have to pay a premium on the transaction date.

 

FX Tunnel foreign exchange rate strategies

It is the simultaneous selling and buying of options, where the purchase of one option is financed in part or in whole by the sale of another option. With this strategy, your company reduces the volatility of the foreign exchange rate to a trading tunnel by guaranteeing a minimum and a maximum foreign exchange rate. The influence of the future development of the foreign exchange rate on the company's cash flows is also significantly limited. There are no costs for this strategy (no payment of any premium is required on the transaction date).

Monetary products and interest rate risk management

The money market is unpredictable and interest rates can fluctuate reaching historically low or high levels. This is why protection with a series of monetary products is important.

 

Negotiated deposits 

These products give the possibility of obtaining higher interests on standard term deposits and flexibility in the choice of maturities and other characteristics.

 

Interest Rate Swap (IRS)

This is a derivative, a contractual arrangement between two parties whereby you can exchange a series of future floating rate payments for payments at a fixed rate determined at the time of the transaction, thus protecting you from any increase in interest rates. The IRS seller seeks to benefit from any decrease in the interest rates, thus exchanging future fixed rate payments for payments at a floating rate determined according to the evolution of the reference index used (e.g. EURIBOR, LIBOR, etc.). An IRS transaction does not involve an exchange of the principal.

 

Derivative and investment products 

OTP Bank's portfolio includes a series of investment products with which your business can grow.

 

Dual Currency Structured Deposit (Dual Currency Deposit)

This is a deposit with terms ranging from 2 weeks to a year, which guarantees the interest, while the principal is subject to a foreign exchange translation risk. The DCD is a structured deposit that is based on the foreign exchange rate and offers a higher interest compared to conventional term deposits in exchange for taking a conversion risk.

 

Government securities

These are a low-risk investment alternative and the issuer of this type of instruments is the state government. Government securities can be treasury certificates, with a maturity date below a year and a yield set as the difference between the purchasing price and the nominal value, and obligations with an initial maturity date of over a year and they provide the holder with the reimbursement of the nominal value and with an interest called "coupon." If you are interested in making a low sovereign risk investment you can buy/sell government securities through OTP Bank Romania.  

OTP Trader

OTP Trader is a trading system that is connected in real time to the inter-bank market and through which the bank gives you the possibility of negotiating and trading foreign exchanges.

 

In order to contract one of these products or to find out more details please contact us at the following address:

 

Treasury Sales

                                              

Τelephone: 

0372 31 85 83

0372 31 85 84

0372 31 85 85

0372 31 85 86

0372 31 85 87

0372 31 85 88

                                             

Fax: (+40) 21 308 51 79                

                                   

E-mail: sales.treasury@otpbank.ro                                                

Regulatory framework

For more details regarding the regulatory framework of the investment products and services distributed by OTP Bank Romania, please access the MiFID II webpage.

OTP Bank provides you the Investment Service Hedge Limit

It is a revolving limit granted through a Credit Contract, whereby OTP Bank can offer your company the contracting of treasury products in different currencies over a certain period of time. 

 

The allocation of such a limit concerns the provision of a guarantee in order to perform of derivatives transactions. 

 

Limit’s value: will be determined according to the company’s hedging needs. 

 

Granting period: maximum 180 months since the data of signing the Credit Contract for financing the obligations from derivatives transactions, being estbalished in connection with the validity period of the derivative products that can be utilized within this limit:

 

  • FX Options: maximum 12 months
  • FX SWAP: maximum 18 months
  • FX Forward: maximum 18 months
  • Interest Rate Swaps: maximum 180 months, but no more than the maturity of the credit for which hedging is made
  • Interest rate Options: maximum 180 luni, but no more than the maturity of the credit for which hedging is made

 

The guarantees structure is flexible, in case of limits granted for interest rate swap or options, the guarantees may be common with the hedged credit.