Bank OTP Now Participates in CLSSettlement as a Settlement Participant
OTP Bank, one of the largest commercial banks in Hungary and a prominent member of the OTP Group, has joined CLSSettlement, the global standard in foreign exchange (FX) settlement risk mitigation across 18 of the most traded currencies [1][2][3][5]. This move is reflective of a broader trend among financial institutions focusing on mitigating FX settlement risk.
As a new settlement member, OTP Bank will benefit from CLSSettlement's widely recognized Payment-versus-Payment (PvP) settlement system. This system eliminates principal risk in FX trades by ensuring simultaneous settlement of both legs of a transaction, reducing the risk that one party pays without receiving the corresponding currency [1][2][3].
Operationally, OTP Bank stands to gain significantly from CLS’s multilateral netting, which substantially reduces the liquidity needed to settle trades. CLSSettlement members achieve approximately 96% liquidity savings, freeing cash flow for other uses such as trading and business growth [1][2][3][4].
Lisa Danino-Lewis, Chief Growth Officer at CLS, has commented on OTP Bank's decision to join CLSSettlement. She highlighted the operational efficiency and liquidity benefits offered by CLSSettlement. Attila Bánfi, Managing Director of OTP Global Markets, further emphasized OTP Bank's focus on mitigating FX settlement risk.
By adopting CLSSettlement membership, OTP Bank aligns with global best practices for FX risk management, as reflected in adherence to the FX Global Code principles, strengthening its risk controls and middle-office processes [1][3].
CLSSettlement currently has 75 settlement members, making it a robust and reliable platform that handles payments across the 18 most traded currencies and processes an average daily settled value of around USD7.9 trillion (as of the first half of 2025) [1][2][3][5].
The growing number of financial institutions focusing on FX settlement risk mitigation and efficiency is demonstrated by OTP Bank's decision to join CLSSettlement. This move is a significant step towards creating a more robust FX ecosystem, as reflected in OTP Bank's dedication to creating a more robust FX ecosystem [2].
In summary, OTP Bank’s CLSSettlement membership significantly reduces FX settlement risk exposure, improves liquidity utilization through multilateral netting, and enhances operational efficiency by integrating with a global, standardized FX settlement platform. This move is a testament to OTP Bank's commitment to adopting best practices across their risk management and middle office functions and aligning with global standards in FX risk management.
[1] CLSSettlement Website: https://www.clstl.com/ [2] OTP Bank Website: https://www.otpbank.hu/en [3] FX Global Code: https://www.fxglobalcode.org/ [4] CLS Annual Report 2024: https://www.clstl.com/media/3088/clssettlement-annual-report-2024.pdf [5] Bank for International Settlements: https://www.bis.org/publ/rpfx1903.htm
- OTP Bank's decision to join CLSSettlement demonstrates their focus on finance and risk management, as they aim to reap the operational efficiency and liquidity benefits offered by CLSSettlement, thus aligning with global best practices for FX risk management.
- By adopting CLSSettlement membership, OTP Bank is not only reducing their FX settlement risk exposure but also enhancing their liquidity utilization, which allows them to allocate cash flow for trading and business growth, reflecting a broader trend among financial institutions focusing on risk mitigation in the finance sector.
