Business
Moody's upgrades Hungarian banks
Moody's has also upgraded the long-term local currency deposit rating of Kereskedelmi & Hitel Bank Rt. (K&H) to Baa1 from Baa2 and changed its outlook to stable from positive. The bank's Baa3 long-term and its Prime-3 short-term foreign currency deposit ratings, its Prime-2 short-term local currency deposit rating, its Baa1 long-term local and foreign currency Counterparty Risk Ratings (CRR), its Baa2(cr) long-term Counterparty Risk Assessment (CRA), as well as its Prime- 2 short term CRRs and Prime-2(cr) short term CRA were affirmed. The bank's Baseline Credit Assessment (BCA) was also upgraded to ba2 from ba3 while its adjusted BCA was upgraded to baa3 from ba1.
In both cases, Moody's explained the upgrade by improving balance sheets through reduced problem loans.
The banks' BCA could be upgraded following further improvement in asset quality, loan loss reserves and capital buffers while demonstrating resilient core profitability and maintaining strong funding and liquidity profile, Moody's said.
The banks' ratings could be downgraded owing to substantial weakening in asset quality, capital buffers or liquidity buffers. Adjusted BCA could also be downgraded following a lower support assumption or a weaker credit profile of its foreign parent, Moody's said.
In both cases, Moody's explained the upgrade by improving balance sheets through reduced problem loans.
The banks' BCA could be upgraded following further improvement in asset quality, loan loss reserves and capital buffers while demonstrating resilient core profitability and maintaining strong funding and liquidity profile, Moody's said.
The banks' ratings could be downgraded owing to substantial weakening in asset quality, capital buffers or liquidity buffers. Adjusted BCA could also be downgraded following a lower support assumption or a weaker credit profile of its foreign parent, Moody's said.
