Economy
Moody's upgrades four Hungarian banks
Moody's Investors Service has taken rating actions on four Hungarian banks, prompted by the upgrade of the Hungarian government's debt rating to Baa3 with a stable outlook from Ba1 (previously positive), and raising of Hungary's country ceiling for long-term foreign-currency deposits to Baa3 from Ba2.
The following banks are affected by today's rating actions:
All other ratings and rating inputs of the banks captured by Monday’s rating actions remain unaffected. In addition, the ratings and outlook of other Moody's rated Hungarian banks -- such as Erste Bank Hungary Zrt., MKB Bank Zrt., Budapest Bank Rt. and FHB Mortgage Bank Co. Plc. -- are unaffected by Monday’s actions.
Upgrade of OTP Bank NyRt's (OTP) long-term foreign currency deposit rating to Baa3 with a stable outlook from Ba2 (previously positive), its short-term foreign-currency deposit rating to Prime-3 from Not Prime, its long-term Counterparty Risk Assessment (CRA) to Baa2(cr) from Baa3(cr) and its short-term CRA to Prime-2(cr) from Prime-3(cr);
Upgrade of OTP Jelzálogbank Zrt.'s (OTP Mortgage Bank) long-term CRA to Baa2(cr) from Baa3(cr) and its short-term CRA to Prime-2(cr) from Prime-3(cr);
Upgrade of Kereskedelmi & Hitel Bank Rt.'s (K&H) long-term foreign currency deposit rating to Ba1 with a stable outlook from Ba2 (previously positive), its long-term CRA to Baa2(cr) from Baa3(cr) and its short-term CRA to Prime-2(cr) from Prime-3(cr).
Moody's upgraded to B3 from Caa1 the long-term local and foreign-currency deposit ratings of FHB Mortgage Bank Co. Plc. (FHB) on 2 November. Concurrently, the bank's long-term Counterparty Risk Assessment (CRA) was upgraded to B1(cr) from B2(cr), its adjusted BCA was upgraded to caa1 from caa2 and its baseline credit assessment (BCA) was confirmed at caa2. The outlook on the long-term deposit ratings is stable. FHB's short-term Not-Prime deposit ratings and Not-Prime(cr) CRA remain unaffected.
FHB's ratings were placed on review for downgrade on 21 June 2016 driven by rising concerns about its solvency and franchise viability.
“According to Moody's, the upgrade of FHB's long term deposit ratings with a stable outlook primarily reflects the significant reduction in the aforementioned risks on the back of the progressive closer integration of FHB into Hungary's saving cooperatives sector that further significantly increased its ownership in FHB during October 2016. At the same time, FHB's fundamental credit profile remains constrained by weak profitability witnessing structural efficiency challenges as well as a high, albeit gradually declining, stock of problematic assets," the rating agency said in a statement last week.
The following banks are affected by today's rating actions:
- Hungarian Development Bank (MFB)
- OTP Bank Nyrt.
- OTP Jelzálogbank Zrt. (mortgage bank)
- K&H Bank.
All other ratings and rating inputs of the banks captured by Monday’s rating actions remain unaffected. In addition, the ratings and outlook of other Moody's rated Hungarian banks -- such as Erste Bank Hungary Zrt., MKB Bank Zrt., Budapest Bank Rt. and FHB Mortgage Bank Co. Plc. -- are unaffected by Monday’s actions.
Rating actions details:
Upgrade of MFB Hungarian Development Bank Private Limited Company's (MFB) backed long-term foreign currency senior unsecured debt rating to Baa3 with a stable outlook from Ba1 (previously positive); its backed long-term foreign currency deposit rating to Baa3 with a stable outlook from Ba2 (previously positive) and its backed short-term foreign-currency deposit rating to Prime-3 from Not Prime;Upgrade of OTP Bank NyRt's (OTP) long-term foreign currency deposit rating to Baa3 with a stable outlook from Ba2 (previously positive), its short-term foreign-currency deposit rating to Prime-3 from Not Prime, its long-term Counterparty Risk Assessment (CRA) to Baa2(cr) from Baa3(cr) and its short-term CRA to Prime-2(cr) from Prime-3(cr);
Upgrade of OTP Jelzálogbank Zrt.'s (OTP Mortgage Bank) long-term CRA to Baa2(cr) from Baa3(cr) and its short-term CRA to Prime-2(cr) from Prime-3(cr);
Upgrade of Kereskedelmi & Hitel Bank Rt.'s (K&H) long-term foreign currency deposit rating to Ba1 with a stable outlook from Ba2 (previously positive), its long-term CRA to Baa2(cr) from Baa3(cr) and its short-term CRA to Prime-2(cr) from Prime-3(cr).
Moody's upgraded to B3 from Caa1 the long-term local and foreign-currency deposit ratings of FHB Mortgage Bank Co. Plc. (FHB) on 2 November. Concurrently, the bank's long-term Counterparty Risk Assessment (CRA) was upgraded to B1(cr) from B2(cr), its adjusted BCA was upgraded to caa1 from caa2 and its baseline credit assessment (BCA) was confirmed at caa2. The outlook on the long-term deposit ratings is stable. FHB's short-term Not-Prime deposit ratings and Not-Prime(cr) CRA remain unaffected.
FHB's ratings were placed on review for downgrade on 21 June 2016 driven by rising concerns about its solvency and franchise viability.
“According to Moody's, the upgrade of FHB's long term deposit ratings with a stable outlook primarily reflects the significant reduction in the aforementioned risks on the back of the progressive closer integration of FHB into Hungary's saving cooperatives sector that further significantly increased its ownership in FHB during October 2016. At the same time, FHB's fundamental credit profile remains constrained by weak profitability witnessing structural efficiency challenges as well as a high, albeit gradually declining, stock of problematic assets," the rating agency said in a statement last week.
