Moody’s lowers ratings on Erste Bank, FHB Bank
Moody's Investors Service downgraded the deposit ratings of both Erste Bank Hungary and FHB Mortgage Bank to B3 from B2, the ratings agency announced today. It says it maintains a negative outlook for both banks.
The agency sees an "increased risk of losses" resulting from the recently adopted borrowers' relief legislation and an "ongoing negative pressure on [...] financial fundamentals".
Moody’s believes the two banks are more affected by the new legislation than any other one in Hungary because they have a “more limited profitability".
In an earlier report, Moody's estimated the impact of the borrowers’ relief legislation on the whole banking sector at €2.6 bln, i.e about 28% of its total capital. However a top central bank official said the refunds to be paid to customers would cost Hungarian banks HUF 900 bln at the most.
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