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.
