Moody's upgrades Raiffeisen Bank to 'A3'

Banking

Moody's Investors Service yesterday said it upgraded the local and foreign currency long-term deposit ratings of Hungarian lender Raiffeisen Bank Zrt. to "A3" from "Baa1," according to portfolio.hu.

The outlook on the ratings is stable. Moody's upgraded the ratings as it expects the lender to issue debt to comply with its Minimum Requirement for own funds and Eligible Liabilities (MREL) by Jan. 1, 2024.

The National Bank of Hungary has set the MREL for Raiffeisen Bank Zrt. at 29.62% of total risk exposure. Moody's noted that Raiffeisen Bank Zrt.'s Austrian parent, Raiffeisen Bank International, has made a public commitment that its Hungarian business will issue around EUR 500 million of debt in 2022.

Moody's added that it expects Raiffeisen Bank Zrt. to issue additional debt in 2023 to comply with the MREL.

Moody's pointed out that Raiffeisen's long-term deposit ratings are two notches over Hungary's "Baa2" sovereign rating, the maximum allowable gap.

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