Fitch confirms MFB and Eximbank at BB+
Fitch Ratings affirmed MFB Hungarian Development Bank's and Hungarian Export Import Bank's long-term issuer default ratings (IDR) at "BB plus" with a stable outlook on Friday. Both banks' IDRs are equalized with those of the Hungarian sovereign which is also "BB plus" with stable outlook, reflecting Fitch's view of a moderate probability of state support for either bank, if required, Fitch said in a release, Hungarian news agency MTI reported.
The agency believes that the government's propensity to support MFB and Eximbank is strong. However, its ability to provide support is moderate, as reflected in the sovereign ratings. MFB and Eximbank are 100% state-owned banks. Fitch's view of support for both banks reflects their strategic policy role to support Hungarian exports and domestic economic growth (MFB), full state ownership and state guarantees for their obligations.
In 2014 and 1Q15, Eximbank continued to receive fresh capital from the state, supporting its strategic lending growth plans. Both banks received short-term bridge financing from the state, MFB in 2011, and Exinbank in 2012.
Fitch does not expect either bank to fully utilize their state guarantee limits over the medium-term, while both banks plan to source their guaranteed medium- and long-term funding primarily from international markets, Fitch said.
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