Moody’s upgrades FHB after SZHISZ members boost stake
Moody’s Investors Service has upgraded the long-term local and foreign-currency deposit ratings of FHB Mortgage Bank from Caa1 to B3 in light of closer ownership ties with savings cooperative integrator SZHISZ, Hungarian news agency MTI reported Wednesday.
Moodyʼs noted that FHBʼs ratings had been placed on review for a downgrade in June because of “rising concerns about its solvency and franchise viability.” The action was taken after FHB became involved in a police investigation and was fined for market misconduct.
“The upgrade of FHBʼs 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 Hungaryʼs saving cooperatives sector, which further significantly increased its ownership in FHB during October 2016,” Moodyʼs said.
In October, former FHB chairman Zoltán Spéder sold a 16.6% stake in the lender to two members of SZHISZ before resigning from his position.
“Moody’s expects that FHBʼs closer ties with [SZHISZ] significantly reduce the risks to its solvency and franchise viability stemming from adverse measures by the Hungarian authorities,” the agency said, referring to the bank’s involvement in the police investigation. “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,” it added.
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