Moody’s upgrades FHB after SZHISZ members boost stake

Ratings

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.

ADVERTISEMENT

Varga puts 2021 GDP growth at 7-7.5% Analysis

Varga puts 2021 GDP growth at 7-7.5%

Opposition parties to begin PM candidate primaries Elections

Opposition parties to begin PM candidate primaries

New managing director at the helm of Wolt Hungary Appointments

New managing director at the helm of Wolt Hungary

Budapest bike-sharing scheme boasts record ridership City

Budapest bike-sharing scheme boasts record ridership

SUPPORT THE BUDAPEST BUSINESS JOURNAL

Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.