Moodyʼs upgrades FHB Mortgage Bankʼs deposit ratings
Rating agency Moodyʼs Investors Service upgraded the long-term local and foreign currency deposit ratings of FHB Mortgage Bank from B3 to B2 on Monday, according to a press statement sent to the Budapest Business Journal.
Concurrently, the bankʼs Baseline Credit Assessment (BCA), the measure of a bankʼs intrinsic strength, was upgraded from caa2 to caa1, its adjusted BCA was upgraded from caa1 to b3, and its long-term Counterparty Risk Assessment (CRA) was upgraded from B1(cr) to Ba3(cr).
The bankʼs long-term ratings and rating inputs have been placed on review for further upgrade. FHBʼs short-term Not Prime deposit ratings and Not Prime(cr) CRA are unaffected.
Moody’s said the upgrade of FHBʼs ratings “primarily reflects the closer integration of the bank into Hungaryʼs savings cooperatives sector, which has reduced previous corporate governance risks under its former ownership and has also led the rating agency to increase its assumptions for sector support to high from moderate previously.”
Moody’s said that there is an expectation of further gradual improvements in FHBʼs standalone financial metrics, which together with affiliate support from the sector will likely result in a further ratings upgrade.
Although ratings downgrades are unlikely in the short term given the bankʼs improving credit profile, according to Moody’s, a deterioration in FHBʼs financial metrics may have negative rating implications in the medium term.
“A change in the bankʼs liability structure may change the uplift provided by Moodyʼs Advanced LGF analysis and lead to a higher or lower notching from the bankʼs adjusted BCAs, thereby affecting deposit ratings,” the rating agency added.
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.