ADVERTISEMENT

Moodyʼs upgrades K&H, Erste, Budapest Bank and MKB

Ratings

Photo by Gil C / Shutterstock.com

Moodyʼs Investors Service said late yesterday it upgraded the ratings of K&H Bank in Hungary, Erste Bank Hungary, Budapest Bank and MKB Bank, Hungarian news agency MTI reported.

Moodyʼs conducted a review for upgrade after changing its Macro Profile for Hungary to "Moderate-" from "Weak+".

"The change of the Macro Profile illustrates Moodyʼs assessment of the improvement in Hungarian banksʼ operating environment, in particular in the gradual recovery in credit demand," Moodyʼs said.

Hungarian banksʼ lending stock has contracted by more than 20% over the past five years, but now is likely to grow by about 5% annually over the next 12 to 18 months, supporting revenue generation, it added.

"The improving operating environment benefits Hungarian banksʼ standalone [baseline credit assessments] by helping to reduce the high level of problem loans, restoring their profitability after several years of losses, and strengthening capitalisation," it said.

K&H Bankʼs long-term local-currency deposit rating was upgraded to Ba1 from Ba3, its long-term foreign-currency deposit rating was upgraded to Ba2 from Ba3, the baseline credit assessment (BCA) was upgraded to b1 from b2 and the adjusted BCA was upgraded to ba2 from ba3. The outlook on the long-term local-currency deposit rating is stable while the outlook on the long-term foreign-currency deposit rating is positive. The bankʼs long-term Counterparty Risk Assessment (CRA) was affirmed at Baa3(cr).

Erste Bank Hungaryʼs long-term local and foreign-currency deposit ratings were upgraded to Ba2 from B2, the long-term CRA was upgraded to Ba1(cr) from Ba2(cr), the BCA was upgraded to b3 from caa1 and the adjusted BCA was upgraded to b1 from b2. The outlook on the long-term deposit ratings is positive.

Budapest Bankʼs long-term local and foreign-currency deposit ratings were upgraded to Ba2 from B2, the long-term CRA was upgraded to Ba1(cr) from Ba3(cr), and the BCA and adjusted BCA were upgraded to b1 from b2. The outlook on the long-term deposit ratings is stable.

MKB Bankʼs long-term local and foreign-currency deposit ratings were upgraded to B3 from Caa2 with a stable outlook. The bankʼs long-term CRA was affirmed at B2(cr).

"A further improvement in the operating environment for Hungarian banks leading to a considerable reduction in problem loans and stronger capital ratios, could have positive rating implications," Moodyʼs said.

"A deterioration in the countryʼs Macro Profile and/or in individual banksʼ standalone financial metrics may have negative rating implications," the ratings agency added.

ADVERTISEMENT

Consumer, business confidence reach 2-year high - GKI Analysis

Consumer, business confidence reach 2-year high - GKI

Parl't votes to phase out savings coops integration framewor... Parliament

Parl't votes to phase out savings coops integration framewor...

Roche Szolgáltató appoints P&C business partner lead Appointments

Roche Szolgáltató appoints P&C business partner lead

Budapest airport shuttle bus service expanded City

Budapest airport shuttle bus service expanded

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.