Moody's upgrades Budapest Bank, MKB Bank deposit ratings

Ratings

Image by Andrius Zemaitis / Shutterstock.com

Moody's Investors Service on Thursday said it upgraded the long-term local and foreign currency deposit ratings of Budapest Bank and MKB Bank to Baa3 from Ba1 and changed the outlooks to stable from positive, according to a report by state news wire MTI.

The rating actions were driven by the approval on Wednesday of the shareholders of Budapest Bank, MKB Bank, and Takarék Group of a merger between the three lenders to create Hungary's second-largest commercial bank.

Moody's now rates Budapest Bank and MKB Bank based on the combined pro-forma balance sheet of the three lenders that will merge, "incorporating its expectations concerning the financial performance as well as a higher assumption of the likelihood of support by the Government of Hungary...given the merged entity's increased systemic importance", the agency said.

Moody's has assigned Hungary a Baa2 sovereign rating with a stable outlook.

The agency explained the stable outlook on the Budapest Bank and MKB Bank ratings noting that the "significant potential synergies" the merger holds will "only be visible over time" due to the complexity of the transaction.

MKB Bank and Budapest Bank will merge on March 31, 2022 and take the name MKB Bank. Takarék Group will join the merged bank in Q2 2023,

ADVERTISEMENT

Business, consumer sentiment improve in January Analysis

Business, consumer sentiment improve in January

Márki-Zay tests positive for COVID-19 Elections

Márki-Zay tests positive for COVID-19

New partner announced at act Bán & Karika Attorneys at Law Appointments

New partner announced at act Bán & Karika Attorneys at Law

Gov't Calls for technical screening of László Papp Arena City

Gov't Calls for technical screening of László Papp Arena

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.