Moodyʼs has decided to change the outlook on the Hungarian banking system to negative from stable, according to a press release sent to the Budapest Business Journal.
Moodyʼs reviewed nine European banking systems in the wake of the coronavirus pandemic, deciding to change the outlook on five of them: Hungary, Norway, Finland, Portugal, and Slovakia.
The changes reflect the likely consequences of the COVID-19 pandemic in Europe, Moodyʼs says.
In the case of Norway, Finland, Hungary, and Portugal, the change in the outlook reflects the agencyʼs expectation that these four countries will experience a sharp contraction in economic growth. Banksʼ profitability will weaken due to rising loan loss provisions and reduced lending growth, Moodyʼs argues.
The outlook on the Slovakian banking system has changed to negative from positive, with Moodyʼs expecting a previous improvement in asset quality to reverse.
Moodyʼs decided to leave the outlook on the Czech, Polish, Austrian, and Irish banking systems stable.