Moody’s Investors Service downgraded seven Hungarian commercial banks late on Friday, in connection with the downgrade of Hungary’s sovereign rating announced late on Thursday.
Moody’s said in London that it downgraded FHB’s long-term local and foreign-currency deposit ratings to Ba2 from Ba1, and MKB Bank’s long-term local and foreign-currency deposit and debt ratings to Ba3 from Ba2.
Moody’s also reduced the foreign-currency deposit ratings of OTP, OTP Mortgage Bank, K+H Bank, and Budapest Bank to Ba2/Not-Prime from Baa3/Prime-3. It cut Erste Bank Hungary’s long-term foreign-currency deposit to Ba2 from Ba1.
The rating agency also lowered the forint deposit ratings of OTP and OTP Mortgage Bank to Ba1/Not-Prime from Baa3/Prime-3, OTP’s foreign-currency senior debt rating to Ba1 from Baa3, its subordinated debt rating to Ba2 from Ba1, and its junior subordinated debt rating to Ba3 (hyb) from Ba2 (hyb).
The foreign currency rating of state-owned Hungarian Development Bank MFB was changed from Baa3 to Ba1 and its foreign currency deposit rating worsened to Ba2/Not-Prime from Baa3/Prime-3.
Moody’s Investor Service also downgraded Budapest to non-investment status. Moody’s downgraded the Hungarian capital’s debt issuer rating to Ba1 from Baa3, with a negative outlook.
The rating actions followed the rating agency’s move to cut the Hungarian government debt rating by one notch to Ba1 from Baa3, bringing it under "investor grade", on November 24. Moody’s maintained a negative outlook on the rating.