Moody's downgraded the long-term foreign currency deposit ratings of seven Hungarian banks, including OTP Bank, following similar action for the country's sovereign rating last month.
Moody's Investors Service lowered the rating one notch to A2, the fifth-lowest investment grade, for OTP Bank Nyrt and its mortgage unit OTP Jelzálogbank Zrt, state owned Magyar Fejlesztési Bank Rt, and the local units of Intesa Sanpaolo SpA, KBC Groep NV, Bayerische Landesbank and General Electric Co.
Moody's on December 22 reduced the country's sovereign rating after a three-month review, citing concerns about the government's ability to cut the budget deficit. The outlook on the new ratings is stable. Government wants to cut the shortfall to 6.8% of GDP this year from an estimated 10% in 2006, the highest in the European Union. (Bloomberg)