Moody’s Downgrades Hungary’s Erste, FHB Banks
- 13 Aug 2014 3:00 AM
Moody’s Investors Service downgraded the deposit ratings of Erste Bank Hungary and FHB Mortgage Bank both to B3 from B2 on Tuesday, the ratings agency announced. Moody’s maintained the negative outlook for both banks, citing “increased risk of losses” resulting from recently adopted borrowers’ relief legislation and “ongoing negative pressure on...financial fundamentals”.
It said both banks were more affected by the legislation than many Hungarian banks it rates because of “more limited profitability” and the higher effect of the new laws on their capital.
The legislation requires lenders to compensate borrowers for using exchange rate margins when calculating foreign currency denominated loan repayments and for making unilateral changes to contracts.
Source www.hungarymatters.hu
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