Moody's ups EON Bank

Moody's Investors Service said it upgraded EON Bank Bhd.'s foreign-currency long-term and short-term deposit ratings to A3/P-1 from Baa2/P-3.

Moody's also upgraded the bank's bank financial strength rating to C- from D. The C- rating maps to a baseline credit assessment of Baa1, upgraded from the former baseline credit assessment of Ba2.

The outlook is stable.

The upgrades are a result of the purchase of EON Bank by Hong Leong Bank (A3/P-1, stable) on May 6, the agency said. This concludes the rating review initiated on April 7, 2010 when the board of EON Capital first called an extraordinary general meeting to seek shareholder approval of the proposed acquisition of its assets and liabilities by Hong Leong Bank.

EON Bank's moderate, but improving credit profile, would likely benefit from Hong Leong's comfortable funding and asset quality, the agency noted. While Hong Leong's pro forma capital ratios will deteriorate, it had a very strong capital cushion prior to the acquisition of EON Bank.

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