Moody's may cut MKB Bank

Moody's Investors Service said it placed on review for possible downgrade MKB Bank Zrt's Aa3 long-term local-currency deposit rating, Aa3 foreign-currency senior debt rating and A1 foreign-currency subordinated debt rating. The bank's C- bank financial strength rating and A2 long-term foreign-currency deposit ratings are affirmed.

The outlook is stable.

The action comes after Moody's placed on review for possible downgrade the C- bank financial strength rating of its German parent, Bayerische Landesbank (rated Aa2/prime-1/C-).

The review of Bayerische Landesbank reflects its exposure to structured credit products, Moody's said, and will consider what measures the bank may take to limit or offset the negative impacts linked to the structured credit product portfolio on the bank's capital base.

Although MKB's bank financial strength rating has not been affected by its parent's exposures, the agency said the deposit and debt ratings for MKB incorporate uplift, reflecting a possible support from Bayerische Landesbank.

A downgrade of the parent's bank financial strength rating would reflect a reduction in Bayerische Landesbank's ability to support MKB and would result in a downgrade of MKB's ratings, Moody's said.

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