Moody's cuts 7 Hungarian banks

Moody's Investors service said it took actions on the debt and deposit ratings of eight Hungarian banks to reflect the agency's reassessment of the country's capacity to support its banking system following the downgrade of the Hungarian government's rating to Baa3 from Baa1. Seven of the banks were downgraded.

The agency also said it lowered to Baa3 from Baa1 the country's ceiling on foreign-currency bank deposit ratings and this has caused a more pronounced downward adjustment to the foreign-currency deposit ratings of the three highest rated banks.

OTP Bank's local-currency long-term deposit ratings were downgraded to Baa2 from Baa1, foreign-currency deposit ratings to Baa3/prime-3 from Baa1/prime-2, foreign-currency senior unsecured debt rating to Baa2 from Baa1, foreign-currency subordinated debt rating (lower tier 2) to Baa3 from Baa2, and its local-currency short-term deposit rating was confirmed at prime-2. The outlook is negative.

OTP Mortgage Bank's local-currency long-term deposit rating was downgraded to Baa2 from Baa1, foreign-currency deposit ratings to Baa3/prime-3 from Baa1/prime-2, and its local-currency short-term deposit rating was confirmed at prime-2. The outlook is negative.

K&H Bank's local-currency long-term deposit ratings were downgraded to Baa2 from A3, foreign-currency deposit ratings to Baa3/prime-3 from Baa1/prime-2, and its local-currency short-term deposit rating was confirmed at prime-2. The outlook is negative.

MKB Bank's local-currency deposit ratings were downgraded to Baa3/prime-3 from Baa2/prime-2, foreign-currency deposit ratings to Baa3/prime-3 from Baa2/prime-2, foreign-currency senior unsecured debt rating to Baa3 from Baa2 and foreign-currency subordinated debt rating (lower tier 2) to Ba1 from Baa3. The outlook is negative.

Erste Bank Hungary's local-currency deposit ratings were downgraded to Baa3/prime-3 from Baa2/prime-2 and foreign-currency deposit ratings to Baa3/prime-3 from Baa2/prime-2. The local currency deposit rating has a stable outlook and the foreign-currency deposit rating has a negative outlook.

FHB Mortgage Bank's local-currency deposit ratings were confirmed at Baa3/prime-3 and foreign-currency deposit ratings at Baa3/prime-3. The outlook is negative.

MFB Development Bank's foreign-currency deposit ratings were downgraded to Baa3/prime-3 from Baa1/prime-2 and foreign-currency senior unsecured debt to Baa3 from Baa1. The outlook is negative.

Budapest Bank's local-currency deposit ratings were confirmed at Baa2/prime-2, its foreign-currency deposit ratings were downgraded to Baa3/prime-3 from Baa2/prime-2. The outlook is negative.

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