Moody's cuts some Hungarian bank outlooks to negative

Moody's Investors Service said it changed the outlook on selected deposit and debt ratings of seven Hungarian banks to negative from stable and affirmed the bank's other ratings. The rating actions have been prompted by the recent changes in outlooks on Hungary's sovereign ratings, which Moody's attributed primarily to the country's deteriorating fiscal balance.

Moody's changed the outlook on the Republic of Hungary's A1-rated medium- to long-term foreign and local currency government bonds and notes and the country's ceiling for foreign currency bank deposits to negative from stable on Wednesday. The outlook for Hungary's foreign currency country ceiling for bonds and notes was changed to developing pending resolution of Moody's policy on foreign currency country ceilings for medium- to long-term bonds and notes.

The outlook on the foreign currency deposit ratings of six Hungarian banks - Budapest Bank, Kereskedelmi & Hitel Bank, MKB Bank, OTP Bank, OTP Jelzalogbank and Hungarian Development Bank Ltd. - has been changed to negative from stable to reflect the similar outlook change on Hungary's A1 ceiling for foreign currency bank deposits.

The outlook on Land Credit and Mortgage Bank's long-term foreign currency rating was also changed to negative from stable following the change in the outlook of the rating of the Hungarian government domestic debt to negative from stable.

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