Moody's might downgrade Hungarian banks

Moody's Investors Service placed on review for possible downgrade the debt and deposit ratings of several Hungarian banks following the placement of Hungary's Baa1 government bond rating on review for possible downgrade.

Among the ratings affected are MKB Bank's Baa2 long-term local- and foreign-currency deposit and debt ratings, Prime-2 short-term local- and foreign-currency deposit and debt ratings and Baa3 foreign-currency subordinated debt rating and OTP Bank's Baa1 long-term local- and foreign-currency deposit and debt ratings, Prime-2 short-term local- and foreign-currency deposit and debt ratings and Baa2 foreign-currency subordinated debt rating.

According to Moody's, the reviews reflect the fact that these banks' deposit and debt ratings benefit from systemic support and the amount of uplift resulting from this would be reduced in the event that the sovereign is downgraded.

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