Moodyʼs assigns first-time ratings to Raiffeisen Hungary
Moodyʼs Investors Service has today assigned first-time long-term Baa2 and short-term Prime-2 local currency, and long-term Baa3 and short-term Prime-3 foreign currency deposit ratings, to Raiffeisen Bank Zrt. (RBH).
Concurrently, the rating agency has also assigned a ba2 Baseline Credit Assessment (BCA), and a ba1 Adjusted BCA, as well as long-term Baa1 and short-term Prime-2 local and foreign currency Counterparty Risk Ratings (CRRs), according to a press release sent to the Budapest Business Journal.
The rating agency has also assigned Baa2(cr) long-term and Prime-2(cr) short-term local currency Counterparty Risk Assessments (CRAs). The outlook assigned to the long-term deposit ratings is stable.
The agency says that RBHʼs ba2 BCA reflects the agencyʼs expectation that the bankʼs asset quality will continue to improve, given its good capital levels and strong funding and liquidity profile. The ba2 BCA also reflects the bankʼs profitability as weaker than peers, while its exposure to foreign currency loans is higher than peers, a significant part of which is loans in the cyclical commercial real estate sector, the press release notes.
The bankʼs ratio of non-performing loans (NPLs) to gross loans continued to decline to 5.7% as of December 2018, down from 11.0% at the end of 2017. Although the NPL ratio is higher than similarly rated domestic peers, Moodyʼs says it expects the bankʼs asset quality to continue to improve as the positive macroeconomic environment supports loan performance and loan growth.
The stable outlook on RBHʼs deposit ratings reflects the agencyʼs expectation that the bankʼs overall credit profile will remain broadly stable over the next 12-18 months, thereby taking into account the anticipated further improvements in asset quality.
SUPPORT THE BUDAPEST BUSINESS JOURNAL
Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.