OTP Leads Losses as Moody’s Downgrades Lenders: Budapest MoverAndras Gergely
OTP Bank Nyrt., Hungary’s largest lender, fell for a second day, leading a decline in stocks, after Moody’s Investors Service lowered its credit ratings.
OTP’s shares fell 0.9 percent to 4,760 forint by the close in Budapest, extending its two-day drop to 3.1 percent and paring this week’s gain to 1.9 percent. The benchmark BUX index slumped 0.3 percent today and 1.1 percent this week.
Moody’s lowered OTP’s standalone credit assessment by one level to Ba2 and that of FHB Jelzalogbank Nyrt., a mortgage lender, by two steps to B3, citing a drag on profits as Hungary’s economy deteriorates, according to a statement after the market’s close yesterday. OTP led a plunge in Hungary’s stocks yesterday after data showed gross domestic product fell 2.7 percent in the fourth quarter from a year earlier, the most in three years.
“The drivers of the lower standalone credit assessments are the increasingly weak economic and operating environment in Hungary and the challenges this creates for all three banks’ franchises, asset quality and profitability,” Simone Zampa, a Milan-based analyst at Moody’s, wrote in the statement.
FHB reversed intraday declines of as much 3.1 percent to close 0.5 percent higher.