Moody's: Hungarian banks benefit from foreign shareholder support

Moody's Investors Service said the stable outlooks assigned to its rated Hungarian banks continue to reflect the benefits that many of the banks have received from their foreign shareholders. Foreign investment is relatively high at around 80% of registered capital, with the majority of the larger having Western European or U.S. banks as majority shareholders.

The creditworthiness of the Hungarian banking system has improved significantly as the foreign owners have provided financial support and driven structural improvements in areas such as risk management, quality of service and product expertise, the agency said.

These improvements, together with the banks' strong and defensible domestic franchises, underpin their ratings. Moody's said the Hungarian banking market, which is one of the most developed in Central Europe, is converging with Western standards and thus has one of the highest weighted bank financial strength ratings in Central Europe.

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