Bulletin: Hungarian Banks Face High Risks Of Asset Quality Deterioration; BICRA Economic Risk Trend Now Negative

FRANKFURT (S&P Global Ratings) Dec. 12, 2022--Following a review of the Banking Industry Country Risk Assessment (BICRA) for Hungary (BBB/Negative/A-2), S&P Global Ratings now views the economic risk trend as negative, versus stable previously. The negative trend reflects risks to borrowers' creditworthiness amid reducing real incomes and higher inflation driven by the availability and cost of energy, which could weaken banks' asset quality. Potential delays or cuts to EU fund disbursements represent a major downside, in our view, and would lead to another review of our assessment, since this could result in an abrupt slowdown and pronounced recession with indirect effects on the banking sector. At the same time, we maintained the BICRA group classification at '5' and the economic

...To From BICRA group 5 5 Economic risk 5 5 Economic resilience Intermediate risk Intermediate risk Economic imbalances High risk High risk Credit risk in the economy Intermediate risk Intermediate risk Trend Negative Stable Industry risk 5 5 Institutional framework Intermediate risk Intermediate risk Competitive dynamics High risk High risk Systemwide funding Intermediate risk Intermediate risk Trend Stable Stable...

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