Bondholders in the Hungarian National Bank’s Bond Funding for Growth programme (‘NKP’) face a covenant-related credit challenge amid difficult domestic economic conditions, says Scope Ratings.

BBVA’s determination to pursue Banco de Sabadell and Sabadell’s confidence in its standalone strategy align with our view of the supportive banking environment in Spain, which remains an attractive market to deploy capital.

Significant efforts have been made since the GFC to improve the supervision of systemically important banks and address the issue of too-big-to-fail. But on this and the effectiveness of AT1s in supporting G-SIB recovery, there is room for improvement.

EU supervisors remain concerned that banks’ real-estate exposure is vulnerable, and US contagion risk is an issue. But while German banks’ CRE portfolios are unlikely to have endangered the safe-haven status of Pfandbriefe, office exposure is a worry.

Scope Ratings has published the performance overview of notes issued by Marzio Finance, a EUR 10bn securitisation programme backed by ‘cessione del quinto’ and ‘delegazione di pagamento’ (CQS) loans originated by IBL Banca.

Safety-related production problems at Boeing Co. are delaying the normalisation of the aviation finance sector, partly to the benefit of aircraft-leasing companies, as post-pandemic demand for air travel grows faster than the supply of aircraft.

CRE refinancing risk remains high. We still believe that 40% of fully-extended securitised loans present high or very high refinancing risks but based on recent extension requests, moderate refi risk has increased materially from 23% to 41%.

Faster growth and higher interest rates in Central and Eastern Europe have boosted the profitability of Western European banks present in the region and supported their credit profiles. The strategic case for maintaining their presence remains intact.

Norwegian savings banks have displayed strong profitability on the back of the supportive interest-rate environment. We expect this to continue. The pace of credit expansion has abated but the banks have managed to continue growing their loan books.

May 16, 2024 15:30 (CEST)