BLG Building Materials##

By Margit Feher

BUDAPEST--Hungarian retail bank MKB Bank Zrt. Wednesday has canceled its credit rating contract with Moody's Investors Service after the rating company dramatically downgraded the bank Tuesday.

Moody's downgraded the baseline credit assessments of MKB Bank by four notches from b3 to ca--one level above the lowest rating.

On terminating its contract, MKB Bank said it didn't agree with Moody's assessment of the bank's standing or its ability to implement its mid-term business strategy.

The rating firm also downgraded fellow Hungarian retail banks Budapest Bank Zrt., K&H Bank Zrt. and Erste Bank Hungary Zrt. because of the "increasingly weak economic and operating environment in Hungary and the subsequent negative implications this has on all four banks' franchises, asset quality and profitability."

Germany's Bayerische Landesbank AG holds a 98% stake in MKB but in July 2012 it agreed with the European Commission to divest the Hungarian subsidiary by the end of 2015 as part of its restructuring program.

Write to Margit Feher at margit.feher@dowjones.com