KARACHI – Five Pakistani banks are placed to have opportunities from recovering economic prospects. Moody’s Ratings said.
Moody revised long-term deposit ratings for Habib Bank Ltd (HBL), United Bank Ltd (UBL), National Bank of Pakistan (NBP), MCB Bank Limited (MCB), and Allied Bank Limited (ABL).
The American top financial agency upgraded Baseline Credit Assessments (BCAs) for ABL, HBL, MCB, and UBL to caa2, while NBP’s BCA remains at caa3. The outlook for these banks’ long-term deposit ratings is now positive, up from stable.
This adjustment follows Moody’s upgrade of Pakistan’s sovereign issuer and senior unsecured debt ratings to Caa2 from Caa3. The sovereign rating boost reflects Islamabad’s improved credit situation, marked by better macroeconomic conditions and slightly improved government liquidity and external positions.
The rating upgrades for the banks are tied to significant holdings in sovereign debt, which link their credit profiles closely with that of government. For National Bank, the upgrade also takes into account the government’s ability to provide support.
The positive outlook for banks depicts only improved outlook for Pakistani government but also the possibility of better operating conditions that could enhance the banks’ credit profiles.
Future upgrades could occur if the country’s economic environment continues to improve and the sovereign rating increases, provided the banks maintain their financial stability.
Moody’s upgrades Pakistan’s credit ratings, changes outlook to positive
