KARACHI: Moody’s Investor’s Service downgraded the long-term deposit ratings of five Pakistani banks. Allied Bank Limited, Habib Bank Ltd, MCB Bank Limited, National Bank of Pakistan, and United Bank Ltd have been downgraded to Caa1 from B3. The rating agency has also lowered the banks’ long-term foreign currency counterparry risk ratings (CRRs) from B3 to Caa1.
Earlier, Moody’s downgraded Pakistan’s local and foreign currency and senior unsecured debt ratings from B3 to Caa1.
“The outlook on all banks’ deposit ratings remains negative,” Moody’s said in a statement on their website.
Moody’s explained that the government’s lack of capacity to support banks, especially NBP and HBL which have a higher credit linkage with the government, has impacted the banks’ ratings. This is the first time Moody’s has slapped a C rating in 7 years.
“As a result, NBP’s and HBL’s deposit ratings no longer incorporate a government support uplift.”
