Moody’s downgrades ratings for 5 Pakistani banks
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Islamabad: Moody’s Investors Service on Tuesday downgraded the long-term deposit ratings of five Pakistani banks Allied Bank Limited (ABL), Habib Bank Ltd (HBL), MCB Bank Limited (MCB), National Bank of Pakistan (NBP) and United Bank Ltd (UBL) to Caa1 from B3. It also lowered the banks’ long-term foreign currency counterparty risk ratings (CRRs) to Caa1 from B3.
“As part of the same rating action, Moody’s lowered the baseline credit assessments (BCAs) of ABL, MCB and UBL to Caa1 from B3, and as a result also downgraded their local currency long-term CRRs to B3 from B2 and their long-term counterparty risk assessments to B3(cr) from B2(cr). The BCAs of NBP and HBL were affirmed at Caa1. “The outlook on all banks’ deposit ratings remains negative,” Moody’s said in a statement on their website. The downgrade comes days after Moody’s cut Pakistan’s local and foreign currency and senior unsecured debt ratings to Caa1 from B3.
In its statement, Moody’s said the ratings reflected the government’s reduced capacity to support the banks, which has affected the banks whose ratings benefit from government support.
Published in The Daily National Courier, October, 12 2022
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