Moody’s downgrades five Pakistani banks
Moody’s Investors Service on Friday downgraded the long-term deposit ratings of five Pakistani banks to Caa3 from Caa1.
The banks are Allied Bank Limited (ABL), Habib Bank Limited (HBL), MCB Bank Limited (MCB), National Bank of Pakistan (NBP) and United Bank Limited (UBL).
Moreover, Moody’s also downgraded the five banks’ long-term foreign currency Counterparty Risk Ratings (CRRs) to Caa3 from Caa1.
Moody’s downgraded the five banks’ Baseline Credit Assessments (BCAs) to Caa3 from Caa1 as part of the same rating action. As a result, the five banks’ local currency long-term CRRs were also downgraded to Caa2 from B3 and their long-term Counterparty Risk Assessments were also downgraded to Caa2(cr) from B3 (cr).
However, the outlook on all banks’ long-term bank deposit ratings has been changed to stable from negative, said the rating agency in a statement.
Moody’s latest rating action follows its decision to downgrade the Government of Pakistan’s issuer and senior unsecured debt ratings to Caa3 from Caa1 earlier this week, to reflect Moody’s assessment that Pakistan’s increasingly fragile liquidity and external position significantly raises default risks.