WASHINGTON D.C.: Moody’s Investor’s Service on Tuesday downgraded the long-term deposit ratings of five Pakistani banks including Allied Bank Limited, Habib Bank Ltd, MCB Bank Limited, National Bank of Pakistan, and United Bank Ltd which have been downgraded from B3 to Caa1.
The rating agency has also lowered the banks’ long-term foreign currency counterparty risk ratings (CRRs) from B3 to Caa1.
Earlier on October 6, Pakistan’s local and foreign currency and senior unsecured debt ratings were downgraded from B3 to Caa1.
“The outlook on all banks’ deposit ratings remains negative,” Moody’s said in a statement on their website.
The credit rating company 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 on Pakistan in 7 years.
“As a result, NBP and HBL’s deposit ratings no longer incorporate a government support uplift.”