ISLAMABAD: Moody’s Investors Service on Saturday upgraded the ratings of five major Pakistani banks, reflecting the country’s improving economic conditions.
The long-term deposit ratings for Habib Bank Limited, National Bank of Pakistan, United Bank Limited, Allied Bank Limited, and MCB Bank Limited have been raised from Caa3 to Caa2. Additionally, Moody’s has revised the outlook for these banks from stable to positive.
This rating adjustment follows Moody’s recent upgrade of Pakistan’s credit rating from Caa3 to Caa2, with the country’s outlook also shifting from stable to positive.
The international rating agency highlighted several positive developments, including a reduction in default risk and Pakistan’s $7 billion agreement with the International Monetary Fund (IMF), which is expected to be approved by the IMF’s executive board soon. This agreement is anticipated to further bolster Pakistan’s economy and mitigate default risks.
Moody’s upgrade also affects Pakistan’s senior unsecured Medium-Term Note (MTN) program, which has been upgraded from (P)Caa3 to (P)Caa2. The outlook for the Government of Pakistan has been revised to positive from stable. This reflects improvements in Pakistan’s macroeconomic conditions and a modestly better external government position from previously weak levels.
This positive shift follows Fitch Ratings’ decision in July to raise Pakistan’s credit rating from CCC to CCC+. Moody’s noted that Pakistan’s default risk has now decreased to a level consistent with a Caa2 rating.
