Five Pakistani banks see rating upgrade as Moody’s improves outlook

WEB DESK: Moody’s Ratings, an international credit ratings agency, has upgraded the long-term deposit ratings of five major Pakistani banks.

The banks—Allied Bank Limited (ABL), Habib Bank Ltd (HBL), Muslim Commercial Bank (MCB), National Bank of Pakistan (NBP), and United Bank Ltd (UBL)—saw their ratings improve from Caa3 to Caa2.

However, for the National Bank of Pakistan, its basic credit rating, known as Baseline Credit Assessment (BCA), remains at Caa3, which is lower than the others.

According to Business Recorder, Moody’s explained that the upgrade for ABL, HBL, MCB, and UBL reflects a better credit position for these banks. The rating agency also changed the outlook for all five banks from stable to positive.

This means that Moody’s believes these banks are likely to perform better in the future.

One of the reasons for the upgrade is the strong connection between these banks and the Pakistani government, particularly due to their investments in government securities. This upgrade also shows that the government is now in a better position to support these banks if they need help.

The positive outlook is tied to Pakistan’s improving economic situation, which could lead to even higher ratings for these banks in the future. If Pakistan’s overall economic environment continues to get better, and the government’s credit rating improves, these banks could see further upgrades in their ratings.

However, if Pakistan’s government rating stays the same, the banks’ ratings might also remain unchanged.

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