Moody’s changes outlook to stable for five Pakistani banks

LIMASSOL: Moody's Investors Service has affirmed the B3 long-term local-currency deposit ratings of five Pakistani banks and changed the outlook on these ratings to stable from negative.

At the same time, the rating agency has affirmed the banks' Caa2 foreign-currency deposit ratings and Not- Prime short-term ratings. The banks' standalone E financial strength ratings corresponding to caa1 baseline credit assessments (BCA) have also been affirmed.

The affected banks are: Allied Bank Limited, Habib Bank Ltd, MCB Bank Limited, National Bank of Pakistan and United Bank Ltd.

The rating actions follow Moody's decision on 14 July to affirm the Caa1 rating for the Government of Pakistan and change the outlook on the sovereign rating to stable from negative.

The bank rating actions take into account a stabilization of the government's risk profile and its capacity to support the banks, and the high underlying inter-linkages between the banks' standalone credit risk profiles and that of the sovereign, owing to their high lending concentrations to the government and to government related entities.