In a significant development, Moody’s Ratings has upgraded the long-term deposit ratings of five major Pakistani banks:
- Allied Bank Limited (ABL)
- Habib Bank Ltd (HBL)
- MCB Bank Limited (MCB)
- National Bank of Pakistan (NBP)
- United Bank Ltd (UBL)
The upgrade from Caa3 to Caa2 reflects Pakistan’s improved creditworthiness, better macroeconomic conditions, and moderately improved government liquidity and external positions.
The upgrade benefits Pakistani banks due to their substantial holdings of sovereign debt securities and the strong linkage between the banks’ credit profiles and that of the government.
The positive outlook for the banks’ long-term deposit ratings suggests a potentially higher capacity of the government to support the banks if required. Improvements in the operating environment could result in higher BCAs.
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