KARACHI: International rating agency Moody’s on Saturday upgraded the ratings of five major Pakistani banks, citing improved economic conditions in the country.
The long-term deposit ratings of the five banks have been upgraded from Caa3 to Caa2.
The banks include Habib Bank Limited, National Bank of Pakistan, United Bank Limited, Allied Bank Limited, and MCB Bank Limited.
Moody’s also changed the outlook for all five banks from stable to positive. The decision comes after Moody’s upgraded Pakistan’s credit rating from CAA3 to CAA2 and changed the country’s outlook from stable to positive.
The international ranking agency noted that Pakistan’s improved economic conditions, including a reduction in default risk, were key factors in the upgrade. The agency also cited the country’s $7 billion deal with the International Monetary Fund (IMF) as a positive development.
In the upcoming days, the $7 billion deal is anticipated to be approved by the IMF’s executive board. It is anticipated that the agreement will boost Pakistan’s economy and lower the default risk.
Read More: Moody’s upgrades Pakistan’s ratings to ‘Caa2’
In a positive development, Moody’s Investors Service has upgraded Pakistan’s long-term issuer rating from “Caa3” to “Caa2” with a stable outlook.
This upgrade follows Fitch Ratings’ decision in July to raise the country’s credit rating from “CCC” to “CCC+”.
Moody’s said that this upgrade reflects Pakistan’s improved macroeconomic conditions and moderately better government external positions from very weak levels.
“We have also upgraded the rating for the senior unsecured MTN programme to (P)Caa2 from (P)Caa3. Concurrently, the outlook for Government of Pakistan is changed to positive from stable,” read the statement.
Accordingly, Pakistan’s default risk has been reduced to a level consistent with a Caa2 rating.
