Moody’s cuts five Pakistani banks’ long-term deposit ratings

Moody's Investors Service has downgraded the long-term deposit ratings of five Pakistani commercial banks — Allied Bank Limited (ABL), Habib Bank Ltd, (HBL), MCB Bank Limited (MCB), National Bank of Pakistan (NBP) and United Bank Ltd (UBL) — to Caa1 from B3. The rating agency has also downgraded the five banks' long-term foreign currency Counterparty Risk Ratings (CRRs) to Caa1 from B3, according to Moody’s statement issued on Tuesday. “As part of the same rating action, Moody's lowered the Baseline Credit Assessments (BCAs) of ABL, MCB and UBL to Caa1 from B3, and as a result also downgraded their local-currency long-term CRRs to B3 from B2 and their long-term Counterparty Risk Assessments to B3(cr) from B2(cr).” However, the BCAs of NBP and HBL were affirmed at Caa1. “The outlook on all banks' deposit ratings remains negative.” The latest rating actions follow Moody's last week’s decision to downgrade Pakistan's credit rating to Caa1 from B3 and maintained a negative outlook.