Modi’s on Tuesday confirmed the rating of five Pakistani banks. ‘B3 long-term local currency and Caa1 foreign-currency deposit ratings.
Pakistani Banks include Allied Bank Limited (ABL). Habib Bank Limited (HBL). MCB Bank Limited (MCB). National Bank of Pakistan (NBP) and United Bank Limited (UBL).
According to a report published by Moody’s. The review of long-term local currency deposit rates of all Pakistani banks. Now It stabilized under review.
According to Modi’s Report, “Following Modi’s decision to verify the rating of banks. Modi’s decision to verify Pakistan’s B3 absolute rating followed. indicating that Pakistan’s credit profile. The pressure reduced, which indirectly supports the rating of the bank. which makes them more exposed to the risk of government debt.”
The credit rating agency added that as a result of its decision to ratify Pakistan’s B3 government bond rating with a firm view. The Pakistani government’s ability to assist the country’s banks in case of need. It is to strengthen his position.
Furthermore, it said that the downgrade of the authoritarian rating will increase the downward pressure on the rating of banks. Which reflects the high correlation between the credit profile of banks and the government, and the expansion of financial assistance. Indicates a reduction in the government’s ability to do so. Banks in case of need.
In addition, Moody’s said that downward pressure on individual banks’ baseline credit assessment (BCA). It could exceed the expected deterioration in operating conditions caused by the corona virus, weakening asset quality and profitability.