Moody’s has downgraded rating of 5 Pakistani Banks – Alfalah Securities Limited

Karachi, July 19, 2012 (PPI-OT): Moody’s Investors Services, has downgraded the local-currency deposit ratings of 5 Pakistani banks namely Allied Bank Ltd., Habib Bank Ltd, MCB Bank Ltd., National Bank of Pakistan and United Bank Ltd. by one notch from B2 to B3, and maintained its negative outlook on the rated Pakistani banks.

According to Alfalah Securities Limited, it has also lowered their stand alone credit assessments to Caa1 from B3. The downgrade was anticipated after Moody’s lowered the Country’s rating by on notch to Caa1 particularly as these banks have expanded their exposure in government papers, thus, raising sovereign risk. It has also downgraded the foreign-currency deposit ratings of the five banks by two notches to Caa2, from B3, to reflect the lowering of the foreign-currency deposit ceiling in Pakistan. The ratings’ downgrade bodes negative for these banks due to higher risk perception.