Moody’s has upgraded ratings of four Pakistani big banks reflecting their increasingly stronger financial fundamentals.
According to Moody’s announcement the BFSRs (Bank Financial Strength Rating) of NBP, HBL, MCB and UBL were upgraded by one notch, which reflects their increasingly stronger financial fundamentals and their evolving local franchises.
BFSR rating of MCB Bank (MCB) has been upgraded to D from D-, while it has been assigned Baa3/Prime-3 (Long term/Short term) on its global local currency deposits. Baa3/Prime-3 rating falls in investment grade and reflects the bank’s acceptable ability to repay short-term obligations.
On its foreign currency deposits, however, its rating remained unchanged at B2/NP. Overall, ‘stable’ outlook is maintained on MCB Bank and this is in line with the outlook of country’s deposit and debt ceilings. MCB Bank, as per FITCH rating services, has ‘D’ individual rating with a support rating of ‘5’.
National Bank of Pakistan’s (NBP) BFSR rating has also been upgraded to D from D- with ‘stable’ outlook. NBP, on its global local currency deposits, has been assigned Baa2/Prime-3 (Long term/Short term) and like MCB, this rating falls in the investment grade. Also, it reflects NBP’s acceptable ability to repay short-term obligations.
On its foreign currency deposits, however, its rating has been remained unchanged at B2/NP. National Bank of Pakistan, as per FITCH, has ‘D’ individual rating with a support rating of ‘4’.
The other two banks rated by Moody’s are United Bank Limited (UBL) and Habib Bank Limited (HBL). BFSR ratings of both these banks have been upgraded to D- with ‘stable’ outlook.
Earlier they had rating of E+. On their global local currency deposits, they have been assigned a rating of Ba1/NP (Long term/Short term), which falls in speculative grade. On foreign currency deposits, their rating remained unchanged at B2/NP.
Standard & Poor’s (S&P), in its recently released banking sector reports, have categorized banking system in Pakistan as ‘Supportive’. Banking systems in Asia, as per S&P, are categorised either as ‘Interventionist, ‘Supportive’ or ‘Support Uncertain’