Moody’s downgrades five major banks

In a follow-up to Pakistan’s sovereign rating downgrade, Moody’s Investors Service on Tuesday downgraded the long-term deposit ratings and long-term Foreign Currency Counter Risk Rating (CRR) to Caa1 from B3 of five leading Pakistani banks. These banks include Allied Bank Ltd (ABL), Habib Bank Ltd (HBL), MCB Bank Ltd, National Bank of Pakistan (NBP) and United Bank Ltd (UBL). “The outlook on all banks’ deposit ratings remains negative,” said the New York-based rating agency in a statement. Finance Minister Ishaq Dar had strongly questioned the Moody’s sovereign rating downgrade, saying it was done unilaterally and without confronting the authorities even though one of the factors behind the negative rating action was the purported rescheduling of Paris Club debt which was not at all under consideration of the government of Pakistan. He also challenged the data used by Moody’s in reaching the sovereign’s rating downgrade decision.