ISLAMABAD – The international rating agency Moody’s has changed outlook offive Pakistani banks to stable.
The Moody’s has kept the rating outlook of the banks unchanged to B-3.
Earlier this week, the Moody’s had also changed Pakistan’s outlook topositive from negative in the light of steps taken by the PTI government touplift the economy.
It had further said the Pakistani economy is improving and the biggestchallenge being faced by the Pakistani economy, the current accountdeficit, is also shrinking.
Earlier, the Moody’s in a report released in September, said, “Over thenext 12-18 months, banks in Pakistan would see their credit profileschallenged by their high exposure to the country’s low-rated sovereign debtand a slowing economy.”
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The report had said that the banks’ operating conditions would bedifficult, as GDP link growth slowing to 4.3% inthe fiscal year ending June 2019, down from 5.8% in 2018.
The agency had also observed that Pakistan’s banks face the risk ofmacroeconomic contagion through a range of channels, including their largeholdings of government securities, which caps their credit profiles to thesovereign, and from the authorities’ weakening capacity to support thebanks in case of need.
