Moody's is reconsidering its assessment of these banks' local and foreign deposit credit ratings, because of its concern that Pakistan could default on debt repayments to international creditors. In such a situation, these banks would also find it harder to operate.
The global investors' service has said:
“Moody’s has placed on review for downgrade the B3 long-term local-currency deposit ratings of Allied Bank Limited (ABL), Habib Bank Ltd (HBL), MCB Bank Limited (MCB), National Bank of Pakistan (NBP) and United Bank Ltd (UBL). The banks’ foreign currency deposit ratings and baseline credit assessments were also placed on review for downgrade.”
Moody's concerns stem from Pakistan's economic difficulties in the wake of the Coronavirus pandemic, which is likely to severely hamper economic growth, employment debt repayments and the financial viability of Pakistan's banking system.