Moody’s—a US-based financial services company has changed the outlook of at least five Pakistani banks to “stable”.
The international rating agency has kept the rating outlook of the banks unchanged to B-3.
It is pertinent to mention here that earlier this week, the US-based rating agency had also changed the outlook of Pakistan from ‘negative’ to ‘positive’ after evaluating the steps taken by the PTI-led government of Pakistan to strengthen the economy of Pakistan.
Moody’s further said that the economy of Pakistan is improving and the biggest challenge— the current account deficit— which was being faced by the economy of Pakistan is also shrinking.
“Over the next 12-18 months, the Pakistani banks would see their credit profiles challenged by their high exposure to the low-rated sovereign debt and a slowing economy of the country,” Moody’s said in its report which was released in September.
The agency further said that the operating conditions of the Pakistani banks would be difficult, as Gross Domestic Product (GDP) growth slowing to 4.3 percent in the fiscal year ending June 2019, down from 5.8 percent in 2018.