‘Pakistan’s banking system would have a stable outlook for the next 12-18 months’ – Moody’s

Moody’s said that Pakistan's credit profile has improved in the past months. 

A leading global agency, Moody’s Investors Service, has stated that Pakistan’s banking system would have a stable outlook for the next 12-18 months. Moody’s said that Pakistan’s credit profile has improved in the past months.

Moody’s said that Pakistan’s credit profile has improved in the past months.

“The sovereign credit profile has improved in recent months, benefiting the banks through their high exposure to government securities, which account for around 40% of their assets,” Moody’s Senior Vice President Constantinos Kypreos said. 

“Operating conditions for Pakistan banks, although gradually improving, remain difficult amid tight monetary conditions – with the policy rate at 13.25% – and large government borrowing needs crowding out funding for the private sector,” Kypreos further added.

The rating agency appreciated Pakistan’s efforts to exchange rate stable since June 2019. It further added that the markets are expecting the State Bank of Pakistan to lower policy rates over the next few years.

“Capital levels will remain broadly stable, but Moody’s considers these modest relative to peers. Profits will increase slightly but remain below historical levels,” the report said.

“Capital levels will remain broadly stable, but Moody’s considers these modest relative to peers. Profits will increase slightly but remain below historical levels,” the report said.

“Capital levels will remain broadly stable, but Moody’s considers these modest relative to peers. Profits will increase slightly but remain below historical levels,” the report added.

 

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