LIMASSOL:  Moody's Investors Service on Tuesday, downgraded the local-currency deposit ratings of the top five Pakistani banks by one notch to B3, with negative outlook, from B2, and lowered their standalone credit assessments to caa1 from b3.

The affected banks are Allied Bank Limited, Habib Bank Ltd, Muslim Commercial Bank Limited, National Bank of Pakistan and United Bank Ltd.

Moody's also wngraded the foreign-currency deposit ratings of the five banks by two notches to Caa2, from B3, to reflect the lowering of the foreign-currency deposit ceiling in Pakistan, which is the highest rating that can be assigned to a foreign-currency deposit obligation of a domestic bank.

The short-term ratings have been affirmed.

The full list of affected ratings can be found in this press release.

These actions follow the downgrade of Pakistan's government bond ratings to Caa1, with negative outlook, from B3, on 13 July 2012, and reflect the significant linkages between the credit profiles of Pakistani banks and sovereign credit risk.

—  Courtesy Moody's

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