Moody's: Negative view for Pakistan banks

The fundamental credit outlook for the Pakistani banking sector is negative, reflecting challenging operating conditions as a result of the continued economic slowdown, domestic security instability and the weak sovereign position of Pakistan.

But the banking system remains relatively resilient overall, the agency said.

The negative outlook reflects the likely future direction of fundamental credit conditions in the industry over the next 12 to 18 months, Moody's said. It does not represent a projection of upgrades versus downgrades, the agency added.

Overall credit conditions in Pakistan remain unfavorable as the security situation hinders both foreign and domestic confidence, the agency said. Lending rates are high, the political environment remains fragile and structural impediments in the supply of power and gas persist, Moody's said.

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