Overview
- Moody's says the operating environment is improving only gradually and expects banks' performance to remain steady over the next 12–18 months.
- Real GDP growth is projected at about 3.5% in 2026, with easing policy rates supporting credit demand and inflation likely near 7.5% after 4.5% in 2025.
- Sovereign exposure equals roughly half of banking assets and about 9.4 times equity, closely linking sector health to the Caa1-rated state.
- Sector buffers remain robust, with Tier 1 capital around 18%, total capital near 22.1% and problem loans fully covered for rated banks.
- Moody's recently raised long-term deposit ratings and BCAs for ABL, HBL, MCB, NBP and UBL, reflecting an improved macro profile and stronger perceived sovereign support.