ISLAMABAD – Moody’s Investors Service has maintained a stable outlook for the banking sector in Pakistan (B3 stable). Pakistani banks successfully navigated the pandemic and we expect nonperforming loans (NPLs) to remain high but broadly stable at around 9% of gross loans. Sharp increases in interest rates will also weigh on private-sector investment. Accordingly, we expect credit growth to exceed 12% in 2022. Earnings will be supported by balance sheet growth of over 15% and gradually widening interest margins due to higher interest rates.
