Fitch Ratings revises outlook of four Egyptian banks to positive
TLDR
- Fitch Ratings revises outlook on four Egyptian banks to positive, affirming long-term issuer default ratings at B-.
- State-owned institutions NBE, BM, and BDC, along with CIB, Egypt's largest private bank, are included in the revision.
- Positive outlook for capitalization and leverage scores of CIB and BDC, stability for NBE and BM.
Fitch Ratings has revised its outlook on four Egyptian banks from stable to positive while affirming their long-term issuer default ratings at B-.
The banks include three state-owned institutions—National Bank of Egypt (NBE), Banque Misr (BM), and Banque du Caire (BDC)—as well as Commercial International Bank (CIB), Egypt’s largest private bank. The outlook on CIB's and BDC's capitalization and leverage scores has been revised to positive from stable, and for NBE and BM, these scores have been revised to stable from negative.
These revisions reflect reduced pressures on the banks' capital ratios for FY2024/2025, following recent foreign exchange inflows into Egypt. This improvement has alleviated some of the financial strains on the sovereign, thereby positively impacting the banks' outlooks.
Points clés à retenir
Fitch's revisions come shortly after it revised the outlook on Egypt's long-term foreign-currency issuer Default Rating to positive from stable, affirming the IDR at 'B-'. This adjustment reflects the easing of the US dollar shortage crisis that has plagued Egypt for over two years. The viability ratings also indicate a strong correlation between the banks' credit profiles and that of the sovereign due to their substantial holdings in Egyptian government debt and loans to public sector companies. According to Fitch, the Egyptian banking sector's total exposure to the sovereign and the broader public sector accounted for 53% of total assets at the end of 2023.
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