Fitch Ratings downgrades credit ratings of 4 Egyptian banks to ‘B’
Updated 5/18/2023 9:00:00 AM
Arab Finance: Fitch Ratings has downgraded the Long-Term Issuer Default Ratings (IDRs) of four Egyptian banks, namely the National Bank of Egypt (NBE), Banque Misr, Banque Du Caire, and Commercial International Bank Egypt (CIB) to ‘B’ from ‘B+’, with their outlooks remaining negative, according to a rating action commentary released on May 17th.
The Viability Ratings (VRs) of the banks were also trimmed to ‘b’ from ‘b+’, as well as the Government Support Ratings (GSRs) to ‘b-’ from ‘b’.
The downgrades indicate higher external financing risks due to increased external financing requirements.
This also reflects the “sovereign’s weaker ability to provide support, particularly in foreign currency (FC), which caps the domestic systemically important bank (D-SIB) GSR for Egyptian banks at 'b-’.
The credit ratings agency expects the banks’ core capital ratios to see some pressure in 2023 due to the possibility of further currency depreciation and MTM losses.
According to Fitch estimations, certificates of deposit (CDs) would account for over half of total reported deposits at NBE and Banque Misr.
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