CAIRO: Moody’s Investors Service, a global credit rating agency and provider of financial analyses, changed to stable from negative the outlook on the long-term local currency deposit ratings of five Egyptian banks, according to a Wednesday report.
The five banks include the National Bank of Egypt SAE (Caa1), Banque Misr SAE (Caa1), Banque du Caire SAE (Caa1), Commercial International Bank (Egypt) SAE (Caa1) and Bank of Alexandria SAE (B3). The banks’ standalone bank financial strength ratings and their long-term foreign-currency deposit ratings have also been affirmed, according to the report.
The rating action comes shortly after Moody’s decided Monday to upgrade Egypt’s investment outlook to “negative” to “stable.” The agency also affirmed Egypt’s government bond rating at Caa1, according to a Monday market research paper.
Moody’s said that their actions reflect “the stabilization of the government’s credit risk profile, which is a key driver of Egyptian banks’ creditworthiness given their substantial holdings of Egyptian government bonds; the improvements in domestic operating conditions that will contribute towards stabilizing the banks’ asset quality and profitability; and (3) the stabilization in the government’s capacity to provide support in the case of the government-owned banks (National Bank of Egypt SAE, Banque Misr SAE, Banque Du Caire SAE).”
The agency also attributed the Egypt’s outlook upgrade to “the stabilized political and security situation, the launch of government initiatives toward fiscal consolidation, signs of a growth recovery and an improvement in macroeconomic stability and strong support from external donors.”