Moody's alters outlook to negative for 5 Egyptian banks

RIYADH, Jan 24 (Arab News): Egypt's outlook shift reflects concerns about the potential weakening of the country's credit profile amid challenging macroeconomic conditions and ongoing efforts for fiscal consolidation. This connection constrains the standalone financial profile of these banks.
Additionally, the negative outlook considers broader challenges such as foreign currency shortages, difficult operating conditions, high asset risks, and potential impacts on earnings, asset quality, and foreign currency liquidity metrics.
Despite these challenges, Moody's acknowledged the banks' resilient financial profiles, including deposit-based funding, strong local currency liquidity, stable profitability, adequate capital adequacy ratios, and reported non-performing loans at 3.3 per cent of gross loans.
The bank-specific rating drivers highlighted the unique challenges and strengths of each institution.