Moody's places a review rating of 5 Egyptian banks

CAIRO - 17 May 2023: Moody's Investors Service (Moody's) has placed the B3 long-term local and foreign currency deposit ratings for review on all Moody's rated banks in Egypt.

The banks' long-term Counterparty Risk Ratings (CRRs) and Baseline Credit Assessments (BCAs) were also placed on review for downgrade.

The banks are: the National Bank of Egypt SAE, Banque Misr, Banque Du Caire and Commercial International Bank. As well as the B2 long-term local and foreign currency deposit ratings of Bank of Alexandria.

This follows Moody's decision to place the Government of Egypt's B3 long-term issuer ratings on review for downgrade that was announced last week.

“The review period will focus on the government's ability to finalize the targeted $2 billion in asset sales necessary to meet the IMF program's financing targets for fiscal 2023 (ending June) and demonstrate the viability of the program's external funding strategy that relies significantly on asset sales,” the statement issued by Moody’s last week read.

The Egyptian government finalized the Telecom Egypt (TE) transaction selling a 9.5 percent stake in state-owned TE, raising more than LE 3.7 billion, which accounts for $121 million. The Egyptian government sold more than 162 million shares, at a price of LE 23.1 per share.

TE was one of the 32-listed state-owned companies that are part of Egypt’s IPO program, this signals Egypt’s seriousness about conforming to the economic reform program and stressing the government’s willingness to work towards supporting economic growth and stability in the country.