Global ratings agency Standard & Poor’s upgraded the long-term credit ratings on three major Egyptian banks; the National Bank of Egypt (NBE), Banque Misr, and Commercial International Bank (CIB) to “B-” from “CCC+”, according to OKAZ Saudi newspaper.
At the same time, S&P affirmed the short-term credit ratings on NBE, Banque Misr and CIB at “C” with the outlooks on the three banks being stable.
The rating agency added that the rating actions follow the update of its outlook on Egypt from “stable” to “positive” on Friday, pointing out that the Egyptian authorities have secured sufficient foreign currency funding to manage the country’s short-term fiscal and external financing needs.
On 15 May, S&P revised its outlook on Egypt to positive from stable, citing “gradual economic recovery.”
“The rating action reflects our view of Egypt’s gradual economic recovery, supported by improving, albeit still fragile, political stability, alongside policymakers’ commitments since 2014 to embark on economic reforms,” said S&P.
“These include subsidy and income tax reforms, a new law on investment, and the announced value-added tax (VAT) system on goods and services. In addition, we expect some Gulf states will continue to provide the Egyptian Government with sufficient foreign currency funds to manage the country’s short-term fiscal and external financing needs.”
