Moody's downgrades five Egyptian banks by one notch

Moody's Corporation has announced the downgrade of five Egyptian banks, after previously downgrading the sovereign rating of the country due to worsening debt affordability. The downgrade includes the nation's largest private bank. The move is in response to increasing risks in the banking industry's operational environment, tied closely to the sovereign's weakened creditworthiness. The banks affected are state-owned National Bank of Egypt, Banque Misr and Banque Du Caire, and the privately-owned Commercial International Bank. Bank of Alexandria, a subsidiary of Italy's Intesa Sanpaolo, also got downgraded. Moody's statement expressed concerns about the ability of these banks to fulfil foreign currency liabilities as they fall due, which could affect their asset quality, earnings, and capital buffers. Additionally, the high exposure of these banks to sovereign debt securities links their credit profiles to that of the government, posing further risks.