Moody's could cut Egyptian banks

Moody's Investors Service said it placed the standalone and deposit ratings of the following five Egyptian banks on review for downgrade: National Bank of Egypt SAE, Banque Misr SAE, Banque du Caire SAE, Commercial International Bank (Egypt) SAE and Bank of Alexandria SAE.

Moody's said its review of the banks' ratings was prompted by the recent sovereign review and will focus on: (a) Risks posed by the banks' very high (and increasing) exposure to government securities; (b) the risk of further deterioration in the operating environment and the corresponding impact on the banks' asset quality and capitalization; and (c) a reassessment of the country's capacity to support systemically important government-owned banks.

The bank reviews follow the review for downgrade of Egypt's B2 government bond ratings, initiated Jan. 18.

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