Egypt: S&P downgrades 3 major banks, from B- to C

Downgrade subsequent to Egypt's slide from B to B-

27 December, 12:52

(ANSAmed) - CAIRO, DECEMBER 27 - Standard & Poor's has lowered the credit rating of three of Egypt's most important banks from B- to C. The agency feels that the number of state bonds held by the two publicly-owned banks, the National Bank of Egypt (NBE) and Banque Misr (BM), and one private one, the Commercial International Bank (CIB), results in a higher risk level. Earlier this week S&P lowered Egypt's rating from B to B- ''due to the political tensions'' dividing the country over the past few weeks. ''The downgrade of NBE, BM and CIB reflects the negative outlook expressed on Egypt,'' according to statement released by the agency, raising serious concerns over the country's solvency. Over the past two years, notes Al Ahram Online, the Egyptian government has borrowed huge amounts of money from the domestic market in order to cover the immense deficit that, according to the latest outlook, is likely to top in at around 33 billion dollars by the end of the 2012/14 fiscal year (12% of the country's economic output). In the eyes of S&P, things will only get worse. ''From our standpoint, the political and social tensions in Egypt are growing at a constant rate and will remain high at least over the medium term.'' (ANSAmed).

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