Moody’s keeps Egypt banking system stable

Moody's Investors Service has maintained its stable outlook on Egypt's banking system, reflecting its expectation that the country's banks will continue to benefit from a stable deposit base, high local currency liquidity and strong profitability over the next 12 to 18 months.

"We expect Egypt's gradually recovering economy to continue to provide banks with plenty of business opportunities," Moody’s assistant vice president Melina Skouridou said in a news release.

The rating expects GDP growth to slow to 3.5% for the fiscal year ending in June 2016 (4.2% fiscal year 2015), but accelerate to 4% in 2017.

"As a result, we anticipate domestic loan growth of around 15% over the next 12-18 months, although Egyptian banks' increasing exposure to the sovereign will remain a key risk, given modest capital buffers," Skouridou added in the release.

© 2015 Prospect News.
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