S&P cuts three Egypt banks

Standard & Poor's said it lowered the long-term counterparty credit ratings on National Bank of Egypt and Commercial International Bank (Egypt) SAE to BB- from BB.

The agency also said it affirmed the banks' B short-term counterparty credit ratings.

The outlook on both banks is negative.

The agency also said it lowered the unsolicited rating on National Societe Generale Bank SAE to BB-pi from BBpi.

The downgrades follow the downgrade of the Arab Republic of Egypt, S&P said.

Risks to macroeconomic stability have risen during the transition period for Egyptian political reform, which is expected to evolve over the next two years, the agency said.

The uncertainties surrounding the political outcome at the end of the transition phase and security issues will hamper Egypt's economic growth, S&P said.

These events are likely to have a negative effect on the banks' financial profiles, particularly asset quality and profitability, the agency said.

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