An improvement of Egypt's creditworthiness has led Standard and Poor's (S&P) to raise the ratings on four Egyptian banks on Monday, a ratings agency said in a statement. S&P upgraded long-term credit rating on National Bank of Egypt (NBE), Banque Misr (BM) and Commercial International Bank (CIB) to B- from CCC+. At the same time, it affirmed the short-term credit rating on NBE, BM and CIB at C. The agency also said it had raised its unsolicited public information rating (pi) on National Societe Generale Bank (NSGB) to B-pi from CCC-pi. "In our view, NBE, BM, CIB and NSGB face very high sovereign risk because they hold a very high amount of government debt compared with their equity base and earnings capacity," the statement said. The ratings actions follow the upgrade of Egypt's long and short-term foreign and local currency sovereign credit rating to B- from CCC+ on Friday. S&P said it deemed that Egyptian authorities had secured sufficient foreign currency funding to manage the country's short-term fiscal and external financing needs. "We expect support from bilateral lenders to continue over the medium term as the Egyptian authorities try to address the country's political and economic challenges," the agency said. Following the ouster of former President Mohamed Morsi on 3 July, Gulf countries pledged financial aid packages to help boost the economy, including $5bn from Saudi Arabia, $3bn from the UAE and $4bn from Kuwait, in form of cash grants, deposits and petroleum products. The stable outlook for the banks reflects S&P's stable outlook on Egypt, the ratings agency said, adding that it balances its views of Egypt's political landscape and external financing pressures against the support from bilateral donors. According to the statement, S&P could lower the ratings on sovereign debt if Egyptian authorities are unable to prevent further deterioration of fiscal indicators. It also could raise ratings on Egypt if the political transition strengthens relations between the government and society and brings about a sustained improvement in external performance.
