A Moody's sign is displayed on 7 World Trade Center, the company's corporate headquarters in New York - Reuters/Brendan McDermid
CAIRO - 3 February 2021: Moody's credit rating agency maintained its rating for the egyptian banking sector at B2, with a stable outlook.
The B2 rating is the 14th rating out of Moody's 18 ratings, from highest to lowest.
The agency said that continued investments in infrastructure and spending will support economic growth in Egypt, and financial inclusion initiatives will provide good opportunities for banks.
Moody's expects the Egyptian economy to grow 5.5 percent in the current fiscal year 2022-2021.
Moody's warned that non-performing loans will rise with the decline in support measures to counter the effects of the pandemic, but it believes that loan growth will make the non-performing loan ratio stabilize at 4 percent.
“Rapid loan growth, in addition to reduced loan loss provisions, will support banks’ profitability despite higher operating costs and taxes,” Moody's said.
Moody's emphasized that operating conditions will support banking activities, as infrastructure investments, a recovery in tourism and strong household spending backed by remittances from abroad will help drive 5.5 percent GDP growth for the current and next fiscal years.