Banque Misr - File photo/Tarek wagih
CAIRO – 22 May 2017: A dollar funding agreement between Banque Misr, Egypt’s second largest public bank, and China Development Bank Corporation (CDB) to provide a $500 million loan is credit positive for Banque Misr, Global credit rating agency Moody’s Investors said Monday.
Egypt’s Ministry of Investment and International Cooperation signed Tuesday a $500 million, eight-year loan agreement between Banque Misr and CDB.
“The agreement is credit positive for Banque Misr, whose foreign-currency liquidity will increase,” Moody’s said in a Monday report.
It added that the increasing foreign-currency liquidity will enable Banque Misr to finance domestic projects by multinational companies and imports by its trade clients.
“The deal would help generate additional revenues from interest income, loan fees and commission income, in addition to fees and commissions from non-cash business, such as letters of credit,” Moody’s said.
Further, the loan’s eight-year term lengthens the maturity profile of Banque Misr’s funding.
In January, Banque Misr signed a similar deal with CDB on a five-year $100 million loan to finance small and midsize enterprises.
Egypt has been suffering sharp foreign-currency shortfall, but the central bank’s decision to free float the pound last November increased the availability of dollars to Egyptian banks.
“The shortage has not been fully addressed,” said Moody’s. Meanwhile, the agency anticipated this issue to be addressed with investor confidence being improved.