Global Arab Network | Egypt: Banque du Caire Ratings Affirmed with Positive Outlook

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Egypt: Banque du Caire Ratings Affirmed with Positive Outlook

Global Arab Network - - Gamal Ragay

Friday, 05 November 2010 12:25

Egypt (Cairo) - Capital Intelligence (CI) announced today that it has affirmed Banque du Caire's (BdC) Financial Strength Rating at "BB+". The ratings are driven by the Bank's strong asset quality, good liquidity and balanced business profile, despite its still low profitability and the sharp decline in capital adequacy in the current year. The support rating of 3 is also affirmed, as are the Foreign Currency Long Term and Short Term Ratings of BB+ and A3 respectively, underpinned by the indirect ownership and support of the Egyptian government. A Positive Outlook is maintained on all ratings in view of the favourable outlook for the Bank's profitability based on latest interim figures.

Since the sale of legacy NPL loans three years ago, stringent risk management has kept BdC's asset quality at a very strong level with a very low NPL ratio and more than full loan loss coverage. The Bank has very good liquidity based on its solid retail customer deposit base and large holdings of treasury bills. Although now formally a private joint stock bank, BdC remains wholly owned by Egypt's second largest state owned bank Banque Misr. The major rating constraints are the Bank's still low profitability and the rapid decline in capital adequacy in the current year due to high growth in loan assets. Increasingly competitive conditions in the retail market and the Bank's still weak financial disclosure are also constraining factors.

Banque du Caire (BdC) was established in May 1952 and ranks fifth largest in terms of assets in the Egyptian banking sector . Under the impetus of new management BdC has adopted a new commercial bank business model with a good balance between retail and corporate activities. Retail is premised on payroll based loans to government sector employees. Newer segments such as credit card car loans and vehicle finance have also been launched. The Bank maintains a strong operating platform of more than 200 branches nationwide.

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