Egypt's banks downgraded as crisis continues

Major credit rating agencies have downgraded the ratings of Egypt’s biggest banks after days of violent protests have brought the north African nation to a halt.

Moody’s has downgraded five banks, while rival agency Standard & Poor’s lowered its view on two.

Moody’s, which on Monday downgraded Egypt’s sovereign debt rating to Ba2 and changed the outlook from stable to negative, has also warned that more cuts may follow.

The five banks hit by the Moody’s downgrade are the National Bank of Egypt, Banque Misr, Banque du Caire, Commercial International Bank and Bank of Alexandria.

S&P said the creditworthiness of the National Bank of Egypt and Commercial International bank had been negatively impacted.

S&P has also now downgraded its sovereign rating on Egypt to BB from BB+ and said another downgrade could follow in the next three months.

Banks in Cairo have been closed all week while political protests have raged alongside looting and smashing of cashpoints. The stock exchange has also been closed all week and is expected to remain closed tomorrow.

The downgrade of the banks’ local currency deposit ratings was a result of the expected economic impact of the unrest and fears that foreign investment could be affected.