Fitch Ratings has downgraded Commercial International Bank (Egypt) S.A.E. (CIB) 's Long-Term Issuer Default Rating (IDR) to 'B-' from 'B' and its Viability Rating (VR) to 'b-' from 'b'. Fitch has also downgraded CIB's Government Support Rating (GSR) to 'no support' from 'b-'. The Outlook on the IDR is Stable.
The rating downgrades follow the downgrade of Egypt's sovereign rating on 3 November 2023 (see Fitch Downgrades Egypt to 'B-'; Outlook Stable at www.fitchratings.com) and reflect the strong linkage between the sovereign's and CIB's credit profiles. The Stable Outlook on CIB's rating reflects that on the Egyptian sovereign rating, which caps the bank's ratings at their current levels.
The downgrade of Egypt's sovereign rating reflects increased risks to the country's external financing, macro-economic stability and the trajectory of already-high government debt. Downward pressures on the currency have increased, and the path to policy adjustment has become more complicated, in Fitch's view.
Fitch has revised down the operating environment score for Egyptian banks to 'b-'/stable from 'b'/negative, in line with the sovereign rating action as operating conditions for banks are closely linked with the sovereign profile. It considers tight external liquidity, high core inflation (40% in September 2023) and much weaker business conditions in the non-oil sector.