CAIRO: Fitch Ratings affirmed yesterday Commercial International Bank s International ratings at Issuer Default BB+ with Stable Outlook and Short-term B . The bank s National ratings are affirmed at Long-term AA(egy) with Stable Outlook and Short-term F1+ . The bank s other ratings are affirmed at Individual C and Support 3 . CIB s International Issuer Default, Short-term, Individual and National ratings reflect the strength of its local franchise and management, as well as the bank s good level of profitability. They also take into account the operating environment, which, while improved, remains potentially volatile. Capitalization is only adequate and a reduction in capitalization could lead to negative rating action. CIB has shown higher profitability than other banks in the Egyptian market over a consistent period, says Tim Beck of Fitch s Financial Institutions Group.
While the bank was affected by the economic downturn of the late 1990s and early 2000s, it avoided many of the problems faced by the sector as a whole, he added.
With the improving operating conditions now seen in Egypt, CIB is showing improved performance through loan growth and lower loan provisioning charges. CIB s core market continues to be the large corporate sector, though the bank is looking to penetrate the less developed SME and retail segments.
Margins should be higher here, though these are relatively untested sectors and could lead to higher risk costs, states Mr. Beck. Fitch