Fitch Ratings has downgraded the long-term foreign currency Issuer Default Ratings (IDR) of the National Bank of Egypt (NBE) and Commercial International Bank (CIB) from 'B' to 'B-'.
The downgrade is seen as a consequence of the credit ratings agency cutting Egypt's long-term foreign and local currency IDR from B to B- last week. The outlooks are negative, meaning Fitch could cut the rating again in the coming months.
In a press release issued Wednesday, Fitch said the downgrade of Egyptian banks is due to the reduced ability of Egyptian authorities to provide support, and the "likely impact of the heightened political uncertainty on the operating environment in Egypt and hence on the banks' performance and asset quality."
The rating agency estimates that recent political events have increased risks of a material deterioration of domestic political stability.
"There is high uncertainty over how the risks resulting from the military coup evolve over the short term and the eventual pathway to a peaceful political transition," Fitch said.