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Thursday, 23 January 2020

Egyptian banking system “stable” on high liquidity, strong growth -Moody's

Egyptian banking system “stable” on high liquidity, strong growth -Moody's: The Egyptian banking system will remain stable over the next 12-18 months amid high liquidity rates and strong economic growth that will raise demand for credit, Moody’s Investors Service said in a report yesterday. Lower interest rates and state funding initiatives for the industrial, tourism and mortgage sectors will improve fuel credit growth of 12-15%, boosting profitability in the sector. "The economy is growing robustly – we project real GDP growth of 5.8% in 2020 – supported by declining interest rates. Banks retain good access to stable, deposit-based funding and are very liquid, especially in local currency," Senior VP Constantinos Kypreos said.

It’s not entirely plain sailing: Profits will be held back by an increase in real tax rate, a double-digit rise in costs, and margin-pressure that comes with lower interest rates, Moody’s said. Long-standing issues relating to bureaucracy, geopolitical volatility and security will continue over the period.

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