Fitch Affirms Egypt's Commercial International Bank at 'BB+'; Outlook Stable

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LONDON, November 30 (Fitch) Fitch Ratings has today affirmed Egypt-based Commercial International Bank's (CIB)Commercial International Bank's (CIB) International ratings at Long-term Issuer Default (IDR) 'BB+' with Stable Outlook, Short-term IDR 'B', Individual 'C' and Support '3'. The Support Rating Floor is affirmed at 'BB'. The bank's other ratings are affirmed at National Long-term 'AA (egy)' with Stable Outlook and National Short-term 'F1+(egy)'.

CIBCIB's IDRs are based on the bank's intrinsic strength and constrained by Egypt's Country Ceiling of 'BB+'. The Individual and National ratings reflect the strength of the bank's local franchise and management, its consistently strong profitability and adequate credit risk management. However, they take into account the difficult operating environment, in which context its capitalization is only adequate.

CIBCIB maintained strong profitability levels in 9M09, aided by sound efficiency, continued strong asset quality with correspondingly low impairment charges, and relatively good business diversification. Asset quality compares well with peers and there was no material deterioration in the quality of the bank's loan portfolio in 9M09. The non-performing loan (NPL) ratio improved marginally to 2.9% at end-9M09; coverage was satisfactory at around 179%. Asset quality remains vulnerable, however, to deterioration in operating conditions, especially in light of slowing economic growth.

CIBCIB is Egypt's largest private-sector bank and the country's third-largest overall. CIBCIB's core market continues to be the large corporate sector, though the bank is looking to penetrate the less developed SME and retail segments. CIBCIB has a market share of about 6.5% of loans and deposits, a figure which slightly understates the strength of the bank's corporate franchise; its market share in the corporate segment is close to 9%. The bank has a strong and long-standing franchise among the larger local companies and multinationals operating in Egypt.

In Fitch's rating criteria, a bank's standalone risk is reflected in Fitch's Individual ratings and the prospect of external support is reflected in Fitch's Support ratings. Collectively these ratings drive Fitch's Long- and Short-term IDRs.

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