IIRA reaffirms fiduciary ratings of ABBE

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Cairo—Islamic International Rating Agency (IIRA) has reaffirmed the international scale ratings of AlBaraka Bank Egypt (‘ABBE’ or ‘the bank’) at ‘B-/B’ (Single B Minus / Single B). On the national scale, ratings have been reaffirmed at ‘A-(eg)/A2(eg)’ (Single A Minus / A Two). Outlook on the assigned ratings is Stable. The fiduciary score has been assessed in the range of ’66-70’, reflecting adequate fiduciary standards wherein rights of various stakeholders are adequately protected.
ABBE operates as a mid-sized player in a highly concentrated and competitive Egyptian banking sector. Owned in majority by the Al Baraka Banking Group (ABG), ABBE benefits from the group’s presence in diverse operating regions, the resulting business synergies, and the parent bank’s strong franchise.
Egypt’s economy has posted improving indicators in terms of growth and foreign investment. However, the country’s economic development continues to be hampered by adverse security situation and geopolitical issues. Moreover, the continued depreciation of Egyptian pound in recent periods and foreign exchange shortages, in view of continuously falling exports, pose additional issues for the economy. Thus far, the banking sector has remained relatively resilient in the face of economic pressures; however financial and operational challenges for the sector are expected to gradually increase in the medium term, with implications on the banking sector’s international ratings.—Agencies