Cairo – Mubasher: The Egyptian banking system has a stable outlook over the next twelve to 18 months with the help of high liquidity rates and robust economic growth that will help lenders provide more loans, Moody's Investors Service said in a recent report.
"The economy is growing robustly – we project real GDP growth of 5.8% in 2020 – supported by declining interest rates," senior vice president at Moody’s, Constantinos Kypreos, said.
“Banks retain good access to stable, deposit-based funding and are very liquid, especially in local currency," he remarked.
Profitability of banks are forecast to improve on the back of an expected credit growth of 12-15%, driven by the reduction in interest rates and the launch of government funding initiatives for the industrial, tourism and mortgage sectors, according to the international credit rating agency.
However, “profits will face headwinds due to a rise in the effective tax rate, a double-digit rise in costs and lower interest rates that will eventually pressure margins,” Moody’s noted.