Fitch affirms ratings of Credit Agricole Indosuez Egypt
The London-based Fitch Ratings agency has affirmed Credit Agricole Indosuez Egypt's support rating of '3'. Credit Agricole Indosuez Egypt, formerly Credit International d'Egypte Bank, was acquired by Credit Agricole Indosuez (CAI) in 2001. The support rating reflects the fact that it is now more than 70 percent owned by a bank (CAI) whose parent company, Caisse Nationale de Credit Agricole, is one of the 10 largest French banks by consolidated assets.
Nile Rating, a locally incorporated agency that forms part of the Fitch Ratings group, has also affirmed the bank's national short-term and long-term ratings at 'F1+ (egy)' and 'AA (egy)' respectively, reflecting the presence of its parent.
CAIE provides a range of commercial banking services to medium and large-sized companies. The bank is being refocused following a period of shareholder uncertainty. Risk management is being strengthened via integration with CAI and asset quality addressed through a process of cleaning out problem loans.
Profitability for the past three years has been low due to large loan loss provisions following the introduction of a more prudent provisioning policy by the bank's new management. Other contributing factors were a slow-down in lending and continuing pressure on industry interest margins. These pressures on core profits have been, to some extent, offset by foreign currency revaluation gains.
Management expects the bank to start being more externally focused from 2002. CAIE has budgeted for a substantial turnaround in its lending growth and profits for 2002 but, nevertheless, Fitch expects that under current market conditions, pressure on profits will continue. — (menareport.com)
© 2002 Mena Report (www.menareport.com)