The Egyptian banking sector is expected to be stable in 2021 even as profitability comes under pressure due to falling net interest margins and growing non-performing loans, according to Moody\u2019s Investors Service.<\/p>\n
Profitability of Egyptian banks will compare well against their peers thanks to the Central Bank of Egypt\u2019s (CBE) decision to ban dividend payments for 2020 which will be \u201cenough to absorb growth in risk-weighted assets and keep capital ratios stable<\/em>,\u201d the international credit ratings agency said in a report on Wednesday.<\/p>\n Non-performing loans are expected to rise from an\u00a0average 3.9% of total loans due to the economic disruption caused by the coronavirus pandemic which affected tourism and construction sectors and dampened consumer demand.<\/p>\n The CBE\u2019s decision to cut interest rates by 400 basis points (bps) in 2020 will reduce net interest margins, leading to lower incomes for banks, Moody\u2019s noted.<\/p>\n Liquidity will remain solid as cash and interbank balances represent 19% of total assets, while an additional 39% are invested in government securities. However, state-owned banks will continue to face tighter foreign-currency liquidity.<\/p>\n","protected":false},"excerpt":{"rendered":" The Egyptian banking sector is expected to be stable in 2021 even as profitability comes under pressure due to falling net interest margins and growing non-performing loans, according to Moody\u2019s Investors Service.<\/p>\n","protected":false},"author":4,"featured_media":320657,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[22,33],"tags":[],"class_list":["post-320656","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-banking","category-main"],"yoast_head":"\n