Fitch Affirms NBE and Banque Misr at B as Core Capital Rises to 10.6 and 10.7 Percent
Fitch Ratings affirmed National Bank of Egypt and Banque Misr at B with a Stable Outlook on 20 October, and kept both banks’ Viability Ratings at b. Both banks ended 2025 with stronger core capital than a year earlier. National Bank of Egypt’s common equity Tier 1 ratio rose to 10.6 percent at end-2025 from 8.4 percent. Banque Misr’s rose to 10.7 percent from 9.1 percent.
National Bank of Egypt, the country’s largest bank, holds 38 percent of sector assets. Banque Misr, the second-largest fully state-owned lender, holds 20 percent. Together they account for 58 percent, on our calculation. For National Bank of Egypt, the agency points to “low loan impairments, healthy profitability” and better foreign-currency liquidity. The larger bank serves 22 million customers, and Banque Misr more than 18 million.
Capital Rebuilt From Earnings
Both gains came mainly from earnings, the agency says. National Bank of Egypt added 2.2 percentage points of core capital in a single year, on our calculation. Banque Misr added 1.6 points, on our calculation. Return on equity at the larger bank was 29 percent in 2025.
The agency expects both ratios to pass 11 percent by end-2026, and Banque Misr’s to keep climbing in 2027. The regulatory minimum the agency cites for National Bank of Egypt is 8.25 percent. It expects the bank to keep 250 to 300 basis points above that floor. At end-2025 that cushion was 235 basis points, on our calculation, so the forecast points to a wider margin.
There is still room to grow. The sector average core capital ratio is 14.5 percent, on the agency’s figure. That leaves National Bank of Egypt 3.9 points short of it and Banque Misr 3.8 points short, on our calculation. Banque Misr has one more lever: the agency says the sale of its UAE branches to National Bank of Egypt would lift its core capital ratios.
National Bank of Egypt and Banque Misr at a Glance
| Measure | NBE | Banque Misr |
|---|---|---|
| Share of sector assets, end-2025 | 38% | 20% |
| CET1 ratio, end-2025 | 10.6% | 10.7% |
| CET1 ratio, end-2024 | 8.4% | 9.1% |
| Stage 3 loan ratio, end-2025 | 0.8% | 2.2% |
| Stage 2 loan ratio, end-2025 | 3.1% | 5.3% |
| Operating profit/RWA, 2025 | 6.5% | 5.7% |
Figures from the Fitch Ratings commentaries of 20 October 2026. NBE is National Bank of Egypt; CET1 is common equity Tier 1 capital; RWA is risk-weighted assets. NBE’s Stage 2 ratio is given as approximate in the source.
Low Impairments and Sound Liquidity
National Bank of Egypt’s Stage 3 ratio, the share of impaired loans, was 0.8 percent at end-2025. That is 1.1 points under the 1.9 percent sector average the agency cites, on our calculation. Stage 2 loans eased to 3.1 percent of gross loans from 3.7 percent. The agency expects the impaired ratio to stay stable this year and edge up to 1 percent in 2027 as the loan book matures. Continued loan growth has helped keep the ratio low, though the stock of impaired loans has doubled since end-2021.
Banque Misr’s loan loss reserves covered 409 percent of its Stage 3 loans at end-2025. They covered 121 percent of Stage 2 and 3 loans together. Its Stage 3 ratio was 2.2 percent, a level the agency calls low and ties largely to its government-related lending. That is 0.3 points above the sector average, on our calculation. The agency expects it to stay near 2 percent in 2026 and 2027.
Banque Misr lends out less of its deposits than the sector does. Gross loans equalled 54 percent of customer deposits, against 66 percent for the sector. The gap is 12 points, on our calculation. Its foreign-currency liquidity coverage ratio stood at 260 percent. Counting all currencies, the ratio was 547 percent, and the net stable funding ratio 173 percent. Retail customers supplied 69 percent of deposits. Placements with foreign banks covered its foreign funding almost twice over.
At National Bank of Egypt, net placements with foreign banks covered 44 percent of foreign funding at end-2025, a level the agency calls adequate. Foreign term loans made up 11 percent of total funding, a share it expects to keep shrinking this year.
Banque Misr Against the Sector
| Measure | Banque Misr | Sector |
|---|---|---|
| Gross loans/customer deposits | 54% | 66% |
| Stage 3 loan ratio | 2.2% | 1.9% |
| CET1 ratio | 10.7% | 14.5% |
Banque Misr’s Stage 3 and CET1 ratios are at end-2025. All figures as given in the agency’s Banque Misr commentary of 20 October 2026.
Profits, Rates and the Economy
National Bank of Egypt’s operating profit rose to 6.5 percent of risk-weighted assets in 2025, from 5.4 percent in 2024. That is a gain of 1.1 points, on our calculation. High interest rates, solid fee growth and exceptionally strong trading income supported it. The agency expects 5.2 percent in 2026 as trading income normalises.
Banque Misr earned 7.5 percent of risk-weighted assets before impairment charges in 2025. After a further build in loan loss provisions, operating profit came to 5.7 percent, against 5.9 percent in 2024. The agency calls profitability a key rating strength and expects it to stay solid in 2026.
Egypt’s growth has been resilient, the agency says. Real GDP grew 5.1 percent in the fiscal year to June 2026, and the agency expects 4.7 percent in fiscal 2027. It forecasts inflation of 12.3 percent in fiscal 2027 and below 10 percent in fiscal 2028. Banking-sector net foreign assets stood at 12.6 billion dollars in August, according to its 8 October review, which affirmed Egypt itself at B with a Stable Outlook.
Headline annual inflation was 13.9 percent in September and core inflation 14.1 percent, according to the Central Bank of Egypt. Its overnight deposit rate has stood at 19.00 percent since a 100 basis point cut took effect in February. That puts the deposit rate 5.1 points above September headline inflation, on our calculation. It is 6.7 points above the agency’s fiscal 2027 inflation forecast, on our calculation. The September decision was the fifth straight hold since that cut, on our count.
Egypt’s Macro Markers Behind the Ratings
| Measure | Value | Period |
|---|---|---|
| Real GDP growth | 5.1% | Fiscal 2026 |
| Real GDP growth, agency forecast | 4.7% | Fiscal 2027 |
| Headline inflation, annual | 13.9% | September 2026 |
| Core inflation, annual | 14.1% | September 2026 |
| Overnight deposit rate | 19.00% | Since 15 February 2026 |
| Inflation, agency forecast | 12.3% | Fiscal 2027 |
Growth and forecasts from the agency’s 20 October bank commentaries; inflation and the policy rate from the central bank. Fiscal years end in June.
Government securities were 31 percent of National Bank of Egypt’s assets at end-2025, equal to 5.6 times its core capital. At Banque Misr, sovereign securities made up 26 percent of assets at the same date. Its total sovereign exposure came to 8.4 times core capital, or 57 percent of assets. For National Bank of Egypt, the agency says a sovereign downgrade would lead to a downgrade of its issuer rating, and an upgrade would require a sovereign upgrade. For Banque Misr, it does not expect a notice of proposed rulemaking on its UAE branches to change its business profile. By its estimate, those operations make up 5 percent of the group’s balance sheet and profitability.
Why it matters: National Bank of Egypt and Banque Misr hold 58 percent of Egypt’s banking-sector assets between them, on our calculation. Both are rebuilding capital from their own earnings. Impaired loans at both remain low. Their stronger capital therefore sits behind most of the sector’s assets.
Outlook: The next markers are core capital above 11 percent at both banks by end-2026, with a further rise at Banque Misr in 2027. The Central Bank of Egypt’s next rate meeting is on 29 October. The agency’s 8 October sovereign review sees debt interest taking a smaller share of revenue as policy rates come down. It forecasts interest at 52 percent of government revenue in fiscal 2028, from 63 percent in fiscal 2026.
Sources: Fitch Ratings, Central Bank of Egypt, The Edge.
