...Ratings Correlated w ith Sovereign: National Bank of Egypt's (NBE) Long-Term Issuer Default Ratings (IDRs) are driven by its Viability Rating (VR) and underpinned by potential support from the Egyptian authorities, if needed. NBE's VR reflects strong correlation betw een the bank's credit profile and that of the sovereign given its sizeable holdings of government debt (39% of total assets at end-2017) and lending to public-sector companies (around 16% of total assets). Operating Environm ent Still Challenging: The operating environment has improved but economic activity is expected to remain subdued given the high interest rates. Fitch Ratings expects banks to continue deploying excess liquidity in sovereign securities , w hich represent 30%-50% of their balance sheets. Im proving Asset-Quality Metrics: NBE's asset-quality metrics have been improving since 2012 as the bank has been cleaning its balance sheet from legacy impaired loans. The impaired loans ratio w as 2% at end-2017. Reserve...
