Fitch affirms Credit Agricole Egypt at 'AA+(egy)'

The Outlook for the National Long-term rating is Stable. CAE's ratings reflect the moderate probability of support that would be available from its majority shareholder, the Credit Agricole Group (CA, rated 'AA-'/'F1+') in case of need.

There is limited upside potential in CAE's National Ratings given their current high level. A downward rating movement would be prompted by a significant weakening in Credit Agricole group's willingness to provide support; however, this is unlikely, as the group remains committed to CAE and its strategy.

CAE is the entity formed following the merger of Calyon Bank Egypt with Egyptian American Bank (EAB). EAB was acquired by CA and Mansour and Maghraby Group for Investment and Development (MMID) in February 2006. The merger process is now complete and a new management team has been put in place to focus on growing the business. CAE's aim is to double its market share (currently 2% of system assets) in three years. The bank intends to grow its loan book by 30%-40% per year, targeting retail and SME clients, as well as corporates, and aims to increase its branch network to around 100 branches by 2010.

Net income for 9M08 declined 7% yoy. This was due to the absence of large trading gains and dividend income, which benefited from the strong performance of the Egyptian stock market in 2007. The reversal of significant levels of taxation provisions in 9M07 also distorts the comparison with 9M08. Nevertheless, core banking income remained solid, with increases in net interest revenue and net fee and commission income of around 8% and 14% yoy, respectively.

CAE is a large private sector bank in Egypt. The bank is 46%-owned by Credit Agricole S.A.; 13% by CALYON, a wholly owned subsidiary of Credit Agricole S.A.; and 20% by MMID, one of Egypt's largest diversified groups. The remaining shares are widely held.