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Arab African International Bank – Ratings and Outlook Affirmed
(MENAFN- Capital Intelligence Ltd) 26 August 2026
Capital Intelligence Ratings (CI Ratings or CI) today announced that it has affirmed both the Long-Term Foreign Currency (LT FCR) and Short-Term Foreign Currency (ST FCR) ratings of Arab African International Bank (AAIB or the Bank) at ‘B’. At the same time, CI Ratings has affirmed AAIB’s Bank Standalone Rating (BSR) of ‘b’, Core Financial Strength (CFS) rating of ‘bb’ and Extraordinary Support Level (ESL) of High. The Outlook on the ratings remains Stable.
AAIB’s BSR is derived from a CFS rating of ‘bb’ and an OPERA of ‘b’ (indicating significant risk). The CFS is underpinned by strong ownership (Egyptian and Kuwaiti governments) and by the expectation that the shareholders will continue to be willing to provide a high degree of ordinary support. The key rating supporting factors are the Bank’s improving profitability and loan asset quality (despite Stage 2 loans remaining elevated at 19% of gross loans), a satisfactory capital position, and sound liquidity. Loan asset quality (an area of some weakness in the past) has become a credit strength, with NPLs falling both as a ratio of gross loans and more importantly, in money terms (down by 84% since end-2021) with full and still rising loan-loss reserve (LLR) coverage. The quality of the Bank’s corporate and investment banking franchise is also a major non-financial factor supporting its business and operational profile. Both capital and liquidity buffers are significant and provide substantial support to the Bank’s overall risk profile in what remains a somewhat difficult operating environment, although the risk-weighted capital adequacy metrics are boosted by the zero-weighting of AAIB’s substantial holdings of Egyptian government securities.
The main credit challenges remain unchanged, although the domestic element of the leading rating constraint (the difficult operating environment) has lessened, reflecting further improvements seen in economic prospects since late 2024. Unfortunately, this improvement is now threatened by external geopolitical risk factors that could impact the Egyptian economy, should the US-Iran armed conflict persist. Concentrations in both loan assets and customer deposits remain a credit challenge, although the low share of net loans in total assets reduces the impact of concentrations in the loan book. Moreover, the concentrations in terms of individual borrower, are to high quality counterparties. The high level of government securities exposure in the investment book is also considered to be a credit challenge. As regards to customer deposits, over 43% as at end-2025 came from retail depositors. Looking ahead, expected vigorous growth in both loans and deposits should help to achieve further reductions in customer concentrations.
As the BSR is already constrained by the sovereign rating, our ESL assessment of High does not result in any uplift for either the Bank’s LT FCR or BSR. The high likelihood of extraordinary support is pinned on the Bank’s strong sovereign ownership, namely the Kuwait Investment Authority (KIA), Kuwait’s sovereign wealth fund, and to a lesser degree, the Central Bank of Egypt (CBE). Being a strategic Kuwaiti government entity, the KIA is deemed to have the capacity and willingness to provide support in case of need. We also consider the CBE to be very willing to provide extraordinary support, although its financial capacity may be more limited as indicated by Egypt’s sovereign LT FCR of ‘B’ with a Stable Outlook.
The OPERA reflects Egypt’s still high sovereign risk profile, due to significant government borrowing needs and a long-standing balance of payments vulnerabilities. These vulnerabilities were first compounded by the effects on Suez Canal revenues of the Gaza war and the 2025 Houthi attacks. Now, there are headwinds from the US-Iran conflict and more recently, the real possibility of renewed attacks by the Houthis on Red Sea shipping. The OPERA also takes into account the still fairly sound condition of the banking system and the continuing support received from the IMF and rising FDI from GCC countries.
The Bank is well-capitalised, with better than sector average leverage metrics. The Bank’s capital is USD denominated and AAIB has been able to achieve a solid rate of internal capital generation, particularly over the last three years. Capital quality is good, while ownership should provide additional capital flexibility should additional capital be required in the future, although such a need in the near term is not anticipated, as current capital resources are sufficient to support expected asset growth rates.
Loan asset quality has been on an improving trend, with annual NPL growth in money terms being negative in the last four years, and with LLR coverage now being strong. Loan assets, however, only made up less than 24% of total assets on a net basis as at end-2025, reducing to some degree the significance of loan asset quality on the Bank’s overall risk profile. As for non-loan assets, the quality of interbank placements is considered as being satisfactory. Although the investment securities portfolio contains a significant proportion of Egyptian government paper (where asset quality here is closely linked to the credit risk profile of the sovereign), it also includes a smaller, but still significant, component of investment-grade foreign debt securities. As at end-2025, Egyptian government securities made up almost 20% of total assets (this represented an amount equivalent to 133% of equity).
Although profitability still lags that at most other Egyptian banks, this is in part a reflection of the fact that AAIB operates a USD-based balance sheet and P/L. By contrast, banks that have balance sheets and P/Ls denominated in EGP tend to benefit (in the short term at least) from the impact of still high EGP interest rates. Although such movements have had some benefits for AAIB (and the other USD-denominated bank (Arab International Bank), the effects have been much smaller in USD terms.
AAIB has a good franchise within the Egyptian banking sector, ranking fourth by total assets. However, the Bank’s strong corporate and investment banking franchises can tend to increase concentration risks in both loans and deposits. Core banking activities are complemented by AAIB’s active presence in more niche segments, such as margin lending, credit card merchant acquisition, fund and wealth management, as well as equity brokerage and custody services. The Bank continues to have a good distribution capacity and an established retail customer deposit franchise. Accordingly, good liquidity is underpinned by a strong and rapidly growing base of customer deposits.
Last year saw stronger, but still moderate, asset growth (despite AAIB having a USD-denominated balance sheet) and similar growth in customer deposits. Given that the bulk of surplus liquidity was deployed into interbank placements, a low loan-to-deposit ratio at year-end 2025 meant that there was ample scope to reverse the previous 2022-24 negative growth in gross loans. With customer loan growth of almost 27% in 2025, it would appear that such a reversal is well underway. In this regard, it should be noted that these negative growth rates in previous periods for net loans on a USD-denominated balance sheet were in part due to the translation effect of the pronounced fall in the value of the EGP in USD terms. AAIB remains well-placed to be able to further grow its loan book as the lending environment improvement continues.
Rating Outlook
The Stable Outlook for AAIB’s LT FCR and BSR, which are both already at the sovereign level, indicates that the ratings are unlikely to be altered over the next 12 months.
Rating Dynamics: Upside Scenario
The most likely upside scenario would be a revision of the Outlook to Positive, following a similar upward adjustment to the sovereign ratings outlook. While not our current base case scenario, this is nonetheless seen as being a possibility in the specified timeframe.
Rating Dynamics: Downside Scenario
The most likely downside scenario would be a lowering of the Outlook to Negative. Given the generally sound financial metrics, such a downward action would probably require a similar action on the sovereign ratings’ outlook.
Contact
Primary Analyst: Rory Keelan, Senior Credit Analyst; E-mail: ...
Secondary Analyst and Committee Chairperson: Morris Helal, Senior Credit Analyst
About the Ratings
The credit ratings have been issued by Capital Intelligence Ratings Ltd, P.O. Box 53585, Limassol 3303, Cyprus.
The following information sources were used to prepare the credit ratings: public information and information provided by the rated entity. Financial data and metrics have been derived by CI from the rated entity’s financial statements for FY2021-25. CI may also have relied upon non-public financial information provided by the rated entity and may also have used financial information from credible, independent third-party data providers. CI considers the quality of information available on the rated entity to be satisfactory for the purposes of assigning and maintaining credit ratings. CI does not audit or independently verify information received during the rating process.
The principal methodology used to determine the ratings is the Bank Rating Methodology, dated 3 April 2019. For the methodology and our definition of default see Information on rating scales and definitions and the time horizon of rating outlooks can be found at Historical performance data, including default rates, are available from a central repository established by ESMA (CEREP) at
This rating action follows a scheduled periodic (annual) review of the rated entity. Ratings on the entity were first released in March 1995. The ratings were last updated in September 2025. The ratings and rating outlook were disclosed to the rated entity prior to publication and were not amended following that disclosure. The ratings have been assigned or maintained at the request of the rated entity or a related third party.
Conditions of Use and General Limitations
The information contained in this publication including opinions, views, data, material and ratings may not be copied, distributed, altered or otherwise reproduced, in whole or in part, in any form or manner by any person except with the prior written consent of Capital Intelligence Ratings Ltd (hereinafter “CI”). All information contained herein has been obtained from sources believed to be accurate and reliable. However, because of the possibility of human or mechanical error or other factors by third parties, CI or others, the information is provided “as is” and CI and any third-party providers make no representations, guarantees or warranties whether express or implied regarding the accuracy or completeness of this information.
Without prejudice to the generality of the foregoing, CI and any third-party providers accept no responsibility or liability for any losses, errors or omissions, however caused, or for the results obtained from the use of this information. CI and any third-party providers do not accept any responsibility or liability for any damages, costs, expenses, legal fees or losses or any indirect or consequential loss or damage including, without limitation, loss of business and loss of profits, as a direct or indirect consequence of or in connection with or resulting from any use of this information.
Credit ratings and credit-related analysis issued by CI are current opinions as of the date of publication and not statements of fact. CI’s credit ratings provide a relative ranking of credit risk. They do not indicate a specific probability of default over any given time period. The ratings do not address the risk of loss due to risks other than credit risk, including, but not limited to, market risk and liquidity risk. CI’s ratings are not a recommendation to purchase, sell, or hold any security and do not comment as to market price or suitability of any security for a particular investor. Further information on the attributes and limitations of ratings can be found in the applicable methodology or else at
The information contained in this publication does not constitute investment or financial advice. As the ratings and analysis are opinions of CI they should be relied upon to a limited degree and users of this information should conduct their own risk assessment and due diligence before making any investment or other business decisions.
Copyright © Capital Intelligence Ratings Ltd 2026
Capital Intelligence Ratings (CI Ratings or CI) today announced that it has affirmed both the Long-Term Foreign Currency (LT FCR) and Short-Term Foreign Currency (ST FCR) ratings of Arab African International Bank (AAIB or the Bank) at ‘B’. At the same time, CI Ratings has affirmed AAIB’s Bank Standalone Rating (BSR) of ‘b’, Core Financial Strength (CFS) rating of ‘bb’ and Extraordinary Support Level (ESL) of High. The Outlook on the ratings remains Stable.
AAIB’s BSR is derived from a CFS rating of ‘bb’ and an OPERA of ‘b’ (indicating significant risk). The CFS is underpinned by strong ownership (Egyptian and Kuwaiti governments) and by the expectation that the shareholders will continue to be willing to provide a high degree of ordinary support. The key rating supporting factors are the Bank’s improving profitability and loan asset quality (despite Stage 2 loans remaining elevated at 19% of gross loans), a satisfactory capital position, and sound liquidity. Loan asset quality (an area of some weakness in the past) has become a credit strength, with NPLs falling both as a ratio of gross loans and more importantly, in money terms (down by 84% since end-2021) with full and still rising loan-loss reserve (LLR) coverage. The quality of the Bank’s corporate and investment banking franchise is also a major non-financial factor supporting its business and operational profile. Both capital and liquidity buffers are significant and provide substantial support to the Bank’s overall risk profile in what remains a somewhat difficult operating environment, although the risk-weighted capital adequacy metrics are boosted by the zero-weighting of AAIB’s substantial holdings of Egyptian government securities.
The main credit challenges remain unchanged, although the domestic element of the leading rating constraint (the difficult operating environment) has lessened, reflecting further improvements seen in economic prospects since late 2024. Unfortunately, this improvement is now threatened by external geopolitical risk factors that could impact the Egyptian economy, should the US-Iran armed conflict persist. Concentrations in both loan assets and customer deposits remain a credit challenge, although the low share of net loans in total assets reduces the impact of concentrations in the loan book. Moreover, the concentrations in terms of individual borrower, are to high quality counterparties. The high level of government securities exposure in the investment book is also considered to be a credit challenge. As regards to customer deposits, over 43% as at end-2025 came from retail depositors. Looking ahead, expected vigorous growth in both loans and deposits should help to achieve further reductions in customer concentrations.
As the BSR is already constrained by the sovereign rating, our ESL assessment of High does not result in any uplift for either the Bank’s LT FCR or BSR. The high likelihood of extraordinary support is pinned on the Bank’s strong sovereign ownership, namely the Kuwait Investment Authority (KIA), Kuwait’s sovereign wealth fund, and to a lesser degree, the Central Bank of Egypt (CBE). Being a strategic Kuwaiti government entity, the KIA is deemed to have the capacity and willingness to provide support in case of need. We also consider the CBE to be very willing to provide extraordinary support, although its financial capacity may be more limited as indicated by Egypt’s sovereign LT FCR of ‘B’ with a Stable Outlook.
The OPERA reflects Egypt’s still high sovereign risk profile, due to significant government borrowing needs and a long-standing balance of payments vulnerabilities. These vulnerabilities were first compounded by the effects on Suez Canal revenues of the Gaza war and the 2025 Houthi attacks. Now, there are headwinds from the US-Iran conflict and more recently, the real possibility of renewed attacks by the Houthis on Red Sea shipping. The OPERA also takes into account the still fairly sound condition of the banking system and the continuing support received from the IMF and rising FDI from GCC countries.
The Bank is well-capitalised, with better than sector average leverage metrics. The Bank’s capital is USD denominated and AAIB has been able to achieve a solid rate of internal capital generation, particularly over the last three years. Capital quality is good, while ownership should provide additional capital flexibility should additional capital be required in the future, although such a need in the near term is not anticipated, as current capital resources are sufficient to support expected asset growth rates.
Loan asset quality has been on an improving trend, with annual NPL growth in money terms being negative in the last four years, and with LLR coverage now being strong. Loan assets, however, only made up less than 24% of total assets on a net basis as at end-2025, reducing to some degree the significance of loan asset quality on the Bank’s overall risk profile. As for non-loan assets, the quality of interbank placements is considered as being satisfactory. Although the investment securities portfolio contains a significant proportion of Egyptian government paper (where asset quality here is closely linked to the credit risk profile of the sovereign), it also includes a smaller, but still significant, component of investment-grade foreign debt securities. As at end-2025, Egyptian government securities made up almost 20% of total assets (this represented an amount equivalent to 133% of equity).
Although profitability still lags that at most other Egyptian banks, this is in part a reflection of the fact that AAIB operates a USD-based balance sheet and P/L. By contrast, banks that have balance sheets and P/Ls denominated in EGP tend to benefit (in the short term at least) from the impact of still high EGP interest rates. Although such movements have had some benefits for AAIB (and the other USD-denominated bank (Arab International Bank), the effects have been much smaller in USD terms.
AAIB has a good franchise within the Egyptian banking sector, ranking fourth by total assets. However, the Bank’s strong corporate and investment banking franchises can tend to increase concentration risks in both loans and deposits. Core banking activities are complemented by AAIB’s active presence in more niche segments, such as margin lending, credit card merchant acquisition, fund and wealth management, as well as equity brokerage and custody services. The Bank continues to have a good distribution capacity and an established retail customer deposit franchise. Accordingly, good liquidity is underpinned by a strong and rapidly growing base of customer deposits.
Last year saw stronger, but still moderate, asset growth (despite AAIB having a USD-denominated balance sheet) and similar growth in customer deposits. Given that the bulk of surplus liquidity was deployed into interbank placements, a low loan-to-deposit ratio at year-end 2025 meant that there was ample scope to reverse the previous 2022-24 negative growth in gross loans. With customer loan growth of almost 27% in 2025, it would appear that such a reversal is well underway. In this regard, it should be noted that these negative growth rates in previous periods for net loans on a USD-denominated balance sheet were in part due to the translation effect of the pronounced fall in the value of the EGP in USD terms. AAIB remains well-placed to be able to further grow its loan book as the lending environment improvement continues.
Rating Outlook
The Stable Outlook for AAIB’s LT FCR and BSR, which are both already at the sovereign level, indicates that the ratings are unlikely to be altered over the next 12 months.
Rating Dynamics: Upside Scenario
The most likely upside scenario would be a revision of the Outlook to Positive, following a similar upward adjustment to the sovereign ratings outlook. While not our current base case scenario, this is nonetheless seen as being a possibility in the specified timeframe.
Rating Dynamics: Downside Scenario
The most likely downside scenario would be a lowering of the Outlook to Negative. Given the generally sound financial metrics, such a downward action would probably require a similar action on the sovereign ratings’ outlook.
Contact
Primary Analyst: Rory Keelan, Senior Credit Analyst; E-mail: ...
Secondary Analyst and Committee Chairperson: Morris Helal, Senior Credit Analyst
About the Ratings
The credit ratings have been issued by Capital Intelligence Ratings Ltd, P.O. Box 53585, Limassol 3303, Cyprus.
The following information sources were used to prepare the credit ratings: public information and information provided by the rated entity. Financial data and metrics have been derived by CI from the rated entity’s financial statements for FY2021-25. CI may also have relied upon non-public financial information provided by the rated entity and may also have used financial information from credible, independent third-party data providers. CI considers the quality of information available on the rated entity to be satisfactory for the purposes of assigning and maintaining credit ratings. CI does not audit or independently verify information received during the rating process.
The principal methodology used to determine the ratings is the Bank Rating Methodology, dated 3 April 2019. For the methodology and our definition of default see Information on rating scales and definitions and the time horizon of rating outlooks can be found at Historical performance data, including default rates, are available from a central repository established by ESMA (CEREP) at
This rating action follows a scheduled periodic (annual) review of the rated entity. Ratings on the entity were first released in March 1995. The ratings were last updated in September 2025. The ratings and rating outlook were disclosed to the rated entity prior to publication and were not amended following that disclosure. The ratings have been assigned or maintained at the request of the rated entity or a related third party.
Conditions of Use and General Limitations
The information contained in this publication including opinions, views, data, material and ratings may not be copied, distributed, altered or otherwise reproduced, in whole or in part, in any form or manner by any person except with the prior written consent of Capital Intelligence Ratings Ltd (hereinafter “CI”). All information contained herein has been obtained from sources believed to be accurate and reliable. However, because of the possibility of human or mechanical error or other factors by third parties, CI or others, the information is provided “as is” and CI and any third-party providers make no representations, guarantees or warranties whether express or implied regarding the accuracy or completeness of this information.
Without prejudice to the generality of the foregoing, CI and any third-party providers accept no responsibility or liability for any losses, errors or omissions, however caused, or for the results obtained from the use of this information. CI and any third-party providers do not accept any responsibility or liability for any damages, costs, expenses, legal fees or losses or any indirect or consequential loss or damage including, without limitation, loss of business and loss of profits, as a direct or indirect consequence of or in connection with or resulting from any use of this information.
Credit ratings and credit-related analysis issued by CI are current opinions as of the date of publication and not statements of fact. CI’s credit ratings provide a relative ranking of credit risk. They do not indicate a specific probability of default over any given time period. The ratings do not address the risk of loss due to risks other than credit risk, including, but not limited to, market risk and liquidity risk. CI’s ratings are not a recommendation to purchase, sell, or hold any security and do not comment as to market price or suitability of any security for a particular investor. Further information on the attributes and limitations of ratings can be found in the applicable methodology or else at
The information contained in this publication does not constitute investment or financial advice. As the ratings and analysis are opinions of CI they should be relied upon to a limited degree and users of this information should conduct their own risk assessment and due diligence before making any investment or other business decisions.
Copyright © Capital Intelligence Ratings Ltd 2026
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