Proposed restrictions by the US on Banque Misr’s five branches in the UAE are expected to have a minimal impact on the bank’s credit rating according to a report from Fitch Ratings.
The agency noted that the branches contribute a small fraction to the overall business and are positioned to manage deposit withdrawals effectively.
The US Treasury Department’s Financial Crimes Enforcement Network (FinCEN) has suggested prohibiting US financial institutions from establishing or maintaining correspondent accounts for these branches, alleging connections to Iranian shadow banking activities.
This proposal is currently open for public comment until 1 October.
Fitch indicated that the UAE branches represent less than 5% of Banque Misr’s assets and net profit.
As of the end of 2025, Banque Misr UAE branches’ liabilities were approximately $2.3B, constituting 43% of the branches’ total liabilities while accounting for only about 2.5% across the entire bank.
Since the announcement of the restrictions, between 20% and 30% of the branches’ USD deposits have been withdrawn.
Liquidity No Issue
Despite this, Fitch anticipates that the liquidity at both the branches and the bank’s headquarters will suffice to cover these outflows, enabling the branches to fulfil their dollar obligations by the comment deadline, even should dollar liabilities continue to decline.
Fitch does not foresee any significant reduction in the value of payments as the UAE Dirham is pegged to the USD.
Yet the agency warned that pressure on Banque Misr’s rating could arise if the branches are unable to meet dollar obligations or adequately compensate creditors in an alternative currency.
NBE Takeover
Earlier this week, it was reported that the Central Bank of the UAE had granted preliminary approval for the National Bank of Egypt’s takeover of the branches.
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