Moody's puts Egypt banks on negative outlook | Reuters

Moody's on Tuesday revised its outlook on Egypt's banking system to negative from stable, citing growing exposure to lower-rated Egyptian sovereign debt and the effect of political turmoil on the economy.

The ratings agency said it expected a decline in tourism, foreign direct investment, incoming fund flows and private consumption in the wake of political unrest would reduce Egypt's economic growth to around 2 percent in the next 12 to 18 months.

"These adverse economic conditions are likely to challenge the banking system's asset quality and business prospects as well as its profitability and internal capital-generation capacity," Moody's wrote.