S&P Global Ratings has cut its outlook on the National Bank of Egypt, Banque Misr, and CIB to negative, it said Friday. The change mirrors the agency’s negative outlook on Egypt’s sovereign credit rating, which it announced last week, warning that the country risks not being able to meet its external funding needs if it doesn’t deliver on economic reforms tied to its IMF assistance program. The ratings agency held the three banks’ credit ratings at B, aligned with Egypt’s sovereign rating.

It’s all about the sovereign ceiling: “Our rated banks operate solely in Egypt. Therefore, we do not believe they would withstand a sovereign default without defaulting on their financial obligations,” the ratings agency said.

Moody’s already did the same: Earlier this year, Moody’s downgraded the long-term deposit ratings of five Egyptian banks — the National Bank of Egypt, Banque Misr, Banque du Caire, CIB, and Bank of Alexandria — after it downgraded the country’s sovereign credit rating.

Madbouly is trying to maintain market confidence: Prime Minister Moustafa Madbouly last week moved to reassure the markets that Egypt will meet its debt obligations amid rising concern among investors that the country is at risk of default. “I reassure you that the Egyptian state has not failed, nor will it fail, to pay back its international debt,” he said in televised statements.

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