The Financial Stability Report said the Central Bank of Egypt (CBE) continues to strengthen banks' risk management and governance frameworks and to monitor their performance on an ongoing basis, ensuring they continue to comply with regulatory requirements, best practice and international financial soundness standards.

According to the report, this was reflected in improved financial soundness indicators for the banking sector during fiscal year 2025 and through March 2026. That strengthened the sector's ability to absorb shocks and keep playing its pivotal role in providing the financing the domestic economy needs, including the foreign currency required to finance foreign trade. It was supported by the continued confidence of individual and institutional depositors in the banking sector, which helped bolster financial stability and drive economic growth.

The report showed that the ratio of non-performing loans to total loans fell to 1.9% in fiscal year 2025 and in March 2026, while the sector continued to hold high levels of provisions against those loans, supporting its ability to absorb expected credit losses. Local-currency loans also continued to account for the largest share of total lending, limiting credit risks linked to exchange-rate fluctuations.

The report noted that Egypt's banking sector is highly financially resilient and able to withstand a range of shocks, at a time of elevated risks to global financial stability, particularly amid rising geopolitical tensions. This is supported by the CBE's continued adoption of appropriate supervisory and macroprudential measures in line with economic and financial developments at home and abroad, keeping pace with the constantly evolving nature and sources of risk, including emerging risks.