Jun 12, 2013
Limassol, June 7th 2013 - Moody's Investors Service has today downgraded to Ba2 from Ba1 the long term local currency deposit ratings of Arab Tunisian Bank (ATB), Banque Internationale Arabe De Tunisie (BIAT) and Banque De Tunisie (BdT).
Today's rating actions have been driven by (1) the Tunisian government's weakening capacity to provide support to the banks, indicated by the recent downgrade of the government bond rating to Ba2 from Ba1 and (2) Moody's view that the fragile domestic operating environment will continue to weigh on the banks' financial fundamentals, mainly their asset quality, profitability and capitalisation metrics.
Concurrently, BIAT's, ATB's and BdT's long term foreign currency deposit ratings have also been downgraded to Ba3 from Ba2, as a result of the lowering of the country ceiling on foreign-currency bank deposit ratings in Tunisia to Ba3.
Moody's has also confirmed the long term local and foreign currency deposit ratings of Societe Tunisienne De Banque (STB) at B1 and Amen Bank at Ba3. The confirmation of the deposit ratings -- which are positioned below the ratings of the government- reflects the rating agency's view that these ratings already capture bank-specific and operating environment challenges.
All deposit ratings carry a negative outlook, reflecting both the fragile operating conditions and the negative outlook on the government's ratings.
The actions follow Moody's recent downgrade of Tunisia's government bond rating to Ba2 (negative) from Ba1 (please see "Moody's downgrades Tunisia government issuer ratings to Ba2; outlook negative"). The key drivers of the sovereign rating action were (1) Tunisia's persistent political uncertainty and risk of instability; (2) the fragile state of the undercapitalised government-owned banks; and (3) the sizeable external pressures on Tunisia's balance of payments and government finances.
The rating action concludes the review for downgrade initiated on 8 March 2013.
Today's rating actions have been driven by (1) the government's weakening capacity to provide support to the banks, indicated by the downgrade of Tunisia's government bond rating to Ba2; (2) Moody's view that the fragile domestic operating environment weighs on the banks' financial fundamentals, mainly asset quality, profitability and capitalisation metrics, and (3) Moody's lowering the country ceiling on foreign-currency bank deposits to Ba3 from Ba2.
Re-disseminated by The Asian Banker