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Tunisia: fighter as he is, he fought unevenly and under threat of the 96, to save “the soldier STB”

He works a lot, appears little and is not easy to interview. It is because he is aware of the immensity of the Herculean task for which he signed by accepting the post of CEO of the largest, but also the public bank with the heaviest cumulative losses and that he must nevertheless, recapitalize, restructure and recover.

In return for the 750 MDTs injected by the State into the STB, Samir Saied had signed a five-year program contract. It is halfway there and the results show a beginning of success.

He knows, however, that the terms of his contract may not be respected by the state, that he fights unequally with his competitors in the private sector, and he sounds the alarm, apologizing to the small shareholders and by asking his principal debtors, the hoteliers, to support the bank. Will he be heard?


Midway through the new strategy, where are you in its implementation?

We are, in fact, halfway through. We are working intensively on 159 projects and 45 projects and covering all the functions of the bank. We took heavy commitments. But I prefer to err by excess than to do the minimum and err. Some works are moving slowly, others are already starting to bear fruit. But overall, we are moving forward.

Our results are better than we had planned, but the coming years will not necessarily be simpler or easier for the bank. I am speaking here of the problem of recovery and especially the problematic of Article 96 of the Penal Code and the need to put public banks on an equal footing with the private sector in the issues of transaction, resolution and abandonment.

This issue was raised before the parliament and I read that my colleague from the BNA talked about it in an interview with Africanmanager, so I will not come back to it.

This does not prevent me from recalling that it was foreseen, when we had drawn up the program contract with the public authorities, that at the end of December 2016 at the latest, the interpretation of Article 96 for the banking application should be clarified. This has not been done yet.

Was it part of the deal with the government when it agreed to fund the bank’s recapitalization plan?

Indeed. I’m not criticizing section 96 and it’s not my role. I speak only of its interpretation for the public banks which are subjected to the banking law. This had to be settled by the BCT.

We are moving forward in the implementation of our program contract, while this point remains unresolved. I know and I thank them, that the officials of the Ministry of Finance

made the effort to develop a bill to this effect and which was submitted to the parliament. There is obviously a fear of decision making, understandable certainly, while some colleagues are still under judicial investigation in this regard, but this point remains a disturbing element for the restructuring plan of the bank that may not have the same level of performance in its second half, if this issue of the interpretation of Article 96 is not definitively dealt with.

I also spoke, during the last financial communication of Thursday, May 10, 2018 about the issue of debts of the tourism sector at the STB.

I do not understand why we are still not implementing the proposals contained in the “White Paper”, as the Prime Minister has already announced.

I do not understand, either, the reluctance to grant tax benefits to hotel businesses to encourage them to recapitalize and save the units that need them, especially as these units are already identified and listed…

How many are there?

There are about 60 hotel units at most for the STB. The amounts are not huge, but the impact is. They are classified debts and therefore cannot benefit from bank credits, and the only issue for these hotel units remains the capital increase.

They cannot mobilize resources because the Tunisian tourism sector is still classified at risk. The exceptional tax advantage, even for one or two years, remains the only way to revive these companies and put them in condition of repayment of their debts.

Profit will be huge for the bank, for employment, for foreign exchange inflows and for all related sectors of tourism.

One of the important audit points mentioned by the statutory auditors was that of receivables amounting to more than 9,950 MD and the provisions made to cover this risk of only 1,369 MD. It seems that this issue of NPL is still one of the major challenges for the bank, midway through its new recovery strategy!

Indeed, it is the great handicap that prevents us today, for example, from using external financing lines and thereby improving the cost of STB’s resources. Donors are very watchful about the rate of NBI.

We try to explain that we have one of the highest coverage rates of the place with 74% of coverage rate of classified claims. We are told that this rate remains high and we cannot grant an external credit line to STB.

It has been vainly explained that the cause is the heavy legacy of the debts of the BNDT-BDET and that apart from this legacy, the rate of the classified debts of the only portfolio of the STB would not exceed 15%.

Today, we are in bad shape, because in competition with the private sector that can have this kind of line of credit at lower cost while we, public bank with a heavy legacy, cannot access it.

So, we are disabled, first by the NPL and then by the gap that widens with private banks, and we are no longer on equal terms for access to cheap resources. To this is added the effect of Article 96.

But at the STB it is not only these ratios that are still going badly

To my knowledge, the other ratios are improving. The NBI is improving, the EBIT is consolidating, the net profit too, with the “Return on Asset”.

To simulate the pruning of the cost of the social plan and the effect of additional provisions on beachfront hotels with high financial value recoverable within a period of 3 to 4 years, we would have 17% in “Return on Equity” as the best banks and would even double the return on asset ratio from 0.9 to 1.8%. The reality is however different. It certainly undermines the profitability of the year, but we remain confident that it will improve.

The only one, in fact related to the series of handicaps mentioned above, is the “Third Party”. The fact that we were unable to recover our receivables, made this ratio a little tighter. We are no worse off than other banks. However, there remains a ratio that we closely monitor and we adapt, seeking to improve and diversify our offer of investment and savings, to try to remedy it as soon as possible.

In fact, I’m not working on results for 2017, 2018 or even 2019, but on better prospects for the bank, in 2022 and even 2023, because all the reforms undertaken, which are structural and profound, will only bear fruit in the long-term.

It is actually a message to the shareholders to tell them that I am sorry not to distribute the dividends or to improve, in an immediate and spectacular way, the STB share price.

I think, however, that the stock price of our bank will be better and better and financial analysts will eventually recognize that our reforms will place the STB necessarily and in the medium and long term in a decidedly bullish trend.

If you want to instill more optimism and hope in your savers, it would be enough to regulate as they ask you. Thing you refuse!

I do not refuse. In fact, I do not believe that creating a mechanism to buy and then sell STB paper can be the right solution to take action. My deep conviction is that the radical solution remains the work in the long run.

In a mature market, analysts will eventually detect and announce it. On the other hand, it is practically impossible, because of the large amount of deferred postponements, to regulate the STB share on the rating. So I would not give false hope, and I would say that STB will not

distribute a dividend either this year or the next, to say the least; however, the market value will eventually appreciate.

Already for 2018, the provisions will strongly impact your results, which should be reduced by 90 MTD, as you announced in your last financial communication

I confirm it alas. That being the case, I call on the hoteliers to understand the situation in which the STB is in and that they stand by it and pay for the sums to be negotiated with them.

We do not ask for all the money for the bank, but the amount needed to save the additional provisions. Otherwise, the 2018 net profit of the STB will not be brilliant, I fear.

In 2017, you still made good gains in treasury bonds and reached the cumulative of 1,068 MD!

It is mainly due to the efforts made in 2016 by public bank STB for the benefit of the State, as a primary dealer. I do not claim to be the author of these benefits, because it is easy money for a bank whose role remains intermediation and where the profit must come from operation.

Note, however, that this gain remains reversible in the event of a rise in the long-term rate.

But I have to act, so that we are not dependent on the treasury bonds. We will, as far as possible, try to be a player in the creation of a secondary market and gradually sell these bonds.

You said, precisely, you want to give them to the SME and VSE. How?

This is what we will try to do with the stock exchange and all the professionals of the place, how to animate a secondary market, to alleviate the burden of the bonds on the banks which are in fact to do the “Crowding-Out” against an essential role of intermediary between depositors and credit applicants.

Besides, the spirit of the contract program that binds me to the state, is to manage the bank in a professional way, just like the private one, and I do not think effective for the bank to use the depositors’ money to buy treasury bonds at the expense of sound financing of the economy, especially SMEs and professionals, not individuals via consumer credit and not large groups that have other opportunities on the financial market.

The main objective is to gradually do without the treasury bonds through the creation and animation of a secondary market.

Why not refuse to take treasury bonds? And indeed, could you do it?

We can and we did this partially in 2017. Our growth in treasury bonds did not exceed 4 to 5%. It created some tense moments in tight negotiations. I would like to thank, on the

occasion, officials of the Finance Ministry (FinMin), headed by the Minister of Finance, who was understanding and even helped maintain the appetite of the FinMin. But I cannot play the politics of the ostrich.

I live in Tunisia and I know the situation perfectly. We have benefited from 750 MDT and

I cannot be brash about it. We must contribute when necessary, but at homeopathic and reasonable doses and no longer make the 28% of the market share in the treasury bonds of the year 2017.

What prospects does Samir Saied draw for STB?

Gradually, a new STB emerges from the restructuring plan and will be put in place within five years. A modern, rejuvenated STB where the female element takes over, as seen in the results of the various recruitment competitions that we organize, with 70% success rate.

We are already in the gender parity and I think that next year, they will be more numerous, which will be the pride of the STB and will do some of its advantage in the transformation it engages towards the digital.

If the White Paper is implemented, its impact on the bank’s finances will be significant.

And if the recovery is successful and Article 96 is changed and the State makes a final effort in terms of tax benefits for hoteliers, the results of the STB will follow suit.

I would like to remind you that, on the numbers side, the STB has already done more than what has been planned.

It is already + 25% in NBI for the 1st quarter of 2018 and we are counting on +20% and may be more by the end of the year, while recalling that the provision effort will necessarily impact the 2018 result.

I would not forget the effort made by the employees of the STB in terms of productivity and we started an experiment for the introduction of a variable part in the payment of employees, depending on the result.

For shareholders investors, I remind you that the bank must, before any distribution of dividend, pay off the 640 MTD of losses carried forward. I’m sorry for them, but I’m sure they’ll wait until their bank’s finances are clean.


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