Fitch Ratings has affirmed Arab Tunisian Bank’s (ATB) Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDRs) at ‘B-‘. The Outlooks are Stable, it said in a statement Thursday.
Fitch has also upgraded the bank’s Viability Rating (VR) to ‘ccc’ from ‘ccc-‘ following the upgrade of Tunisia’s sovereign IDR to ‘CCC+’ on September 16, 2024.
ATB’s National Rating of ‘AAA(tun)’ is unaffected by today’s action, it pointed out.
Fitch said the VR upgrade follows the upgrade of Tunisian banks’ operating environment factor score to ‘ccc+’, in line with the sovereign rating, reflecting the high correlation of local banks’ standalone credit profiles with that of the sovereign.
ATB’s VR is one notch below the operating environment score, primarily reflecting the bank’s below-average core financial metrics, particularly capitalization, profitability and asset quality, it added.
The rating agency said ATB’s Long-Term IDRs are driven by potential support from the bank’s 64.2% shareholder, Jordan-based Arab Bank Plc (AB; BB/Stable).
ATB’s Long-Term Foreign-Currency (LTFC) IDR of ‘B-‘ is above the sovereign LTFC IDR of ‘CCC+’ but is capped by Tunisia’s Country Ceiling of ‘B-‘ which reflects transfer and convertibility risks.
ATB’s National Ratings are the highest ratings among Tunisian issuers. Its ‘ccc’ VR is heavily influenced by the bank’s weak capitalization, according to Fitch.
