Fitch Ratings has upgraded Tunisia-based Banque Tuniso-Koweitienne SA’s (BTK) Long-Term Issuer Default Rating (IDR) to ‘CCC’ from ‘CCC-‘ and its Viability Rating (VR) to ‘ccc’ from ‘ccc-‘, it said in a statement Monday.
It has also upgraded BTK’s National Long-Term Rating to ‘BB-(tun)’ from ‘B(tun)’. The National Long-Term Rating Outlook is Stable.
The rating agency said the upgrade of BTK’s Long-Term IDR is driven by the upgrade of its VR and reflects the bank’s restored compliance with its regulatory minimum capital requirements, and our expectation that it will remain compliant.
It added that BTK’s IDRs are driven by the bank’s standalone creditworthiness, as reflected in its ‘ccc’ VR.
The VR reflects still limited capital buffers despite the return to regulatory compliance, a high impaired loans ratio, structurally low earnings generation through cycles, and a weaker funding and liquidity profile than peers’.
BTK’s National Rating of ‘BB-(tun)’ remains the lowest among Fitch-rated issuers in Tunisia, despite the two-notch upgrade. “This reflects a limited franchise and weaker-than-peers financial profile,” according to the rating agency.
