Moody’s Investors Service (“Moody’s”) said Thursday it downgraded the long-term bank deposit ratings of five Tunisian banks: Amen Bank (Amen), Arab Tunisian Bank (ATB), Banque de Tunisie (BdT) and Banque Internationale Arabe de Tunisie (BIAT) to B3 from B2 and Société Tunisienne de Banque (STB) to Caa1 from B3.
The rating agency also affirmed the banks’ Baseline Credit Assessments (BCAs) and Adjusted BCAs. The outlook on all banks’ ratings remains negative.
The rating actions reflect the government’s weakening capacity to extend financial support to the Tunisian banks, as reflected by Moody’s decision to downgrade the long-term issuer rating of the Tunisian government to B3 from B2 on 23 February 2021, it noted.
The rating agency said the downgrade of the banks’ ratings reflects the weaker capacity of the Tunisian government to extend support to banks in case of need as indicated by the downgrade of the government’s rating.
The affirmation of the banks’ BCAs indicates Moody’s view that the banks’ low standalone credit profiles already capture the expected deterioration in asset quality and profitability on the back of the coronavirus induced economic disruption in the context of already weak operating conditions, it added.