Tunisia: Moody’s Downgrades Four Tunisian Banks’ Ratings and Maintains a Negative Outlook

Moody’s Investors Service (Moody’s), on October 20, 2021, downgraded the long-term bank deposit ratings to Caa1 from B3 of four Tunisian banks: Amen Bank (Amen), Arab Tunisian Bank (ATB), Banque de Tunisie (BT) and Banque Internationale Arabe de Tunisie (BIAT). The long-term deposit ratings of Société Tunisienne de Banque (STB) have been affirmed at Caa1, Moody’s said in a statement.

The rating agency has also downgraded the Baseline Credit Assessments (BCAs) of BIAT and BT to caa1 from b3, Amen and ATB to caa2 from caa1 and affirmed STB’ caa3 BCA. The outlook on all banks’ ratings remains negative, the statement added.

The primary driver for these rating actions is the increasingly difficult operating environment for banks in Tunisia as reflected by Moody’s decision to lower Tunisia’s Macro Profile score to ‘Very Weak’ from ‘Very Weak+’. A secondary driver of these rating actions is the weakening credit profile of the Tunisian government as reflected by the decision to downgrade the sovereign rating to Caa1 from B3 on 14 October 2021.

Tunisian banks are directly and indirectly exposed to the sovereign on both sides of the balance sheet, according to the same source.