Moody's Upgrades Tunisian Banks' Ratings, Citing Improved Financial Solidity
The American financial rating agency Moody's has recently announced an improvement in its outlook for the Tunisian banking system. Four local banks stand out for their increasing financial solidity, aligning them with the country's sovereign rating, which is also improving. The banks in question are Amen Bank, Banque de Tunisie (BT), Banque Internationale Arabe de Tunisie (BIAT), and Société Tunisienne de Banque (STB). This announcement comes amidst government reforms aimed at stabilizing the national economy.
The long-term deposit ratings of these banks have been revised upward, rising from Caa2 to Caa1. Additionally, the long-term counterparty risk ratings have also seen an improvement. For BT and BIAT, these ratings have evolved from Caa1 to B3, while for STB, they have risen from Caa2 to Caa1. These adjustments reflect renewed confidence in the ability of these Tunisian institutions to meet their financial obligations.
Moody's attributes this favorable development to the Tunisian government's effective management of its debt repayment. More rigorous management reduces the risk of sovereign debt-related incidents. However, challenges remain, weighing on the Tunisian banking sector in the medium term.
Indeed, economic growth remains slow, hindered by significant budgetary and external imbalances. Financial tensions remain relatively high, and local banks are heavily exposed to public debt. These conditions limit any notable improvement in solvency and liquidity. Over the next 12 to 18 months, Moody's anticipates that these constraints will restrict the necessary maneuvering room for further strengthening the stability of the Tunisian financial sector.
