Bank of Tunisia and Emirates (BTE) to Recapitalize
The Bank of Tunisia and Emirates (BTE), equally owned by the Tunisian State and the Abu Dhabi Investment Authority, with a 38.9% stake each, has decided to recapitalize. The board of directors has conducted a comprehensive audit of the bank's accounts, which show a cumulative loss. The Extraordinary General Assembly on April 30, 2024, has given the green light to the board of directors to launch the operation, aiming to regularize the capital situation and comply with the provisions of Article 110 of Law No. 2016-48 on banks and financial institutions. The bank's solvency ratio has fallen below 50% of the regulatory capital requirement set by the Central Bank of Tunisia.
Capital Increase
The bank's social capital will be increased by 24,099,840 TND through a cash subscription and the issuance of 1,204,992 new shares. The nominal value is 20 TND, and the issue will be made at par. The price will be fully paid upon subscription. The date of enjoyment of the new shares is set for January 1, 2024.
Subscription Terms
Subscription to the new shares is reserved, on a preferential basis, for all former shareholders of the bank, whether they own ordinary shares or priority dividend shares, as well as for assignees of subscription rights on the stock exchange, both irreducible and reducible.
On an irreducible basis, subscription is open to all shareholders pro rata to their preferential subscription right, at a rate of 4,184 new ordinary shares for every 15,625 old ordinary or priority dividend shares without voting rights.
It is worth noting that the subscription rights to the new shares belonging to the Tunisian State will be ceded to the National Post Office. The subscription period is set between August 12, 2024, and August 29, 2024, inclusive.
Restructuring Plan
If the subscriptions do not cover the entire capital increase, the board of directors is authorized to limit the amount to the total subscriptions received, provided that the total reaches at least 3/4 of the decided increase.
The Central Bank of Tunisia plans to launch a major restructuring plan. For the 2024-2028 period, the strategic orientations aim to strengthen corporate governance. Moreover, the financial institution intends to return to its primary mission of development while pursuing its growth objectives as a commercial bank. By combining these two aspects, BTE aspires to solidify its position in the Tunisian banking market and contribute actively to the country's economic development, particularly by supporting the energy and digital transition. Its services will be digitized to improve accessibility and efficiency, while expanding the customer base and product range, and strictly adhering to prudential rules and good governance standards imposed by the regulator. This approach aims to ensure sustainable growth while effectively protecting its assets.
Objectives
For the next 5 years, a new agency will be opened each year, reaching 36 agencies by the end of 2028. The projected growth rate of the net banking product (PNB) is 7% on average. The target PNB structure is based on commissions, representing an average of 41% over the 2024-2028 period. Market activities are expected to contribute at least 24%.
Short-term corporate loans are expected to grow at a rate of 6.9%, while medium- and long-term loans will reach an average growth rate of 5.6%. Leasing financing will increase by 6.8%. For individuals, medium- and long-term loans will grow at an average annual rate of 7.4%. Meanwhile, a solid and proactive recovery policy will be implemented to ensure an average annual recovery of 10 Mtnd, distributed across different ages of overdue payments. The target rate of classified claims is 14.9% by the end of 2028.
In terms of deposits, the objective is to achieve an average annual growth rate of around 6.6% of customer deposits and assets over the 2024-2028 period, aiming to collect a total of 514 Mtnd.
If this program is implemented, the bank's net result will turn positive by 2026, with a net profit of 2,827 Mtnd. The mission is challenging, but it is not impossible. It requires strong commitment from all bank staff and hard work to reach the turning point.
