Ministerial Council Examines Three Economic Bills, Including Tunisian Saudi Bank Recapitalization
Yesterday, a Ministerial Council reviewed three economic bills, including one related to Tunisia's participation in the capital increase of the Tunisian Saudi Bank (TSB). As this involves public funds, the State must obtain formal authorization to proceed.
TSB's Financial Situation
The latest financial statements of the TSB, related to the 2022 exercise, show a net loss of -102 million Tunisian dinars (Mtnd). The bank has undertaken a major cleaning operation of its assets, provisioning 92,299 Mtnd. As a result, the TSB is considered a bank in a compromised situation. Its solvency ratio has fallen below the 50% regulatory capital requirement set by the Central Bank of Tunisia, standing at only 0.96% as of 2022.
Furthermore, the bank does not meet the condition of having assets exceeding liabilities owed to third parties, with a minimum capital requirement of 50 Mtnd. As of 2022, its equity stands at only 28,977 Mtnd.
Action Plan and Recapitalization
Based on this situation, the board of directors has prepared an action plan for 2024-2028, which was addressed to the Central Bank on January 18, 2024. The shareholders, including the Tunisian State and the Kingdom of Saudi Arabia, have consulted the Commission for the Rehabilitation and Restructuring of Publicly Held Enterprises (Carepp), which met on December 30, 2023, authorizing the Tunisian State and other public parties to participate in a 100 Mtnd recapitalization operation.
Next Steps
The communiqué released yesterday did not specify whether the Ministerial Council has given the green light for the bill to be examined by the Assembly of the Representatives of the People (ARP). We believe this fits into a broader vision concerning the State's presence in the capital of these banks. Nevertheless, it is expected that this operation will be completed in the short term. Another bank saved, for now.