Global Arab Network | Capital Intelligence raises rating of Tunisia-based Attijari Bank

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Capital Intelligence raises rating of Tunisia-based Attijari Bank

Wednesday, 24 March 2010 15:10

Capital Intelligence (CI), the international credit rating agency, today announced that it has raised both the long-term Foreign Currency rating of Tunisia’s Attijari Bank (Attijari) to B and the Financial Strength rating to B. The short-term Foreign Currency rating was affirmed at B and the Support rating was maintained at 4.

Attijari Bank (previously known as Banque du Sud) was established in 1968. In 2005, the Tunisian government and Italy’s Monte Dei Paschi Di Siena sold their stakes to Morocco’s Attijariwafa Bank. Attijariwafa Bank now owns 55% of Attijari Bank, held through a holding company, Andalucarthage. Attijariwafa Bank was established in 1911 as Banque Commerciale du Maroc and is Morocco’s oldest and largest bank.

Attijari has made a noted recovery in its financial profile over the last few years following a period when both its balance sheet and profitability were extremely weak. The latter reflected a substantial stock of previously made bad loans. In 2008, the Bank returned to profit for the first time in some years, aided by improving net interest income, but principally driven by a sharp fall in the provision charge. This has been due to an improvement in the Bank’s loan asset quality through a lower level of non-performing loans. However, the level of bad loans still represents quite a high proportion of total loans and provisioning coverage is still low.

Capital adequacy has improved due to retained earnings and Attijari met the 8% minimum regulatory capital ratio as at end-2009, the first time it has met this for some years. Nonetheless, the capital adequacy ratio needs to be strengthened further in order to support balance sheet growth. Liquidity is currently adequate and the Bank has been able to generate a healthy increase in customer deposits. Good profitability was maintained through to end-June 2009.

With assets of TND3,178mn (USD2,352mn) at end-June 2009, Attijari is Tunisia’s sixth largest bank by total assets and operates a system of 151 branches nationwide, which is the second largest in Tunisia. The Bank controls over 7% of total sector assets in Tunisia.

Global Arab Network

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