The Foreign Currency Ratings of Banque de Tunisie (BT) were reaffirmed at 'BBB-' Long-Term and 'A3' Short-Term by Capital Intelligence (CI), while the outlook remained 'Negative'. Meanwhile, the Financial Strength Rating (FSR) was downgraded to 'BBB-', reflecting very tight liquidity, the brisk increase in non-performing loans (NPLs) in H1 2012, and the continued challenging operating environment. The FSR outlook was affirmed at 'Negative'. In the absence of adequate liquidity, and unless this is improved, there is downward pressure on the Rating. The Rating is supported by a strong capital adequacy ratio, very good loan-loss coverage, and a much lower than sector average NPL ratio. BT's profitability also remains sound and comfortably above peer average. The Support Rating is affirmed at '3'; the Tunisian Government currently holds a small stake, which was controlled by the previous regime.

As with all Tunisian banks, BT has been negatively impacted by events in Tunisia over the past two years. The Bank enjoys a good level of gross income and has a low operating expense base. This results in the best operating profit by average assets ratio in the peer group.

Although tight liquidity has been experienced across the Tunisian banking sector over the past year, BT's position is much weaker than average. The Bank has only a very small base of liquid assets, and other main liquidity ratio indicators, such as the ratio of net loans to customer deposits, are very high.

At end-June 2012, assets totaled TND 3,465 million ($2.5 billion).