Dec 21 2006 |
more articles from
|
Fitch: Restructuring Continues at Major Tunisian Banks; Challenges Remain
Fitch Ratings-London/Paris/Tunis - Fitch Ratings says in a special report issued today that the five largest Tunisian banks are expected to report fairly modest lending growth and substantial loan loss provisions in their 2006 results. In addition, Fitch views that the improvement of the operating efficiency ratios will be a key driver for sustaining bottom-line results in the near future."The performance of the five largest Tunisian banks improved in 2005 although loan loss provisions remained heavy at all banks and operating costs substantial at some, a trend which has continued in 2006" says Sonia Trabelsi in Fitch's Bank team.
Fitch says cleaning of the balance sheet continued in 2005 at the major banks through the sale of bad loans to their affiliates or through write-offs. Efforts are being made to better manage credit risk although Fitch views that further progress is needed. For 2005, some banks benefited from substantial non-recurring earnings, which were allocated to loan loss reserves. However, delinquency ratios remain high and loan loss reserve coverage is low by international standards. In 2005, the impaired loan ratio ranged from roughly 16% to 43%, while impaired loan/equity ratios varied between 72% and 250%. For 2006, impaired loan figures were not available for a large part of these banks.
For the first six months of 2006, the major Tunisian banks generated operating return on equity ratios ranging from 15% to a low 4%. Despite increasing earnings, loan loss provisions continued to absorb a substantial part of revenues. Fitch considers that a final reliable picture for these banks' performance will only be available at the disclosure of full-year audited financial data. This is because loan loss provisioning charges, which are largely determined at the end of the year, after being approved by auditors and the Tunisian central bank, have historically introduced major volatility to banks' net income.
The five banks have either '2' or '3' Support ratings, which were affirmed this year, reflecting Fitch's view that the Tunisian state remains highly to moderately supportive of these banks. Fitch does not expect changes to these Support ratings in the short term. The five banks are Amen Bank , Banque de l'Habitat , Banque Internationale Arabe de Tunisie , Banque Nationale Agricole and Societe Tunisienne de Banque .
The report, entitled "Major Tunisian Banks' 2005 Results and Outlook for 2006- Improving Results Posted by Banks but Major Weaknesses Persist", is available on the agency's website www.fitchresearch.com under Financial Institutions/Banks/Special Reports.
Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.
For more information please contact:
Sonia Trabelsi
Tunis
Tel: +216 71 840 902
Anne Ries
Paris
Tel: +33 44 29 92 72
Media Relations
Francoise Alos
Paris
Tel: +33 1 44 29 91 22
Mayra Cunningham
London
Tel: +44 20 7417 3557
Zawya Comment Policy
-
Zawya encourages you to add a comment to this discussion. You agree that when you add content to this discussion your comments will not:
1.1 Contain any material which is libelous or defamatory of any person, is obscene, offensive, hateful or inflammatory or causes damage to the reputation of any person or organisation.
1.2 Promote sexually explicit material, violence, discrimination based on race, sex, religion, nationality, disability, sexual orientation or age or any illegal activity.
1.3 Be made in breach of any legal duty owed to a third party, such as a contractual duty or a duty of confidence.
1.4 Be threatening, abuse or invade another's privacy, or cause annoyance, inconvenience or needless anxiety.
1.5 Be used to impersonate any person, to misrepresent your identity or affiliation with any person, or be likely to deceive any person.
1.6 Give the impression that they represent Zawya.
1.7 Advocate, promote or assist any unlawful act such as (by way of example only) copyright infringement or computer misuse. - The content posted on www.zawya.com is created by members of the public. The views expressed are theirs and unless specifically stated are not those of Zawya. Zawya reserves the right to review all comments prior to posting and edit or delete any contribution, but Zawya is not responsible for and can not be held liable for any content posted by members of the public on www.zawya.com.
- Zawya is not responsible for the availability or content of any third party sites that are accessible through www.zawya.com. Any links to third party websites from www.zawya.com do not amount to any endorsement of that site by Zawya and any use of that site by you is at your own risk.
- By submitting your comment, you hereby give Zawya the right, but not the obligation, to post, air, edit, exhibit, telecast, webcast, re-use, publish, reproduce, use, license, print, distribute or otherwise use your comments worldwide, in perpetuity.
Copyright © 2012 Zawya Ltd. All rights reserved. |
provided by www.zawya.com |
Post Your Comment