S&P lowers Banque de Tunisie

Standard & Poor’s said it lowered the long-term counterparty credit ratings on Banque de Tunisie et des Emirats to B- from B, along with the short-term counterparty credit ratings to C from B.

The outlook is stable.

The bank experienced a strong increase in loan-loss provisioning in 2014, primarily because of the bank’s legacy portfolio of loans extended to the tourism sector, S&P said.

That jump led to a decrease of a calculation of the bank’s risk-adjusted capital ratio to less than 7% at year-end 2014, the agency said.

The agency added that the bank’s weak profitability, constrained by its costly above-average reliance on wholesale funding, will impede the build-up of enough capital to accompany its projected above-sector loan growth in the next 18- to 24-months.

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