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Moody's Investors Service has downgraded to Ba3 from Ba2 the long-term local currency (LC) deposit ratings of Arab Tunisian Bank (ATB), Banque De Tunisie (BdT) and Banque Internationale Arabe De Tunisie (BIAT), and has also downgraded Amen Bank's long-term LC deposit ratings to B1 from Ba3.

Those rating actions have been driven by the weakening of the government's capacity to provide support to the banks, as indicated by the recent downgrade of the government bond rating to Ba3 (negative) from Ba2; and Moody's view that the fragile domestic operating environment will continue to weigh on the banks' financial fundamentals, mainly their asset quality, profitability and capitalization.

Concurrently, and as a result of the lowering of the country ceiling on foreign-currency (FC) bank deposits in Tunisia to B1 from Ba3, Moody's also downgraded ATB's, BdT's and BIAT's long-term FC deposit ratings to B1 from Ba3. Amen Bank's FC deposit ratings were also downgraded to B1 from Ba3, in line with the downgrade of the bank's long-term LC deposit ratings.

In the same action, Moody's has also affirmed the long-term LC and FC deposit ratings of Société Tunisienne De Banque (STB) at B1. The affirmation of STB's deposit ratings, positioned below the ratings of the government, reflects Moody's view that these ratings already capture bank-specific and operating environment challenges.

All deposit ratings carry a negative outlook, reflecting both the fragile operating conditions and the negative outlook on the government's ratings.


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