Fitch: Tunisian banks to grow modestly

Fitch Ratings said the performance of the five largest Tunisian banks in 2005 is likely to reflect a continuing need to book further substantial loan loss provisions at the expense of lower profitability.

In a recent report entitled "Major Tunisian Banks' 2004 Results and Outlook for 2005- Restructuring continues but Challenges Remain," Fitch said it expects lending growth to remain fairly modest in 2005.

Restructuring is continuing at the banks with the main challenges being to reduce impaired loans, strengthen controls and enhance recovery procedures while reducing operating costs, Fitch said.

The five banks have either 2 or 3 support ratings, which were affirmed this year, reflecting Fitch's belief that the Tunisian state remains highly to moderately supportive of these banks. Fitch said it does not expect rating actions on 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.

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