- Tunisia passes bill for $662m recapitalisation of Banque de lHabitat and Societe Tunisienne de Banque
- The state-owned banks will be able to write off a proportion of their bad debt
Tunisias Assembly of Peoples Representatives (ARP) financial committee has passed a TD1.3bn ($662m) bill to recapitalise two state-owned banks, Banque de lHabitat (BH) and Societe Tunisienne de Banque (STB). The government will directly contribute TD450m.
STB will receive TD757m in the recapitalisation. It will issue 130.5 million shares worth a total of TD653m to bring its capital to TD777m. Twenty-one new shares will be the equivalent of four original shares.
STB is Tunisias second-largest lender, with a loan portfolio worth TD5.6bn at the end of 2014, while deposits reached TD5.3bn.
It had a non-performing loan (NPL) ratio of 26.9 per cent in 2012, according to the local Amen Invest, partly due to its exposure to the tourism sector.
STB also received a TD117m government loan in 2012 to help balance its asset sheets.
BH, a mortgage provider, will receive TD110m to recapitalise. It will issue 10 million new shares worth TD50m by subscription, and distribute TD30m as 6 million shares to existing shareholders free of charge. It will keep the remaining TD30m in its capital reserves.
The direct participation of the government amounts to TD35m, according to the Tunisian Press Agency.
It had an NPL ratio of 14.8 per cent in 2012, according to Amen Invest. Its loanbook reached TD4.8bn at the end of 2014.
The restructuring plans are intended to ensure the banks financial soundness, improve governance, allow the banks to write off NPLs and build capacity. The banks will have to submit biannual reports to the ARP on their restructuring.
Banque Nationale Agricole (BNA) is also in line for a recapitalisation deal. The recapitalisation was due to be approved in mid-2014, but the transitional government did not have the authority to approve the funds.
Tunisias NPL ratio across the banking system fell from 16.5 per cent in 2013 to 16.2 per cent in 2014, according to figures from the Washington-based World Bank, which do not include asset recovery agencies. This was partly due to the predatory business practices of former president Zine el-Abidine Ben Alis inner circle. Loans to underperforming state-owned companies also played a role.
The capital adequacy rate for Tunisian banks was only 8.8 per cent in mid-2014, according to the Washington-based IMF, with six banks, including the three to be recapitalised, below minimum levels of 10 per cent.