Mubasher: Moody's Investors Service affirmed and changed the outlooks to negative from stable on the local-currency deposit ratings of Amen Bank (Amen, B1), Banque de Tunisie (BdT, Ba3); Banque Internationale Arabe de Tunisie (BIAT, Ba3) and Societe Tunisienne de Banque (STB, B1).

Concurrently, Moody's affirmed the Local currency deposit rating of Arab Tunisian Bank (ATB, Ba3), the outlook remains stable.

Moody's also affirmed the foreign-currency deposit ratings for the five banks, according to a note compiled and published by the credit agency.

The negative outlook on the four Tunisian banks' deposit ratings is primarily driven by the rating agency's assessment that the Tunisian government's capacity to support the banks is deteriorating, indicated by  worsening fiscal deficit and debt trajectory and signaled by Moody's recent decision to change the outlook on Tunisia's government bond rating to negative from stable.

Moody's noted that the four Tunisian banks' deposit ratings, which incorporate government support uplift from their baseline credit assessment (BCA), could be reduced.

Moody's decision to maintain a stable outlook on ATB's ratings reflects the absence of government support uplift from the bank's adjusted BCA and therefore resilience of ATB's ratings to a reduction in the government's capacity to support banks in case of need, said the note.

However, in line with other banks, ATB's B1 long-term foreign-currency deposit ratings could reduce if Moody's reduces its B1 country ceiling on foreign-currency bank deposits for Tunisia, added the report.