OREANDA-NEWS. Fitch Ratings has affirmed Arab Tunisian Bank's (ATB) Long-term foreign and local currency Issuer Default Ratings (IDRs) at 'BB' and 'BB+' respectively. The Outlook on ATB's Long-term foreign currency IDR has been revised to Stable from Negative. The Outlook on ATB's long-term local currency IDR remains Negative.

The rating actions follow Fitch's revision of the Outlook on Tunisia's long-term foreign currency IDRs to Stable from Negative (See "Fitch affirms Tunisia at 'BB-'; Outlook Revised to Stable", dated 27 March 2015 at fitchratings.com).

A full list of rating actions follows at the end of this press release.

KEY RATING DRIVERS- IDRS, SUPPORT RATING, NATIONAL RATINGS, SENIOR DEBT

ATB's IDRs, Support Rating, National Ratings and senior debt rating are driven by the moderate probability of support it could expect to receive, if required, from its majority (64.2%) shareholder, Arab Bank Plc (AB, rated BBB-/Negative). This is because ATB is strategically important to AB as the latter remains committed to the development of retail banking in Tunisia, in line with AB's strategy in the Middle East/North African region. ATB is fairly well integrated with AB, which defines the subsidiary's strategy, oversees its credit, market and liquidity risks and provides ATB with its expertise in risk management. ATB's assets and operating profit contributed 6% and 4% respectively to AB's in 2013.

ATB's Long-term foreign currency IDR is capped by Tunisia's Country Ceiling of 'BB' due to convertibility and transfer risks. ATB's Long-term local currency IDR is not constrained by Tunisia's Country Ceiling, and as a result is a notch higher than the Long-term foreign currency IDR. Nevertheless, in line with Fitch's criteria, the agency assumes significant correlation between the risk of foreign currency and local currency restrictions being imposed in a particular country, and therefore will rarely assign a Long-term local currency IDR more than one notch above the Long-term foreign currency IDR.

The Stable Outlook on ATB's Long-term foreign currency IDR mirrors that on Tunisia. The Negative Outlooks on ATB's Long-term local currency IDR and National Long-term Rating mirror that on AB's Long-term foreign currency IDR.

RATING SENSITIVITIES - IDRS, SUPPORT RATING, NATIONAL RATINGS, SENIOR DEBT

ATB's IDRs, National ratings, Support Rating and senior debt rating are sensitive to changes in Fitch's assumptions of AB's capacity and willingness to support the bank.

ATB's Long-term foreign currency IDR would be sensitive to a two-notch downgrade of AB's Long-term foreign currency IDR, due to Tunisia's Country Ceiling currently acting as a cap. Its Long-term local currency IDR and National Long-term Rating are sensitive to a one-notch downgrade of AB's Long-term foreign currency IDR. The Support Rating would be sensitive to a downgrade of AB's Long-term foreign currency IDR by more than two notches.

ATB's Long-term foreign currency IDR would also be sensitive to any downward revision of Tunisia's Country Ceiling, which is strongly correlated with sovereign risk. ATB's Long-term foreign currency IDR will be positively impacted by any upward revision of Tunisia's Country Ceiling. An upgrade of the Long-term local currency IDR and National Long-term Rating is contingent on an upgrade of AB's Long-term foreign currency IDR and an upward revision of Tunisia's Country Ceiling.

The rating actions are as follows:

Arab Tunisian Bank
Long-term foreign currency IDR: affirmed at 'BB', Outlook revised to Stable from Negative
Short-term foreign currency IDR: affirmed at 'B'
Long-term local currency IDR: affirmed at 'BB+', Outlook Negative
Short-term local currency IDR: affirmed at 'B'
Support Rating: affirmed at '3',
Viability Rating: Unaffected at 'b'
National Long-term rating: affirmed at 'AA+(tun)', Outlook Negative
National Short-term rating: affirmed at 'F1+(tun)'
National senior unsecured debt: affirmed at 'AA+(tun)'