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| Project sponsor and major shareholders of project company |
| The sponsor of the project is Banque Internationale Arabe de Tunisie (BIAT). BIAT was established in early 1976 by a group of investors composed of local institutions and individuals, and Arab and European banks, who acquired the domestic branches of the British Bank of the Middle East and Société Marseillaise de Crédit. In its early years, BIAT expanded rapidly, and in the 1980s it had become the largest private bank in Tunisia. IFC involvement with BIAT goes back to 1998 when it underwrote the first international equity offering in Tunisian in the form a GDR in which IFC invested (currently holding 1.13%). BIAT is considered the most sophisticated Tunisian bank. It is the leading customer-deposit collector through product innovation and sophisticated marketing. Historically the Bank had a strong involvement with domestic corporates and SME’s which it is now complementing with new developments in the more profitable consumer/personal banking. This developmental strategy should help the bank broaden its large deposit base, diversify its sources of income, reduce its average risk per customer, and report higher profitability. Overall, BIAT enjoys a strong market franchise among its clients as evidenced by a stable market share of about 11% of loans and 15% of deposits over the past four years. |
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| Total project cost and proposed IFC investment |
IFC’s investment will be in the form of subordinated loan (C Loan) for up to $50 million to BIAT. The loan will be structured to meet the regulatory requirements for a Tier 2 capital as per Central Bank of Tunisia (CBT) guidelines. |
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| Location of project and description of site |
| The location of the project is in Tunis, Tunisia. |
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| Description of company and purpose of project |
The project comprises of up to $50.0 million subordinated loan to Banque Internationale Arabe de Tunisie (BIAT or the bank). BIAT is the largest private bank and the third largest bank in Tunisia in terms of asset size ($2.3 billion) and equity ($186 million). BIAT operates as a full-service bank, offering corporate/SME banking services as well as consumer banking through a network of 100 branches and 72 ATM’s. Founded through the merger in April 1976 of the local branch operations of the British Bank of the Middle East and of the French bank Société Marseillaise de Crédit, it is listed on the Tunis and London (through GDRs). BIAT is characterized by a widely diversified ownership. European and Arab banks together hold about 28% of BIAT's shares, Tunisian institutions almost 26%, and private Tunisian investors the remainder.
BIAT's capitalization-- although adequate by Tunisian standards, with a BIS solvency ratio of 9%, exceeding the minimum Tunisian regulatory requirement of 8%--is on a declining trend. With loan growth expected to continue at over 10%, in line with BIAT's market-share objectives, there is a critical need for BIAT to enhance its equity to meet its growing volume of activity. IFC’s loan will partially meet this need. IFC’s proposed subordinated loan is expected to count as Tier II capital and will bolster BIAT’s capital base and facilitate its growth particularly in the consumer and SME segments. More importantly, the proposed transaction is expected to serve as an enabling element for Tunisian banks as it will represent the first Tier II capital instrument to be introduced in the sector. |
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| Environmental and social issues - Category FI-1 |
This is an FI Type 1 project. BIAT must establish and maintain an environmental management system to ensure that investments under relevant operations meet host country environmental, health and safety requirements and are consistent with IFC’s exclusion list. IFC will asses BIAT’s ability to carry out environmental reviews and if need be, will work with the bank to develop the capacity to meet these requirements.
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| To contact the project company, please write to: |
Mohamed Gouled / Giri Jadeja
e-mail address: mgouled@ifc.org or gjadeja@ifc.org
Phone: 202 473 7008 / 202 473 8996 |