Tunisia’s leading private bank is intensifying its search for new outlets to international expansion.

By Walid Kéfi, Tunis

For the first few months of this year, Banque internationale arabe de Tunisie (BIAT) was Tunisia’s number one bank in terms of total active capital with 5.20 billion dinars (dinar = 0.56 euros). For the first time this chapter, it dethroned two of the nation’s leading public banks - Société Tunisienne de Banque and Banque Nationale Agricole. During the first period under review where, from 2001, it has held a coveted spot, the private financial institution advanced its net banking product by 15.8%, raising it to 188.1 million dinars. It was also ranked first locally in terms of deposits with a total of 4.89 billion dinars.

The establishment directed by Slaheddine Laâdjimi, Taher Sioud, in tandem with the former governor of the Central Bank of Tunisia, also successfully doubled its net profits which amounted to 22.9 million dinars between January 1 and September 30 of this year. With a 16.8% share of the market, BIAT’s earnings rest particularly on traditional components – margin of interests (125.7 million dinars, progressing from 15.7%), margin on commission (35.2 million dinars) and non-banking earnings from subsidiaries operating in the tourism and finance like the capital risk investment company, “SICAR Avenir”.

Ten branches per year by 2012

However, loans are the bank’s Achilles tendon. In this regard the bank is in fourth place behind public banks with 3.35 billion dinars. So, is this a new risk-based culture emerging or is it simply excessive caution? “Certainly, we have become too fixated on the risk-taking of the last few years, but our modest performance is also due to the fact that public banks prefer to have public banks as creditors,” explains Slaheddine Lâadjimi, the bank’s general manager. In the last few years, the establishment has indeed adopted the very rigorous, prudent norms in order to reach a provision coverage rate of delinquent loans (currently 12.5%) to 70.8% at the end of 2008, as opposed to 64.9% in 2007.

“A lot of banks that were practically sleepwalking not too long ago are beginning to nibble away at new market shares,” indicates Mr. Laâdjimi  To address these shortcomings resulting from public institutions preference for public banks, the 4 year development plan (2008 – 2012) that was developed in collaboration with the advisory board, McKinsey & Company, provides for the strengthening of personal and corporate banking products. Similarly, BIAT’s management team is also working on strengthening the bank’s commercial network, which currently comprises 115 agencies, by opening 10 new branches per year by 2012. “This new strategy is what competition requires. A lot of banks that were practically sleepwalking not too long ago are beginning to nibble away at new market shares,” indicates Mr. Laâdjimi, alluding to the rise in power of two other private banks, namely Attijari Bank – a subsidiary of the Moroccan institution, Attijariwafa Bank, and Banque de Tunisie (BT).

An international approach to development

BIAT plans to intensify its search for new opportunities for international growth. The institution, which has branches in Tripoli and Paris, has now set its sights on the Algerian market. “Contrary to what was reported in the media, we are not planning to open a branch in Algeria but a real bank in every sense of the term. We recently submitted a request to start open in Algeria where the market offers immense perspectives for growth,” revealed the bank’s general manager, adding that this would address needs of some 700 Tunisian businesses in Algeria.

In order to unite all the right ingredients necessary for a successful start in the largest country in North Africa, BIAT plans to entrust the management of its subsidiary to a connoisseur of the Algerian market - Fethi Mestiri, former director of BNP Paribas-Algeria. However, Algeria’s top private bank doesn not plan to stop at that. Its four-year development plan does not exclude increasing BIAT’s presence in Libya or any potential opportunities in Mauritania.

The Mabrouk Group is in prime position
The private group, Mabrouk, which mainly does distribution and food products, has just made another mark on Tunisia’s leading private bank. One if its subsidiaries, Maghreb Finance Holding, acquired 385,422 new shares in early November. The transaction represents 2.27%of BIAT’s capital for 15,378 million dinars. With these shares ceded by foreign investors, the group’s shares have increased from 26.04% to 28.31% according to a communiqué issued by the Conseil du marché financier (CMF)*. The rest of the bank’s capital is held by eight foreign shareholders including Blakeney Management, HSBC France, Banque populaire Val de France and Natixis, as well as ten Tunisian natural persons and legal entities.