Tunisia's Banking Sector: A Success Story of Risk Management
Despite being widely criticized by non-technical experts, the 2016 law redefining the status of the Central Bank of Tunisia has allowed the country's banking sector to better manage risk. At the time of its promulgation, the sector faced significant risks, with several credit institutions, particularly public ones, recording losses and having low capital ratios compared to the growth of their activities.
Since then, prudential standards have significantly evolved, with the introduction of a famous ratio, the transformation ratio, which is credits/deposits. Here, credits are gross, including bad debts that are not visible in the quarterly activity indicators of listed banks, which show net financing balances.
According to the latest figures from the Central Bank of Tunisia (BCT), the banking sector continued its efforts to collect deposits in 2024, with a 10.3% annual growth rate, compared to 7.4% the previous year. This dynamic affected both dinar and foreign currency deposits, which increased by 10.9% and 7.2%, respectively.
As a result, pressures on banking liquidity have eased, with the liquidity coverage ratio (LCR) improving to 225% at the end of 2024, compared to 188% at the end of 2023. The share of refinancing in total bank resources also decreased to 4.6% at the end of 2024, compared to 4.8% in 2023.
Furthermore, the transformation ratio ("credits/deposits") continued its downward trend, reaching 96.2% at the end of 2024, compared to 101.4% at the end of 2023, due to the slowdown in credit activity and sustained deposit growth. To recall, this ratio was 122% in 2019. This is a commendable achievement, as the impact on the banking system may not be immediately visible, but we now have a solid system, crucial for an economy that functions through bank debt.
In practical terms, the banking sector is now better equipped to serve the economy and meet the demands of businesses. What is still lacking is the pace of investment. Action is needed on this aspect, either through regulations (such as tax incentives) or a system of interest rate bonuses. There is a significant opportunity to capitalize on the good growth rate we observed in the first half of 2025, provided we work on the regulatory framework.
