Central Bank of Tunisia's 2024 Annual Report: A Nuanced Assessment of the Banking System
The third chapter of the Central Bank of Tunisia's (BCT) 2024 annual report, dedicated to financial stability and macro-prudential supervision, presents a nuanced picture of a solid but strained banking system. Despite a challenging economic environment, the Tunisian banking sector has continued to consolidate its fundamentals, supported by strict prudential policies.
Prudential Measures and Macro-Prudential Supervision
In 2024, the BCT maintained a cautious approach by strengthening provisioning rules and regulating dividend distribution to preserve the financial solidity of the sector. The Macro-Prudential Supervision and Financial Crisis Management Committee, which met in November, reaffirmed its mission to prevent systemic risks and coordinate efforts to "green" the financial system.
Macroeconomic Developments
On the macroeconomic front, growth slightly improved to 1.4%, driven by agriculture and services, while inflation declined to 6.2% in December 2024. The budget deficit narrowed to 6% of GDP, but the Treasury's recourse to domestic financing increased, reaching 19.9 billion dinars. The current account deficit also decreased to 1.5% of GDP, contributing to the stabilization of foreign exchange reserves at 27.3 billion dinars.
Credit and Banking Sector Developments
The outstanding amount of credits to the economy reached 118.6 billion dinars, up 2.8%, but the dynamics remain moderate, marked by a significant increase in credits to public enterprises (+13.1%) and a near-stagnation for the private sector (+1.5%). Meanwhile, the share of classified claims continues to rise, reaching 14.5% of total commitments, driven by the deterioration of the SME portfolio.
Risks and Challenges
Concentration risks remain high, with exposures to the top ten public borrowers representing over 100% of banks' net own funds, while the top five private operators account for nearly 48%. Despite these pressures, tensions on bank liquidity have eased, thanks to a good collection of deposits and reduced recourse to BCT refinancing.
Financial Market Performance
Finally, the report highlights the positive performance of the financial market, with the Tunindex rising by 13.7%, although foreign portfolio investment slightly declined. The BCT concludes this chapter by reaffirming its commitment to preserving the stability of the financial system and integrating environmental and social criteria into banking risk management.
