Tunisia’s Banking Sector Boosted By Positive Rating

Tunisia has joined the league of Georgia, Kazakhstan, Nigeria and Lebanon who have all been given a Group 8 rating by Standard&Poor’s (S&P) Rating Services; this rating places Tunisia’s banking sector on the 80th percentile of perfection, the lowest being Group 1, as measured by S&P’s Banking Industry Country Risk Assessment (BICRA).

However, the rating agency has indicated that that banking regulation in Tunisia is weaker than international standards even though the Central Bank of Tunisia (BCT) continues to invest efforts in reversing the situation.

Because the country’s banks do not use complex products and therefore show a moderate risk appetite, stable customer deposits are the primary source of funding for Tunisian banks. This creates insufficiencies in funding the system’s loan portfolio given that the banks have a relatively high loan-to-deposit ratio.

S&P recommends the establishment of an Asset Management Company to further enhance asset quality indicators and promote the banking sector.