Tunisia: What is the economic and financial situation of Tunisian banks?

The Central Bank of Tunisia (BCT) has just published its annual report on banking supervision in 2020 and their situation in 2021. After an increase of +13.5% in 2019 to reach 1.3 billion TDN (401.6 M EUR) the net income of banks fell sharply by 37.9% in 2020 to reach 815 M TND (251.5 M EUR), partly due to the support measures which led to a drop in the money market rate and the rise net allocations to provisions.

While the results of the stress test conducted in the second half of 2020 (over a 3-year horizon) demonstrated a certain resilience of the main banks, the BCT recalled that the persistent weakness of the Tunisian economy and the uncertainty as to the end of the health crisis still poses a major risk to the situation of the banking and financial sector. The results of the stress test show a net result falling to 391 M TND (120.7 EUR) in 2022 in the base scenario and up to a deficit of -1.1 Md TND in the most severe scenario.

In 2020, 15 banks posted a positive result, whose cumulative profit reached 1.1 billion TND (compared to 16 banks in 2019 for a cumulative profit of 1.5 billion TND), and 8 posted a loss result of 254 M TND (compared to 7 in 2019 for a cumulative loss of 165 M TND). The report also notes a high level of concentration in the activity of resident banks (which represent 92% of the total assets of the sector): the first 4 resident banks controlled half of the banking activity at the end of 2020, the 8 first three-quarters.

The contribution of public banks in the sector remains the largest, with a market share of more than 36% in terms of assets. The activity of Islamic banks2 in Tunisia has also developed strongly with net banking income up by almost 40% in 2020, after +18.5% in 2019, and net income amounting to 62 M TND (19 .1 M EUR) after 17 M TND (5.3 M EUR) in 2019, an increase of 265%.

Outstanding loans to the economy grew by 5% in 2020 (+3.1% in 2019) to reach 95 billion TND (29.3 billion EUR) – loans to professionals increased by 26, 8% and those to individuals by 5.8% – and outstanding deposits increased by 10.8% to 67.8 billion TND (20.9 billion EUR). The public sector’s share in bank loans increased from 13.2% in 2019 to 16.5% in 2020, contributing to the increase in banks’ exposure to sovereign risk. In 2020, the bank debt of the State and public enterprises increased by 26.6% (from 17.2 billion TND, 5.3 billion EUR, at the end of 2019 to 21.7 billion TND, 6.7 EUR billion, end of 2020).

2020 was also marked by a consolidation of the bank branch network with the opening of 29 new branches. At the end of the year, there was one agency for 5,934 inhabitants compared to one for 6,027 at the end of 2019. Despite everything, the distribution remains very unequal on the territory with 2/3 of the agencies located in Greater Tunis and in the Center East.

The main Tunisian banks record an increase in their NBI in 2021

The Banque Nationale Agricole (BNA) recorded an increase in its net banking income (NBI) of 20.1% in 2021, amounting to 829 M TND (254.7 M EUR) after 690 M TND (212.6 M EUR) in 2020 and a 5% increase in equity. The Union Bancaire pour le Commerce et l’Industrie (UBCI) announced a 9% increase in its NBI between the fourth quarter of 2020 and that of 2021 (amounting to 263 M TND in 2021 , i.e. EUR 81 million).

Société Tunisienne de Banque (STB) has seen its growth accelerate since the second half of 2021: the various components of NBI have increased significantly, with the exception of the net interest margin, which shows a moderate increase of 2.1 M TND, in line with the fall in interest rates. Overall, NBI increased by 3.8% to 649 M TND in 2021, i.e. 200.3 M EUR (compared to 626 M TND in 2020).

Attijari Bank’s NBI increased by 7.36% in 2021, from 487 M TND in 2020 to 523 M TND (161.5 M EUR) in 2021. Amen Bank’s NBI reached 455 M TND (139. 5 M EUR) at the end of December 2021, compared to 401 M TND in 2020, i.e. an increase of 13.6%. The bank has also been awarded several distinctions for the year 2021 by the journal Global Banking and Finance Review.

BIAT, Banque Internationale Arabe de Tunisie, was also awarded four prizes for its financial performance throughout the year. Its NBI amounts to 1 billion TND in 2021 (306.5 M EUR), an increase of 8% compared to the previous financial year. Finally, the NBI of BH Bank (Banque de l’Habitat) increased by 12.2% in 2021 (569 M TND, i.e. 175.1 M EUR, after 507 M TND in 2020) and its shareholders’ equity by 4.6 % (from 982 M TND in 2020 to 1,026 M TND at the end of December 2021).

Source Embassy of France in Tunisia