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TUNISIA: CENTRAL BANK PUBLISHES 12TH EDITION OF ANNUAL REPORT ON BANKING SUPERVISION

Resilience of Tunisian Banking Sector Amid Economic Challenges

The Central Bank of Tunisia has released its annual report on banking supervision for the year 2022, highlighting regulatory developments and the performance of banks and financial institutions in a challenging economic context.

Key Takeaways from the Report

• The Tunisian banking sector demonstrated resilience in 2022 due to proactive prudential measures taken by the Central Bank.
• The sector maintained a strong liquidity position, kept non-performing loans (NPLs) at around 13%, and improved profitability indicators.

However, the report notes that vulnerability sources impacting financial stability intensified in 2023, driven by economic challenges, monetary policy tightening, and increased exposure to the public sector. As a result, credit demand slowed down, and default risks rose.

Central Bank’s Response

• The Central Bank of Tunisia plans to implement preventive measures to preserve banking soundness.
• Support measures aimed at safeguarding the economy will also be implemented.

Regulatory Efforts and Future Plans

• The central bank is continuing its efforts to converge the normative and prudential framework towards Basel and IFRS standards.
• Two new payment institutions were created in 2022, bringing the total number to four.
• The Central Bank of Tunisia is also integrating Environmental, Social, and Governance (ESG) considerations into banking regulation, governance, and risk management.

Conclusion

The report provides an overview of the Tunisian banking sector’s performance in 2022 and outlines the central bank’s strategy for maintaining financial stability in a challenging economic context.