Tunisian banks’ credit profiles have been resilient to very challenging business conditions. Rising interest rates have slightly supported the sector’s profitability, as most corporate loans (around 70% of sector loans) are floating-rate, while low-cost current accounts and – to a lesser extent – savings accounts make up the bulk of banks’ funding, Fitch Ratings reports on Tuesday.
The sector’s return on equity rose to 10.8% in 2023 (2022: 9.1%). Higher profitability and weak credit growth led to a slight improvement in regulatory capital ratios, with the sector’s total capital adequacy ratio (CAR) improving by 50bp year-on-year to 14.5% at end-2023, Fitch adds.
Fitch Ratings expects modest real GDP growth in 2024 (1.2%) before it picks up slightly to 1.7% in 2025. Inflation will remain high (2025: 7%, on average). Heightened Risks from Sovereign Tunisia’s September upgrade to ‘CCC+’ reflects our increased confidence in the government’s ability to meet its large fiscal financing needs, the same source underlines.
TunisianMonitorOnline (NejiMed)
