Central Bank of Tunisia Maintains Prudent Approach to Banking Regulation
The Central Bank of Tunisia (BCT) has maintained its cautious and proactive approach to regulating dividend distribution policies and strengthening collective provisioning rules to cover latent risks for the fifth consecutive year in 2024. This was stated by BCT Governor, Fethi Zouhaier Nouri, in his presentation of the Annual Report on Banking Supervision for the 2024 fiscal year, recently published by the central bank.
Key Financial Indicators
This approach has enabled the banking sector to further consolidate its capital and liquidity, with a average Liquidity Coverage Ratio (LCR) of 223.3%, a global solvency ratio of 14.4%, and a Tier 1 ratio of 11.7%, providing the sector with a safety cushion of over four percentage points to absorb potential economic shocks.
Economic Context
The Governor noted that the Tunisian banking system evolved in 2024 in a complex and unstable national and international economic context, marked by rising protectionist trends and persistent geopolitical tensions. In this environment, the BCT has consistently worked to preserve financial stability and consolidate the solidity of the banking system, serving the national economy and the general interest.
Challenges and Concerns
However, the central bank remains concerned about the persistence and severity of certain vulnerabilities affecting the stability of the banking sector, including sluggish economic growth, an unprecedented slowdown in credit activity, particularly due to the weakness of private investment, increased exposure to struggling public enterprises, and a worrying rise in credit risks.
Credit Risks
The share of classified claims increased by 200 basis points over the past two years to reach 14.5% at the end of 2024, reflecting the difficulties faced by private companies, especially small and medium-sized enterprises (SMEs).
Prudential Measures
Fethi Zouhaier Nouri affirmed that the BCT remains fully committed to addressing these challenges by pursuing preventive prudential measures, ensuring the conditions for financial stability, and aligning the prudential regulation framework with international standards.
Regulatory Reforms
To this end, the Central Bank officially launched a comprehensive consultation with the banking sector and all stakeholders in April 2025 on an ambitious program of prudential and regulatory reforms. This program covers capital adequacy standards, risk classification and coverage rules, and an IFRS 9 (International Financial Reporting Standards) guide.
Anti-Money Laundering and Combating the Financing of Terrorism
The Governor also highlighted that the BCT continues to strengthen compliance and risk management mechanisms for anti-money laundering and combating the financing of terrorism, in accordance with the recommendations of the Financial Action Task Force (FATF). This commitment is part of a broader approach to preserving financial stability and strengthening the confidence of national and international partners.
Environmental and Social Considerations
In this regard, the BCT has formalized a new internal risk surveillance process for the banking sector, based on a risk-based approach. At the same time, it is working to integrate environmental and social dimensions into banking risk governance and economic financing.
