Banking in Tunisia Past and Present

Tunisia's banking system has a rich history that dates back to the French colonial era.

The first bank in Tunisia was the Banque de Tunisie, established in 1884.

In the early 20th century, Tunisia's banking system was heavily influenced by French banks, with many Tunisian banks being subsidiaries of French institutions.

The Tunisian banking system has undergone significant changes since the country gained independence in 1956.

Tunisia's financial sector was tightly controlled until the mid-1980s. The country has since undergone three decades of gradual but insufficient reforms.

State-owned commercial banks dominate the banking system, accounting for more than half of the market share. This implies state control of the banking sector, which is a negative for economic growth.

The average non-performing loan to total loan ratio for Tunisian banks was 18.3% from 2005 to 2008. This is slightly lower than Egypt's 19.7% but significantly higher than Jordan's 4.8%, Lebanon's 11.9%, and Morocco's 10.1%.

Tunisia was among the first to introduce financial reforms in the Middle East and North Africa (MENA) region.

The country's financial sector was tightly controlled through the mid-1980s, but has undergone three decades of gradual but insufficient reforms since then.

State-owned commercial banks dominate the banking system and account for more than half of market share, which implies state control of the banking sector and is a negative for economic growth.

Tunisian banks have a relatively high non-performing loan (NPL) to total loans ratio, with an average of 18.3% for the period 2005-2008.

The 2011 Jasmine Revolution in Tunisia had a significant impact on the country's economic, social, and political stability, changing its prospects and making a modern offshore banking system a viable development strategy.

Tunisia's historical, economic, and cultural links to Europe, its proximity to the European market, and strong correlation of economic growth rates with those in nearby Europe make it an attractive alternative for financial services.

The country's stability, highly educated workforce, and lack of resource curse make it an attractive location for financial services.

Following the Arab Spring, Tunisia's state banks faced significant financial challenges due to the poor health of the three major state banks, which account for about 40% of the country's total banking assets.

The tourism sector's decline after the 2011 revolution and the 2015 terrorist attack in Sousse further exacerbated the problem, with approximately 40% of the state banks' bad debts coming from the tourism industry.

Société Tunisienne de Banque and Banque de l'Habitat received a bailout of 867 million dinars ($440 million) in August 2015 to recapitalize their finances.

The IMF provided a $300 million emergency loan and the World Bank provided a $500 million loan to help restructure the state banks and spark economic growth.

Finance minister Slim Chaker promised to restructure the three state banks before the end of 2015, but transparency over the bailout funds and the state of the banks' finances remains a concern.

The government audit of the three state-owned banks was demanded by activists such as the NGO I Watch, but the results remain public.

Despite protests from Tunisian parliament members, the bailout was approved by a large margin.

The Tunisian government provided a bailout of 867 million dinars ($440 million) to two large state-owned banks, Société Tunisienne de Banque and Banque de l'Habitat, in August 2015. This recapitalization was aimed at helping the banks recover from the financial crisis.

The bailout sparked protests from activists who demanded transparency in the government audit of the three state-owned banks. The main concern was that the banks had provided loans to allies of former president Zine el-Abidine Ben Ali during his administration, which were never repaid and were counted as "gifts".

The International Monetary Fund (IMF) and the World Bank provided additional loans to support the restructuring of the state banks. The IMF provided a $300 million emergency loan, while the World Bank provided a $500 million loan, both with the goal of restructuring the state banks and sparking economic growth.

The finance minister, Slim Chaker, promised to restructure the three state banks before the end of 2015.

In Tunisia, the state-owned banks were in a bit of a financial mess after the Arab Spring. The three major state banks, Société Tunisienne de Banque, Banque de l'Habitat, and Banque Nationale Agricole, make up about 40% of total banking assets in the country.

These banks had a lot of bad debts, with approximately 40% coming from the tourism industry, which had suffered significantly after the 2011 revolution and the 2015 terrorist attack in Sousse.

The government stepped in with a bailout of 867 million dinars ($440 million) in August 2015 to recapitalize two of the large state-owned banks, Société Tunisienne de Banque and Banque de l'Habitat.

The bailout was met with protests from activists, who demanded transparency over the bailout funds and the state of the banks' finances. Tunisian parliament members like Hafedh Zouari and Sami Abbousaid also spoke out for more transparency.

The IMF and World Bank provided additional loans to help with restructuring the state banks. The IMF gave a $300 million emergency loan, and the World Bank provided a $500 million loan.

Here's a breakdown of the loans and their goals:

Finance minister Slim Chaker promised to restructure the three state banks before the end of 2015, but it's unclear if that goal was met.

Tunisia's President Influence plays a significant role in the country's bank restructuring and bailouts.

President Kais Saied has been actively involved in the restructuring process, working closely with the government and the Central Bank of Tunisia to implement reforms.

He has also been a key figure in negotiating with international lenders, such as the International Monetary Fund (IMF), to secure funding for the country's struggling banks.

The President's influence has helped to increase transparency and accountability in the banking sector, which has been a major issue in Tunisia.

In 2020, the President issued a decree that required all banks to disclose their financial information, marking a significant step towards greater transparency.

This move has helped to build trust among investors and has facilitated the restructuring process.

The President's efforts have also led to the creation of a new bank regulatory agency, which is responsible for overseeing the banking sector and enforcing regulations.

This agency has been instrumental in implementing reforms and ensuring that banks operate in a safe and sound manner.

Tunisia's president is now calling for a say in setting monetary policy, a significant shift in the country's financial landscape. This move could potentially lead to more local control over economic decisions.

The Saudi Central Bank has named a director for its CBDC, or central bank digital currency, team. This appointment is a step forward in the development of digital currencies.

Tunisia has announced a senior appointment, further solidifying its position in the global financial community.