Tunisian banks will face a sharp rise in credit losses over the next 12 months as borrowers' debt servicing capacity weakens due to the recent end of support measures put in place amid the pandemic. of coronavirus, announced the rating agency Fitch Ratings in its report “Major Tunisian Banks: 1H20 Results” published on November 9, 2020.

Fitch clarifies that a decline in profitability will negatively impact already limited capital buffers, particularly in banks with lower underlying profitability. Ratings could be downgraded for banks whose financial metrics deteriorate beyond the agency's baseline expectations.

“Most major banks saw modest increases in loan and securities impairment charges in 1H20, reflecting the mitigating effects of debt relief and regulatory forbearance. The ratio of impairment charges to operating income before impairment increased to 62.9% for our entire sample of large banks, compared to 29.9% in 2019. However, most of the increase was attributable to one bank, Union Internationale de Banques, including a decline in operating profit before impairment and a likely more conservative approach to provisioning, in line with its parent bank, Societe Generale,” the report noted.

Borrowers will face cash flow pressures, especially those hard hit by the impact of the pandemic on tourism, hospitality and exports, including due to the end of debt relief. debt in September. Also, Fitch forecasts a growth of the Tunisian economy of 4.5% in 2021.