Tunisia: Banks to remain under pressure says Moody's
Slow economic, asset risk pressure and evolving regulations have placed banks under pressure.Rating agency, Moody's in a newly published report says the pressure faced by Tunisian banks will continue due to slow economic growth, significant asset risk pressure and evolving regulations. In the report titled "Banks- Tunisia: Subdued economic growth, evolving regulations and significant assets risk will maintain pressure on banking performance", the Vice President-Senior Credit Officer at Moody's, Oliver Panis said "asset risk is a major issue facing Tunisian banks, and we expect non-performing loans (NPLs) to remain at high levels, around 17 percent of gross loans at the end of 2016. "These high non-performing loans levels reflect challenging economic conditions amid historically loose regulation that has contributed to weak loan underwriting practices" he stated. The high rate of NPLs shows that Tunisian
banks have difficulty in collecting interest and principal on their credits which may subsequently lead to less profit for banks and possibly, bank closure. Compared to 1.6 percent slow economic growth witnessed in 2016, the economy has been projected to rise to 2.5 percent in 2017.