Standard & Poor's, in its recent report on Tunisia's banking sector, reported that the system is characterized by a weak financial profile. The report said that despite a stable macroeconomic environment and consistent recovery in GDP growth, S&P expects the banking sector's fundamentals to continue to remain weak. S&P does not expect any significant improvement in the sector in 2006 and 2007. The sector's profitability is expected to remain mediocre.

The report attributes this on government controls of more than 50% of banking assets and the fact that Tunisian banks are riddled with doubtful loans. The banking sector's non-performing loans ratio to total loans is at a high 23.4%, at mid-year 2005, while the coverage ratio is at a low of 45%. S&P's report Bank Industry Risk Analysis: Tunisia states that Tunisian banks suffer from an unfavorable legal environment for creditors, poor payment culture and a state-directed lending to state-owned institutions. With 44 financial institutions for a population of 10.1 million, the banking industry is fragmented and characterized by intense competition and mediocre profitability. The government's presence is has slowed down the restructuring and rationalization of the system.