Owned Banks Restructuring in Tunisia

Project Development Objective (PDO)

The proposed technical assistance project aims to support the government of Tunisia in the restructuring of its three commercial state-owned banks to (a) restore banking sector stability, (b) improve banking sector competition and innovation, and (c) improve access to finance.


The Tunisian financial sector, dominated by banks, is relatively small. There are 21 onshore banks, including three large state-owned banks (Société Tunisienne de Banque, Banque Nationale Agricole, and Banque d’Habitat), three large private domestic banks, and six foreign-owned private banks. There are also four large foreign-owned banks, which are from France, Jordan, and Morocco. 

The governance of the state-owned banks poses difficult problems for the government because of several key conflicts of interest. In Tunisia, the state is the majority shareholder of one-third of the banking sector, as well as the largest customer of the banking system. Nevertheless, the state and the Central Bank of Tunisia regulate and supervise the banking sector together. 

The public banks also have weaknesses in corporate governance. The main shortcomings in the corporate governance of these banks include (a) weak boards of directors that lack sufficient expertise, (b) a general lack of autonomy, (c) a heavy administrative control structure, and (d) the absence of an overall strategic framework or ownership policy. The project aims to support the restructuring process by providing the Ministry of Finance with technical advice based on the findings of international audit firms.


The project team, assisted by the World Bank, and with the participation of the staff of the Central Bank of Tunisia and the Ministry of Finance, are providing technical assistance to draft a decision note to be presented to an interministerial committee and a restructuring plan for the three commercial state-owned banks.

1.  Development of a policy for the state-owned banking sector
    The project team is building on various issues noted in the 2012 Financial Sector Assessment
    Program, defining the role of the state in the banking sector, and developing the mandate of the
    state banks. The team is also advising whether one or more state banks should be privatized, 
    liquidated, or merged and providing recommendations on how the state banks can be used to
    support access to finance. 

2.  Development of restructuring plans for the state-owned banks
    Following the completion of the preceding activity, the project team is proposing a set of
    restructuring options for each bank in line with the overall sector strategy and the following
    four objectives: strengthening financial soundness, improving governance and management, 
    improving human and operational capacities, and strengthening competitiveness and efficiency in 
    financing the economy. 

    On the basis of the optimal scenario selected by the Ministry of Finance, the ministry will ask the
    international audit firms to prepare adequate restructuring plans. These plans should include 
    (a) strategic orientations for political and development goals; (b) an action plan and a timetable for
    implementation; (c) definitions of financial, human, and operational requirements; (d) blueprints
    for the redesign of information systems and the implementation of the internal control system;
    and (e) a costing of implementing this proposed plan.