Almost every week, the Official Gazette of the Republic of Tunisia (JORT) brings its share of judicial sales where Tunisian banks are seizing party. It thus seems that the efforts of the Central Bank of Tunisia (BCT) in the Ministry of Justice and the creation of a special one-stop shop for banks to issue copies of judgments have begun to bear fruit in the enforcement of legal judgments and accordingly recovery of loans by banks in Tunisia.
We do not know the exact number of judgments it has enforced this year, but the BNA (Banque Nationale Agricole) is one of the lending institutions whose name as seizing party was repeated on the pages of JORT. Indeed, this public bank has made sustained efforts, for some time, to collect its debts, not only in agriculture but also in trade. It’s not for nothing that the collecting rate of the bank, which is the financial arm of the Tunisian government to develop the agricultural sector, rose to 68.6% and is expected to reach over 70% and even 80% by the end of 2010 even 80% if one excludes credits granted on the state budget lines.
According to the latest news, debts to be collected by BNA amount to about 3 billion TD. Agriculture accounts only for 687 MTD, and credits on budget lines will account for between 5 and 7% of the total. This, by the way, warps the operating accounts of the bank, especially since it has no leeway on a number of credits that date back to the pre-independence of Tunisia and others going back to the 70’s.
Meanwhile, the bank, which is run by Moncef Dakhli, has made great efforts to collect money from defaulters. There are two ways to do this. The first is done by recovery teams within the bank’s headquarters. For debts of more than 100 thousand dinars, they are the teams in headquarters who bear the responsibility, move on the scene and even make estimates of cash flow for indebted companies and determine their collecting expectations. For debts between 40 and 100 thousand TD, they are the regional branches of the bank which intervene. Everything is done to recover the money and the results are there. From only 61.7%, the overall recovery rate of BNA rose to 68.8% in 2009 and should reach 70% or more by the end of 2010, depending on the direction of the bank.
Agricultural debt collecting, which was only 14.8% in 2008, rose to 19.3% last year. The growth is there, although this also depends on the national agricultural situation. It thus fell to 18% for 2010, and this is the result of an agricultural situation where reference cereal regions, such as Siliana, Kef, Jendouba or South Beja, have been declared agricultural disaster areas. The recovery of commercial debts in BNA increased, in turn, from 96% in 2008 to 97% last year, and it should stabilize at this rate of 97% this year.
The second way is certainly not always the happiest to recover NPLs. It is the recourse to litigation. BNA, like the rest of the banking sector, resorts to this way only as a last resort. As a result of the failure to recover debts, files in litigation in BNA increased from 4.6% of the total amount in 2008 to 5.02% the year after and should reach 7% this year. In 2009, they accounted for 29 MTD and already reached 32 MTD in the first 9 months of this year. This means that the bank does not skimp on means and even sets recovery targets for its staff tasked to do this job and who are even questioned if they are slow in bringing a file to litigation once the usual means for recovery have been exhausted. We always talked about agricultural debts, but the BNA does not refrain here again from using legal means to recover the money from its shareholders and the state. Thus, agricultural recovery by litigation increased from 10.6 MTD in 2006 to 12.1 MTD last year and should reach 12.3 MTD this year. Regarding trade, it rose from 8 to 20 MTD between 2009 and 2010