Banking sector resilience in the Maghreb Countries: A comparative study of Algeria, Morocco, and Tunisia using financial soundness indicators (2017–2023)
Keywords:
Banking sector, Financial Soundness Indicators, Maghreb countriesAbstract
This study aims to analyze and compare the Financial Soundness Indicators (FSIs) of the banking sector in three Maghreb countries Algeria, Morocco, and Tunisia over the period 2017–2023. The research adopts a descriptive and analytical approach, relying on secondary data from the International Monetary Fund (IMF) and national central banks, focusing on five key indicators: Capital Adequacy Ratio (CAR), Non-Performing Loans (NPL) ratio, profitability indicators (ROA and ROE), Net Interest Margin (NIM), and the Liquidity ratio. The findings reveal significant disparities among the three countries. Algeria recorded high levels of capitalization and liquidity but faced weak asset quality and low profitability. Morocco demonstrated a more balanced and stable performance across most indicators, while Tunisia showed relative fragility, reflected in low capital adequacy and liquidity levels, coupled with high non-performing loans, despite maintaining moderate profitability supported by higher interest margins. The study concludes that enhancing banking sector resilience in the Maghreb requires country-specific structural reforms, including reducing non-performing loans, strengthening capitalization, and improving risk and liquidity management, along with greater regional coordination among monetary authorities to support sustainable financial stability.
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