Classified loans and coverage of a bank: definition and how to read it

Classified loans are the loans and commitments a bank classifies as risky under the rules of the Central Bank of Tunisia: classes 2, 3 and 4, and class 5 when a bank keeps one. They are the commitments whose repayment is late or doubtful.

The coverage ratio says what share of these loans the bank has already absorbed in its accounts: through provisions set aside on them, and through the interest it has not collected and has put in reserve (reserved interest).

They are also known as non-performing loans (NPL).

Two ratios, computed in the same way for every bank:

1. the classified loan ratio: classified commitments, on and off balance sheet, gross, divided by all gross customer commitments;
2. the coverage ratio: provisions on these loans, additional provisions included, plus reserved interest, divided by gross classified loans.

Example, the bank with the highest classified loan ratio: BNA, in the first half of 2026, with 20.35% of its commitments classified, covered at 74.89%.

The two are read together. A high classified loan ratio that is well covered weighs less on the future than an average one barely covered.

The classified loan ratio shows the stock of risk the bank carries, built up over several years. The cost of risk only shows the charge of the half-year.

The coverage ratio shows what remains to be absorbed. The uncovered part of a classified loan is a possible loss that has not yet gone through the income statement.

It does not say what the bank will recover. The collateral taken on loans (mortgages, pledges) is not in the coverage ratio. Yet provisions are computed on the risk net of eligible collateral: low coverage can come from strong collateral, not only from less prudence.

It does not say how the stock moves. A loan repaid, sold or written off leaves the stock; a falling ratio can come from an improvement as well as from an accounting exit.

The amounts come from the notes to the financial statements, under item AC3, «loans and advances to customers». Banks publish there their classified commitments and their coverage, with a level of detail that varies from bank to bank: by class or in total, on balance sheet only or off balance sheet too, reserved interest broken down by class or not.

Collective provisions, which cover class 0 and class 1 commitments, are not counted in coverage: they do not relate to classified loans.

When a bank does not separate the reserved interest on classified loans from the rest, all of it is counted. When it reports commitments on budgetary funds separately, they are left out of the calculation.

First trap: our ratios may differ from those the bank publishes. They are computed in the same way for every bank, from the published amounts; the bank may use another scope. A note in the series always says whether it takes the published ratio or computes it.

Second trap: high coverage is not always prudence. Reserved interest counts in it; it is interest never collected, not money set aside.

Third trap: one amount missing, the ratio missing. When a bank does not publish, at the date, one of the amounts the calculation needs, the ratio is shown as «n.a.», with no amount from another date or another scope.

The banks are ranked from the highest value to the lowest; a bank without a value («n.a.») comes last:

Out of scope: BTE (preferred dividend shares) and Wifak International Bank (an Islamic bank).

Where it can be computed, the classified loan ratio ranges from 5.13% to 20.35% of commitments, and coverage from 72.21% to 85.69%.

Read also: cost of risk of a bank, the half-yearly note on listed banks, the method of the series.

Sources: interim individual financial statements at 30 June 2026 published with the Conseil du marché financier (CMF), notes included.