The aim of this paper is to examine the impact of foreign ownership on the profitability of Tunisian financial institutions. Empirical evidence shows (i) that the foreign ownership has a positive and significant effect on firm profitability as measured by return on assets and return on equity.(ii) The presence of foreign directors in the board causes also an increase in return on assets. (iii) However, contrary to previous studies, state-owned firms seem to perform better than fully privatized companies.