Banks: Dynamism and Resilience, the Sector’s Key Principles

The banking sector continues to show unwavering dynamism. All indicators are positive, driven by growth in several economic activity sectors. As of the end of October, total deposits reached 1.400 trillion dirhams (MMDH), up 1.3% since the beginning of the year.

While current accounts rose by 3.4% to 917 MMDH, term deposits fell by 1.5% to settle at 124 MMDH. This is explained by the increasingly less attractive remuneration offered by banks compared to other more appealing investment products, notably bancassurance and the stock market.

On the other hand, passbook accounts maintain their upward trend, with an outstanding amount of nearly 192 MMDH, up 2.2%, although profitability is not exceptionally high. Indeed, for the second half of the year, the remuneration rate was set by Bank Al-Maghrib at 1.91%, compared to 2.21% for the first six months.

For its part, total loans increased by 2% to 1.188 trillion dirhams. With the exception of working capital loans, which fell by 1.6% to 254 MMDH, all other segments show improvement. That said, the overall outstanding amount remains driven by equipment loans, which recorded a significant increase of 12% to reach 271 MMDH, notably due to the investment efforts of both public and private companies.

In fact, the outstanding amount of investment loans increased by 10% among private non-financial companies and by 18% among public enterprises, with outstanding amounts of 138 MMDH and 39 MMDH respectively.

Maintenance of the Non-Performing Loan Ratio

Other segments, including real estate loans, increased by 2.8% to 319 MDH, while consumer loans appreciated by 4.7% to 61 MMDH. It should be noted that successive reductions in key interest rates (starting in June 2024) from 3% to 2.25% since March of this year have stimulated borrowing by both businesses and households.

In fact, the latter have increased their outstanding amount to 412 MMDH, an increase of 4.6%. This is also confirmed by the recovery in domestic demand, which, according to the Finance Ministry’s economic outlook note, continues to benefit from the purchasing power support measures put in place by the authorities, as well as moderate inflation.

These developments have not been accompanied by a worsening of non-performing loans. They reached 102 MMDH, an increase of 4.7%. The ratio stood at 8.6%, the same level observed since the beginning of the year.

Furthermore, banks continue to strengthen their financial base, notably through the issuance of subordinated bonds, which has allowed them to maintain comfortable solvency ratios. Indeed, with a capital ratio of 12.3% and an overall ratio of 16.3%, the banking system is positioned above regulatory requirements.

In terms of outlook, the banking sector will need to maintain this momentum. Bank Al-Maghrib thus forecasts that bank credit to the non-financial sector will see a clear acceleration with an increase of more than 6% in 2025 and 2026, instead of an average of 2.7% during the two previous years.

Moreover, according to the latest report from Fitch Ratings, the decline in interest rates and the strength of credit demand for investment projects should allow for moderate loan growth in 2025 and 2026. On another front, fiscal policy would remain favorable to public investment and infrastructure expansion.

Interesting Prospects

Alongside this, the sector is leading several major projects, including intensifying digital transformation with the introduction of biometric identification for access to online financial services.

It is also preparing for the FATF review scheduled for 2026 by consolidating its anti-money laundering and counter-terrorist financing prevention systems. Furthermore, it is making progress in establishing sustainable finance, in line with the climate commitments made by Morocco.

That said, the sector is preparing to welcome a new entrant, a British neobank, “Revolut,” already present in 140 countries worldwide. Negotiations are reportedly still ongoing to obtain a banking license in Morocco, which, according to the governor of BAM, is based on several criteria, including the industrial project, added value, experience, and respect for the overall market balance.

It should be noted that in some countries, the license granted to this bank has been limited to certain activities, which will not prevent the central bank from adopting a similar approach, which would be tailored to Moroccan specificities.

Listed Banks: GNP Up 6.3% as of End-September

As of the end of September, listed banks achieved a consolidated GNP of nearly 73 billion dirhams (MMDH), an increase of 6.3% compared to the same period the previous year. This represents an additional 4.5 MMDH, driven essentially by the top trio, namely Attijariwafa bank with a GNP of 26.3 MMDH (+4.7%), BCP with 20.4 MMDH (+4.2%), and BOA with 15.3 MMDH (+8.7%).

For their part, the aggregate profits of the listed banking sector reached 17.5 billion dirhams (MDH), not including CFG Bank which, to date, has not released its detailed consolidated financial statements. The cumulative RNPG thus shows an increase of 14% year-on-year. Attijariwafa bank, still in the lead, attracted 47% of the sector’s overall result, followed by BCP with a share of 24% and BOA with 17%.