Banks: The New Strategic Pillars

While the banks’ annual results will only be known in a few weeks, it can already be stated that 2025 has been an excellent vintage for the sector.

The latest available figures at the end of September show a consolidated Net Banking Income (NBI) of nearly 73 billion dirhams for the seven listed banks, an increase of 6.3% compared to the same period the previous year.

The rise in the sector’s profits is even more pronounced, as the aggregated Gross Operating Profit (GOP) exceeds 17.5 billion dirhams at the end of the third quarter, an improvement of 14% year-on-year.

According to analysts, the sector could generate around 20 billion dirhams in profits by the end of the 2025 financial year. Attijariwafa bank, the sector leader, would even become the first listed company, across all sectors, to cross the 10 billion dirham profit mark this year. Furthermore, CIH Bank would reach one billion dirhams in profits for the first time in its history.

The 2026 outlook is just as good. The economic environment is highly supportive, characterized by a rapidly expanding national economy, an acceleration in consumption and investment, low inflation, and a more accommodative monetary policy which, while contracting margins on intermediation activity, boosts the banks’ capital markets activities, whether in the equity or bond market.

All this, combined with an improvement in asset quality and a non-performing loan ratio that is stabilizing around 8%.

Profitability Above All

According to experts, the ability of banks, particularly the largest ones, to generate ever more profits is establishing itself as the new compass for management.

Indeed, a major strategic shift is taking place within the sector, moving from a pure growth logic to an approach centered on profitability and performance management.

In a now mature market, where banking penetration seems to have reached a ceiling, the time is no longer for all-out conquest, but for operational efficiency, the true leitmotiv of banking leadership.

“This approach leads to a rationalization of investments, which become more targeted, more selective, more rational,” explains a banking sector expert. This change can be seen, for example, in the contraction of the branch network over the past two years.

In 2024, 152 branches closed their doors, compared to only 39 openings. A trend that reflects the imperative to optimize locations, accentuated by the growing digitalization of customer services.

Performance management, whether financial or operational, is becoming a major concern. Processes must be as efficient as possible. We are talking about operational excellence.

This involves several levers, including automation and the digitalization of customer journeys. “When a bank digitalizes a journey, it reduces operational tasks carried out in branches in favor of higher-value commercial tasks,” our interlocutor points out.

Downward Trend

In this context, the hunt for superfluous costs is in full swing. Bank executives have their eyes fixed on the operating cost ratio (Coex), which measures the ratio between operating expenses and the NBI, and reflects a bank’s ability to generate revenue without increasing its costs.

This indicator is following a fundamentally downward trend. Ratios above 50%, as was the case a few years ago, are no longer the norm for most institutions.

On average, the consolidated operating cost ratio of the 11 banking groups in the country has fallen from 51.7% in 2022 to 43.9% in 2024, according to Bank Al-Maghrib. A historically low level that continued to decrease in 2025.

Attijariwafa bank holds the prize for operational efficiency with, at the end of September, an operating cost ratio of only 32.3% on a consolidated basis. Banque Populaire and Bank of Africa are on the same trajectory, with respective operating cost ratios of 41.6% and 43.4%.

To manage financial performance as closely as possible, banks are turning to dedicated software, called ERPs, for financial performance management, which allow for rational and real-time profitability steering, offering a unified view of operations through a single database.

These software solutions consolidate all the data necessary for managing financial performance by drawing from the bank’s other systems. Several local banks have already embarked on acquiring performance management software and have launched tenders to procure these ERPs.

AI, “The Topic of the Moment”

Artificial intelligence is another major concern for the sector. “To date, only isolated initiatives in AI have been undertaken. Now, banks are working on comprehensive strategies,” our source says.

Indeed, local institutions are engaged in defining an AI strategy to deploy this technology across all the bank’s business lines.

“The challenge for banks is identifying priority ‘use cases’ for each of these business lines in order to inject AI into them. The question then arises of having sufficient maturity to deploy these ‘use cases’. Because to do AI, prerequisites are needed, primarily data, which must be collected, made reliable, processed, etc. Technological infrastructures, like the cloud, are also needed, and of course, the skills,” analyzes the banking expert.

With this in mind, management training in AI is multiplying. “AI Factory” projects are also emerging. These AI factories are defined as centralized and industrialized infrastructures within banks that accelerate the development, deployment, and management of artificial intelligence solutions, by pooling resources, enabling the transformation of massive volumes of data into concrete applications.

“AI is the topic of the moment within banks, it’s the game changer,” he states. The use of AI should not only address business development issues but also those related to risk management, particularly fraud detection.

Cybersecurity is emerging as a systemic challenge for banking groups. It must be said that Morocco is particularly targeted, with a significant increase in phishing and attacks targeting payment infrastructure in recent years, in a context of growing digitalization.

This is why banks are investing heavily in advanced detection systems and incident response plans. The stability of the financial system depends on it.

Towards a Market Reconfiguration?

The Moroccan banking market could undergo significant changes in the balance of power. On the capital front, the sale of BMCI is on track.

Its parent company, BNP Paribas, has officially entered into negotiations with Holmarcom Finance Company to sell its 67% stake in its Moroccan subsidiary.

If the negotiations are successful, the Moroccanization of bank capital in Morocco would be complete, following the purchase of Société Générale Maroc by the Saham group in 2024, and the sale, in December 2022, of Crédit du Maroc (the former subsidiary of Crédit Agricole France) to the Holmarcom group.

The Bensalah family group would then own two banks (CDM and BMCI), which is already fueling speculation about a merger between the two entities.

Such a scenario would give rise to a mid-sized banking group, with equity of 15.1 billion dirhams and an NBI of 7.1 billion dirhams (based on 2024 results), which would position the new entity just behind the country’s three systemic banks, reshuffling the competitive deck in the sector.

The arrival of potentially disruptive new entrants is also on the table: the British neobank “Revolut,” already present in 140 countries worldwide, is in talks with the central bank to obtain a banking license in Morocco.

Equity: The Impacts of SREP

Bank Al-Maghrib is continuing the gradual introduction of the Supervisory Review and Evaluation Process (SREP), with full implementation expected by 2027.

This mechanism, derived from Basel prudential standards, represents a significant advance in terms of capitalization and risk governance within the Moroccan banking system.

It imposes an unprecedented strengthening of capital for the three systemically important banks (Attijariwafa bank, Bank of Africa, and the Banque Centrale Populaire group).

Concretely, the three banks will have to maintain a minimum Tier 1 capital ratio of 11%, which is two percentage points higher than the current requirement of 9%.

The mechanism also imposes an overhaul of risk governance, further aligning the Moroccan prudential framework with international standards and consequently improving the sector’s resilience to shocks.

The flip side: this tightening of capital requirements could, in turn, moderate credit growth and dividend distribution, at least in the short term.