“The banking sector in Morocco is expected to post record performances during the period 2024E-2026E. Thus, we have revised our profit growth forecasts upwards, from an initial average annual growth of 8.3% to 13.5% to exceed 22.0 billion dirhams (billion dirhams) at the end of the period. studied”, indicates AGR in its “Research Report Equity” for January, devoted to the balance sheet and prospects of the banking sector.
According to the same source, banks listed in Morocco confirm, in a generally resilient macroeconomic context, the improvement of their growth profile, moving from an average annual growth rate (CAGR) of their net banking income (NBI) from 3.7% during the pre-covid period to 7.5% over the 2023-2026 forecast phase. This scenario is supported by a series of factors, including the new investment dynamic in Morocco which has a positive impact on the evolution of equipment loans (+14.2% at the end of October 2024), explains AGR, noting that the solid recovery in construction starts of 32.1% in the first half of 2024 under the impetus of the Direct Housing Assistance Program is a harbinger of the great return of housing credit from 2025.
It is also about the positive direction of market activities thanks on the one hand, to the start of a new accommodating monetary cycle in Morocco and on the other hand, to the accelerated democratization of hedging products within small and medium-sized businesses (SMEs), as well as the continued optimization of the average cost of the Resource through sustained growth in non-remunerated deposits in Morocco.
AGR also cites the underlying downward trend in the operating coefficient (COEX) which attests to the proven ability of Top Management to optimize costs, noting that thanks to the growing adoption of digital platforms by clients, the COEX of sector could improve by an additional 5.7 points during the period 2023-2026, going from 47.3% to 41.7%.
And added: “In addition to our valuation exercise, we emerge with a target market capitalization of the listed banking sector of MAD 312 billion, offering an appreciation potential of +13.0% over the next 12 months and a P/ E 26E induced which remains ‘conservative’ around 14.0x”.
Entitled “Listed banks: towards new records in 2025”, this report is structured around several axes, namely “Recommendations”, “Macro-economic & sectoral environment”, “Achievements of listed banks in 2024”, “Focus OPV Crédit du Maroc”, “Growth prospects & stock market multiples 2024E-2026E” and “Value sheets”.
