The European Investment Bank praises the Moroccan banking system, which includes 24 establishments, with assets totaling around 130% of the country’s GDP, according to the report.
In a report entitled “Finance in Africa”, the European Investment Bank (EIB) highlighted the solidity and sophistication of the Moroccan banking sector, which stands out as one of the most advanced on the African continent. This sector is distinguished by impressive levels of lending to the private sector, as well as remarkable financial stability.
The report highlights that Morocco’s banking sector is “among the deepest and most sophisticated in Africa”, highlighting robust performance indicators such as profitability and low levels of non-performing loans. The ratio of credits granted to the private sector in relation to Morocco’s gross domestic product (GDP) reaches 88%, giving it first place in North Africa and well ahead of its regional counterparts.
With such a ratio, Moroccan banks play an essential role in supporting national economic growth. By comparison, the ratios of Tunisia, Egypt and Algeria stand at 62%, 31% and 21% respectively. This depth also allows Moroccan banks to expand their activities beyond national borders.
The country’s banking system consists of 24 institutions which, according to the report, have total assets worth around 130% of GDP. Among these establishments, 19 are traditional banks and five are Islamic banks. The three largest banks in the sector hold approximately 62% of total assets, reflecting a significant level of concentration.
Another notable point of the report is the constant reduction in the share of public banks, which fell from 40% in 2002 to 22% in 2023, illustrating a rise in power of the private sector.
While Morocco’s non-performing loan (NPL) ratio has remained stable at 8.6% this year, private sector defaults remain slightly high due to difficulties in subsidized loan repayments. during the pandemic.
The increase in interest rates supported the profitability of Moroccan banks, with the return on equity improving from 10.9% in 2022 to 11.8% in the first half of 2023. This financial performance is favored by resources low-cost from current and savings accounts, thus strengthening the resilience of the sector.
However, regulatory capital requirements have helped protect the financial system. Morocco’s Tier 1 capital ratio reaches 12.9%, a figure that well exceeds the minimum regulatory threshold of 9%, with additional requirements planned for the largest banks by 2025.
RT/SF/ac/APA
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