In this report, presented by Hiba Zahoui, Director of Banking Supervision at BAM, the Central Bank takes stock of its activities in this area during the second year of the pandemic, during which progress in vaccination and the maintenance of fiscal and monetary stimulus , combined with the good results of the agricultural campaign, favored a rebound in the Moroccan economy.
On this occasion, Zahoui said that the banking sector benefited from the improvement in economic conditions in 2021 after the 2020 recession, noting that it also continued to play its role as the main source of funding for the national economy.
Overall, he continued, the indicators of the banking sector, in terms of liquidity, profitability and solvency, have demonstrated the solidity and resilience of the banking ecosystem despite a context characterized by a high level of risk.
The main actions carried out by BAM in terms of banking supervision in 2021 revolve around monitoring the effects of the pandemic on the sector, the digitization of financial services to improve accessibility and increase financial inclusion, the improvement of the bank-customer relationship and sustainable finance development that deals with climate change, Ms. Zahoui said.
The banking sector has thus proved resilient and secured the financing of economic agents, in particular thanks to public support measures in the form of state-guaranteed loans.
The growth of bank lending to the non-financial sector stood at 3%, driven by the financing of the cash requirements of companies. At the end of this year, the rise in bad loans eased slightly, bringing the loss rate to 8.5%.
At the same time, the banks’ average solvency ratio stood at 15.8% for a regulatory minimum of 12% and their cumulative net profit recovered by 76.4%.
The investee banking sector, although still young, has also shown resilience in terms of activities, results and quality of assets. This ecosystem is expected to experience new momentum with the launch of Takaful insurance products.
In this context, BAM was induced to revoke some of the temporary prudential support measures it had decided upon at the outbreak of the Covid-19 crisis. With regard to the distribution of dividends, he asked the banks for prudence and the prior consent of BAM before any distribution operation.
In addition, risk monitoring focused on priority issues in the context of the crisis, with particular attention to monitoring the fate of loans that have benefited from moratoriums, the activation of loan programs linked to Covid-19 and guaranteed by the state as well as evolution of overdue receivables and their provision.
On the regulatory level, BAM has adopted the reforms that are part of the continuous implementation of the Basel III standards.
The body also worked to strengthen the regulatory and operational framework aimed at responding to the target areas of intervention brought to the fore by the Covid-19 crisis, in particular in relation to customer protection, digitalization and climate change.
In the area of financial integrity, BAM has mobilized within the national coordinating bodies to accelerate the implementation of the Moroccan action plan aimed at meeting all the requirements of the Financial Action Group (FATF).
In addition, a series of initiatives were launched to strengthen the bank-customer relationship and the accessibility of information on the cost of banking services.
BAM has also intensified its awareness-raising actions to the general public, through the distribution of educational guides and capsules relating in particular to banking mobility, the issue of releases from guarantees and the management of complaints from customers of credit establishments.