Banks: no risk that worries beyond measure Bank Al-Maghrib

In a very uncertain context, Hiba Zahoui, Director of Banking Supervision, reassures about the health of banks and their ability to cope with headwinds. On the other hand, the economic situation has weakened many microcredit associations. Bankruptcies are not excluded but it is a diminishing risk, the Central Bank estimates. A battery of measures was put in place to avoid failures in the sector.

The economic situation could have derailed them, but the banks continue to record quite comfortable solvency ratios, i.e. 15.8% for the overall ratio and 12% for the Tier 1 capital ratio. The Central Bank has not vetoed the distribution dividends, which means that on an individual level, he is also satisfied. While the banks have successfully passed the stress tests conducted by the Banking Supervision Service and the Macroprudential Supervision Service, the threats are numerous and their customers are faced with new adversities.

“We are closely monitoring developments. But there is not one topic that worries us too much, ”said Hiba Zahoui, Director of Banking Supervision, during the presentation of his department’s annual report.

The deterioration of the economic situation keeps non-performing loans high. The chain of shocks puts pressure on the financial situation of many clients. Of the outstanding loans of 122 billion dirhams that were subject to a moratorium, 75.6% was normalized at the end of May 2022, according to the regulator. These are credits for which the normal repayment of maturities has resumed. For the rest, these are arrears or loans with unpaid debts and for which there is the possibility of recovery.

Overall, outstanding debt peaked at AED 87 billion at the end of May. “On the bright side, the rise in NPLs is slowing over time. The most important thing for us is that the necessary provisions are behind it and that the secondary market project for bad loans is able to allow a deflation of the stock ”, indicates the Director of Banking Supervision.

Associations more microcredit vulnerable
Serving just under 1 million customers (more precisely 837,000), micro-credit associations are the hardest hit by the economic situation. The frequency of dry seasons also weighs. The portfolio loss ratio worsened by 200 basis points to 10.3% in 2021. The sector suffered a loss of 65 million DH last year.

Bankruptcies are not excluded but it is a diminishing risk, the Central Bank estimates. A battery of measures was put in place to avoid failures in the sector. On the one hand, there is the support of the Central Bank through the temporary relaxation of the classification and provisioning rules for microcredits and the establishment of a refinancing mechanism for loans granted by banks to AMCs.

Instead, two guarantee funds have been set up by the Ministry of Finance for restructured microcredits, new loans granted to the actors of the underground economy affected by the pandemic and for refinancing lines granted to the AMCs.

Crypto-asset: an account by the end of the year?

“It is better to regulate and protect users and actors in the financial system rather than being in a form of prohibition that does not allow us to understand these flows and to mitigate the resulting risks for the various players in the financial system. ‘Economy,’ ‘he said. Hiba Zahoui, Director of Banking Supervision.

After taking actions to make users aware of the risks they run on crypto-assets but also on banks on the use that can be made of bank accounts to carry out transactions, Bank Al-Maghrib will regulate the use of these tools. “I think we could have a first account by the end of the year,” said the director of banking supervision.

Bank rates: the imminent launch of the comparator

The banking services comparator will be launched in the coming weeks, announced the Director of Banking Supervision. Customers will have an additional tool to compare the rates applied on the market and compete.

Banking network: closures accelerate

29 branches in 2020, 117 in 2021. In two years, 7% of bank branches closed. This movement is explained by the important role that digital channels play in customer interactions. ATMs whose functionality has changed a lot in recent years to accommodate changing behaviors are progressing. 206 new ATMs were registered in 2021.

Franck Fagnon / ECO Inspirations


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