Moroccan Banks Accept Real Estate as Loan Repayment Amid Sector Challenges

The portfolio held by the entire sector is estimated at 18 billion DH, writes the newspaper l’Économiste. These are significant amounts that can weaken the banks, hence the intervention of the Central Bank. The situation in the real estate sector and the restructuring plans of certain major operators have led the banks to accept real estate as repayment of loans.

The exchanges have taken several years between the banks and Bank Al-Maghrib, which has finalized the new rules. These should come into force in the coming months, according to the new schedule published by the Central Bank.

The system provides for the establishment of dedicated accounting rules, the issuance of a directive setting good practices in terms of governance and management of these operations. It also introduces a specific prudential treatment of exposures on assets acquired through debt payments.

"It’s very delicate. We’ll have to see if the impact will be smoothed out in the context of Covid-19 and an illiquid real estate market," says the director of a bank. The idea is to find a transitional solution that does not have a brutal impact on the banks.