Moroccan Banks Show Resilience Amid COVID-19 Crisis, Central Bank Reports

The banks have managed to cope with the adverse effects of the Covid-19 pandemic through various economic measures and initiatives, said Bank Al-Maghrib in a new report. According to the document, measures have been taken to ensure the stability of banking activity in the kingdom, such as the sound monetary policy adopted in 2021 due to the progress made in vaccinating the population and the maintenance of fiscal and monetary stimulus measures.

"The sector’s indicators in general, in terms of liquidity, profitability and solvency, have shown the strength and resilience of the banking system despite the context of a high level of risk," said Hiba Zahoui, the institution’s director of supervision, adding that the sector has "been able to obtain financing from economic players, thanks to public support measures in the form of state-guaranteed loans".

The easing of health measures has allowed banking policies to increase and generate more profits. This is the case of bank credit for the non-financial sector, which has increased by 3% and has allowed companies and productive sectors to continue to develop their activities. However, the financial institutions of the kingdom remain confronted with the problem of loans. The cumulative debt of banks increased by 76.4% during the pandemic and non-performing debt by 8.5%, amounting to 8.5 billion dirhams.

The central bank also plans to implement an action plan to ensure financial integrity and fight money laundering. According to its forecasts, economic growth should increase by 1% this year and 4% by 2023.