Moroccan Central Bank Urges Banks to Reduce Real Estate Holdings Amid Market Concerns

The central bank has not failed to warn banks in recent years about the increase in payment in kind, recalls l’Économiste. Several developers, facing cash flow difficulties, have been forced to transfer their real estate assets to banking institutions to repay their loans.

Faced with this situation, the central bank has put in place measures governing assets acquired through payment in kind and sales. According to the same daily, these rules would be effective in the very near future.

Among these measures are the implementation of dedicated accounting rules, as well as the issuance of a directive setting good practices in terms of governance and management of these operations. It is also planned to introduce a specific prudential treatment of exposures to assets acquired through payment in kind.

According to the central bank, any non-operating asset not sold after a certain period has no market and must therefore be provisioned. In addition, Bank Al-Maghrib has planned a minimum provision of 30% after four years. The current portfolio is equivalent to a provision of 6 billion dirhams, writes the same source.