Rabat - Morocco’s banking system has solidified its reputation as one of Africa’s most advanced, marked by significant private sector lending and strong financial stability, according to a recent report by the European Investment Bank (EIB).
In its recent “Finance in Africa” report, the EIB describes Morocco’s banking sector as “among the deepest and most sophisticated in Africa,” pointing to strong performance indicators like private sector credit levels, profitability, and low non-performing loan ratios.
The EIB report notes that Morocco’s private sector credit-to-GDP ratio, estimated at 88%, leads North Africa and ranks far above regional peers.
“Moroccan banks have a private sector credit/GDP ratio of 88%, the highest in North Africa,” the report notes, reflecting on the sector’s key role in supporting economic growth.
In comparison, Tunisia, Egypt, and Algeria have ratios of 62%, 31%, and 21%, respectively. This financial depth enables Moroccan banks to sustain business growth within the country and expand operations abroad.
The Moroccan banking structure includes 24 institutions, with assets totaling approximately 130% of the country’s GDP, according to the report.
“The Moroccan banking sector includes 24 banks—19 traditional banks and five Islamic banks—with total assets representing around 130% of GDP,” it states. Concentration within the sector is high, as the three largest banks hold about 62% of total assets.
The report also noted the gradual decline in the share of public banks over the last two decades, from 40% of total assets in 2002 to 22% in 2023, reflecting a trend toward private sector dominance.
While Morocco has maintained a steady non-performing loan (NPL) ratio of 8.6% this year, private sector defaults are slightly elevated due to challenges in repaying pandemic-era subsidized loans.
Higher interest rates have also enhanced bank profitability, with return on equity for Moroccan banks increasing from 10.9% in 2022 to 11.8% in the first half of 2023, the report noted.
These gains are supported by low-cost resources from current and savings accounts, allowing banks to remain financially resilient.
Regulatory capital requirements have also played a role in safeguarding the financial system. Morocco’s Tier 1 capital ratio, standing at 12.9%, comfortably exceeds the regulatory minimum of 9%, with a further capital surcharge planned for the country’s largest banks by 2025.
In its recent “Finance in Africa” report, the EIB describes Morocco’s banking sector as “among the deepest and most sophisticated in Africa,” pointing to strong performance indicators like private sector credit levels, profitability, and low non-performing loan ratios.
The EIB report notes that Morocco’s private sector credit-to-GDP ratio, estimated at 88%, leads North Africa and ranks far above regional peers.
“Moroccan banks have a private sector credit/GDP ratio of 88%, the highest in North Africa,” the report notes, reflecting on the sector’s key role in supporting economic growth.
In comparison, Tunisia, Egypt, and Algeria have ratios of 62%, 31%, and 21%, respectively. This financial depth enables Moroccan banks to sustain business growth within the country and expand operations abroad.
The Moroccan banking structure includes 24 institutions, with assets totaling approximately 130% of the country’s GDP, according to the report.
“The Moroccan banking sector includes 24 banks—19 traditional banks and five Islamic banks—with total assets representing around 130% of GDP,” it states. Concentration within the sector is high, as the three largest banks hold about 62% of total assets.
The report also noted the gradual decline in the share of public banks over the last two decades, from 40% of total assets in 2002 to 22% in 2023, reflecting a trend toward private sector dominance.
While Morocco has maintained a steady non-performing loan (NPL) ratio of 8.6% this year, private sector defaults are slightly elevated due to challenges in repaying pandemic-era subsidized loans.
Higher interest rates have also enhanced bank profitability, with return on equity for Moroccan banks increasing from 10.9% in 2022 to 11.8% in the first half of 2023, the report noted.
These gains are supported by low-cost resources from current and savings accounts, allowing banks to remain financially resilient.
Regulatory capital requirements have also played a role in safeguarding the financial system. Morocco’s Tier 1 capital ratio, standing at 12.9%, comfortably exceeds the regulatory minimum of 9%, with a further capital surcharge planned for the country’s largest banks by 2025.
