Assahafa.com
Morocco’s banking sector demonstrated exceptional performance in 2024, with analysts projecting even stronger growth through 2026, according to recent financial reports and expert analyses.
The sector posted a remarkable 13.2% increase in aggregate Net Banking Income (NBI), reaching MAD 45.7 billion ($4.57 billion) in the first half of 2024, according to Attijari Global Research’s (AGR) January report. Market activities showed particularly strong growth, surging by 57.2%, while interest margins rose by 4.8%.
“The banking sector should display record performances during the 2024E-2026E period,” AGR stated in its latest equity report, revising its growth forecasts upward from an initial 8.3% to 13.5% annual average growth, projecting profits to exceed MAD 22 billion ($2.2 billion) by the end of the period
Operational efficiency hit new benchmarks, with the cost-to-income ratio (COEX) reaching its lowest level since 2014 at 41.6% in the first half of 2024. Stringent cost management practices and an increase in digitalization contributed to this improvement.
The sector’s profitability also showed significant improvement, with Group Net Income rising by 26.7% to reach MAD 10.6 billion ($1.06 billion). Return on Equity (ROE) averaged 14.3%, surpassing the pre-COVID average of 11.6%.
Economic context and future outlook
Despite challenging agricultural conditions, including a 43% decrease in cereal production compared to 2023, Morocco’s economy demonstrated resilience. Non-agricultural sectors grew by 3.6%, helping to maintain overall economic growth at 2.6% in 2024.
The banking sector’s positive trajectory was supported by Bank Al-Maghrib’s accommodative monetary policy, which reduced the benchmark rate to 2.5% in December 2024. This move aimed to stimulate credit growth while managing inflation, which declined to 0.7% in October 2024 from 10% in February 2023.
According to a recent Atlantic Council analysis, despite these positive indicators, Morocco faces significant economic challenges. “The danger for Morocco is that it could remain stuck in a so-called middle-income trap with low growth and high poverty, which could further ignite social tensions,” noted Rabah Arezki, former World Bank chief economist for the MENA region.
The analysis pointed out concerns about market concentration, particularly in non-tradable sectors. “Like in most countries in the Middle East and North Africa, Morocco is subject to an important level of market concentration in many sectors,” the report stated, elevating the need for increased competition to drive productivity and job creation.
The report also pointed to regional disparities as a significant challenge: “Regional inequalities are significant in several components included in the Prosperity Index, such as income, education, and health. Increasing economic prosperity in the last decades has disproportionately benefited urban populations in cities.”
Despite these challenges, the banking sector’s robust performance and positive forecasts suggest that Morocco’s financial services industry is growing stronger, with AGR projecting the sector’s market capitalization to reach MAD 312 billion ($31.2 billion), offering a potential 13% appreciation over the next 12 months.
Source: Morocco word news
