Moroccan Banking Sector Shows Robust Fundamentals in 2023: CCSRS Report
The Moroccan banking sector is thriving in 2023, with robust fundamentals and strong financial performance, according to the Systemic Risk Coordination and Supervision Committee (CCSRS).
In a statement issued by Bank Al-Maghrib (BAM) after their 19th meeting, it was revealed that the banking sector’s profitability has rebounded significantly this year. Aggregate earnings of the banks rose by 20.4%, a stark contrast to the 13% contraction experienced in 2022. This recovery can be attributed to the positive performance of market operations.
Moroccan banks also boast solid solvency ratios, with an average solvency ratio of 15.5% on a parent-company basis and an average Tier 1 capital ratio of 12.9%, well above regulatory minimums. Even on a consolidated basis, these ratios remain strong at 13.5% and 11.6% respectively.
The sector’s resilience was further confirmed by macro-stress solvency tests, which showed that Moroccan banks can withstand scenarios simulating a deterioration in macroeconomic conditions. Additionally, the short-term liquidity ratio remains above the regulatory threshold of 100%.
Financial market infrastructures in Morocco are also demonstrating strong resilience both financially and operationally, presenting a low level of risk to financial stability.
During the meeting, the CCSRS approved the Financial Stability Report for 2023 and reviewed progress on the Financial Stability Roadmap for 2022-2024. The Committee also acknowledged the continued strength and resilience of the Moroccan financial sector based on monitoring indicators.
Furthermore, the CCSRS welcomed efforts to enhance compliance with national anti-money laundering and combating the financing of terrorism framework, as confirmed by MENAFATF at its plenary meeting in Manama.
Overall, the Moroccan banking sector is on a positive trajectory in 2023, with strong fundamentals and a resilient financial system that bodes well for the country’s economic stability and growth.
