LMoroccan banks accumulated some 89 billion dirhams of non-performing loans at the end of July 2022. This represents 7.3% of outstanding loans to the economy and 8.8% of bank loans (including crowdfunding). This figure has continued to swell since 2021, after a year 2020 where, between moratoriums and guaranteed loans, bankers had a break on the bad debts aspect. Over the first 7 months of the year, these bad debts increased by 4.7%.
This figure rises to 6.4% over a rolling year when bank credit is progressing more slowly (+2.7% over 7 months and 5% over a rolling year). Race results: a credit portfolio less “clean” only at the start of the Covid crisis. 2022 follows a year 2021 where the subject was already a hot topic for banks. These unsuccessful claims had jumped 5.7% and the gross litigation rate of banks, at least those listed, socially, rose to 8.2%.
“The deterioration in the litigation rate between 2019 and 2021 was particularly noted with the 3 largest Moroccan banks: BMCE (+1.4 additional pt), Attijariwafa bank (+1.3 pt) and BCP (+1.1 pt )”, write Valoris Securities analysts in a commentary in early September. Under these conditions, the aggregate cost of risk of listed banks, in social terms, weighed for nearly 1.04% of gross customer outstandings, compared to 1.24% in 2020 and 0.75% in 2019.
“In our opinion, the slight improvement in the cost of risk, despite the increase in the rate of disputes, should be linked in part to the increase in the share of loans guaranteed by the State, which may be the subject of claims overdue, without being provisioned. We thus note that the aggregate provisioning rate for non-performing loans of listed banks has decreased by 2.4 pts compared to 2019”, reassure analysts. For bankers, inflation and the slowdown in economic growth explain a decline in the financial capacity of households and businesses.
Consumer credit: New battleground?
Reputed to be riskier than other market segments, consumer credit will paradoxically be the banks’ next battleground. At least that’s what analysts covering the sector predict: “anticipation of an upcoming fierce competition from banks in the consumer credit segment, which could weigh on consumer credit companies”, predicts the broker Valoris. According to them, at the end of June 2022, the growth rate of bank loans over 12 rolling months improved to reach 4%, against 2.8% at the end of December 2021 and +3.8% at the end of June 2021. analysis of this improvement in the rate of distribution of credits makes it possible to highlight certain remarks qualified as “not very positive”, by the broker’s analyst. Indeed, this increase was mainly driven by the growth of “accounts receivable and cash loans” of +10.1% (vs. 9.6%), while the growth rate of equipment loans is struggling to return to positive territory despite a relative improvement: -2.6% at the end of June 2022, against – 5.2% at the end of December 2021.
In another register, the growth of housing loans was limited to +2.5% at the end of June 2022 (vs. +2.6% at the end of December 2021), while the banks seem to fall back in parallel on consumer loans: +3.2% at the end of June 2022, against +2.5% at the end of December 2021.
“Given these variations in H1-2022, we anticipate three main trends which should be confirmed for the banking sector in this year: a preference for short-cycle credits at the expense of long-cycle credits, motivated by the consequences of the inflation on the economic outlook and the cost of refinancing, and a probable maintenance of the rate of non-performing loans at more than 8% of gross outstandings in 2022, due to the rise in loans less covered by collateral (loans of cash, consumer loans, etc.).