From one crisis to another, banks continue to show resilience. For the sector, the slowdown in economic activity could affect demand for credit and increase the risk of default within portfolios. So far, they are showing good results. BCP generated a profit of 831 million dirhams, up 66% in the first quarter, thanks to the good performance of net banking income and the reduction in the cost of risk.
The drought and the acceleration of inflation once again upset economic projections with expected growth below 2%. They also modify the banks’ scenarios. For the sector, the slowdown in activity could affect credit demand and increase the risk of default within portfolios, as the post-covid recovery is still fragile in some sectors, before inflationary pressures exacerbated by the war in Ukraine do not degrade the outlook.
So far, this risk has not materialized. In the first quarter, the BCP group saw its cost of risk decrease by 23% to 896 MDH. But banks remain on their guard given the high level of uncertainty. Added to this driver is the good performance of net banking income.
It increased by 2% to 4.9 billion dirhams, thanks to the interest margin and commissions. The first item increased by 9.5% largely thanks to the work on the charges. These fell by 17% to 1 billion dirhams. The products themselves show an increase of 1.8%.
At this level, the fall in lending rates in the first quarter (-17 basis points compared to the first quarter of 2021) was offset by strong demand from companies, mainly for cash financing. Long-term credit investments are less dynamic. The commission margin widened by 3.3% in the first quarter.
On the other hand, the growth of net banking income was significantly slowed by the underperformance of the result of market activities (-35%) in a context of rising interest rates. At the end of March, operating expenses increased at the same rate as net banking income (+1.9% to 2.5 billion dirhams) showing a stable operating ratio at 51.3%.
Between January and March, the group made a profit of 831 million dirhams, up 66%. For the full year, BKGR forecasts a profit of 2.7 billion dirhams, the group not expected to return to its pre-pandemic results until 2023.
Franck Fagnon / ECO Inspirations
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