Bank Al-Maghrib (BAM) presented, Monday in Casablanca, the 19th edition of its annual report on banking supervision for the 2022 financial year.
In this report, presented by Hiba Zahoui, Director of Banking Supervision at BAM, the Central Bank takes stock of the activities of the credit institutions and similar organizations sector and their control by BAM during the year 2022, marked by a deceleration in economic growth and an exceptional rise in inflation on a global scale.
On this occasion, the manager said that the macroeconomic environment had a negative impact on banking activity in Morocco in terms of an increase in bad debts and profitability.
Despite this, she continued, the indicators of the banking sector have demonstrated the solidity and resilience of the Moroccan banking ecosystem.
In addition, BAM has carried out a set of reforms and projects to strengthen the stability of the banking system, increase financial inclusion, develop a green economy and accelerate digitalization, she said.
Thus, BAM was led to increase its key rate, twice in 2022 and then a third time in March 2023, i.e. a total increase of 150 bp to 3%, in order to promote the return of inflation to levels in line with the price stability objective.
In addition, the central bank has strengthened the resilience of banks by inviting them to maintain caution in terms of dividend distribution and to submit to it the necessary comfort elements in this regard by carrying out projections of their solvency according to various scenarios.
In this context, credit grew by 6.5% driven by the increase in companies’ financing needs resulting from the rise in the price of energy products and raw materials, while loans to households decelerated.
At the same time, the banks’ average solvency ratio stood at 15.6% for a regulatory minimum of 12% and their cumulative net income fell by 13%, under the effect of the fall in the market value of their securities portfolio.
The short-term liquidity ratio, meanwhile, continued to evolve at a comfortable level.
In an environment marked by a rise in money market and bond rates, the results generated by the banking system fell by 13% in 2022 on a social basis, reflecting the impact of the new rate conditions on the valuation of the securities portfolios held by the banks.
Nevertheless, and thanks to the good performance achieved by the activities of their establishments abroad, the banking groups were able to increase their consolidated results by 15.5%.
In terms of prudential supervision, the Bank directed its surveillance actions towards the sources of risk induced by the economic situation, in particular credit, market and interest rate risks.
With regard to green finance and with the aim of supporting transition efforts towards a green and sustainable economy, BAM has conducted, with the support of the World Bank, an exercise to assess the risks likely to impact banking institutions as a result of climate change.
In the field of financial integrity, BAM has mobilized alongside other public and private stakeholders to implement the national roadmap for the fight against money laundering and the financing of terrorism (AML-FT) led by the National Authority for Financial Intelligence (ANRF), which has enabled Morocco to be removed from the gray list maintained by the Financial Action Task Force “FATF” in early 2023.
At the same time, Bank Al-Maghrib continued initiatives aimed at supporting the digitization of banking services by contributing in particular to the establishment of an online authentication and identification system for users of banking services and the enactment of regulatory texts in the areas of cloud computing, mobile payment and crowdfunding.
With regard to the bank-customer relationship, BAM continued its actions aimed at strengthening the bank-customer relationship through a series of initiatives at the regulatory, conventional, control and communication levels.
The priority areas have targeted the strengthening of access to information for credit applicants, the promotion of the gender approach for greater economic empowerment of women, the improvement of the accessibility of people with disabilities to banking services and ethical practices in the area of pre-judicial debt collection.
In addition, work to set up a comparator of bank rates and value dates has been completed in coordination with the banking sector for the deployment of a first service offer in early 2023.