Moroccan banks can absorb shocks, financial stability report finds

Moroccan banks are well-equipped with adequate capital buffers to absorb macroeconomic shocks, according to the annual financial stability report for 2025. The report, a joint publication by Bank Al-Maghrib, the Moroccan Capital Market Authority, and the Insurance and Social Welfare Regulatory Authority, detailed a new macro-economic stress test conducted on the eight largest banks.

The stress test assessed the banks' solvency under three distinct scenarios: a central scenario aligned with June 2026 macroeconomic forecasts, a severe but plausible scenario of deteriorating economic conditions, and an extreme scenario involving a sharp recession triggered by multiple economic and financial shocks. The severe scenario, for instance, assumes an escalation of the conflict in the Middle East, leading to global supply chain disruptions and a significant rise in commodity prices, consequently accelerating inflation and slowing economic activity internationally and domestically.

Under the central scenario, which projects positive economic growth in 2026 and 2027 due to favorable climate conditions and robust non-agricultural activities, the average rate of non-performing loans for the eight main banks is expected to stabilize around 9.8% between 2025 and 2027. Banks are projected to maintain comfortable levels of precautionary capital, with an average solvency ratio of approximately 15.2% and a core equity ratio of 11.8% by the end of 2027. The report indicates that net income will be supported by growth in interest margins and commissions.