Nonperforming loans in Morocco drops to 97.4 Billion Dirhams in 2024

Moroccan Banks See Drop in Nonperforming Loans

Credit quality improves as NPLs decline to 8.4% of total loans

Morocco's banking sector witnessed a positive shift in 2024 with nonperforming loans (NPLs) decreasing by 2.7 percent to 97.4 billion dirhams, according to Bank Al-Maghrib's latest annual supervisory report. This decline signals an improvement in credit quality, as NPLs now represent 8.4 percent of total loans.

Loans Under Watch Rise, Doubtful Debts Decrease

While NPLs decreased, the number of loans under watch saw a 4.1 percent increase to 6.5 billion dirhams. Conversely, doubtful debts experienced a 1.7 percent decline, reaching 8.7 billion dirhams. Irrecoverable debts, however, rose by 3.1 percent to 82.2 billion dirhams, continuing to be the dominant factor within the NPL structure.

Provision Coverage Strengthened Across Categories

Overall provision coverage increased to 69 percent, demonstrating a strengthened commitment to managing risk. This includes 76 percent for irrecoverable debts, 45 percent for doubtful debts, and 11 percent for loans under watch. Household NPLs climbed by 6.7 percent to 44.6 billion dirhams, while non-financial firms held 70.1 billion dirhams in NPLs.

Resilience Amid Sectoral Risks

Despite ongoing sectoral risks within industries like trade and construction, the banking system demonstrated resilience and improved provisioning rates.