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AfricaMay 4 2008

Morocco loans still strong

Moroccan banks have achieved strong growth in their loan books in recent years. Bank Al-Maghrib, the central bank, reports that total credit in the banking sector grew 17.7% to Dh327,357m ($38,708m) in 2006, the last complete year for which figures are available, following on 2005’s 12.5% growth.
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The strongest growth in the overall loan book was in real estate loans, increasing by 28.2% to Dh73,328m compared with a 24.7% increase the previous year. Overdraft facilities and consumer credit also increased by more than 24%.

Indications are that strong growth continued in the first half of 2007. Such growth can lead to problems, especially in the credit squeeze. But each of the top banks has a gross customer loans to customer deposits ratio of less than 100%, an indication that they have not had to seek external funding to underwrite their loan books. Provided increases in loan books are matched by deposits, there is little prospect of problems arising in the event of a downturn in the economy.

Our list is headed by Attijariwafa Bank, Groupe Banques Populaire and Banque Marocaine du Commerce Extérieur – private sector banks that control about 70% of the system’s total assets. They have been expanding aggressively into other north and west African countries. Such rapid expansions are not without risk that could affect capitalisation.

Also in the listing are the three subsidiaries of major French banks, which benefit from the support of their parents.

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