Casablanca – Moroccan listed banks are poised to achieve remarkable performance in the coming years, with record profits expected in 2024 and continued robust growth through 2026. A series of updated projections from Attijari Global Research (AGR) and BMCE Capital reveal strong financial health across the sector, supported by favorable market conditions, rising credit activity, and efficient cost management.

Profit growth surpassing expectations
According to AGR’s latest report, the Moroccan banking sector is on track to report a profit growth of +27% in 2024, exceeding earlier forecasts of +10.4%. This upward revision follows a year marked by solid performance, including a 13.2% increase in Net Banking Product (PNB) in the first half of 2024, reaching $4.71 billion.

This robust performance is driven by several factors. The interest margin, a key source of income for banks, increased by +4.8% to $134 million, bolstered by a 5.3% rise in consolidated loan volumes. Additionally, commission margins—fueled by growth in international trade, digital services, and specialized subsidiaries—saw a +5.3% boost, contributing $41 million.

However, the standout achievement for 2024 is in market activities, which surged by an impressive +57.2% (an increase of $371 million), driven by favorable interest rates and strong dynamics in both the bond and foreign exchange markets.

Sustained growth and strong future outlook
Looking further ahead, AGR has revised its 2024 forecast for consolidated PNB growth to +11.9%, reaching $9.28 billion, up from an initial projection of +6.4%. The sector is expected to maintain an average annual growth rate of +5.6% between 2025 and 2026, fueled by sustained credit activity.

Despite the strong profit prospects, AGR warns of a potential increase in risk costs, projected to rise by +10.5% in 2024, primarily due to a deterioration in sovereign risk in some African countries where Moroccan banks operate. However, this increase is expected to stabilize in the medium term.

By 2026, AGR anticipates the sector will reach a total profit of $2.27 billion, reflecting an average annual growth of +7.3% over the three-year period.

Attractive investment opportunity
Although banking stocks have experienced a +21% increase in 2024, they still trade at a 34% discount compared to historical valuation levels. The price-to-earnings (P/E) ratio for the sector is expected to average 12.2x in 2025-2026, significantly lower than the historical average of 18.4x from 2013 to 2023.

Analysts point out that the sector offers an attractive dividend yield of 3.5%, which is notably higher than the yield on five-year Treasury bonds, currently at 2.83%.

Top performers in the market
Within the sector, Attijariwafa Bank and CIH Bank are highlighted as particularly strong performers. These banks stand out for their high profitability (ROE) and attractive valuation (P/B) ratios—15.0%-1.77x for Attijariwafa Bank and 11.9%-1.70x for CIH Bank. Additionally, both banks feature a P/E ratio of 12.0x, combined with high daily trading volumes exceeding $1.75 million.

Meanwhile, CFG Bank, a newer entrant into the market, has seen significantly higher valuation ratios, reflecting its differentiated positioning in the sector.

A bright future for Morocco’s banking sector
As Moroccan banks continue to demonstrate resilience and profitability, the sector is expected to remain a key driver of economic growth. With strong credit growth, efficient operational practices, and attractive stock valuations, Moroccan banking stocks offer a compelling investment opportunity as they move towards new records in 2025 and beyond.

The optimistic outlook and solid performance of listed banks provide investors with confidence in the sector’s ability to deliver steady returns and continue its positive momentum.