Moroccan Banks' Fundamentals Strengthen, but Sector Faces New Challenges

Moroccan banks entered 2026 with improved fundamentals, driven by revenue growth, loan expansion, and a decline in the cost of risk.

Fitch Ratings expects aggregate net income to continue rising in 2026, albeit at a more moderate pace.

However, the agency is keeping a close watch on asset quality, with a still-high non-performing loan ratio, and solvency, with CET1 ratios below the average for emerging-market banks.

The SREP and the potential arrival of new digital players, such as Revolut, add new challenges for the sector.

The banking sector posted group share net income of nearly MAD 24 billion in 2025, up 12.6% year-on-year.

This momentum reflects stronger business activity and better control of the cost of risk.

Fitch Ratings believes that the credit profiles of Moroccan banks should continue to improve in 2026 and 2027, supported by business growth, profitability, and changes in the regulatory framework.

The rollout of the SREP, capital consumption linked to African exposures, asset quality, and the potential arrival of new digital players will be key tests for the sector.

The entry of Revolut in Morocco raises questions about the balance of the local banking sector, but Fitch analysts believe that the sector remains oligopolistic, with the three largest banks accounting for more than 60% of the country's banking assets.

Current conditions are particularly favorable in terms of liquidity, with banks having sufficient liquidity buffers and alternative sources of funding if needed.

The SREP will require banks to conduct in-depth self-assessments and correct any weaknesses in their business model, internal controls, and capital and liquidity management by 2027.