Morocco's resilient banking sector sees surge in bank deposits

Morocco's financial sector has demonstrated remarkable resilience, with bank deposits reaching an impressive $110.9 billion by the end of November 2023.

This data, disclosed by Morocco's Central Bank, Bank Al-Maghrib (BAM), reveals a substantial 3.9% increase compared to the previous year.

The driving force behind this growth can be attributed to household deposits, which surged to an impressive $85.7 billion. This represents a robust annual growth rate of 4.8%, underscoring the trust Moroccans have placed in the country's banking sector. Additionally, Moroccans living abroad have made a significant contribution, depositing a total of $20.4 billion. This paints a picture of a banking sector that enjoys trust both domestically and among its diaspora.

Furthermore, deposits from private sector entities have experienced a substantial uptick, boasting an annual growth rate of 5.8%, amounting to $19.4 billion. This surge highlights the confidence of businesses and corporations in the stability and reliability of Morocco's banking sector.

Despite this robust performance, the period also witnessed a decline in deposit rates.

The 12-month term deposit rate decreased by 23 basis points to 2.65%, while the 6-month deposit rate dipped by 7 basis points to 2.37%. Such fluctuations in deposit rates are common in dynamic financial markets and are influenced by a myriad of factors.

In response to these changes, Bank Al-Maghrib has adjusted its savings account policy by setting the minimum interest rate for savings accounts at 2.98% for the second half of 2023. This significant increase of 147 basis points from the previous period represents a strategic move by the banks to incentivize savings among their customers, thereby ensuring the continued health and growth of Morocco's banking sector.

This proactive approach reflects the adaptability and resilience of the country's financial institutions in the face of evolving market conditions.