Crédit du Maroc (CDM), 78.7%-owned by French group Crédit Agricole, posted a net profit of MAD190 million in 2020, about €17.6 million. Compared to 2019, the figure is down 62.6%.

In its financial reporting, the company attributes this underperformance to the support granted for the fight against Covid-19, and to the increase in the cost of risk, also related to the pandemic.

"At the end of 2020, the consolidated cost of risk increased by 124.7% to MAD721.7 million, or an annual increase in the cost of risk rate from 90 basis points to 164 basis points. This increase is mainly due to the integration of the impact of the covid-19 crisis, including a significant portion of provisioning for sound outstanding loans. Thanks to its prudent procurement policy, Crédit du Maroc saw its coverage rate increase to 93.4%," the company explains.

However, the company’s resilience goes beyond these two indicators, which are aggravating factors. On its activity, CDM's revenues (net banking income) posted a slight decline of 0.9% in 2020, mainly because of lower commission margins (-8.1%).

"This change is linked in particular to the decline in branch and electronic payment flows linked to the lockdown and the decline in import/export activity," the document reads.

Morocco is one of the African countries where lockdown measures to limit the spread of the virus have been the most strict. Many businesses and households that are clients of banks have found it difficult to borrow new credit or repay existing loans.

According to a recent report by Bank al-Maghrib, Morocco's central bank, outstanding loans on the balance sheets of local banks increased by 15.8% between January 2020 and 2021. Initial earnings announcements at both the Bank of Africa and BCP show a sharp decline in net income in 2020.

Idriss Linge