Moroccan banks are poised to step up lending to corporate borrowers in 2026 as large-scale infrastructure spending, pro-business reforms and steady economic growth create a more supportive operating backdrop, according to S&P Global Ratings.
The rating agency expects stronger loan growth, gradually improving asset quality and resilient profitability, even as legacy risks and regional exposures continue to weigh on credit profiles.
In its Moroccan Banking Outlook 2026: Economic Growth Fuels Strong Performance, S&P projects that Morocco’s economy will sustain solid momentum, with gross domestic product growth averaging about 4% through 2026.
That expansion, it says, will be underpinned by mega infrastructure projects, including preparations for the 2030 FIFA World Cup, transport network upgrades, and investments in energy and healthcare.
Infrastructure spending lifts lending
Those projects are opening up sizeable financing opportunities for banks, particularly through public-private partnerships. S&P forecasts lending growth will accelerate to about 3.5%–4% in 2026, from an estimated 3.1% in 2025, driven mainly by corporate investment loans.
“Ambitious infrastructure projects… are generating significant lending opportunities for banks,” the agency said, adding that interest-rate reductions and pro-business government reforms should further bolster investment activity over the year.
A sustained slowdown in Morocco’s inflation last year supported a gradual easing of monetary policy to 2.25%. With the northern African nation now recording deflationary readings, policymakers have greater room to consider further rate cuts.
Household lending is also expected to benefit from rising disposable incomes, supported by low inflation, wage increases and social reforms. Still, S&P expects corporates to remain the dominant engine of credit expansion, with consumer lending contributing more modestly to overall growth.
A stable, locally funded deposit base and limited reliance on foreign borrowing should further support overall credit expansions and shield Moroccan banks from external shocks.
Asset quality edges higher, legacy issues linger
Improving economic conditions are also expected to feed through into asset quality.
S&P projects the sector’s non-performing loan (NPL) ratio will decline to around 8.5%–8.6% in 2026, from an estimated 8.9% in 2025, supported by modest recoveries in real estate values, stronger loan recoveries and some write-offs.
Despite the improvement, the agency cautions that Moroccan banks’ NPL ratios remain elevated compared with peers in other emerging markets, largely reflecting a stock of legacy problem loans.
Authorities are seeking to establish a secondary market for distressed assets to accelerate clean-up efforts, free up capital and expand lending capacity, although S&P notes that implementation could be slow and dependent on further judicial reforms.
Profits to hold up as volumes grow
On profitability, S&P expects operating revenue to stabilise in 2026 as resilient margins and higher loan volumes offset a decline in trading gains, which had surged between 2023 and 2025 amid policy rate cuts. Modestly lower impairment charges and controlled operating costs should also support earnings.
The outlook builds on a strong performance in the first nine months of 2025, when banks benefited from robust trading income, solid margins despite easing rates, and falling credit losses. The average return on equity for the ten largest banks reached 13.1% by the end of June 2025, up from 11% in 2024.
Capital buffers strengthened ahead of new rules
Moroccan banks have also been reinforcing their capital positions ahead of tighter regulatory standards. System-wide capital adequacy and common equity Tier 1 (CET1) ratios stood at 14.3% and 12.3%, respectively, in the first half of 2025, supported by stronger earnings and capital issuances, including subordinated debt and additional Tier 1 instruments.
Regulators are moving to align domestic rules more closely with international standards and to fully adopt Supervisory Review and Evaluation Process requirements by 2027. Since December 2025, domestic systemically important banks have been required to maintain a minimum CET1 ratio of 11%, 200 basis points above the level for other lenders.
“These regulatory changes are expected to enhance the banking system’s resilience to shocks,” S&P said, although it added that some large banks may need to optimise capital use by moderating growth, adjusting dividend policies or issuing fresh capital to stay comfortably above the new thresholds.
Regional exposure remains a key risk
Risks persist, particularly from overseas operations. About a quarter of large Moroccan banks’ assets are concentrated in sub-Saharan Africa, where exposures carry higher risk than domestic lending. While those operations contribute meaningfully to profitability, S&P cautions that they add volatility to balance sheets.
Even so, the agency expects improving economic prospects across sub-Saharan Africa from 2026 to help contain related risks.
Overall, S&P’s outlook points to a year in which stronger growth, infrastructure investment and regulatory reforms support credit expansion and earnings resilience, while longer-standing asset quality and regional exposure challenges remain firmly in view.
