Non-financial sector: Bank credit slows, money supply increases

In June 2024, bank credit to the non-financial sector recorded a growth of 1.2%, compared to 2.1% a month earlier, according to Bank Al-Maghrib (BAM). This increase reflects a slowdown in loans allocated to the public sector, from 17.4% to 4.4%, with a deceleration of loans to public non-financial companies from 23.8% to 5.5%. Financing to the private sector saw its pace accelerate from 0.5% to 0.9%, including an increase in loans to households of 1.2% after 0.9%, and an attenuation of the decline in loans to private non-financial companies from 1.2% to 0.7%.

By economic object, the evolution of banking support to the non-financial sector shows a deceleration in the growth of equipment loans to 5.9% and consumer credits to 0.5%. We also observe an accentuation of the decline in cash facilities from 1.1% to 2.9% and a virtual stagnation of real estate loans at 1.2%. As for non-performing loans (CES), their growth slowed to 3.4%, with a ratio of 8.6% compared to total credit.

At the same time, the money supply (M3 aggregate), estimated at 1,812.3 billion dirhams (MMDH), was marked by an acceleration of its annual growth to 4.7% last June, still according to BAM. This development results mainly from the increase in net claims on the Central Administration to 6.1%, following in particular a 4.7% increase in banks’ holdings of Treasury bills, and the acceleration to 5.8% of the growth of official reserve assets. The slowdown in the growth of bank credit to the non-financial sector to 1.2% also influenced this development.

The acceleration in the annual growth rate of the M3 aggregate mainly reflects a 7.5% increase in sight deposits with banks, an acceleration in the growth of savings accounts to 3.7%, and a slowdown in the decline in economic agents’ holdings of securities in money market undertakings for collective investment in transferable securities (UCITS) to 15.5%. There is also a virtual stagnation in the decline in term accounts at 4.6% and a deceleration in the growth of fiduciary money to 8.4%.

LNT