How to read Morocco's NPL coverage ratio

The coverage ratio answers a prudential question: what fraction of the non-performing stock has already been provided. It does not answer the pricing question: how many dirhams will come back, and when.

The printed figure, not a quotient

At end-2025, Bank Al-Maghrib prints a 68% coverage ratio for bank NPLs on a social basis, beside a stock of MAD 102.3 billion. The monitor series takes that ratio as published. It does not divide provisions by the stock when the report already states the ratio.

In some years the report states provisions and not the ratio, or the reverse. The year then has no ratio in the series, rather than a manufactured one. A gap stays a gap.

Separate from the 20, 50 and 100% floors

The Article 13 minima apply category by category, after reserved interest and eligible guarantees. The sector coverage ratio is an aggregate. A bank can show coverage near 70% while its compromised claims sit at the 100% floor on the base that remains after guarantees, and its pre-doubtful claims sit at the 20% floor.

Using 68% as a single haircut on the face value of a portfolio ignores that mechanism. The right place for provision versus value is NPL valuation in Morocco.

A stable ratio can hide a growing stock

From 2023 to 2025 the printed ratio moves from 67% to 69% and then 68%, while the stock moves from 94.8 to 102.3 billion. Stability of the ratio does not mean the risk is standing still. It means provisions have roughly kept up with the stock.

For a seller, a stable ratio is not a pricing argument either. The buyer is not buying the provision. The buyer is buying a right to cash flows, net of cost and time. The ratio shows what the bank has already recognised. It does not set the transfer discount.

Perimeter

The end-2025 figure of 68% is banks, social basis. It does not carry over to finance companies, to the consolidated basis, or to a line labelled irregular claims if the report uses that label for a different aggregate.

The public chart and the annual table are on the Morocco NPL Monitor. This note explains how not to over-read the column. It does not republish the series.

In this series

• NPL valuation in Morocco
• Morocco NPL market
• Compromised claims in Moroccan banks
• Solo and consolidated NPL figures in Morocco

This note is a method of reading a file or a published series. It is not legal, tax or investment advice, and it is not an opinion on a particular exposure. Serenor Capital does not buy claims for its own account, manage a fund, or carry on collection.

Sources and references

• Bank Al-Maghrib, Annual Report on Banking Supervision, financial year 2025 — PDF
• Bank Al-Maghrib, Circular No. 19/G/2002 of 23 December 2002 on the classification of claims and their provisioning, as amended — PDF
• Circular No. 1/W/2025, adopted on 5 December 2025, effective 1 January 2027. It does not restate the 2012–2025 figures discussed here.
• Serenor public series, banks, social basis — Morocco NPL Monitor and methodology