NPL severity in Morocco

The NPL ratio says how much of the book is non-performing. It does not say whether that stock is newly classified or already deep in the grid. Severity answers the second question, using the three categories Bank Al-Maghrib prints for banks on a social basis.

Three stocks, one total

Bank Al-Maghrib splits bank NPLs on a social basis into pre-doubtful, doubtful and compromised claims. A year enters the public series only when all three amounts are verified on the same basis and their sum stays within tolerance of the total stock. A missing stock is not backed out of a printed share.

At end-2025 the supervision report prints MAD 4.9 billion pre-doubtful, 14.7 doubtful and 82.7 compromised, summing to 102.3. The compromised share is 80.8%. In 2022 it was 83.1% (73.8 out of 88.8). The difference is 2.3 percentage points, not a growth rate.

What the mix changes in a price

A pre-doubtful claim can still cure, migrate or worsen. A compromised claim sits at the far end of the prudential grid: recovery is treated as unlikely, or the arrears have reached the longest threshold. One recovery curve for both erases that distinction.

A portfolio price is built from that portfolio's expected cash flows, not from the sector's compromised share. The sector mix is context. It does not replace the loan tape. The path from face value to cash flows is set out in NPL valuation in Morocco.

The 2020 gap stays visible

For 2020, the three categories printed in that year's report sum to MAD 79.7 billion. The stock kept in the annual series, later restated at 79.8, does not match at the tenth. The gap is shown. It is not closed by an average.

The same rule governs the basis. The public chart does not mix social and consolidated figures, and it does not splice monthly monetary statistics. Sources are recorded in the monitor methodology.

What the series does not say

A high compromised share does not show that banks are selling, or that they are not. It does not produce a sale price and it does not measure supply. Those readings sit outside the series.

The circular adopted on 5 December 2025, effective 1 January 2027, does not restate these observations. The definitions used to read 2019–2025 remain those of Circular 19/G/2002, set out without simplification in the methodology.

In this series

• Morocco NPL market
• NPL valuation in Morocco
• Morocco NPL Monitor
• Minimum provisions of 20, 50 and 100 percent
• Pre-doubtful claims 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