Regulation
Write-offs of fully provisioned loans in Morocco
Removing a claim from the balance sheet is neither a sale nor the end of the right.
- Author
- Serenor Capital
- Published
- Read
- 2 min read
The NPL stock can fall because files cure, because they are sold, or because they are written off. Reading a lower ratio as better collection, without knowing which of those three happened, is a conclusion the figure does not carry.
What the entry changes
A write-off removes the claim from assets and, when the residual base is already fully provisioned, it does not recognise the same loss again. The published stock falls. The NPL ratio can fall with it, even though the debtor paid nothing.
That is why the monitor's annual series does not narrate year-on-year changes as sale flows. A stock change is the gap between two 31 December snapshots. It is not a collection profit-and-loss.
Write-off and sale
A sale transfers a right to a third party, for a price. A write-off leaves the right, if it still exists, with the institution, outside the non-performing stock. The two can happen in sequence. They are not interchangeable in a market note.
Draft Law 02-26, which is not enacted, is about a transfer regime. It does not define write-off. The transfer framework today is the one in Morocco NPL sale process and, for the vehicle, FPCT.
Buying a book of written-off files
Historical face value is often swollen by default interest that will not be collected. Price is built on what is still legally recoverable, on security interests that are still registered, and on the cost of finding an old debtor. A tape of written-off lines without documents is an inventory, not an asset that can be valued.
Monitoring after a transaction, if one happens, starts from that incomplete inventory. See portfolio monitoring.
What is not quantified here
Bank Al-Maghrib discusses write-offs in some years of the supervision report. This note states an amount only when it has been extracted and checked for the public series. Otherwise no write-off total is offered.
The discipline matches the rest of the monitor: a gap stays a gap. The share of write-offs in the move from MAD 97.4 billion to 102.3 billion between 2024 and 2025 is not estimated.
In this series
- NPL valuation in Morocco
- Morocco NPL market
- Participatory bank NPLs in Morocco
- NPL classification contagion inside a group
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
Frequently asked questions
- Is a written-off claim legally extinguished?
- Not by the accounting entry alone. Extinction depends on the instrument, payments, waivers and time limits. It is decided on the file, with counsel, not from the label 'written off'.
- Does a falling NPL stock prove sales?
- No. Cures, repayments, write-offs and sales can all reduce the stock. The ratio does not separate them.
Evaluating an NPL Portfolio
Serenor Capital supports financial institutions and investors in the analysis and valuation of non-performing loan portfolios in Morocco.
Serenor Capital publishes research on non-performing loans, distressed-credit valuation and the development of Morocco’s secondary credit market.
This note is general commentary on method and market structure. It is not investment advice, legal advice, or a recommendation in relation to any portfolio, transaction or financial asset.