Overdraft NPLs in Morocco

A classified overdraft is not an amortising loan frozen on a single date. The balance may reflect capitalised interest and set-off against the operating account. The tape must make those mechanics visible, or the price assumes a stability that is not there.

Balance, interest and reference date

On a revolving line, the tape balance is not necessarily the economic amount a buyer should underwrite. Interest and fees may have been capitalised. Post-reporting movements may still change the figure. The sale note must fix the reference date and the treatment of later entries.

Without that discipline, two bids compare different objects. One reads a frozen balance; the other reads a living one. The gap is a perimeter difference, not a discount-rate difference.

Set-off and the account relationship

The selling bank may have set-off rights against other credit balances of the same customer. If already exercised, the sold balance is net of that effect. If not, the buyer must know whether those rights transfer and on what terms. Alleged but undocumented set-off does not belong in the base case.

The same applies to salary flows and direct debits that once ran through the account. Their disappearance after classification changes contact and payment behaviour. The recovery model must reflect that.

Classification and migration

Overdrafts follow the prudential classification grid like other claims. What changes is the operating reading: partial regularisation may be more common than full cure, and a line restructuring is not the same as a classic amortising plan.

BAM's end-2025 aggregates (MAD 102.3 billion; 8.3% social basis) do not isolate overdrafts in the usual public commentary. Any product share must therefore come from the sold tape, not from an invented reconstitution.

Pricing consequences

A book containing overdrafts should separate accounts where the operating relationship is still informative from those where it is dead. Mixing both into one contact curve destroys information.

This note does not assign a standard recovery rate to overdrafts. It only requires that they not be treated as amortising loans by default.

In this series

• Morocco NPL market
• NPL valuation Morocco
• Consumer credit NPLs in Morocco
• IFRS 9 versus BAM NPL classification

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.
• Dahir forming the Code of Obligations and Contracts (DOC); Commercial Code, Book V, as amended by Law 73-17, where relevant.
• Serenor public series — Morocco NPL Monitor and methodology