Bank Al-Maghrib Reports Record Profits in 2024 Due to Sharp Management of Foreign Exchange Reserves

The 2022 fiscal year ended with a net loss for Bank Al-Maghrib, an unusual situation for the central bank. This loss was largely attributed to an exceptional provision allocation related to the depreciation of portfolio securities amid a global bond market correction. By 2023, this burden was partially alleviated, with net provision recoveries amounting to 1.81 billion dirhams. Concurrently, interest earned on foreign currency assets increased by 2.36 billion dirhams, thanks to rising yields in American and European markets. Consequently, the income from managing foreign exchange reserves improved from a loss of 1.23 billion dirhams in 2022 to a profit of 7.47 billion dirhams in 2023, marking a significant turnaround both financially and in accounting terms. In 2024, the upward trend continued, with bond income reaching 8.73 billion dirhams, an increase of 1.26 billion dirhams. This growth was primarily driven by ongoing interest gains, although provision recoveries declined. While the pace of growth moderated, the structural effect remained significant. The valuation of external reserves has once again become a sustainable source of profit after two volatile years. In addition, Bank Al-Maghrib has intensified its interventions in the money market. In 2023, revenues from lending to banks reached 3.1 billion dirhams, compared to 1.56 billion dirhams the previous year. This increase was due to a higher structural liquidity need among banks and rate hikes implemented between 2022 and early 2023. In 2024, despite two cuts to the key interest rate, which was lowered to 2.50%, the average amount of refinancing remained high, allowing the bank to earn 3.95 billion dirhams in this area, an increase of 840 million dirhams from 2023. Furthermore, the "non-recurring income" category improved from a loss of 996.7 million dirhams in 2023 to a loss of 446.8 million dirhams in 2024. This difference was largely due to the absence of a one-time donation of one billion dirhams made by the bank to the special post-earthquake fund in Al Haouz in 2023. In 2024, this category remained negative due to the payment of a social solidarity contribution on profits, amounting to 486 million dirhams. General operating expenses rose by 450 million dirhams in 2024, reaching 2.54 billion dirhams, driven by both operational costs and allocations for depreciation and provisions. Over the two fiscal years, Bank Al-Maghrib's net result improved from a loss of 412 million dirhams to a profit of 6.46 billion dirhams. This recovery can be attributed to several factors. First, the partial recovery of past provisions on investment securities, particularly in 2023, significantly contributed to restoring profits. Second, rising yields in international bond markets enhanced the valuation of foreign currency investments, especially in dollars and euros. Additionally, sustained monetary interventions amid ongoing banking liquidity tensions bolstered revenues from refinancing operations. Finally, the impact of exceptional items, such as the post-earthquake donation recorded in 2023, diminished in 2024, contributing to the consolidation of net results. Ultimately, it can be said that the central bank has strengthened its financial capacity over these two years. It demonstrates that a monetary authority can be both a guardian of macroeconomic stability and a profitable entity without deviating from its mandate.