Moroccan Banks Research Articles

Modeling the efficiency of Tunisian and Moroccan banks using the SFA approach

PurposeThe purpose of this paper is to evaluate and compare bank efficiency between the two Maghreb countries, Tunisia and Morocco, over the period 2005–2014.Design/methodology/approachThe authors follow the stochastic frontier analysis, where the preferred cost model is determined via various hypothesis tests based on the maximum likelihood estimation. Then, the first and the second derivates of the cost function are employed to determine scale elasticities, scale inefficiencies and technological progress.FindingsSpecification tests indicate that the Fourier Flexible form provides better fit to the data set. Further, the estimated model shows that Tunisian and Moroccan banks’ efficiency is positively affected by banking service quality, but negatively influenced by both bank capitalization and GDP growth. Overall, Moroccan banks are found to be the most efficient despite the decrease of efficiency levels in both countries. Additionally, foreign banks have a higher scale inefficiency and, therefore, a lower cost efficiency. Equally, the technical progress raises banking costs in both countries, providing a decrease in efficiency scores.Practical implicationsThe findings of this study provide novel insights to Tunisian and Moroccan policy makers on the relevance of the smaller banks’ consolidation to improve bank efficiency by achieving unrealized economies of scale. Also, more reforms should be implemented in Tunisia to reduce non-performing loans.Originality/valueTo the best of the authors’ knowledge, this study is the first which offers a comparison between Tunisian and Moroccan banks to clarify the sources of inefficiency and to make strategic decisions.

The Determinant of Organizational Performance of Moroccan Banks: Bank Opera Model Adapted to Moroccan Case

This study aims to identify the determinants of organizational performance relevant of the Moroccan banks. To achieve this, an approach based on a BANK-OPERA model, which is inspired by the OPERA model, was chosen to be applied in the Moroccan environment. The empirical results of this research show that the model is validated in our context. However, some determinants, that have been considered crucial in the performance assessment using the tested model, are not decisive for the Moroccan banks ‘performance.

The impact of ethics on Moroccan consumer behavior toward Islamic banking products

Abstract. Participatory finance is currently operational in Morocco, following the agreement of the central bank, five banks and the subsidiaries of three major foreign banks has the right to provide Sharia-compliant products. These products bring a new dimension to the Moroccan banking services, the practice of the Islamic ethics in the operation of financing is a new component for the Moroccan consumer, the use of Islamic marketing combines the principle of maximizing value with the principles of equity and justice for the well-being of society. This article studies the different behaviors of Moroccan consumer towards participatory products, what values can the ethical dimension bring to Moroccan consumers and how to match they are convinced by these products. In this framework, we conducted a survey of a sample of 362 individuals and used the chi-square test on the SPSS software, from where we found a strong relationship between ethics and consumer choices. Keywords. Ethics, Marketing, Consumer, Banking products, Sharia-compliant. JEL. M31, G20, C12, Z13.

Formal Concept Analysis based Framework for Evaluating Information System Success

This paper aims to propose a methodology for evaluating information system success. It is based on two main fields, which are formal concept analysis and multi criteria decision-making methods. A framework whose main objective is to visualize the synchronization between company processes and information system indicators via process mapping and formal concept analysis exploited the methodology. Moreover, owing to the application of multi criteria decision-making methods, we can rank the information system among the others system for the purpose to ameliorate system performance. In practice, we apply the steps of this framework on a Moroccan bank by choosing a combination of processes and indicators.

Factors Affecting Bank Performance: Empirical Evidence from Morocco

This study empirically examines the effects of bank-specific characteristics, bank governance, financial market structure, and macroeconomic conditions on Moroccan banks’ performance. Moroccan banks’ performance is measured by return on assets (ROA) and return on equity (ROE). For this aim, panel data method (fixed effects model) is applied to data which is obtained from a sample of 6 Moroccan banks’ financial statements during the period 2010-2016. The findings show that only operating management efficiency represented by the cost-to-income ratio (COST) is highly significant and negatively related to bank’s performance. Also, the results indicate that bank size (SIZE) is positively related to ROA and statistically significant. Nevertheless, the effects of the other variables are statistically insignificant. The findings suggest that future studies could be include more dependent and independent variables to explain Moroccan banks’ performance.

The Impact of Moroccan Banks on Economic Growth in African Countries: Analyzing the Synchronization between the Financial and Business Cycles in WAEMU

The strategic choice of Moroccan banks to conquer the African market has accelerated since the mid-2000s. According to the Banking Commission of the West African Economic and Monetary Union (WAEMU), Moroccan banks concentrate 29.6% of the market share in the WAEMU region in 2015, and more than 30% of the share of global net income in the region. The article is devoted to the research of the role of Moroccan banks in the economic development in African countries. Can Moroccan banks affect real economic activity and act as catalysts for financial and economic development in African countries? To answer this question, we examine the co-movements between loans granted by Moroccan banks in African countries and real activity in those countries. Therefore, we use the synchronization index proposed by Hading and Pagan (2002). The cycles were obtained with a Hodrick-Prescott (HP) filter. The concordance index values, cross-correlation values were used to identify the characteristics of the relationships between the cyclical components. The study covers the period 2006-2015 and focuses on three Moroccan banking groups (Attijariwafabank, BMCE Bank of Africa and Banque Centrale Populaire BCP) set up in seven countries: Benin, Burkina Faso, Cote d'Ivoire, Mali, Senegal, Togo and Niger. The empirical results revealed that the financial (credits granted by Moroccan banks) and business (real activity) cycles are highly synchronized in WAEMU. The study concluded that the bank credits have a positive impact on real activity in WAEMU countries within the period examined.

Assessing the Impact of Modelling on the Expected Credit Loss (ECL) of a Portfolio of Small and Medium-sized Enterprises

This paper studies the impact of the internal modelling on the calculation of expected credit loss in the framework of the international standard IFRS 9. Indeed, the probability of default of counterparty depends on the model used for the conception of the internal rating system. The multitude of probabilistic models renders uncertain and imprecise, the calculation of the expected loss for the same SMEs portfolio of a Moroccan bank, as well as the comparison of losses over time due to the non-permanence of the rating system used. As a result, the regulator will be unable to guarantee an equitable and transparent system of provisioning of the losses because of the absence of standardization of the elaboration process of the rating tool. To show this risk associated with the multitude of models, this paper studied the impact of choice of the model on the expected credit loss, by calculating of the probability of default for several types of modelling based respectively on the pure logistic regression and the logistic regression on the principal components.

Determinants of Financial Moroccan Banks Performance: Approach by the Cointegration Method

Abstract The purpose of this paper is to test the long-term relationship between banks financial performance and two groups of variables, internal variables specific to the bank, and exogenous macroeconomic variables. To appreciate this long-term relationship, we applied the Fully Modified Ordinary Least Squares FMOLS method as a technique for estimation cointegrated panel data. Over a period of 26 semesters (2004 to 2016), our results show that a set of internal variables explains the financial performance of banks. As for external factors, economic growth explains this performance, while inflation has no predictive power of performance at least for our sample of the main Moroccan listed banks.

Evidence of the cross border contagion risk for Moroccan banking system

Analysis of contagion continues to attract growing interest from both regulatory authorities and the academic world and we are witnessing the development of analytical approaches for assessing the risk of contagion in the interbank market. Indeed, given its role in financial stability and monetary policy, the Central Bank must be able to accurately determine the level of international vulnerability associated with various scenarios for cross-border contagion, both to prevent than to manage situations systemic crises. The purpose of this study is to assess the risk of cross-border contagion of the Moroccan banking system through the data of the “BIS”. The methodology is to first approximate the gross bilateral exposures using data from the banks’ financial statements. Then simulations based on contagion algorithm integrating counterparty risk are conducted to assess the risk of contagion. Also centrality of indicators and measurement of systemic importance are presented. The results were synthesized in indicators to assess the systemic importance of the French banking system internationally to Morocco; the fall of the latter is a significant risk of contagion.

Les Problemes d’Agence dans le Financement de la Banque Islamique : Une Etude Exploratoire pour le Cas du Maroc

The objective of this work is to explore the issue of agency problems in the Islamic finance industry in Morocco. Particularly in the financing formulas based on the principle of sharing profits and losses. Thus, we have conducted an analogous reasoning that allowed us to draw lessons about the agency problems in Islamic banking, based on the observation of the credit relationship between a Moroccan bank and the young promoters benefiting from Moukawalatiprogram. Our results predict a high degree of moral hazard in the behavior of the borrowers, while the issue of adverse selection remains uncertain. Therefore, we insist on the need to find solutions for agency problems by reducing their effects on the optimal allocation of resources. Other wise, there is a risk that the efforts of Islamic banks will concentrate on non-risky debt contracts, such as Mourabaha and Ijira, to the detriment of risky financing formulas such as Moudhraba and Moucharaka .

Short-term stock price forecasting using kernel principal component analysis and support vector machines: the case of Casablanca stock exchange

Stock market prediction is a key problem to the financial field. An accurate prediction model may yield profits for investors. However, the volatile nature of the stock market makes it difficult to develop efficient models. This study attempts to improve the prediction capacity of the stock price via an integrated prediction model based on Kernel Principal Component Analysis (KPCA) and Support Vector Machines for Regression (SVR). KPCA is firstly introduced to reduce the feature dimensions. On that basis, SVR is used to build a short-term investment decision system. 23 technical indicators are calculated for five major Moroccan banks listed on the Casablanca Stock Exchange (Casablanca S.E) and used as input of the models. A comprehensive parameters setting is performed to improve the prediction performance. The simulation results show that, through KPCA attribute reduction, the structure of the investment decision system can be simplified significantly with improvement of the model performance. The average performance of the integrated model that uses KPCA and SVR is significantly better than that of SVR model, which verifies the effectiveness and accuracy of the proposed method.

Les Déterminants Idiosyncratiques De La Performance Bancaire Au Maroc : Analyse Sur Données De Panel

If the financial crisis of 2008 raised the interest in analyzing the impact of the financial system, particularly the banking one, on the real economy ; studies were focused on macroeconomic variables given the crisis fallout. However, in spite of its propagation to the international scale, the financial crisis has impacted more severely some developed economies. Rightly, the Moroccan banking system was slightly affected. This suggests a specificity of the Moroccan context. The aim of this study is, therefore, to apprehend the banking performance in Morocco from a microeconomic point of view. To do so, a panel data analysis relative to eight banks was conducted over the period 2004-2015. The results allowed to identify the determinants of banking performance in the Moroccan context while confirming certain specificities of the banking system in Morocco.

Impact of Person-Job Fit, Person-Organization Fit, Information Sharing and Empowerment on Organizational Commitment of Moroccan Banks Managers

Impact of Person-Job Fit, Person-Organization Fit, Information Sharing and Empowerment on Organizational Commitment of Moroccan Banks Managers

Determinants of Bank Deposits in Morocco

This paper aims to define the determinants of bank deposits in Morocco for the period 2003-2014 using panel data regression. Thus, we used deposits in Moroccan banks as dependent variables and twelve explanatory variables (banks’ size, logarithm of banks’ total assets ; bank’s capital to total assets ratio; external funding to total liabilities ratio; equity to total assets ratio; unemployment rate; inflation rate; growth rate of gross domestic product; foreign direct investment and financial crisis. Results obtained show that deposits are positively correlated with banks size, with both internal and external funding, with interest rate on deposits and with unemployment rate.

Les Determinants des Prets Non Performants : Etude Empirique du Secteur Bancaire Marocain

The purpose of this study is to identify the main determinants of non-performing loans in Moroccan banks for a period from 2005 to 2015. The explanatory variables used are of two categories: Macroeconomic and bank-specific. The specific variables taken into account in our model are the return of assets, the cost to income ratio, the variation in loans granted and the average interest rate charged. As for the macroeconomic variables, the choice was made for the GDP growth, the growth of agricultural value added, the unemployment rate and the rate of inflation. Using the panel data methodology, it was concluded that non-performing loans varied negatively with the GDP growth, agricultural GDP growth, the return of assets and positively with the unemployment rate, Inflation rate, the average borrowing interest rate and the banks' operating ratio.

The Impact of Micro Finance Institutions on Economic Growth of Morocco

The Moroccan banking system is characterized by great diversity and is largely modeled on the French banking system. It includes banks and other institutions working in specialized areas such as, agriculture. At the end of 2011, the banking sector comprised eighty five institutions, with the Bank Al Maghrib (BAM) as its central state institution. This system includes nineteen banks, thirty five finance companies, six offshore banks, thirteen Micro Finance Institutions and twelve other institutions. The total number of banks has not changed since 2009, whereas the number of finance companies has declined. In contrast, the area of microcredit was reinforced. After several years of growth, the microfinance sector in Morocco began to experience some problems in 2008. The crisis in Morocco started with the crash of one of the largest MFIs and jeopardized the whole system. Reasons given for the crisis were mainly the unsustainable growth of the sector, but also the high market concentration of MFIs, multiple indebtedness, the lack of controls and monitoring systems, nonperforming loans and delinquency problems. The microfinance market is very concentrated, and clients are mainly allocated among the four biggest MFIs accounting for over 90% of client outreach. From 2003 the amount of active clients rose from almost 308,000 clients to 1,353,000 clients in 2007.

Evaluation of banking competition in Morocco: implementation of Panzar and Rosse model

This paper assesses the degree of competition in the Moroccan banking sector with the approach of Panzar and Rosse (1987). Thus, a revenue function of the reduced form was estimated using panel data on a sample of five Moroccan banks that hold more than 80% of the credit market. The results confirm empirically that the Moroccan banking sector is not competitive (by price or/and by quantity), is characterised by monopolistic competition which factors are specific to bank behaviour. Furthermore, analysis of the dynamics of the index of Panzar and Rosse between 1993 and 2010 made a claim stabilisation of competitive level, varying between 0.37 and 0.28, which suggests that banks in the presence strategies lead to agreements that reduce competition in the banking sector in Morocco.

Morocco: The Sub-Saharan Expansion of Moroccan Banks: Challenges and Opportunities

Morocco: The Sub-Saharan Expansion of Moroccan Banks: Challenges and Opportunities

Bank Liquidity and Financial Performance: Evidence from Moroccan Banking Industry

This paper aims to analyze the relationship between liquidity risk and financial performance of Moroccan banks and to define the determinants of bank’s performance in Morocco during the period 2001–2012. We first evaluate Moroccan banks’ liquidity positions through different liquidity and performance ratios then we apply a panel date regression to identify determinants of Moroccan banks performance. We use 4 bank’s performance ratios, 6 liquidity ratios and we analyze 5 specific determinants and 5 macroeconomic determinants of bank performance. Results show that Moroccan bank’s performance is mainly determined by 7 determinants: liquidity ratio, size of banks, logarithm of the total assets squared, external funding to total liabilities, share of own bank’s capital of the bank’s total assets, foreign direct investments, unemployment rate and the realization of the financial crisis variable. Banks’ performance depends positively on size of banks, on foreign direct investments and on the realization of the financial crisis and negatively on external funding to total liabilities, on share of own bank’s capital of the bank’s total assets and on unemployment rate while the dependence between bank performance and liquidity ratios and bank performance and logarithm of the total assets squared depend on the model used.

Umbilical Cord Blood Banking for Transplantation in Morocco: Problems and opportunities

Since the success of the first umbilical cord blood (UCB) transplantation in a child with Fanconi anaemia in 1989, great interests have emerged for this source of stem cells. UCB provides an unlimited source of ethnically diverse stem cells and is an alternative for bone marrow (BM) and peripheral blood (PB) haematopoietic stem cell transplantation (HSCT). Thus, UCB and manipulated stem cells are now collected and banked according to international accreditation standards for listing on registries allowing rapid search and accessibility worldwide. This work aims to identify problems limiting the creation of a Moroccan cord blood bank and to highlight opportunities and issues of a new legislation promoting additional applications of cell therapy.