The emergence of participatory banks in Morocco reached a significant milestone with the positive results of Al Akhdar Bank, paving the way for a new era for the banking sector consistent with the principles of Islamic finance.
History! After a little more than five years of participatory (Islamic) banks operating in Morocco, the sector is starting to see the end of the tunnel. Indeed, “for the first time in the history of participatory banks in Morocco, one of the five institutions displays a positive result and goes green, marking a major step for participatory banks in Morocco,” notes Dr. AS- Soulaimani, Consultant in Islamic Finance, CEO of Fineopolis Almaali, a firm specializing in Islamic finance established in Morocco since 2010. This is the participatory bank Al Akhdar Bank SA, one of the five participatory banks operating in Morocco.
The institution was created jointly by the Crédit Agricole du Maroc Group (CAM) and the Islamic Society for the Development of the Private Sector (SID), a multilateral development financial institution, a subsidiary of the Islamic Development Bank Group, recently published, on September 22, 2023, the limited examination certificate from its Statutory Auditors for the period from January 1 to June 30, 2023. This certificate reveals a positive result, making Al Akhdar Bank the first Moroccan participatory bank to display figures contrasting with those that experts have become accustomed to seeing.
After more than a handful of years of existence of the participatory banking sector in Morocco, this step marks a significant turning point. Dr. Sami AS-Soulaimani comments on this progress, emphasizing that “the hope is to see other participatory banks follow this example in future publications”.
A net profit of close to a million dirham
The limited examination certificate of the Statutory Auditors, carried out by the firms Fidaroc Grant Thornton Maroc and Coopers Audit Maroc, confirms that the intermediate situation of Al Akhdar Bank is faithful to the financial reality of the period studied. Equity and similar amounts to 205.777 million dirhams, including a net profit of 913,000 dirhams. As can be seen, the numbers are relatively low, as this is a very small result. “But for the symbolism and for what the transition to green represents after several years of investment and several capital increases observed at almost all participatory banks, this observation deserves to be highlighted,” underlines Dr. AS-Soulaimani.
It should be remembered that participatory banks in Morocco, in accordance with Sharia principles, combine profitable objectives with specific rules in all financial segments, such as savings, investments, and loans. Five participatory banks are currently active in the country: Bank Assafa, Umnia Bank, Al Akhdar Bank, Bank Al Yousr, and Bank al Tamweelwa Al Inma, which we remind you has changed its name and has been called Bank for some time Al Karam.
This positive performance of Al Akhdar Bank demonstrates the growing effectiveness of the participatory banking model in Morocco. By complying with the principles of Sharia, these financial institutions manage to offer products and services consistent with the ethical values of their customers while maintaining profitability.
The achievement of a positive result for Al Akhdar Bank is of particular importance for the Moroccan participatory banking sector. This demonstrates that participatory banks can successfully establish themselves firmly in the market while respecting the ethical principles of Islamic finance. This encouraging step could encourage other financial institutions to consider a transition to participatory banking practices.
