Morocco Experiences Slowdown in Growth of Bank Loans

A general view of the Central Bank of Morocco in Rabat. Reuters
A general view of the Central Bank of Morocco in Rabat. Reuters
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Morocco Experiences Slowdown in Growth of Bank Loans

A general view of the Central Bank of Morocco in Rabat. Reuters
A general view of the Central Bank of Morocco in Rabat. Reuters

Bank lending showed year-on-year growth of 4.5 percent in December 2020 compared to 5.2 percent in November 2020, with an increase in loans to the non-financial sector of 3.9 percent, according to Bank Al-Maghrib (BAM).

“This change reflects the slowdown in the growth of loans to private non-financial corporations from six percent to 4.7 percent and to public non-financial corporations at 0.5 percent, following a +4.4 percent compared to the previous month, BAM explained in its memo on key indicators of monetary statistics for December 2020.

It further highlighted the acceleration in the growth of loans to households from 2.7 percent to 3.4 percent.

The distribution of loans granted to non-financial sector according to the economic purpose indicates a continuous decline in consumer loans from 3.3 percent to 4.2 percent, an acceleration in the growth of loans to real estate by 2.1 percent to 2.5 percent and a decrease in equipment loans of three percent after +1.5 percent.

Meanwhile, the monetary aggregate (M3), which represents the money supply, recorded an annual growth of 8.5 percent in December 2020 compared to 7.7 percent in November 2020, BAM noted in its latest monetary statistics.

This development reflects the increase in the growth of demand deposits at banks to 10.6 percent, the further decrease in term accounts from 12.9 percent to 9.6 percent and the deceleration in the growth of currency in circulation from 20.6 percent to 20.1 percent.

Year-on-year, the M3 increased in December by 2.7 percent to amount to1,486.8 billion dirhams, mainly reflecting the four percent increase in sight deposits with banks and 1.7 percent in accounts term, BAM said.

On the other hand, the evolution of M3 is mainly attributable to the increase in bank credit of 2.1 percent and that of official reserve assets of 9.9 percent, the bank noted.



PwC China Faces 6-month Business Ban over Evergrande Audit

The logo of Price Waterhouse Coopers is seen at its Berlin office in Berlin, Germany, September 20, 2019. REUTERS/Wolfgang Rattay/File Photo Purchase Licensing Rights
The logo of Price Waterhouse Coopers is seen at its Berlin office in Berlin, Germany, September 20, 2019. REUTERS/Wolfgang Rattay/File Photo Purchase Licensing Rights
TT

PwC China Faces 6-month Business Ban over Evergrande Audit

The logo of Price Waterhouse Coopers is seen at its Berlin office in Berlin, Germany, September 20, 2019. REUTERS/Wolfgang Rattay/File Photo Purchase Licensing Rights
The logo of Price Waterhouse Coopers is seen at its Berlin office in Berlin, Germany, September 20, 2019. REUTERS/Wolfgang Rattay/File Photo Purchase Licensing Rights

Chinese regulators will likely impose a six-month business suspension on a big part of PricewaterhouseCoopers' auditing unit in mainland China, as a penalty for its work on troubled property developer Evergrande, according to five sources with knowledge of the matter.

PwC Zhong Tian LLP, the registered accounting entity and the main onshore arm of PwC in China, is expected to be hit with the ban in its securities related business, affecting its work for clients including listed companies, IPO-bound companies and investment funds on the mainland, said the sources who declined to be named as the information was private, Reuters reported.

A fine of at least 400 million yuan ($56 million) is expected to accompany the six-month ban, three of the people said. Combined with the business suspension, it would be the toughest ever penalty received by a Big Four accounting firm in China, the three people added.

In the most recent case of a Big Four auditor being hit with hefty penalties, Deloitte's Beijing branch in March last year was fined 211.9 million yuan and the branch's operations were suspended for three months after serious deficiencies were found in its audit of China Huarong Asset Management.

The PwC penalties, which are being mainly handled by China's Ministry of Finance (MOF), the primary regulator of accounting firms in the country, are yet to be finalised, said one of the sources.

"Given this is an ongoing regulatory matter, it would not be appropriate to comment," a PwC spokesperson said in a statement.

The MOF did not immediately respond to requests for comment.

PwC has been under regulatory scrutiny for its role in auditing China Evergrande Group 3333.HK since the developer was accused in March of a $78-billion fraud. PwC audited Evergrande for almost 14 years until early 2023.

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Chinese regulators are expected to announce PwC's penalties in the coming weeks, three of the people said.

The Financial Times first reported on Thursday that PwC China expected a six-month business ban by Chinese authorities as early as September.

Bloomberg in May reported that the firm faces a record fine of at least 1 billion yuan ($140 million).

The looming PwC penalties have led to an exodus of clientele, opens new tab and prompted cost cuts, opens new tab and layoffs, opens new tab at the firm in recent months, sources have said, clouding the firm's prospects in the world's second-largest economy.

As part of the penalties, PwC would be barred from signing off on certain key documents for clients in mainland China such as results and IPO applications as well as from carrying out other securities-related services, the sources said.

The business suspension could also affect PwC Zhong Tian, as a whole, from taking on new state-owned or domestically-listed clients in the next three years, in accordance with Chinese regulations.

Last year, domestic regulators reiterated state-owned firms and mainland China-listed companies should be "extremely cautious" about hiring auditors that have received regulatory fines or other penalties in the past three years.

In the past few months, at least 50 Chinese firms, many of which are state-owned enterprises or financial institutions, have either dropped PwC as their auditor or cancelled plans to hire the firm, according to stock exchange filings reviewed by Reuters.

Its largest mainland China-listed audit client, Bank of China 601988.SS, said on Monday it plans to hire EY, opens new tab for its 2024 annual audit. In June, the bank stated that its service agreement with PwC would only be for the interim report review.

PwC Zhong Tian recorded revenues of 7.92 billion yuan in 2022, making it China's highest-earning auditor that year, followed by EY, Deloitte and KPMG, official figures show.