CPI FINANCIAL
The rating is supported by a solid level of capitalisation, adequate loan-loss provisioning, and reasonable profitability at the operating level. The rating is constrained by a high level of non-performing loans (NPLs), modest returns, and a mixed liquidity profile, specifically the Bank’s high loans to customer deposits ratio.
BMCI’s Long- and Short-Term Foreign Currency Ratings (FCRs) are maintained at ‘BBB-’ and ‘A3’, respectively. The Outlook for all ratings remains ‘Stable’. Downward pressure on the ratings could occur if asset quality deteriorated (as measured by a rise in NPLs and/or lower loss reserve coverage) and/or liquidity weakened. The Support Rating of ‘2’ is affirmed, reflecting the support and strength of BNP Paribas (BNPP).
BMCI has a reasonable position in the Moroccan banking sector being the fifth largest bank in the country and controlling around six per cent of assets. Although much smaller than the large domestic banks such as Attijariwafa Bank, Banque Populaire and BMCE Bank, BMCI has a solid position in the corporate and retail sectors in Morocco. The Bank receives operational, risk and executive management support from BNPP and looks to exploit synergies with the parent bank, particularly in product offerings.
Last year was moderately better for BMCI in terms of loan asset quality and bottom line profitability. However, operating conditions remain challenging. Both gross income and operating profit again fell due to continued weak loan and asset growth, which in turn meant lower net interest income. A lower cost of risk, reflecting improved credit conditions, aided the net profit and returns, as did a reduced tax charge. Although rising, the return on average assets remained at a modest level. The NPL ratio remained elevated but it should be noted that the French-owned banks in Morocco are more conservative in their classification norms. Provision coverage was sound at end 2017.
BMCI’s loan-based liquidity ratios were tight, particularly loans to customer deposits, although marginal improvement was seen in 2017. The customer deposit market in Morocco remained very challenging and competitive, with limited growth for some years. Aiding BMCI’s overall liquidity position is its sound capital adequacy level and majority ownership by BNPP. CI Ratings believes BNPP has the necessary resources to support BMCI in case of need and that the latter remains an important (although very small in the context of BNPP’s overall size and resources) part of its North African and wider African operations.
From 1964 to 1973 BMCI operated as Banque Nationale pour le Commerce et l’Industrie—Afrique, which was part of what is now the BNPP. Incorporated with local capital in 1973, the Bank’s principal shareholder remains BNPP, which holds a 66.74 per cent stake. At end 2017 total assets stood at MAD 65.7 billion ($7 billion).
