Fitch affirms Morocco-based Eqdom at ‘AA (mar)’;otlk stable

RATING DRIVERS AND SENSITIVITIES: NATIONAL AND SUPPORT RATINGS

Eqdom’s ratings are based on the potential support from its ultimate largest shareholder, Societe Generale (SG; ‘A+’/Negative), if required. Fitch believes that although SG has a high ability to support Eqdom, the probability of support is moderate as SG is not a direct majority shareholder.

Eqdom’s main shareholders are SG Consumer Finance (SGCF), 100% owned by SG and Societe Generale Marocaine de Banques (SGMB, ‘AAA(mar)’/Stable; 56.9%-controlled by SG). Their respective stakes in Eqdom were 35% and 19% at end-H112. In Fitch’s opinion, Eqdom fits into SG’s strategy to offer retail and commercial financial services in Morocco. Eqdom is an important player in consumer finance lending (27% market share at end-H112), and a leader in consumer finance to public sector employees in Morocco where it has a 40% market share. It is also the second-largest player in the competitive car financing market.

Eqdom’s integration into SG is moderate, although its management is relatively independent. Nevertheless, SG and SGMB together control Eqdom’s board (six out of 11 supervisory board members, including the president, are SG and SGMB representatives). In addition, Eqdom benefits from SGCF’s credit risk tools and procedures and from funding support from SGMB (which provided 40% of Eqdom’s bank loans at end-H112).

A downgrade of Eqdom’s National and Support Ratings could result from reduced integration into SG or a multiple-notch downgrade of SG’s IDRs. Eqdom’s Support Rating could also be downgraded if Morocco’s Country Ceiling was downgraded significantly.

The rating actions are as follows:

National Long-term Rating: affirmed at ‘AA(mar)’; Stable Outlook

National Short-term rating: affirmed at ‘F1+(mar)’

Support Rating: affirmed at ‘3’