May 24 – Fitch Ratings has affirmed Casablanca-based Wafa Gestion’s National Scale Asset Manager Rating at ‘M2+(mar)’. KEY RATING DRIVERS The affirmation recognises Wafa Gestion’s long-established franchise in the Moroccan asset management industry and its integrated technological platform allowing efficient investment operations. It also reflects the support from shareholders, Attijariwafa Bank (‘BB+’/Stable) and Amundi. Challenges facing Wafa Gestion include the expansion of risk management and control practices beyond the thoroughly-covered compliance and internal control aspects. This includes enhancing credit and liquidity risk management, as well as controls on potential conflicts of interests given the affiliation to Attijariwafa Bank. Wafa Gestion’s ‘M2+(mar)’ rating is based on the following category scores, which represents a scale from 1 to 5, with 1 as the highest possible score: Company and Staffing: 2.50 Risk Management and Controls: 2.75 Portfolio Management: 2.25 Investment Administration: 2.00 Technology: 2.25 COMPANY AND STAFFING Wafa Gestion is the largest Moroccan asset manager in terms of assets under management (AUM), with a diversified client base of local institutional and retail investors. Its development in the retail and corporate segments is largely supported by the banking network of its parent Attijariwafa Bank and, to a lesser extent Credit du Maroc. The company benefits from a strong financial standing. Staffing resources are generally stable, well-dimensioned and experienced. RISK MANAGEMENT AND CONTROLS The control function carried out by the two internal controllers for regulatory purposes provides strong mitigants to compliance-related risks. They benefit from enhanced accessibility to and reporting capacity on portfolio data through the integrated technological platform. Investment risk management is still to be strengthened as mentioned above. PORTFOLIO MANAGEMENT Wafa Gestion’s fixed income and equity investment processes are rigorous and well structured, increasingly drawing on internal fundamental equity and credit research. They follow a committee-driven approach and focus almost exclusively on domestic markets, although limited international diversification may be implemented (up to 10% per regulation). The strengthening of credit selection and monitoring processes also remains a priority, especially when considering the rapid development of this market segment. INVESTMENT ADMINISTRATION AND TECHNOLOGY Operational and valuation procedures are efficient and adequately controlled. The integration of IT systems around the central tool, Manar, has enhanced the automation of middle and back-office activities, while external data processing (with custodians, brokers and counterparties), remains a largely manual process. All tasks relating to valuation and reporting to customers are performed independently from the front office. Fitch notes that the development of a fully-fledged website, currently in progress, will in turn improve transparency to investors. COMPANY PROFILE Wafa Gestion is the asset management arm of Attijariwafa Bank, its main shareholder with 66% of the capital, while the remainder of the shares are held by the French asset manager, Amundi. Wafa Gestion employed 44 staff at end-March 2012 and was managing assets totalling MAD69bn (about EUR6.2bn) on behalf of Moroccan institutional investors, large corporates and retail clients. Wafa Gestion invests almost solely in the local market and covers all asset classes although a large portion (90%) of AUM is concentrated in money market and bond products, in line with the local market. RATING SENSITIVITY The rating may be sensitive to material adverse changes to any of the aforementioned rating drivers. A material deviation from Fitch guidelines for any key rating driver could cause the rating to be downgraded by Fitch. For additional information about Fitch’s asset manager ratings guidelines, please review the criteria referenced below, which can be found on www.fitchratings.com. Additional information is available at www.fitchratings.com. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings. Applicable criteria, ‘Reviewing and Rating Asset Managers’, dated 13 August 2010 are available on www.fitchratings.com. Applicable Criteria and Related Research: Reviewing and Rating Asset Managers
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