By Souhail Karam
CASABLANCA, Morocco (Reuters) – AttijariWafa Bank, Morocco’s biggest lender, plans to further expand its presence in mostly French-speaking African countries to compensate for a potential slowdown in its main domestic market, bank executives said on Monday.
The bank’s drive to add more African countries is motivated by strong growth potential they offer because of the low banking penetration there, Chief Executive Mohamed Kettani said.
“We want to cover all Ecowas (Economic Community of West African States) countries as well as North African countries,” said Kettani, after meeting reporters and analysts on the bank’s 2011 earnings which were announced last week.
AttijariWafa has been using income from domestic operations to expand in Africa over the past decade. It now has subsidiaries in Tunisia, Ivory Coast, Senegal, Mauritania, Mali, Cameroon, Gabon and Congo Brazzaville, plus branches in Europe catering mainly for Moroccan expatriates.
Africa’s sixth biggest lender by balance sheet will have “to work hard” to replicate in 2012 a near 9 percent rise in its attributable net profit recorded in 2011.
“There will be good growth (in 2012) but it will not be easy (to match 2011’s growth performance). We will have to fight real hard,” he said.
The bank posted a 12 percent rise in its net consolidated income to 5.3 billion dirhams while the net attributable income rose 8.7 percent to 4.5 billion dirhams.
The bank, controlled by a conglomerate in which the Moroccan royal family is a key shareholder, applied in 2007 for a banking licence in neighbouring Algeria, which presents one of the most lucrative options among Africa countries the bank targets.
“We have had no feedback yet from Algeria’s central bank. We are waiting,” Kettani said. Relations between Morocco and Algeria have often been marred by regional rivalry and by the disputed Western Sahara territory Rabat controls.
Attijari is also looking for an opportunity to make a foray into the Libyan market. “We are looking at all opportunities available in Libya,” Kettani said, when asked if the lender would apply for a banking licence there or make an acquisition.
Ismail Douiri, co-Chief Executive Officer, said bank penetration in Morocco may not be able to grow as fast as it did in recent years after it reached a little over 50 percent in 2011.
“We can do better. There are still some 8 million Moroccans who do not have a bank account … They are either to afraid to deal with banks or rely for their living on the grey economy,” Douiri told Reuters. Morocco’s population stands at around 33 million of which a third is considered to be active population
Poor access to infrastructure is also hindering higher banking penetration in Morocco, Douiri said. “We have opened some banking branches lately but we discovered later that none of the country’s three telecom operators covered the areas where they are. We had to rely on a satelite communication system”.
Like other Moroccan lenders, AttijariWafa has been suffering from a chronic shortage in liquidity in the domestic market.
Economic problems in the Euro Zone, at once Morocco’s main export market top source of tourists and migrant transfers, could add to the domestic liquidity squeeze as the North African country struggles to tame a soaring trade deficit.
“I don’t see immediate effects (on the bank’s earnings) from the crisis in the European Union … although 2012 is off to a slow start as far as tourism is concerned,” Kettani said.
To circumvent a noticeable decline in deposits’ growth, the bank has been increasingly resorting to the issue of certificates of deposit as well as dirham-denominated bond issues.
“We have moved from an exploitation ratio of 73 percent of our deposits for loans in 2005 to 104 percent in 2011,” Kettani said, noting that deposits funded 60 percent of the bank’s activity in 2011.
“In Europe, deposits in average finance around 30 percent of lending activity. So there is some way to go,” added Kettani.
The bank raised close to 58 billion dirhams from certificates of deposit in 2011, up 28 percent from 2010, and around 21 billion dirhams from subordinated debt issues, up 8 percent from 2010. Deposits meanwhile grew 6 percent in 2011 for a 11 percent rise in loans.
