CPI FINANCIAL
by Georgina Enzer
Capital Intelligence Ratings (CI Ratings or CI), the international credit rating agency, has affirmed the ratings of Banque Marocaine pour le Commerce et l’Industrie (BMCI), based in Casablanca, Morocco.
The Financial Strength Rating (FSR) is affirmed at ‘BBB-’. 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 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 (rise in NPLs and/or lower coverage) and or liquidity weakened further. The Support Rating of ‘2’ is affirmed, reflecting the support and strength of BNP Paribas (BNPP).
BMCI is majority owned by the French banking Group BNPP and has a reasonable banking position in the Moroccan banking sector. It is the fifth largest bank in the country, controlling around six per cent of assets. Although considerably 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. The Bank receives operational, risk and executive management support from the BNPP and looks to exploit synergies with the parent bank, particularly in product offering.
The year 2016 was a challenging year for BMCI. Both gross income and operating profit fell due to continued weak loan and asset growth, and in turn lower net and non-interest income. The economy and the credit environment remained difficult in 2016. Despite a lower cost of risk, net profit and returns fell. The return on average assets (ROAA) is at a weak level. The NPL ratio remains high and asset quality continues to cause some pressure but it should be noted that the French-owned banks in Morocco are more conservative in their classification. Provision coverage is adequate.
Loan-based liquidity ratios are tight, particularly loans to customer deposits. The customer deposit market in Morocco remains very challenging and competitive, with limited growth for some years. Aiding BMCI’s overall liquidity position is its good capital adequacy level and majority ownership by BNPP. CI Ratings believes BNPP has significant 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 2016, total assets stood at MAD64.4 billion ($6.3 billion).
