Fitch Ratings says the Moroccan banking sector remains resilient, with the largest Moroccan banks maintaining satisfactory profitability and asset quality despite diversification into more volatile operating environments.
Domestic banking remains the largest contributor to operating profit for Groupe Banque Centrale Populaire (GBCP), Attijariwafa Bank (AWB; BB+/Stable/bb-) and BMCE Bank (BMCE; BB+/Stable/b+), although contribution from international activities is accounting for a growing portion of their operating profit. Fitch believes that this strategic international expansion is a further source of income diversification for Moroccan banks, although it is also a source of higher credit and operational risks. Fitch views profitability as resilient and satisfactory.
The agency expects performance of Moroccan banks to benefit in 2015 from higher non-agricultural domestic GDP growth, which should have an overall positive impact on the domestic banking activity. Fitch considers asset quality to be moderate compared with international standards, given significant exposures to vulnerable domestic corporates and SMEs, Moroccan banks’ expansion towards sub-Saharan Africa and their higher level of obligor concentration.
The agency believes that asset quality will remain under pressure in 2015. Fitch views Moroccan banks’ capital buffers against unexpected losses as still modest given their exposures to domestic corporates and SMEs and/or the insufficient coverage of impaired loans in sub-Saharan Africa. Capital ratios have been increasing only because of tighter regulatory requirements.
Fitch considers liquidity as strained but overall adequate and expects funding and liquidity at Moroccan banks to continue to benefit largely from support from the Moroccan central bank through increased repo facilities.
The report, ‘Peer Review: Major Moroccan Banks’, is available on www.fitchratings.com or by clicking the link above. Contact: Solena Gloaguen Director+44 20 3530 1126 Fitch Rating Limited 30 North Colonnade London E14 5GN Eric Dupont Senior Director +33 1 44 29 91 31Media Relations: Elaine Bailey, London, Tel: +44 203 530 1153, Email: elaine.bailey@fitchratings.com. Additional information is available at www.fitchratings.com.
ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY’S PUBLIC WEBSITE ‘WWW.FITCHRATINGS.COM’. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH’S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE ‘CODE OF CONDUCT’ SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.
(The following statement was released by the rating agency) Link to Fitch Ratings’ Report: Peer Review: Moroccan Banks here LONDON, December 15
