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Banque Centrale Populaire Ratings Affirmed

Capital Intelligence (CI), the international credit rating agency, today announced that it has affirmed the ratings of Banque Centrale Populaire ( BCP ), based in Casablanca, Morocco. The Long-Term Foreign Currency rating is affirmed at 'BBB-', and the Short-Term Foreign Currency rating at 'A3' with a 'Stable' Outlook. At the same time, CI affirmed the Bank's Financial Strength rating at 'BBB-' with a 'Stable' Outlook, which has moved from 'Negative', reflecting improved profitability, better disclosure and the expected benefit from the absorption of Banque Populaire de Casablanca going forward. The Support rating is affirmed at '2', indicating that BCP would likely receive support from the authorities in case of need.

Banque Centrale Populaire is the flagship government-controlled bank in Morocco. The Bank has a unique profile, existing primarily as a 'central bank' and 'back-office' substitute for its member banks. As a result, loans, which are mainly to corporates, are a moderate but growing portion of its assets. Groupe Banque Populaire dominates the customer-deposit market in Morocco because of its network of regional cooperative banks, an associated substantial number of branches, and its historic edge in collecting deposits from Moroccans residing abroad. BCP displays a high level of liquid assets, the result of interbank deposits accepted from the regional banks which are largely channeled into Moroccan government securities, cash and deposits with Bank Al-Maghrib.

In 2010, BCP absorbed Banque Populaire de Casablanca, one of the banques regionales within the group. Banque Populaire de Casablanca activities focused on private banking and wealth management. This has altered, and in some ways enhanced, the profile of BCP 's balance sheet and P&L through boosting both loans and deposits and strengthening net interest income and margins. Non-performing loans also grew following the absorption of Banque Populaire de Casablanca, but remain at a low level.

Profitability improved in 2010, aided by much higher net interest income, driven by growth in BCP 's loan book (both organic and through the acquisition). The high rate of loan growth will need to be monitored as the portfolio matures through the economic cycle. BCP 's capital position is considered adequate. Loan-based liquidity ratios are very tight, but this reflects the profile of the institution. Overall, group liquidity is currently adequate.

While Morocco has not avoided the unrest taking place in neighbouring North African countries, the country is in a position of relative strength, and risks to the monarchy currently appear minimal. To date in 2011, economic growth prospects remain favourable as a whole, despite a relatively less buoyant international environment compared to 2010.

Banque Centrale Populaire is part of Groupe Banque Populaire, which has ca. USD26 billion in total assets. BCP 's shares are listed on the Casablanca Stock Exchange and BCP is one of the largest public corporations in Morocco by market capitalisation. BCP was created by law in 1961 to finance the activities of Morocco's SMEs. It is 47% owned by the State of Morocco (40% owned by Treasury and 7% through Office Cherifien de Phosphate), and 10 regional co-operative banks own 22%. The state exercises management control.

BCP is the Group's principal legal and operating entity, responsible for executing policy, acting as the regional banks' legal representative, and conducting much of their asset and liability activities. The Group also holds investments in numerous companies, mostly in the financial services field, both in Morocco and abroad. At end 2010, BCP had total assets of MAD129,758mn (USD15.9 billion).

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CONTACT
Primary Analyst
Darren Stubing
Senior Advisor
Tel: +357 2534 2300
Email: darren.stubing@ciratings.com

Secondary Analyst
Tom Kenzik
Senior Credit Analyst
Email: tom.kenzik@ciratings.com

Rating Committee Chairman
Tom Kenzik
Senior Credit Analyst

The ratings have been initiated by Capital Intelligence. However, the issuer participated in the rating process. The information sources used to prepare the credit ratings are the rated entity and public information. Capital Intelligence had access to the accounts but no other relevant internal documents for the purpose of the rating and considers the quality of information available on the issuer to be satisfactory for the purposes of assigning and maintaining credit ratings. Capital Intelligence does not audit or independently verify information received during the rating process.

The rating has been disclosed to the rated entity and released with no amendment following that disclosure. Ratings on the issuer were first released in April 1997. The ratings were last updated in April 2010.

The principal methodology used in determining the ratings is Bank Rating Methodology. The methodology and the meaning of each rating category and definition of default, as well as information on the attributes and limitations of CI's ratings, can be found at www.ciratings.com

© Press Release 2011