Capital Intelligence (CI), the international credit rating agency, today announced that it has affirmed the ratings of Attijariwafa Bank, 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. The Support Rating is maintained at '2', reflecting the strong ownership profile together with the Bank's dominant banking franchise and the very high likelihood of support from the authorities in case of need.
Attijariwafa Bank (AWB), the leading bank in Morocco, controls a strong domestic banking franchise with a market share of around one-quarter of sector assets, loans and deposits. The Bank's asset quality is good with a low level of non-performing loans (NPLs) and high provision coverage. An increase in non-performing loans (NPLs) was seen in 2010 as some pressure on the loan book was caused by the slightly more challenging economic conditions together with loan growth seen in previous years. However, the increase is not a major concern and importantly the Bank's coverage of NPLs is very high. AWB's capital adequacy ratio is solid with improvement over the last couple of years due to the issue of subordinated Tier 2 capital. Liquidity is comfortable with the position supported by a solid level of liquid assets, and aided on the funding side by AWB's customer deposit base.
AWB's profitability has been consistently solid for some years and the performance in 2010 was again good. The Bank managed to improve its margins largely through a fall in its cost of funds. While Morocco has not avoided the unrest seen in neighbouring North African and Middle East countries, the country is in a position of relative strength, and risks to the monarchy and government appear minimal currently. Economic growth in Morocco may slow slightly this year but is expected to be above four per cent.
While the Bank's historic strength has been in corporate banking and the high net worth markets, it has pitched its strategy recently towards the middle market in retail banking and capital market products, and associated financial services. In November 2008, AWB acquired Credit Agricole S.A.'s stake in its retail banking network in Africa, including Credit du Congo (81% stake), Societe Ivoirienne de Banque (51% stake), Societe Camerounaise de Banque (65% stake), Union Gabonaise de Banque (59% stake) and Credit du Senegal (95% stake) - for EUR250mn (MAD2.8 billion). The move is consistent with its strategy of expanding its retail banking operations in Africa.
AWB was established in 1911 as Banque Commerciale du Maroc (BCM) and is Morocco's oldest and largest domestic bank. The principal owners of AWB include the large National Investment Company (SNI) group (48.4%), Domestic Institutions (30.3%), and Grupo Santander (4.6%). Of the remainder, about 15.7% is public float. At end 2010, total assets stood at MAD227,460mn (USD27.8bn). The consolidated balance sheet amounted to MAD306,655mn (USD37.5bn) at end 2010.
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Primary Analyst
Darren Stubing
Senior Advisor
Tel: +357 2534 2300
Email: darren.stubing@ciratings.com
Secondary Analyst & Rating Committee Chairman
Tom Kenzik
Senior Credit Analyst
Email: tom.kenzik@ciratings.com2
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 and other relevant internal documents of the issuer 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 March 1996. The ratings were last updated in March 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
