Capital Intelligence (CI), the international credit rating agency, today announced that it has affirmed the ratings of BMCE 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. In view of the increased capital support from CM-CIC Group, which is likely to grow further, the Support Rating is raised to '2'.
BMCE holds a good franchise in the Moroccan banking sector, controlling a significant share of sector assets, deposits and loans. Loan asset quality is acceptable and following a large increase in non-performing loans (NPLs) in 2009, the position stabilised in 2010. The Bank's level of NPLs is below the sector average and provision coverage is adequate. The challenge going forward will be to maintain this in the face of some pressure on the domestic economy, with slightly weaker growth predicted for 2011.
BMCE has a sound liquidity profile, supported by an adequate base of liquid assets and a loan book which is funded by a core customer deposit base. Loans as a proportion of total assets are moderate and the Bank's loans to customer deposits ratio is the lowest in the peer group. Capital adequacy improved in 2010 following a capital injection from major French shareholder Crédit Mutuel Industriel et Commercial (CM-CIC Group).
BMCE's main challenge remains its profitability performance. Returns are currently weak, largely a factor of an overall low yield on its earning assets. Returns are expected to improve going forward as the Bank expands further into the retail sector.
Established in 1959 as a state-owned institution specialising in trade finance, BMCE Bank (formerly Banque Marocaine du Commerce Extérieur) was privatised in 1995. While the Bank has long been a depository for retail deposits, it is now targeting that sector for lending and services. At year-end 2010, it employed a total of 5,027 staff. BMCE's total assets stood at MAD136 billion (USD16.6 billion) at end 2010. The consolidated balance sheet amounted to MAD187 billion, with equity of MAD12.4 billion and net profit MAD1.4 billion.
BMCE Bank is the flagship domestic Moroccan bank of the BMCE Group. It has a strong position in all areas of retail, commercial and corporate banking in Morocco. At the Group level, consolidated companies include BMCE International Bank, the London-based institution, BMCE International Madrid, and Bank of Africa (Luxembourg). In regard to the latter, BMCE Group has a 55.8% stake in the bank, which has operations in 15 countries in North and Central Africa.
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CONTACT
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.com
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 January 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
