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CI: BMCI Bank's ratings affirmed with a 'Stable' outlook.

Capital Intelligence Ratings (CI Ratings or CI), the international credit rating agency, today announced that it 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-', supported by a solid level of capitalisation, good 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 net profit, 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 ratings could occur if asset quality and or liquidity weakened. The Support Rating of '2' is affirmed, reflecting the support and strength of the billionP-Paribas Group ( BILLIONPP).

BMCI is majority owned by the French banking Group billionPP 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 and executive management support from the billionPP Group and looks to exploit synergies with the parent bank, particularly in product offering.

The year 2015 remained a challenging year for both BMCI and the Moroccan banking sector. Both gross income and operating profit fell slightly due to continued weak loan and asset growth - in fact, both declined during the year as both the economy and the credit environment remained challenging. However, net profit and returns did improve as the Bank's cost of risk declined. However, the return on average assets remains modest. NPL provision coverage rose to a good 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.

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 billionP Paribas. CI believes billionPP has significant resources to support BMCI in case of need, and believes it remains an important (although very small in the context of billionPP's overall size and resources) part of its north African and wider African operations.

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Publication:CPI Financial
Geographic Code:6MORO
Date:Aug 30, 2016
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