(MENAFN Press) 12 September 2012
Credit du Maroc's Rating Affirmed
Capital Intelligence (CI), the international credit rating agency, today announced that it has affirmed the ratings of Credit du Maroc, 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 (FSR) at 'BBB-'. The Outlook remains at 'Negative' for the Financial Strength Rating due to continued upward trend in non-performing loans - although mitigated by improved coverage - together with lower and insufficient profitability. The improved capital adequacy position has also supported the maintenance of the FSR at this time. The Support Rating is maintained at '2', reflecting majority ownership by Credit Agricole.
Credit du Maroc's (CM) overall financial profile has felt pressure over the past two years due to the rise in non-performing loans (NPLs), with the Bank experiencing deterioration in its corporate loan book. NPLs continued on an upward trend in 2011, but at a reduced rate. On the positive side, provision coverage improved and is at an adequate level. The need for provisioning has impacted CM's returns which fell to a weak level in 2011. The latter was also due to reduced non-interest income. Supporting the Bank's operating performance is its good margins with the interest differential above peer average.
The Bank has an adequate liquidity profile; funding is nearly all sourced from domestic customer deposits and the base of liquid assets is reasonable. However, deposit growth was very low in 2011, reflecting tougher market conditions. Capital adequacy improved in 2011 mainly through a subordinated debt issue and is also at an adequate level.
CM was established in 1963, when the 34-year-old branch of France's Crdit Lyonnais (CL) was incorporated as Crdit Lyonnais Maroc, adopting its present style in 1966. Current ownership consists principally of France's Crdit Agricole S A. Wafa Assurance, one of the largest Moroccan insurance companies and owned by Attijariwafa Bank (AWB), holds a 10% stake. In 2008, Credit Agricole S.A. signed an agreement with Morocco's Attijariwafa Bank to sell its stakes in some African operations to Attijariwafa. The transaction included selling assets in Congo, Cameroon, Gabon, Senegal and some other countries for an amount of EUR250mn. In turn, Credit Agricole purchased another 24% of Credit du Maroc, held by Wafa Assurance for EUR144mn to raise its share in CM to 77%.
At end 2011, CM had total assets of MAD46,526mn (USD5,428mn).
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 May 2011.
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.