ATTIJARIWAFA BANK: SHAKING UP THE MOROCCAN BANKING

UNCLAS SECTION 01 OF 02 RABAT 001159

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E.O. 12958: N/A
TAGS: ECON EFIN KMPI MO
SUBJECT: ATTIJARIWAFA BANK: SHAKING UP THE MOROCCAN BANKING
SECTOR


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1. (SBU) SUMMARY: Attijariwafa bank is the largest private
bank in Morocco and the eighth largest in Africa. It was
created in late 2003 when two of Morocco's top five banks
decided to merge: Banque Commerciale du Maroc (BCM) and
Wafabank. The merger took many in Morocco's staid banking
community by surprise and brought sudden change to a sector
known for conservatism, moderation and risk aversion. The
combined entity is an imposing presence, boasting one million
customers served by 460 national branches. With its
considerable resources, market share and expertise
Attijariwafa seeks to consolidate its national lead as a full
service or "universal" bank, establish "regional" footholds
in Europe, the Maghreb and West Africa and eventually pursue
larger, international ambitions, including establishment of a
North American presence. END SUMMARY


2. (U) Attijariwafa bank is the result of the November 2003
merger of Banque Commerciale du Maroc (BCM) and Wafabank.
Legally completed in 2004, the restructuring is expected to
be operationally completed by the end of 2005. Prior to the
merger, Banque Commercial du Maroc (BCM) was the Kingdom's
third largest bank (and the largest private bank) with assets
of $5.85 billion at the end of 2003. It accounted for 15.3%
of the banking sector and boasted impressive corporate
finance credentials. BCM carried a loan portfolio of $3.07
billion while customer deposits amounted to $5 billion,
representing a growth rate of 12.26%. By end of 2003, BCM
controlled 17.45% of the market share in banking deposits.
It reported 2003 earnings at $45.4 million, posting a return
on assets of 0.8% and a return on equity of 16.9%. BCM had a
staff of 2,479, 268 branches, 113 ATMs and 21 overseas
offices. BCM also brought with it Omnium Nord Africain
(ONA),the most profitable holding company in Morocco and a
key investor of BCM. ONA is a politically significant
investment presence in Morocco given its well known ties to
the Royal Family. Wafabank was Morocco's fourth largest
bank. It brought assets of $3.93 billion to the merger,
about 10.3% of the sector, with loans of $2.11 billion and
deposits of $3.42 billion. It employed 2,065 people and had
189 branches, 135 ATMs and 35 offices overseas. Wafabank also
carried with it a strong retail base and para-banking
expertise (comprising of real estate loans, consumer credit,
cash transfers and leasing).


3. (U) The combined entity, Attijariwafa, is the largest
private bank, the second largest commercial bank after Groupe
Banque Populaire (GBP) and the eight largest private bank in
Africa. Attijariwafa is now the largest lender in the
country with a loan portfolio of $5.16 billion which
represents 20.8% of the sector. It ranks number two in
deposits with $8.43 billion and number two in assets with
$9.78 billion. Consolidated net income for the merged entity
is $3.17 million, giving a return on assets of 0.1% and a
return on equity of 0.7%. Attijariwafa represents 33.3% of
asset management activity and 51.5% of stock market activity.
The largest shareholder remains the Royally controlled
conglomerate ONA which holds 33%. Attijariwafa's credit
rating of BBpi has been confirmed by Standard & Poors.

Contributing to Plan Azure


4. (U) Attijariwafa pledged, along with several other
leading banks, to finance tourism related projects in support
of Plan Azur, the heart of the GOM's Vision 2010 plan to
double tourism in Morocco to 10 million arrivals per year by

2010. Attijariwafa promised to budget one billion Dirhams of
credits (over $100 million) in 2005 for the financing of
tourism related projects to be given over a 15 year period at
fixed interest rates. Minister for Tourism, Handicraft and
Social Economy Adil Douiri said that reimbursements will also
be rearranged in line with industry cycles. Attijariwafa's
top stated corporate value after customer satisfaction is to
participate positively in Morocco's economic and social
development.

Promoting Entrepreneurship


5. (SBU) Attijariwafa is actively seeking ways to confront
the popular image of Moroccan banks as unfriendly toward
entrepreneurs and unwilling to lend to small and medium
businesses. Attijariwafa is co-sponsoring a Moroccan
television program titled "Challengers" broadcast on the
private 2M television network. Challengers is the Moroccan
equivalent to "The Apprentice" where would-be entrepreneurs
compete for complete funding of their proposed enterprise.
The program is quite popular in Morocco and may have inspired
similar contests, including one sponsored by Attijariwafa
rival Banque Populaire and GOMs Regional Centers for
Investment. Attijariwafa sees itself as a "citizen bank" and
seeks to focus more resources toward assisting entrepreneurs
and financing small and medium enterprises. Econoff
discussed the G-8/BMENA initiative to develop a Center for
Entrepreneurship in Morocco with Attijariwafa Director
Mohamed Kettani, considered the right arm of Bank Chairman
Khalid Oudghiri. Kettani said it sounded similar to a
project they are developing called "Maroc Entreprendre" and
suggested that the two projects might offer opportunities for
collaboration. He expressed interest to know more about the
Entrepreneurship Center, including what Attijariwafa could do
to support it and how best to coordinate with their own
entrepreneurship efforts.

How to Sell Banking


6. (U) Attijariwafa is well known in Morocco for its
sophisticated and aggressive approach to marketing, distinct
from other banks in the sector. Attijariwafa billboards are
ubiquitous, and prominently display their new corporate
symbol representing Morocco's Atlas mountains at sunset and
incorporating both a motif of traditional Berber handicraft
alongside Arabic calligraphy. Attijariwafa's advertising tag
line is "The future lies in you!" expressing their objective
to encourage a "spirit of innovation" and entrepreneurship in
support of "national champions". Moroccan marathon runner
Mohamed Ahansal serves as an Attijariwafa "national champion"
and spokesperson and recent Attijariwafa commercials feature
Moroccan soccer star Youssef Hajji offering a new ball to a
small child practicing in an impoverished neighborhood. The
advertising campaign is comprehensive and innovative, with
commercials appearing before film screenings at one of
Morocco's largest private movie theaters.

Next up: USA?


7. (SBU) Kettani told Econoff that he wants to identify a
suitable American partner to begin talks on servicing North
America. Kettani hopes to capitalize on the soon-to-be
implemented U.S.-Morocco Free Trade Agreement (FTA) to access
the U.S. market through a strategic partnership with an
American counterpart. Attijariwafa currently has joint
activities with Citigroup and Wachovia and has already
engaged in preliminary discussions. Kettani specifically
directed his staff to ensure strong representation at the
OPIC/MEPI regional investment conference scheduled to take
place in Marrakech in September of this year.


8. (U) Attijariwafa's stated goal is to consolidate
leadership nationally and extend influence in the Magreb,
Europe and West Africa. Competitors in the banking sector
describe the BCM-Wafabank merger as a "full-frontal assault
on the Moroccan banking sector" with Attijariwafa seeking to,
seemingly overnight, command the number one spot for every
banking sector product and service available. Based on
current data, Attijariwafa is on its way to doing just that,
however challenges still exist. Chief among these is
Attijariwafa's "top five" rival, the formidable, partially
state-owned Bank Populaire.
RILEY