Interview with Mohamed Benchaaboun, CEO, BCP

What value do you think Moroccan banks bring to the African financial landscape?
Let me start by saying that in 2013, the focus for Moroccan companies in general including those from the banking sector shifted to Africa. The King, with his numerous state visits, played an instrumental role in making sure the country and by association the private sector could play a pivotal role and participate in Africa’s growth story. The state visits were an opportunity to lay the foundations of a multidimensional cooperation where the economic aspect rubs shoulders with the cultural, social and religious aspects. With this in mind, the Moroccan banking sector is called upon to play a central role.
The financial services industry is quite sophisticated by international standards in Morocco. The banks are big and second only to those in South Africa in terms of assets and equity. So as we partner with groups in various African countries, like we have, we can contribute by strengthening the fundamentals of these banks and also contribute in bringing in best practice in terms of governance and management.
Secondly, we can share our experience and we will equip our subsidiaries with the necessary resources so that they can continue scaling up and play a role in collecting deposits and financing the economy. Moroccan banks must enable their subsidiaries to access, under the best conditions, international deals for which they were previously quasi-excluded from. Similarly, they can contribute by speeding up the process of financial inclusion as the level of unbanked is still high. We can share our experience in this area through products which are tailored to SMEs and individuals.
 
During the recent royal tour in sub-Saharan Africa, you were the Moroccan group that signed the most agreements – 10 in total. What are your projects in the region?
Through these agreements, the BCP Group intends to provide clear responses to the different facets of cooperation that I just mentioned a minute ago. The presence of the Moroccan banking sector in general, and of the BCP group in particular, during the signing of the various cooperation agreements, is a new approach we are taking, for each project, to commit to financing and thus to increasing the chance of its feasibility. So, the 10 agreements we signed are in fields as diverse as international trade, housing, education and microfinance.

How much are your African operations
outside Morocco contributing to your overall results?
Since we took a stake in Banque Atlantique Group’s share capital, we have begun a broad programme to upgrade these banks across all their banking activities, while making all our assets available to them so that they can position themselves in all the important business areas, whether at a local level or to give them access to international deals. The scope of this approach has started to bear fruit, although the contribution of these banks to the Group’s results is currently no higher than 10%. In terms of servicing, these banks are able to improve all of their indicators rapidly with a better grasp of risk costs, a significant reduction in the cost-to-income ratio and a double-digit increase in deposits collected and credit granted, which has fostered a remarkable progression of the net banking product.
What is the outlook for 2014?
The year has started positively and we expect to strengthen the new dynamic of our subsidiaries through consolidating their position in their respective markets and, above all, launching new products, notably those relating to retail banking.

How do the intra-group synergies with Banque Atlantique work?
Since taking control of the Banque Atlantique, we have worked on three fundamental pillars to enable this pan-African network to realise its full potential. First of all we have strengthened their capital base, to support the development of its activities and to enable these subsidiaries to supply more credit to the economy. We have set up substantial refinancing lines to give it a greater ability to act in financing international trade deals. Next, we have worked to improve the robustness and reliability of its technical platforms and its way of working, in order to serve its current customer base better and increase its market appeal. Finally, we have structured products and services aimed towards the individual and professional markets, on the one hand, to diversify its range and, on the other hand, to enable it to reap the potential of increasingly banked market players.

In January, the BCP Group obtained the highest rating in the Moroccan, and across the whole North African, banking sector from an international credit rating agency, Standard & Poor’s. What does this mean for you?
The Standard and Poor’s ratings agency has given ouGroup a score of BB+/Stable/B, the best rating of any bank in North Africa. With this rating, S&P backs the role the group has played and its strong and dominant commercial position notably in terms of collecting savings, enacting transfers from Moroccans living abroad and financing the national and regional economic economy.

The BCP Group has always wanted to be a “local bank”, close to its customers; how is this manifested on the ground?
Localism is part of our credo, as witnessed by the continued expansion of our distribution network and recruitment of new customers. We have in excess of 1,250 branches, which represents the number-one network in the national banking sector, with a market share of 21.4%. We aim to maintain the momentum of opening branches at a rate of 100 a year. Regarding customer recruitment, we are continuing our strong involvement in the process of increasing the banked population and facilitating access to banking products and services for the largest tranche of the population, particularly through our low-income banking programme. We now have over 4.5m customers and we are recruiting over 400,000 new ones each year. This policy enables us to position ourselves with strength in collecting savings and financing the economy, fields in which we continue to pick up market share.

Do you think that Moroccan banks and insurance companies will make a difference to sub-Saharan Africa’s economic and social development? How can Morocco and Moroccan businesses profit best?
Moroccan banks and insurance companies have achieved a level of maturity and development that rightly enables them to play this role of a driver of economic and social development outside of Morocco and in sub-Saharan African countries. The lead role we have played in expanding outside our borders role should also benefit Moroccan companies that invest across Africa. Thus, Moroccan banks are in a position to guide these businesses in their various investment projects because of the background of their relationships these businesses and their understanding of the needs and way of working.

What is your view on market development in the light of the creation of a regional financial centre with the Casablanca Finance City?
It is certain that the Moroccan banking sector has now reached a certain maturity and a level of governance and best practice that meets international standards thanks to, among other things, the regulatory action of the BCP. We have the foundation necessary to make Morocco into a financial hub in Africa and the Middle East. To this end, we anticipate Morocco and Moroccan financial institutions will have greater influence in international finance and will make a significant contribution to greater South-South cooperation.