Moroccan banks are eating big shares of West African cake…
- October 1, 2013
- Posted by: Gaïcha SADDY
- Category: Financial Services, North Africa, West Africa
With a total market of approximately 80 million consumers, the West African market is attracting more and more investments every day. According to the IMF, annual growth rate will be around 6 percent for sub-Saharan countries, while for McKinsey, overall African GDP will reach 2600 billion dollars in the next decade.
The European crisis led to a new economic scheme on the African continent, illustrated by more inter-African cooperation acts. This is the case with Morocco, which has become the second largest African investor in the continent, behind the leading South Africa. Morocco reached this rank by the important presence of its big companies such as Maroc Telecom, OCP, ONE or Managem; but mainly because of the presence of its three big banks: Attijariwafa, BMCE and Banque Populaire.
With a banking penetration rate ranging around 6 per cent, an intermediation margin of 8 per cent and a return on equity of 11 per cent, UMOA market is a great opportunity for all banks looking for better profitability and diversification.
In 2007, Attijariwafa entered the West African market with a participation of 67 percent in the capital of Banque Senegalo-Tunisiene (BST). It confirmed its interest with another acquisition in November 2007, of 79 percent of Compagnie Bancaire d’Afrique de L’Ouest (CBAO), which in 2008 took control of Attijari Bank Senegal and became the first banking group in Senegal.
In 2008, Attijari continued with the acquisition of 51 percent of Banque Internationale du Mali (BIM-SA) and five African branches of Credit Agricole in Cote d’Ivoire, Senegal, Gabon, Congo and Cameroon. The group attacked Burkina Faso’s market in 2011 using CBAO’s group to open a branch in Ouagadougou, and also the Togolese market recently, with the acquisition of 55 percent of BIA-Togo in May 2013. Attijari is now making its entry in Niger and Benin, and planned to enter Guinea, before developing its presence on next non-francophone countries.
But Attijari is not the only Moroccan bank having its arms on West Africa. BMCE which started with Banque de Developpement du Mali (BDM) in west Africa and La Congolaise des Banques in central Africa, affirmed its presence in sub-Saharan Africa by an acquisition of 35 percent of the capital of Bank of Africa (BOA) in 2007.
BMCE benefits then of a presence in eleven additional countries and in 2008 raised its participation to 42.5 percent. It is also developing business banking in West Africa, which is a new segment of banking activities in this part of the continent, as almost all activities are retail banking. BMCE bank is now present in eighteen African countries, business banks included, covering west, east and central Africa, with more than 65 percent of BOA’s capital, and its ambition is to be represented all over the continent within 20 years.
Banque Populaire which started timidly with a presence in Guinea and Centrafrica increased its participation to this ballet, with an implantation in Mauritania. But the big step was the partnership with Atlantic Financial Group in 2012, to create Atlantic Business International, giving the opportunity for Banque Populaire to have a foot in seven additional countries, covering the whole UMOA’s market.
By increasing money that Moroccan investors can put on foreign market, from 30 million to 100 million dirhams, and creating an investment’s fund of 200 million dirhams to promote trade and investment between Morocco and other African countries, Moroccan authorities have encouraged leading companies to take big participation in African market. From then, Moroccan banks took this new market configuration as an opportunity to develop their activity.
Moroccan banks in sub-Saharan Africa are guiding Moroccan companies through their expansion on the new market in terms of investments needs but also talking about money and trade flows between the two zones. Their presence in West African market appears to be a win-win situation as it will benefit for both parties.
On one hand, Moroccan companies in general gain new market shares that mean more incomes, but also a large presence on an emerging and fast growing market, with a bunch of opportunities; and on the other hand, UMOA banking penetration rate will be raised showing an economic development of banking market, and the region will also benefit from an economic boost as Moroccan banks are financing SMEs to establish themselves in the region.
Gaïcha SADDY, Analyst, Infomineo