US embassy cable - 05RABAT1159

UNCLAS SECTION 01 OF 02 RABAT 001159 
 
SIPDIS 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: ECON, EFIN, KMPI, MO 
SUBJECT: ATTIJARIWAFA BANK: SHAKING UP THE MOROCCAN BANKING 
SECTOR 
 
 
This message is sensitive but unclassified.  Please protect 
accordingly. 
 
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