Casablanca Finance City and Attijariwafa Bank Grow Regional Roles

Jean R. AbiNader, MATIC
May 8, 2015

Jean R. AbiNader, Exec. Dir., Moroccan American Trade and Investment Center

As the recent IMF/World Bank meetings in Washington, DC demonstrated, regional banking and investment powerhouses in Africa and Asia are increasingly important players in the world’s financial sector. Similarly, Morocco’s success in regional banking over the past decade reflects its commitment to regional economic integration and growing its own industry to global standards.

Recently, Casablanca Finance City (CFC) received the grand prize from the Africa Economy Builders for best financial center due to its role as a gateway for investment in rising markets in Africa. The award lauded the CFC approach of building partnerships with other African countries throughout the continent and promoting south-south cooperation. CFC’s recognition reflects in large part the efforts of Morocco’s banking sector in Africa, which has been featured in recent articles highlighting the  country’s work building its financial services sector, especially in West and Central Africa.

One article, in The Banker, analyzed the overall banking sector and interviewed key banking figures in Morocco. The article pointed out that “Moroccan banks are
relatively advanced compared with those of their north African neighbours.” It went on to mention that Moroccan banks, growing at around 7 percent a year, comply with international reporting standards, including voluntary corporate codes regarding capital reserves and risk control.

Mohamed El Kettani, chairman and CEO of Attijariwafa Bank SA, noted three factors in the success of Morocco’s banks. First of all, a high rate of banking penetration – more than 60 percent of Moroccans have bank accounts, providing the sector with liquidity to invest in generating more services in more locations, and, if well-managed, at lower costs. Critical to servicing the Moroccan population is Attijariwafa Bank’s subsidiary Wafacash, which handles remittances at more than 1200 branches, at half the fee previously charged.

The second factor Mr. El Kettani indicated is the quality of management in the banking sector, from the oversight of the Central Bank to the cooperation between the government and the private sector. This, combined with the recently enacted reforms of subsidies and stable political environment, has enabled the financial sector to expand services, reduce costs, and have the capacity to expand operations throughout the region.

El Kettani argues that Morocco’s regional role is smart business. “We had excess capital, distinctive skills in banking, and large clients…that were becoming regional actors. The decision we faced was either to accept leaving our best corporate clients to others and see our growth decline…or to formulate and execute a value-creating international strategy.” To date, Attijariwafa operates in 13 other African countries, which provide more than 26 percent of the bank’s revenues.

This emphasis on growth was echoed by Walter Siouffi, chief executive at Citibank Morocco. “Across the top three banks, which all have growing networks of subsidiaries and branches in Africa, expansion into the wider region is solidly prevalent. I expect this trend to continue as the Moroccan banking sector sees slower growth domestically compared with high-growth markets across the continent.” Mr. Siouffi also noted the potential importance of Morocco’s entry into Islamic finance, which “could help build the pool of foreign currency liquidity to support Morocco in serving as an important recycling hub given the sophistication of its banking sector, channeling investment funds into neighbouring francophone countries on the continent.”

As a sign of its continued commitment to strengthen its business environment, the financial sector is working with the government to reform the exchange controls, which is essential for CFC to serve as a clearinghouse and service center for regional investments and financial instruments. This would allow CFC to manage financial services across a range of currencies without restrictions on exchange rates or transaction amounts – important functions for enabling regional investments.