Moody’s Downgrades Outlook for Major Moroccan Banks Amid Economic Concerns

Attijariwafa bank (AWB), Groupe Banque Centrale Populaire (GBCP), Bank of Africa - BMCE Group (BoA) and Crédit du Maroc (CdM) were analyzed by Moody’s Investors Service. As a result, the stable outlook on the long-term deposit ratings of AWB and GBCP has become negative, Financialafrik reports. As for BoA, its outlook remains negative on long-term deposit and issuer ratings. As for CdM, its outlook is almost stable on long-term deposit ratings.

This situation has shown the government’s level of financial support for Moroccan banks, which will be of great use in the next 12 to 18 months. Moreover, these not very optimistic outlooks on the Moroccan government’s rating prove how much public debt has increased in the kingdom and how enormous the contingent liability risks of public enterprise (SOE) debts and recently granted credit guarantees in the fight against coronavirus are.

In this sense, Moody’s suggests government support for three Moroccan banks (AWB, GBCP and BoA), while increasing the aid included in the long-term deposit ratings by two to three notches. Furthermore, the negative outlooks take into account all the downside risks that the impacts of the health crisis present on the autonomous credit profiles.