Moody's Affirms Attijariwafa Bank's Credit Ratings with Stable Outlook

Moody's Investors Service has reaffirmed the credit ratings of Attijariwafa Bank (AWB) at Ba1 with a stable outlook, citing the bank's strong risk management, stable funding, and high liquidity. The ratings agency also noted AWB's diversified franchise in Morocco, North Africa, West Africa, and Central Africa, as well as its established and conservative risk management approach.

The bank's Baseline Credit Assessment (BCA) was affirmed at ba3, reflecting its strong profitability, stable funding, and high liquidity. Moody's also highlighted AWB's exposure to weaker operating environments in North Africa and Sub-Saharan Africa, but noted that the bank's diversified franchise and conservative risk management approach mitigate this risk. The ratings agency expects AWB's net profits to remain solid over the outlook horizon, driven by strong domestic economic growth, a sophisticated risk management framework, and relatively stable foreign operations.

Key Takeaways:

• Moody's has reaffirmed Attijariwafa Bank's credit ratings at Ba1 with a stable outlook, citing the bank's strong risk management, stable funding, and high liquidity.
• The bank's Baseline Credit Assessment (BCA) was affirmed at ba3, reflecting its strong profitability, stable funding, and high liquidity.
• AWB's exposure to weaker operating environments in North Africa and Sub-Saharan Africa is mitigated by its diversified franchise and conservative risk management approach.
• Moody's expects AWB's net profits to remain solid over the outlook horizon, driven by strong domestic economic growth, a sophisticated risk management framework, and relatively stable foreign operations.
• The bank's real GDP growth in Morocco is expected to average 3.5% over the next three years, driven by lower inflation and government-led investments in social security and infrastructure.
• Al Mada's (Morocco's royal family investment holding) significant stake in the bank and the bank's designation as a D-SIB by Bank Al Maghrib provide two notches of rating uplift.
• The stable outlook reflects Moody's expectation that AWB's solid profitability, stable funding, and high liquidity will balance the risk from North African and Sub-Saharan African exposures against moderate capitalisation.

Statistics:

• Attijariwafa Bank's deposit base represents 94.0% of its non-equity liabilities, driven by its wide branch network and retail activities in Morocco and abroad.
• The bank's liquidity ratio stood at 32% of tangible banking assets as of December 2024.
• AWB's net loans-to-deposits ratio stood at 86% as of December 2024, denoting no structural reliance on market funding.
• The bank's pre-provision income stood at 3.2% of average total assets as of December 2024.
• AWB's cost of risk stood at 95bps in 2024, which is expected to normalise to 60-70bps over the outlook horizon.
• The bank's tangible common equity to adjusted consolidated risk-weighted assets ratio stood at 8.8% as of December 2024.
• AWB's loan-loss coverage ratio stood at 98.3% as of December 2024.

Sources:

• Moody's Investors Service news release (no specific date provided)
• Moody's Credit Rating Methodology (published in November 2024, available at https://ratings.moodys.com/rmc-documents/432741)
• Moody's National Scale Credit Ratings methodology (published in August 2022, entitled "Mapping National Scale Ratings from Global Scale Ratings Methodology", available at https://ratings.moodys.com)
• Moody's research document "Historical Probability of Default" (available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1280297)