Moody's Affirms Groupe Banque Centrale Populaire's Deposit Ratings with Stable Outlook

Strategic Insights -

Moody's Investors Service has affirmed the long-term deposit ratings of Groupe Banque Centrale Populaire (GBCP) at Ba1 with a stable outlook, recognizing the bank's solid profitability, stable funding, and high liquidity. The affirmation reflects GBCP's established cooperative bank franchise, sound profitability, stable and granular funding, and high liquidity, which are balanced by its credit concentrations and Sub-Saharan African exposure that pose risks to asset quality and capitalization.

Key Takeaways:

  • Moody's affirmed GBCP's Baseline Credit Assessment (BCA) and Adjusted BCA at b1, reflecting the bank's established cooperative bank franchise, sound profitability, stable and granular funding, and high liquidity.
  • The affirmation is supported by GBCP's strong and stable deposit funded profile, with around 77% of non-equity funding, and its established domestic retail franchise in Morocco and international diversification of banking activities, primarily in sub-Saharan Africa.
  • GBCP's net loan-to-deposit ratio is expected to remain comfortable at 73% in December 2024, denoting no structural reliance on market funding, which remains low at 9.4% of tangible banking assets as of the same period.
  • The bank's level of liquid assets, at 35% of total assets as of December 2024, will also remain high.
  • Moody's assumes a very high probability of government support, resulting in three notches of rating uplift, reflecting GBCP's systemic importance, designation as a D-SIB, and its status as a strategic entity in Morocco.

Statistics:

  • GBCP's BCA is affirmed at b1, with a stable outlook.
  • The bank's deposit ratings are affirmed at Ba1 with a stable outlook.
  • The short-term deposit ratings (NP) and Counterparty Risk Ratings (CRRs) (also NP) are affirmed.
  • GBCP's net loan-to-deposit ratio is expected to remain at 73% in December 2024.
  • The bank's liquid assets ratio is at 35% of total assets as of December 2024.
  • GBCP's national scale long-term deposit ratings and CRRs have been affirmed at Aa1.ma.
  • The bank's tangible common equity is at 7.0% of adjusted consolidated risk-weighted assets as of December 2024.

Sources:

  • Moody's Investors Service
  • Rating Methodologies page on https://ratings.moodys.com for a copy of this methodology.
  • Moody's National Scale Credit Ratings (NSRs) are intended as relative measures of creditworthiness among debt issues and issuers within a country, enabling market participants to better differentiate relative risks.