Second-Biggest Moroccan Bank Weighs Stake Sale in Pivot to Asia

Banque Centrale Populaire is considering selling a significant stake to a lender based in East Asia, as Morocco’s second-biggest bank seeks to bolster its capital buffers and find fresh avenues of growth.

The sale, which could be enacted through a cash injection, is the linchpin of a five-year strategy starting in 2021 that the Casablanca-based lender plans to present to shareholders for approval, according to two people with direct knowledge of the proposal. A strategic partnership with an East Asian lender would put BCP on a new growth path, they said.

Under the plan, BCP would begin talks next year with lenders from countries including China and Singapore, the people said. They asked not to be identified because they’re not allowed to discuss the proposal before BCP makes a regulatory disclosure and sets the agenda for the assembly that will vote on it.

A shift toward Asia marks a pivot in Morocco’s traditional business links with Europe, where lenders are mostly anchored to counterparts across the Mediterranean, especially France. It comes as authorities and businesses try to attract more tourists and investors from China and India.

A stake sale would come after BCP a decade ago started an expansion drive across sub-Saharan Africa that resulted in acquisitions from Mauritius to Cameroon and the Ivory Coast, giving it a presence in 16 markets on the continent. The push came at a cost to the lender’s capital base due to its “high credit concentrations and growing operations” in the region, Moody’s Investors Service said in a September statement.

The move into riskier markets coincides with a gradual slowdown in the accumulation of deposits in Morocco, which still accounts for the majority of net income and revenue of the nation’s largest banks.

BCP’s spokeswoman Mounia Khachane didn’t respond to emailed requests for comments. Chief Executive Officer Mohamed Karim Mounir didn’t return calls.

©2020 Bloomberg L.P.

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