Moody's Investors Service ("Moody's") has today affirmed the Ba1 long-term deposit ratings of four Moroccan banks: Attijariwafa bank (AWB), Groupe Banque Centrale Populaire (GBCP), Bank of Africa - BMCE Group (BoA) and Credit du Maroc (CdM). Moody's has changed the outlook to negative from stable on the long-term deposit ratings of AWB and GBCP and, at the same time, maintained the negative outlook on the long-term deposit and issuer ratings of BoA and the stable outlook on the long-term deposit ratings of CdM.
Today's rating actions, which follow Moody's change in the outlook of the Ba1 issuer rating of the Government of Morocco to negative from stable, reflect the government's potential weakening capacity to extend financial support to the Moroccan banks, if needed over the next 12 to 18 months. Moody's assumption of a 'very high' willingness of government support for three Moroccan banks (AWB, GBCP and BoA) translates into two to three notches of government support uplift incorporated in the long-term deposit ratings. The negative outlook also captures any downside risks that the ongoing coronavirus outbreak shock on the local economy presents on the banks' already weakening standalone credit profiles .
The negative outlook on the sovereign rating reflects the rising public debt burden and expanded contingent liability risks from state-owned enterprises (SOE) debts in addition to newly extended credit guarantees as part of the government's pandemic response. Please see "Moody's changes Morocco's outlook to negative, affirms Ba1 rating"; (https://www.moodys.com/research/--PR_439136).
