24 Mar 2015 09:47
BMCE BANK GROUP FINANCIAL COMMUNICATION
2014 RESULTS - UPWARD TREND CONFIRMED
BMCE Bank's Board of Directors, chaired by Mr Othman BENJELLOUN, met on Friday 20 March 2015 at the Bank's head office in Casablanca. It examined the business activity of the Bank and of the Group for the financial year ended 31 December 2014 and drew up the financial statements for the financial year in question.
Given the excellent results for the financial year in question, the Board of Directors will propose to the Annual General Meeting of Shareholders a dividend of 4.4 dirhams per share, to be paid in July 2015.
The Board also acknowledges that La Caisse de Dépôt et de Gestion, Director of BMCE Bank, is now represented by Mr Abdellatif ZAGHNOUN, its Chief Executive Officer.
The 2014 consolidated financial statements and accompanying notes, prepared under IAS/IFRS, are published on the bank's website www.bmcebank.ma.
Consolidated Gross Operating Income +27% MAD 5 billion (€ 456 M; $ 553 M)
Net Income attributable to shareholders of the parent company +58%MAD 1.9 billion (€ 177 M; $ 215 M)
Consolidated Net Banking Income +16% MAD 11.5 billion (€ 1,048 M; $ 1,272 M)
Consolidated ROE +4.7 points 13.7%
· Very satisfying performance by BMCE Bank Group with net income attributable to shareholders of the parent company approaching the MAD 2 billion (€ 177 M; $ 215 M) mark, more than double that of 2011
· Significant improvement in Group profitability with consolidated ROE up from 9% in 2013 to 13.7% in 2014
· Increased efficiency in Morocco with a cost-to-income ratio below 55%, an improvement of 10 points since 2011 and of more than 5 points compared to 2013
· Continued growth of sub-Saharan African operations on the back of improved governance and increased synergies
· Return to profitability for European operations, with a positive contribution to Group earnings (+6%) for the third year in succession
FINANCIAL COMMUNICATION BMCE BANK
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ALL PROFIT INDICATORS SHOWING DOUBLE-DIGIT GROWTH
CONSOLIDATED FINANCIAL STATEMENTS - NET INCOME attributable to shareholders of the parent company OF ALMOST MAD 2 BILLION
Net income attributable to shareholders of the parent company rose by +58% to MAD 1,944 M (€ 177 M; $ 215 M), resulting in an CAGR of 33% for the period 2011-2014.
Positive contribution to consolidated earnings from all business lines:
- A healthy performance by Moroccan operations, particularly due to the parent company, BMCE Bank SA, whose contribution to net income more than doubled (x2.2), accounting for more than half of consolidated earnings;
- Earnings growth of 13% by the Group's overseas subsidiaries, accounting for one-third of Group earnings, primarily due to a return to profitability of the European business, which saw its contribution improve significantly, from -1% in 2011 to +6% in 2014; sub-Saharan African operations accounted for more than one-quarter of earnings.
Very strong operating performance as illustrated by +27% growth in consolidated gross operating income to reach the MAD 5 billion (€ 456 M; $ 553 M) mark for the first time, registering average annual growth of +18% over the past 4 years.
+37% rise in the consolidated cost of risk to almost MAD 1.8 billion (€ 162 M, $ 197 M) i.e. a cost of risk ratio of 1.16%.
Consolidated net banking income reached the MAD 11 billion (€ 1,048 M; $ 1,272 M) mark for the first time, +16% versus 2013 and +12% on average over the past 4 years.
Revenue breakdown broadly unchanged with the core business generating 84% of revenue and income from market operations 10%.
Further improvement in the Group's operational efficiency as illustrated by a cost-to-income ratio of 56.5% versus 60.2% in 2013, with net banking income (+16%) growing faster than expenses (+9%).
Group's balance sheet bolstered by an +8% increase in shareholders' equity to MAD 16 billion (€ 1,464 M; $ 1,777 M), up almost threefold since 2009, to support the Group's business development and satisfy regulatory requirements relating to capital.
Significant improvement in the Group's profitability with consolidated ROE rising steadily from 7.2% in 2011 to 9% in 2013 and 13.7% in 2014.
PARENT FINANCIAL STATEMENTS - NET INCOME OF MORE THAN MAD 1.2 BILLION (€ 110 M; $ 133 M)
Parent net income, having more than doubled over the past four years, rose by +9% to MAD 1.2 billion (€ 110 M; $ 133 M) in 2014, registering average annual growth of +30% over the same period.
Parent net banking income grew +15%, primarily driven by income from market operations (+38%) and the Bank's core businesses, fee income (+13%) and net interest income (+9%).
General operating expenses were contained at MAD 3.3 billion (€ 276 M; $ 335 M), registering moderate growth of +4.6%. As a result, the cost-to-income ratio was below 55%, an improvement of as many as 5.2 points on 2013 and of 10 points on 2011.
Strong operating performance by the Bank with gross operating income+18% ahead versus 2013 to MAD 2.6 billion (€ 238 M; $ 288 M), despite a +55% jump in net provisions to MAD 1.1 billion (€ 105 M; $ 127 M) compared to 2013, against a backdrop of rising market risk within the banking industry.
The Bank's share of the loan market rose by 11 basis points to 13.7% due to a +4.8% increase in lending to MAD 103 billion (€ 9.4 billion; $ 11.4 billion) versus +3.8% for the industry.
Deposits rose by +6% to MAD 115.4 billion (€ 10.5 billion; $ 13 billion) versus +5.4% for the industry, resulting in a modest 7 basis point improvement in the Bank's share of the deposit market to 14%.
RISK MANAGEMENT - INCREASED PROVISIONING
The Bank's non-performing loan ratio was 5.79% in 2014, below the industry average (7.13%).
6.5 points increase in the provisioning coverage ratio to 70.78% versus 68.36% for the industry.
Risk management process enhanced by establishing a Group Risks Committee to assist the Board of Directors on strategy and risk management at Group level.
GROUP STRATEGY
Since 2011, the Group has embarked on a number of flagship organisational and operational projects both in Morocco and overseas:
- Morocco: 40 branches opened, regional diversification programme, standardising processes, permanent control entity overhauled
- Sub-Saharan Africa: raises its stake in BOA from 59.4% in 2011 to 72.7% in 2014, 116 branches opened, operations expanded into Ghana, Togo and Ethiopia, projects initiated to reorganise sales & marketing, annual sales action plan, subsidiaries' boards of directors reorganised
- Europe: European subsidiaries reorganised under the umbrella of BIH, London subsidiary restructured, Moroccans living abroad business developed (Belgium, Holland and Canada)
In 2015, the Group's growth strategy will focus on:
- Continuing to expand the branch network in Morocco and in sub-Saharan Africa
- Developing the Bank's high value added segments such as SME banking, online banking and private banking
- Raising the contribution from the Moroccans living abroad business by accelerating network expansion in Europe within the framework of BMCE Euroservices' European passport
- Strengthening Bank of Africa Group's African operations by expanding into countries with high growth potential
- Developing and increasing synergies between the Group's European platform, specialising in corporate and investment banking and Africa, after successfully restructuring the former between 2011 and 2014
- Implementing the Convergence Programme across the entire Group, the aim being to standardise all key functions including risk management and internal control
BMCE Bank in figures:
• Operations in 30 countries
• 12,391 employees
• More than 1,200 branches
• More than 4,500,000 customer accounts
BMCE Bank Group's consolidated financial statements
Net income attributable to shareholders of the parent company +33% CAGR* 11-14
Net banking income +12% CAGR* 11-14
Gross operating income +18% CAGR* 11-14
*Compound Annual Growth Rate
Net income attributable to shareholders of the parent company by geographical region at 31 December 2014
Morocco 67%
Africa 27%
Europe 6%
STRONG PERFORMANCE BY ALL BUSINESS LINES IN MOROCCO AND OVERSEAS
PERSONAL AND PROFESSIONAL BANKING - PRODUCT RANGE ENHANCED
+11% growth in retail loans primarily due to an +11% increase in consumer loans, resulting in a 37 basis point improvement in market share to 19.2% and a +10.6% increase in property loans, resulting in a +52 basis point improvement to 14.4%.
Product range for young people enhanced by launching new products for students in Morocco and overseas as well as offering non-banking benefits such as the launch of the "jesuisjeune.ma" website.
Strong performance by the Moroccans Living Abroad segment as illustrated by a +9% increase in transfers from Moroccans living abroad versus +2% for the industry.
Professional banking customer base expanded to include other self-employed categories such as architects.
BMCE MasterCard World bank card introduced for private banking clients as well as a complimentary weekly publication, Newsletter Actu Hebdo By BMCE Bank, for high-end customers in partnership with the Economic Intelligence department.
BMCE Euroservices' network expanded by opening branches in Amsterdam and Rotterdam in the Netherlands and a new branch in Belgium.
+14% growth in bank-insurance revenue with the bank-insurance penetration ratio reaching 31.3%.
CORPORATE BANKING - STRONG SALES GROWTH MAINTAINED
+2.1% increase versus 2013 in Corporate Banking loans to MAD 65.4 billion (€ 6 billion; $ 7.2 billion) in 2014, outperforming the banking industry which registered growth of +1.7%.
Foreign trade flows were MAD 110 billion (€ 10 billion; $ 12 billion) in 2014 versus MAD 94.6 billion (€ 8.6 billion; $ 10.5 billion), up by as much as +16.3% and much higher than industry growth of +1.9%.
New range of foreign currency-denominated accounts introduced for export companies to facilitate use of annual allowances for overseas business travel under new guidelines issued by the Office des Changes.
Expansion of the SME customer base in 2014 with new accounts growing +8% and loan commitments +28.6%.
SME Club concept extended on a regional basis with training provided in three regions, Agadir, Rabat and Casablanca.
Closer relations developed with corporate customers by opening new business centres in 2014 in Rabat and Béni Mellal.
INVESTMENT BANKING - GROWTH ACCELERATING
Exceptional operating performance for BMCE Capital Markets due to well-chosen strategies and initiatives in various market segments in 2014. Innovation approach included launching the second version of BMCE FX-Direct, an electronic trading platform and a mobile version, which includes new modules and functionality.
With the market environment showing some improvement, BMCE Capital Bourse returned to the black. Demonstrating a high level of resistance, its market share was 12.2%.
BMCE Capital Gestion Privée is reaping the benefits of the major restructuring undergone in recent years by delivering remarkable growth in operating as well as qualitative terms, aimed at improving the quality of its customer service.
Growth of almost 14% in BMCE Capital Titres' assets under custody to MAD 195 billion (€ 18 billion; $ 21.6 billion) in 2014 versus MAD 171 billion (€ 15.5 billion; $ 19 billion) the previous year.
In 2014, BMCE Capital Conseil continued to advise its clients on strategic deals in Morocco and sub-Saharan Africa, as well as on corporate debt transactions and equity issuance.
Boosted by very benign market performance, BMCE Capital Gestion's performance was exceptional in 2014 with more than MAD 42 billion (€ 3.8 billion; $ 4.6 billion) of assets under management, an increase of more than +13%. As a result, its consolidated market share was more than 14%.
BMCE Capital Gestion is the first moroccan management company of mutual funds to manage an SRI "Socially Responsible Investment" fund.
SPECIALISED FINANCIAL SERVICES - GROWING PERFORMANCE
MAGHREBAIL
The Group's leasing subsidiary consolidated its position by again winning market share, the latter rising from 21.5% in 2013 to 22.8% in 2014. Net income was MAD 72.4 million (€ 6.6 M; $ 8 M), an increase of +8.5%.
SALAFIN
Against a backdrop of declining production (-1%) at the industry level, SALAFIN's net income rose by 11.2% compared to 2013. As a result, its ROE increased +150 basis points to 17%.
MAROC FACTORING
Maroc Factoring saw its contribution to net income attributable to shareholders of the parent company rise significantly (+33%), its net income established at MAD 31 million (€ 3.4 M; $ 2.8 M) recording a significant increase of +70%.
RM EXPERTS
MAD 502 million (€ 45.8 M; $ 55.5 M) of debt recovered in 2014, an increase of +20% compared to 2013, with provision write-backs of MAD 231 million (€ 21 M; $ 25.5 M), up by as much as +94%.
AFRICAN OPERATIONS - FURTHER GROWTH
BANK OF AFRICA
Bank of Africa Group's consolidated net banking income rose by +21% to € 388 M ($ 387 M) due to a strong performance by its banking subsidiaries in the Ivory Coast, Mali, Madagascar, Senegal and Benin.
+56% growth to € 49 M ($ 59 M) in net income attributable to shareholders of the parent company with consolidated net income growing +58.5% to € 90 M ($ 109 M). The main contributors to earnings were the subsidiaries in Benin, Ghana, Madagascar, Mali and Ivory Coast.
A convincing top-line performance as illustrated by (i) growth in deposits and loans of +16% and +23% respectively (ii) 48 new branch openings, taking the total number of BOA branches to 461 and (iii) a +23% increase in the number of new accounts to 2.2 million i.e. more than 413,000 new accounts opened on average since 2012.
Improved performance after carrying out a number of initiatives such as: (i) reorganising sales at the retail and corporate customer levels (ii) bolstering governance (iii) the Convergence Programme aimed at standardising rules and processes for risk management and internal control (iv) implementing an "operational efficiency" project consisting of overhauling procedures.
Increased synergies with BMCE Bank Group in the following areas - the Convergence Programme, the BMCE Euroservices' diaspora, trade finance with BMCE Bank/BIH, IT security, developing investment banking and HR policy and training.
LA CONGOLAISE DE BANQUE
+67% increase in La Congolaise de Banque's contribution from MAD 20 million (€ 2 M; $ 2.2 M) in 2013 to MAD 33 million (€ 3 M; $ 3.6 M) in 2014, accounting for 2% of net income attributable to shareholders of the parent company.
LCB Bank, Congo's leading bank with 20 branches, aims to become a leading regional bank by developing its universal banking operations, including investment banking.
BANQUE DE DEVELOPPEMENT DU MALI
+10% growth to MAD 51 million (€ 4.6 M; $ 5.6 M) in Banque de Développement du Mali's contribution, accounting for 3% of net income attributable to shareholders of the parent company.
Further development of BDM's operations within the WAEMU region is expected by establishing two subsidiaries in the Ivory Coast and Burkina Faso in 2015.
AFRICA TO BENEFIT FROM EUROPEAN OPERATIONS RETURNING TO PROFITABILITY
Positive contribution to Group earnings (+6% in 2014 versus -1% in 2011) for the third consecutive year from European operations under the umbrella of BMCE International Holding.
Positive performance by BBI London with net income growing +104% to £5.7 M due to growth of 12% in net banking income and an -26% decline in general operating expenses.
Similarly, BBI Madrid saw its net income rise by +50% to €4.2 M ($ 5 M) in 2014.
After undergoing a successful restructuring over the period 2011-2014, BMCE International Holding is to embark on a development phase from 2015 aimed at reinforcing its status as a corporate and investment banking specialist with a focus on Africa.
CSR - A WELL-STRUCTURED APPROACH
BMCE Bank Foundation's Medersat.com network expanded with the opening of a new school in Bni Chiker in the Nador region and another to be opened in Bamako in Mali.
Partnership agreement between BMCE Bank Foundation and the "Serving Senegal" charitable association with BMCE Bank Foundation funding the fitting out and equipping an education centre in Senegal.
BMCE Bank again named"Top Performer CSR Morocco" by Vigeo, a non-finance ratings agency.
BMCE Bank became the first financial institution in Morocco to sign an innovative partnership agreement with the BERD, KfW, AFD and BEI for a € 20 M ($ 24 M) energy efficiency loan (MorSEFF).
2014 AWARDS
· "Best Bank in Morocco", EMEA Finance 2014
· "Best Bank"in Benin, Burkina Faso and Madagascar
· "Top performer CSR Morocco" for a second time, by Vigeo, a non-finance ratings agency
· Won the Partnership Category at the Arabia CSR Awards 2014
· ISO 14 001 certified in environmental management, underlying the Group's ability to control direct and indirect environmental impacts