Half-year Report

LET'S DREAM TOGETHER OF A NEW RESPONSIBLE WORLD…

FINANCIAL COMMUNICATION

RESULTS AT 30 JUNE 2018

BMCE BANK OF AFRICA

LET'S DREAM TOGETHER OF A NEW RESPONSIBLE WORLD…

ir-bmcebankofafrica.ma

BMCE BANK OF AFRICA GROUP'S PERFORMANCE DIPS AFTER A PERIOD OF ROBUST GROWTH

BMCE Bank's Board of Directors, chaired by Mr Othman BENJELLOUN, met on Friday 28 September 2018 at the Bank's head office in Casablanca. It examined the business activity of the Bank and of the Group for first half 2018 and drew up the financial statements for the period in question.

The first half 2018 financial statements under IAS/IFRS are published on the Bank's website www.ir-bmcebankofafrica.ma.

BMCE Bank SA versus Sector

Figures in MAD B

Net income 2012-2017

CAGR +1.8%

9.9 10.8

Sector

CAGR +16%

0.7 1.5

BMCE Bank

Gross operating income 

CAGR +2.9%

20.4 23.5

Sector

CAGR +8%

1.8 2.7

BMCE Bank

Net banking income

CAGR +3.6%

38.6 46.0

Sector

CAGR +6.2%

4.6 6.2

BMCE Bank

Loans

CAGR +2.6%

704 800

Sector

CAGR +4.4%

94 116

BMCE Bank

First half 2018 marked by a slowdown in banking operations from second quarter after growing strongly since 2012, the year in which the Strategic Development Plan was implemented.

Net income attributable to shareholders of the parent company fell by 12.7% in first half.

Parent net income down 9.5%, impacted by a 3.7% fall in parent net banking income.

BMCE Bank SA's loans decline at 30 June 2018 due to balance sheet optimisation, enabling the Bank to bolster its capital adequacy ratios.

Weaker performance also due to a relatively challenging global environment, impacting the earnings of the Group's overseas subsidiaries and due to investing in and developing new businesses -participatory bank-

Major effort to reduce overheads with expenses down by 0.7% at parent level and contained at +0.7% at consolidated level in first half 2018.

BMCE BANK IN MOROCCO OUTPERFORMED THE SECTOR OVER THE PERIOD 2012-2017

Over the period 2012-2017, BMCE Bank's parent net income rose by 16%, outperforming the banks sector, which registered growth of 1.8%.

BMCE Bank SA's net banking income grew by 6% over the past 5 years, outperforming the banking sector, which registered growth of 3.6% over the same period.

Noteworthy commercial performance over the past 5 years, with loans growing by 4% versus +2.6% for the banks sector.

AFRICAN BUSINESS REGISTERING STRONG GROWTH UNDER THE BOA BRAND

BOA Group posted double-digit growth in its main performance indicators over the period 2012-2017:

- Net banking income up 10% on average over the past 5 years;

- Net income attributable to shareholders of the parent company registered annual average growth of 21%;

- Loan growth averaging 12%;

- Branch network expanded by one-and-a-half times, taking the total number of branches to 576 at 30 June 2018, with an average of just under 40 branch openings each year.

BMCE Bank raised its holding in BOA Group by MAD 1.2 billion from 65% in 2012 to 73% in 2017.

APPROPRIATE RISK PROFILE

Modest 2% increase in the consolidated cost of risk from MAD 633 million at 30 June 2017 to MAD 649 million at 30 June 2018 and by 11.5% at parent level.

Impact from first-time application (FTA) of full implementation and all components of IFRS 9 saw provisions increase by an overall gross MAD 3.6 billion while the overall net impact on shareholders' equity was MAD 2.6 billion, including MAD 1.6 billion after minority interests. This global amount includes the provisioning of interbank loans, customer loans and debt securities.

Significant increase in customers liablilities' provisioning as a result of applying IFRS 9 with more than MAD 3.1 billion of additional provisions, primarily for sound but sensitive loans, resulting in a stock of provisions of MAD 13 billion, up 36% on 2017 under IAS 39 and by 4.6% on a like-for-like basis (FTA).

Improvement of the consolidated non-performing loan coverage ratio from 61,6% at 30 june 2017 to 65,6% at 30 June 2018. Including provisions calculated on performing loans, the overall coverage rate of non-performing loans is 85.2% at 30 June 2018.

Parent loan loss coverage ratio rose from 67% in 2017 to 68.4% at 30 June 2018.

2018 OUTLOOK

The second half outlook is likely to follow a similar trend to that of first half 2018.

BMCE Bank Group, Morocco's most international bank with operations in thirty or so countries, will continue to:

- Play a role as innovation accelerator, leveraging existing business lines and developing new niches (SMEs, green business, multi-channel banking, banking for Moroccans living overseas, participatory banking);

- Generate additional intra-Group synergies within its ecosystem in support of the Group's African business;

- Bolster its organisational bodies and procedures to sustain the Group's performance over the coming years.

RESPONSIBLE APPROACH TO BUSINESS DEVELOPMENT IN MOROCCO AND OVERSEAS

Promoting banking for youngsters by introducing various products to help finance educational studies in Morocco and overseas, with major partnership agreements signed with universities and training organisations.

Incubator project initiated in partnership with Casablanca Hassan II University's Faculty of Legal, Economic and Social Sciences, focusing on developing entrepreneurial flair in youngsters and introducing them to banking and financial products.

Pursuing an SME growth strategy by offering a free banking service to young entrepreneurs with the BMCE Young Entrepreneur package.

New mobile payment service launched, 'DabaPay', a virtual wallet solution linked to a bank account, payment account or prepaid card, enabling customers to carry out various banking transactions securely, conveniently and rapidly.

Significantly increased usage of multi-channel banking channels with major progress made by Agence Directe and new functionality added to the BMCE Direct platform and ATMs.

Factoring product for output VAT launched aimed at private sector companies to facilitate settlement of VAT claims.

Branch network expanded with four new branch openings in first half 2018 in three regions - North Mediterranean, Centre-Atlantic and Eastern as well as a representative office opened in Seville.

Asian operations bolstered with the opening of a BMCE Bank branch in Shanghai to support companies wishing to invest in Africa.

'CapValoris' launched, a solid waste recovery funding line offering companies a subsidised rate of interest in the form of a cash-back and free technical assistance from CID, a consulting, engineering and development firm.

'Ligne Bleue' established, an EUR 20 million funding line for Morocco-based water and sanitation projects managed by private- or public-sector companies that meet predefined eligibility criteria.

'Women in Business' funding line signed in September 2018 with the EBRD aimed at women entrepreneurs, offering support in the form of training, advice and solid financial backing.

BMCE Bank's Corporate Social Responsibility Charter formalised to ensure that the Bank's CSR undertakings are extended to the entire Group.

Subscribed to the 'Mainstreaming Climate Action within Financial Institutions' initiative in conjunction with the EBRD, the AFD, Yes Bank, HSBC, the IsDB and BOAD.

New partnership agreement signed between BMCE Bank Foundation and the Ministry of National Education in relation to a new cooperation programme between both parties in pre-school education.

Visit by the Minister of National Education to the Bouskoura Medersat.com school to observe the Medersat.com educational model in practice.

More Medersat.com schools awarded the Eco-school label from the Mohammed VI Foundation for Environmental Protection, taking the total number of schools designated as Eco-schools to 25.

BMCE Bank Foundation's operations in sub-Saharan Africa bolstered with the opening of a new Medersat.com school in Djibouti.

The African Entrepreneurship Award 2018, now in its fourth year, announced new award categories, including entrepreneurial sport and innovation. Innovation meets the challenges of economic and social development in Africa. Sport bolsters economies, improves health and promotes sound values such as perseverance, courage, integrity and cooperation.

33 AEA award-winners have received aggregate prize-money amounting to USD 3 million and have successfully transformed their projects and start-ups into sustainable revenue-generating businesses, creating more than 2,200 jobs and attracting 264,000 customers.

HIGHLIGHTS

• BMCE Bank of Africa named 'Socially Responsible Bank of the Year 2018' at the African Banker Awards 2018 ceremony held in Busan, South Korea.

• BMCE Bank of Africa awarded OHSAS 18001 certification for occupational health, safety and well-being, becoming the first bank in Morocco to be OHSAS 18001-certified in occupational health, safety and well-being.

• Awarded the bronze medal in the 'Best Integral Phygital Campaign' category for its 'Connected bank' communications campaign to promote and broadcast the Bank's entire range of innovative solutions and services.

• Purchasing Management activity obtains ISO 9001:2015 certification in recognition of the efforts made to establish a well-structured and entirely internal customer-centric quality management system.

Forthcoming Meeting

Monday 1 October 2018 at 15:30

Meeting with Analysts and the Press:

BMCE Bank Group's first half 2018 results presentation

FINANCIAL COMMUNICATION

Tel: +212 522 49 80 03/+212 522 46 28 06 - Fax: +212 520 20 50 54 - E-mail: relationsinvestisseurs@bmcebank.co.ma