Morocco’s banking sector is developing at speed.

ince the reform of the Moroccan banking sector in the 1990s, a lot of things have changed for the better. The industry has become more sophisticated, offering greater product variety and better value, while institutions are more closely aligned to international standards.

The country’s financial services sector has matured. The injection of new capital and management following the privatization of formerly state-controlled banks has brought profound change, in terms of modernization and customer focus. These days, the concepts range from internet banking to bond markets. The development of the Moroccan economy is expected to benefit these new-look institutions.

Although there are nearly 20 commercial banking organizations in Morocco, there is a heavy concentration of assets. The four leading banks control more than 72 percent of the country’s deposits and 66 percent of all loans.
Another issue facing the banking community is the relatively low penetration rate, only 20 percent of the entire population has a bank account, and there is only one branch for every 20,000 inhabitants.

For many, though, this represents opportunity. Morocco’s consumer banking market offers rich potential, especially given the trend towards urbanization.
Banque Marocaine du Commerce Exterieur (BMCE), which was privatized in 1995, has already made significant headway in the consumer market. The bank, founded after independence to deal with Morocco’s foreign trade, is now a pioneer on the retail, as well as the commercial, side.

OTHMAN BENJELLOUN Chairman and CEO of BMCE

Othman Benjelloun, Chairman and Chief Executive Officer, says that retail banking is a priority area, providing customers with a choice of services such as mortgages, loans and savings vehicles. For Mr. Benjelloun, BMCE’s corporate social responsibility also plays an important role. “For us this reflects our philanthropic actions related to the environment and children in rural areas. Specifically, the BMCE Foundation was created with two missions: the fight against illiteracy and the preservation of the environment,” he says.

The bank, which is still the leading player in the international trade field with nearly 30 percent market share, has pioneered the development of higher value-added products in Morocco in recent years. A year after privatization it launched a $60 million global depository receipts program on the international market, a first of its kind for the country.

Technology is playing an important role in shaping the new-look financial services industry. Institutions like BMCE and others are placing a major emphasis on the Internet, tele-banking and other home-banking access technologies. It is another way to raise banking penetration rates across the country.

NOUREDDINE OMARY CEO of Banque Centrale Populaire

As one of the oldest institutions in Morocco, Banque Centrale Populaire, is deeply involved in promoting banking and development throughout the country. Initially dedicated to small and medium-sized firms, the bank now boasts an impressive array of new customers, including big corporations involved in international trade. It is already one of the best known indigenous banks abroad and receives an estimated 60 percent of all remittances from Moroccans living overseas. According to Noureddine Omary, Banque Centrale’s Chief Executive Officer, the institution is something of a link between the country itself and the Moroccan diaspora around the world.

The bank – which is slated for privatization in the near future – plays the role of a central bank to some 15 other regional development banks scattered throughout the country. One of its major aims is to promote local and regional banking activities through its network of 400 branches. After privatization, this fundamental role will continue. “This institution should contribute to the development of the national economy,” says Mr. Omary.

He believes that the country has come through the hardest part of the reform process and that the industry is now more secure as a result. “The banking sector was able to face its difficulties especially after the reforms of 1993 which worked both to liberalize the sector and to impose certain rules which eventually gave more security to the industry,” he says.