BMCE Bank of Africa, the second largest bank on the Casablanca Stock Exchange, is looking for organic growth within its subsidiaries, according to information provided by Moroccan media Challenge.

The bank wants to make new acquisitions in the region to increase its net income, which is still affected by the remuneration of minority interests. In a context characterized by fierce competition on the African banking market, the group still had to spend the equivalent of MAD945.4 million ($98.4 million) of its consolidated net income on minority interests. Similarly, an analysis of the group's shareholders' equity showed that the share of minority interests in consolidated reserves (MAD3.97 billion) is higher than that of the group (MAD1.58 billion).

The expansion strategy could be a tough process for BMCE Bank of Africa, even if the bank now has in its capital the reference shareholder CDC (Commonwealth Development Corporation), the British development finance fund. Just on its main subsidiary, BOA Bank group, BMCE Bank of Africa will have to deal with Proparco (France), BIO (Belgium) and FMO (Netherlands), which together account for 15% of the shareholding and are also present in the capital of the BOA country subsidiaries.

The implementation of such an initiative would allow BMCE Bank to strengthen the shareholder return base. The BCME Bank share gained 4.4% since the year started, compared with an impairment loss over the same period in 2018. But much more remains to be done on the Moroccan financial market. Latest financial publications show a net margin ratio of 19.2%, which lags below that of the whole sector.

Idriss Linge