68 Tariq Si­jil­massi, chief ex­ec­u­tive, Crédit Agri­cole du Maroc

The Africa Report - - CONTENTS - In­ter­view by Jules Cré­tois and Stéphane Bal­long for Je­une Afrique

Cap­i­tal­is­ing on its strong re­sults, state-owned Moroc­can bank Crédit Agri­cole du Maroc is pre­par­ing to go public and ex­pand into Africa

Tarik Si­jil­massi looks re­laxed and poised as he sits down ready to an­swer ques­tions , but he makes it clear that he will not talk about pol­i­tics. Hav­ing worked in bank­ing for the past 30 years, the chief ex­ec­u­tive of Crédit Agri­cole du Maroc ( CAM) and HEC busi­ness school grad­u­ate has be­come a ma­jor fig­ure in the coun­try’s eco­nomic life. Known to close friends as ‘Se­jil’, he was born in Rabat and works in the heart of the city, which has not ham­pered his un­der­stand­ing of the prob­lems of the bank’s largely ru­ral clien­tele. To day, t he banki ng g roup – which is 75% state-owned, with 15% held by in­sur­ers Mam­daMCMA and 10% by the Caisse de Dépôt et de Ges­tion – is do­ing well. Cap­i­tal­is­ing on its pos­i­tive re­sults, CAM, one of the main fun­ders of the Plan Maroc Vert launched in 2008, is set­ting out its new am­bi­tions to ex­pand its op­er­a­tions to sub-sa­ha­ran Africa and share its ex­per­tise there. Your group used to make losses, but it has grad­u­ally be­come prof­itable, as your 2016 and first quar­ter 2017 re­sults show. How did you get things back on an even keel? TARIQ SI­JIL­MASSI: When I took over the reins of the com­pany in 2003, our branches in the ru­ral ar­eas were mainly fo­cused on their public ser­vice mis­sion, and this had a neg­a­tive im­pact on the bank’s prof­itabil­ity. To­day, thanks to a mul­ti­chan­nel bank­ing model, the prof­itabil­ity ra­tio in th­ese ar­eas is higher than that of the big cities, where we are com­pet­ing with other banks. Ba­si­cally, we have fo­cused our ac­tiv­i­ties based on our clients’ pro­files. We of­fer mi­cro­cre­d­its to small farm­ers through the Ardi Foun­da­tion, while the ser­vices of our meso-credit sub­sidiary Tamwil El Fel­lah, which we man­age in part­ner­ship with the state, go to­wards medium-sized farm­ers who are not el­i­gi­ble for tra­di­tional bank fi­nanc­ing. Lastly, we of­fer agribusi­ness fi­nanc­ing, and with that we can say a real revo­lu­tion has oc­curred. For some years now, we’ve had only one client, and one with a high risk pro­file. But now farm­ers have be­come an in­ter­est­ing group for tra­di­tional banks. We are try­ing to main­tain a bal­ance be­tween th­ese dif­fer­ent tar­gets, which helps us to main­tain a com­fort­able fi­nan­cial sit­u­a­tion.

You have been crit­i­cised for pro­vid­ing only a few in­sur­ance prod­ucts. Are you sat­is­fied with your part­ner­ship with the in­surer Mamda? Mamda and CAM feed off each other. For ex­am­ple, we send them clients for drought in­sur­ance. But I think that nei­ther of us is to­tally happy with our level of co­op­er­a­tion. We want more be­cause we see that there is huge po­ten­tial. How­ever, when Morocco is go­ing through dif­fi­cult times, the joint ac­tion taken by Mamda and CAM, against the back­drop of the pro­vi­sions made by the Plan Maroc Vert, help to avoid any dis­as­ters. As a re­sult, dur­ing

the last drought, Mamda paid out D1bn ($106.4m), the state launched a global pro­gramme worth D5bn and CAM put in place ap­prox­i­mately D1.5bn of spe­cial fi­nanc­ing for the plant­ing of late crops. This shows that work­ing to­gether bears fruit.

What is the lat­est on the bank re­cap­i­tal­i­sa­tion an­nounced some time ago? Do you still have plans to list on the stock mar­ket? CAM has fought hard to reach a level of cap­i­tal that com­plies with the cur­rent reg­u­la­tions. We are in good stand­ing in re­gard to the sol­vency ra­tio, but in Morocco the bank­ing sec­tor is par­tic­u­larly strong and re­silient, with lev­els of cap­i­tal­i­sa­tion that far ex­ceed the reg­u­la­tory re­quire­ments. As a re­sult, we want to go be­yond the le­gal re­quire­ments and seek an ex­tra level of se­cu­rity, as our peers have done. Our past and fu­ture sub­or­di­nated debt is­suance give us a sol­vency ra­tio be­tween 13.5% and 14%. With re­gard to the Tier 1 ra­tio, we are at 9%. And we can strengthen this through the in­jec­tion of cap­i­tal, which could hap­pen through the bank’s list­ing on the stock mar­ket. It is up to the stake­hold­ers to de­cide and choose a date. What I can say is that we’ve met all the nec­es­sary pre­req­ui­sites for list­ing.

So CAM will go public in 2018? I’d say more likely in 2019, but this is not an of­fi­cial an­nounce­ment. Once again, it does not de­pend on me. We are do­ing our part : we are re­leas­ing quar­terly re­ports and we have put in place the nec­es­sary in­ter­nal tools. And I would like to re­mind you that, ac­cord­ing to the law that set up CAM, the state has to re­main a ma­jor­ity share­holder and main­tain at least 51% of the shares. For now we have 75%, which still leaves us a good cap­i­tal­i­sa­tion mar­gin with­out the need for new reg­u­la­tions.

You were part of king mo ham med VI’S del­e­ga­tion dur­ing his re­cent African tours. Do you have any plans for sub-sa­ha­ran Africa? We’ve been look­ing at this re­gion for some years now while ask­ing some fun­da­men­tal ques­tions. Yes, we want to go there, but we have to know how and why. There are three Moroc­can banks –At­ti­jari­wafa, BMCE and BCP – that are al­ready well es­tab­lished in many African coun­tries, and they of­ten con­trol a sig­nif­i­cant share of the mar­ket. So to in­tro­duce a fourth bank may not nec­es­sar­ily be rel­e­vant, al­beit the need for fi­nanc­ing in ru­ral ar­eas has to be ad­dressed. Coun­tries in sub-sa­ha­ran Africa want to em­bark on key changes in their agri­cul­tural poli­cies and the need for a fi­nan­cial part­ner is be­com­ing in­creas­ingly ob­vi­ous. Nev­er­the­less, Morocco’s agri­cul­ture min­is­ter has im­ple­mented the Adap­ta­tion of African Agri­cul­ture ini­tia­tive, and we have de­cided to be a part­ner for this ini­tia­tive. For us, our goal is not to make eq­uity in­vest­ments in lo­cal banks be­cause we don’t want to shoul­der the re­spon­si­bil­ity of their fi­nan­cial health. What we can and want to do is to en­ter into part­ner­ships to help de­ploy mod­els that have worked well in Morocco.

Have you al­ready started the process? We have signed agree­ments with about 15 es­tab­lish­ments. The idea is to build a net­work of agri­cul­tural banks in Africa that

“The idea is to build a net­work of agri­cul­tural banks in Africa to share best prac­tice”

will share their best prac­tices, in or­der to ex­port some of ours and learn from oth­ers. When it comes to dig­i­tal­i­sa­tion, for ex­am­ple, we can learn from banks in an­glo­phone East Africa. So that is how I en­vi­sion our roll-out into Africa, us­ing the right ex­per­tise and project part­ner­ships. We signed an agree­ment with a sub­sidiary of Natixis – Mirova – which man­ages a $300m grant from the United Na­tions to fund projects com­bat­ing land degra­da­tion. CAM will be a dis­tri­bu­tion mech­a­nism for th­ese funds.

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