More French Banks Likely to Exit Morocco

When French bank Societe Generale Marocaine de Banques (SocGen) announced its decision to quit Morocco, the North African country, last month, it did not come as a surprise to market watchers as other French banks such as Credit Agricole and BNP Paribas also started to review their strategies in the Kingdom.

SocGen has assets around $12 billion in Morocco and serves over one million customers through its 300 branches across the country. The bank is ranked the country’s fifth largest and has a market share of 8% market in loans and 7% in deposits.

Despite a sound footing, SocGen has decided to sell off 57.67% stake, along with its subsidiaries, to the Moroccan conglomerate Saham Group in a deal valued at $792 million. With SocGen exiting Morocco, the shares of banks with foreign ownership is reported to come down drastically from 19% in 2021 to 5T at present.

The other major concern for the local as well as international banks in Morocco is said the return on equity (RoE) which is around 10% and lower than in most emerging economies. This has forced many domestic banks to look elsewhere in African countries, for more profits to stay afloat as they are faced with increasing competition in an already saturated market.

According to the International Monetary Fund (IMF), Morocco’s banking system is at the core of the financial sector, with 19 conventional banks including five multinational banks and six offshore banks.

The sector is dominated by the five largest banks, which hold a market share of deposits and credit of about 80%. The three largest banks – Attijariwafa, Banque Marocaine du Commerce Extérieur (BMCE) and Banque Centrale Populaire (BCP) – hold about two-thirds of total bank assets. 

As part of consolidating their operations, Moroccan banks closed 145 branches and opened 42 new ones, bringing the total network in operation to 5,811 branches at the end of 2023.

However, the country’s banking sector has showed its resilience and growth potential, as three of its prominent banks – Attijariwafa Bank, BCP Group, and Bank of Africa – have found place in the Forbes Middle East’s 2024 list of the 30 most valuable banks in the Middle East and North Africa (MENA) region.

Saham Group Takeover

SocGen has approved the sale of the Group’s shares (57.67%) in Société Générale Marocaine de Banques including its subsidiaries and the total divestment of Sogecap’s stakes in the insurance company La Marocaine Vie. Saham Group would take over all the activities operated by these companies, as well as all client portfolios and employees.

This divestment project is part of the execution of Societe Generale’s strategic roadmap presented in September 2023, targeting a streamlined, more synergetic and efficient business model, while strengthening the Group’s capital base.

The transaction is expected to be completed by end of 2024. The announcement of this agreement is expected to have a negative accounting impact of approximately $ -80.76 million on the Group’s Q1 2024 results.

Societe Generale and Saham also outlined the framework for a long-term business partnership that would allow Societe Generale’s corporate clients operating in Morocco to engage with a local banking partner. For Saham Group this partnership would offer its future large clients the support and financing solutions provided by Societe Generale Group experts.