EXECUTIVE SUMMARY
RESILIENCE OF THE BUSINESS MODEL…, START OF A NEW GROWTH CYCLE
Attijariwafa bank confirms the resilience of its ¡§business model¡¨ through both a solid and a sustainable growth since the Covid crisis. With its strong positioning, the Group would be at the heart of the new investment dynamic in Morocco over the 2024-2030 period .
Alongside our analysis of the Group's 2023 results and the Moroccan banking sector dynamic, we emerge with the following key messages:
- Attijariwafa bank Group's achievements for 2023 exceed our forecasts posted in Q4-23 (Cf. Banking Sector Report - December 2023). This is a NBI up +15.5% against an estimate of +10.6% and a NIGS up +23.0% against a forecast of +15.6%. In this context, the DPS has continued its long term upward trend from MAD 15.5 to 16.5;
- It is reassuring to notice that the Group's growth dynamic is driven by the "Core Business" activities. Beyond the performance of market activities which benefited from the downward of interest rates, the net interest income, which represents 62% of NBI, maintains a steady growth rate of +13.0%. It has benefited from a faster transmission of the key rate¡¦s (KR) increase on loans and from the optimization of the cost of funding through a +9.2% growth in interest-free deposits of in Morocco, higher than that of the sector of +5.9% ;
- The deployment of a new digital means constitutes a real driver for costs optimization.
After restating the contribution to the 2023 Special Earthquake Fund, the consolidated Cost-to-Income ratio (C/I) would stand at 39.4%, the lowest level observed within the Moroccan banking sector;
- The downgrade of sovereign ratings in Africa resulted in an increase in the consolidated cost of risk (CoR), i.e. +24.9% to MAD 3,982 Mn. To this end, the CoR rate represents the double of that observed in 2019, i.e. around 95 BPS. In our opinion, the persistence of crises on a global scale would maintain the CoR rate at levels structurally higher than those observed during the pre-Covid period;
- In 2024, the Moroccan banking sector begins a new growth cycle thanks to the start of major structuring projects and the revitalization of the real estate sector. As part of the AGR scenario, we retain an AAGR of bank loans superior to that of the GDP, i.e. +5.0% during the period 2024E-2026E;
- Thanks to its ¡§leadership¡¨, Attijariwafa bank Group is well positioned to capture a large part of the new investment dynamic in Morocco. Thus, we forecast a sustainable AAGR of the NIGS of +7.2% during the period 2023-2026E, from an earning power of MAD 7.5 Bn to MAD 9.2 Bn. A scenario which supports our investment strategy published in January 2023 and which consisted of overweighting the banking sector in the portfolios. (Cf. AGR House View January 23, AGR House View April 23).
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