25th Mar 2008 07:00
Banque Marocaine Du Commerce Exteri24 March 2008 BMCE BANK GROUP'S FINANCIAL COMMUNICATION ANNUAL RESULTS 2007 OUTSTANDING RESULTS FOR BMCE BANK GROUP The Board of Directors of BMCE Bank, chaired by Mr Othman BENJELLOUN, was heldon March 18th, 2008, at the Bank's Head Office. It examined the Bank'sactivities during the fiscal year 2007 and closed the related accounts. TheBoard of Directors will propose to the Annual General Meeting the payment of adividend of 30 dirhams per share. • Strong growth of +55% in net earnings • Substantial increase of +60% in earnings before tax to MAD 2.1 billion • Acceleration in the organic growth of BMCE Bank's domestic activities, driven by branch expansion • Consolidation of the Group's international development strategy • Innovative bank with differentiated and high value added products and services SUBSTANTIAL INCREASE IN CONSOLIDATED RESULTS • Strong growth of +55% in consolidated net income to MAD 1.4 billion compared to MAD 905.4 million in 2006. • Sustained increase of +24% in net banking income to about MAD 4.5 billion in 2007. This performance is due, on one hand, to the growth in the intrinsic activity of the bank, and on the other hand, to the capital gains on the sale of a 5% equity stake to Caja de Ahorros del Mediterraneo, following an industrial and equity-based partnership. • Realization of substantial capital gains on the disposal of equity investments, having allowed the establishment of a MAD 300 million provision for future investments. • +53% increase in gross operating income to MAD 2.5 billion. • +52.7% growth in consolidated net income -group share- to about MAD 1.3 billion compared to MAD 834 million in 2006. ACCELERATION OF THE BANK'S ORGANIC GROWTH • Unprecedented commercial development, with the opening of 70 new branches and the recruitment of about 700 employees, combined with important investments in information systems and logistics, as well as large scope structuring projects, leading to a 19% increase in general operating expenses. • Sustained growth in customer deposits and loans, which increased by +21% and +29%(1), respectively. • Increase of +21% in net interest income and +22% in fee income, driven by the reinforcement of the bank's position in the retail market, with outstanding growth in mortgage and consumer loans. (1) Including the leasing and renting operations, as well as advances acquiredby factoring SUSTAINED INCREASE IN TOTAL ASSETS • BMCE Bank Group's total assets exceeding, for the first time, the MAD 100 billion level to attain MAD 107 billion, that is a 26% increase compared to 2006. REINFORCED RISK MANAGEMENT • Carrying over of a dynamic debt collection process, bringing the provision write back amount to MAD 347 million-including recovery of amortized debts- • Significant improvement in risk management ratios, with a decline in consolidated NPL ratio from 6.48% to 5.25% and an increase in the coverage ratio by 7.1 pp to 87.4%. REFOCUS OF THE EQUITY INVESTMENT PORTFOLIO ON CORE BUSINESS • 48% decrease in the net book value of the equity investment portfolio -excluding consolidated subsidiaries- to MAD 842 million compared to MAD 1 636 million in 2006, as part of the refocusing strategy on the bank's core business. RECONFIRMED INVESTORS' CONFIDENCE IN BMCE STOCK Outstanding performance of BMCE Bank stock, with a 125% increase in the stockprice, reaching MAD 2,815 as of December 31st, 2007, over-performing the MASIand MADEX indexes (+34% and+35%, respectively) and the Banking sector index(+53%). 2008 OUTLOOK • Promising growth perspectives thanks to the first fruits of the structuring projects, the acceleration in the branch expansion with the opening of 100 new branches in 2008, and the commercial dynamics in the enterprise and corporate markets. • Likewise, MediCapital Bank, Bank of Africa, the investment banking activities, as well as the specialized financial services, resulting especially from the synergies across the different business lines, will all contribute to the Group's performance. Key Data for Shareholders Annual growth rate of BMCE Stock price +125% Dividend per share 30 MAD Number of shares 15,875,139 AGM May 2008 List of Consolidated Companies Full Consolidation Shareholding (%)BMCE Capital 100.00% BMCE Capital Bourse 100.00% BMCE Capital Gestion 100.00% La Congolaise de Banque 25.00% MediCapital Bank 100.00% BMCE International Madrid 100.00% Salafin 74.55% Maghrebail 35.92% Maroc Factoring 100.00%Equity MethodCasablanca Finance Markets 33.33% ACMAR 20.00% Banque de Developpement du Mali 27.38% SUSTAINED DOMESTIC GROWTH AND REINFORCED INTERNATIONAL DEVELOPMENT Outstanding performance achieved by the Group as shown by a sharp growth in theindicators, thanks to the increasing contribution of the different businesslines, backed up by strengthened synergies. THE DOMESTIC BANK ENGAGED IN A PROFITABLE GROWTH DYNAMICS • Substantial commercial performance, with a +17% increase in deposits from individual and professional customers, and a twofold increase in consumer loans. • Strong growth of 48% in mortgage loans, sustained by the widening of the products portfolio. • Continuous development of the bancassurance activities, as reflected by a 58% growth in turnover. • A new boost in the Moroccan living abroad market; BMCE Bank has achieved the best performance in terms of market share in the banking sector, with deposits and transfers increased by 18% and 25%, respectively. • Strengthening of the bank's position in the professionals market segment, marked by an increase in the uptake of the products offered to this clientele (BMCE Pack Pro, BMCE Net Pro, and Habitat Pro). ENTERPRISE AND SME MARKET DYNAMICS • Fostering of relationships with enterprise customers, as illustrated by a significant growth in investment loans (+92%), current account deposits (+16%), and commercial transactions (+50%). • Foreign trade activity, put at the heart of the bank's strategy for the enterprises market, with import and export domiciliation increased by +37% and +11%, respectively. • Proximity to enterprise customers reinforced with the business centers network expansion CONSOLIDATED POSITION IN THE CORPORATE MARKET • 2007, a year placed under the sign of innovation and development in terms of financial engineering, partnerships and performance, with a +18% increase in corporate deposits, +28% in off balance sheet commitments, +46% in trade finance, and a threefold increase in "commitments by disbursement" • Major success in the project finance area; BMCE Bank being the arranger and lead manager or co-lead manager in the financing of the major projects contributing to the development of the Moroccan economy. • Development of new financing products, in synergy with the investment bank, with the introduction of an FX hedging instrument, combining debt and equity. EXPANSION OF THE INTERNATIONAL ACTIVITIES • International development marked in 2007 by the launching of MediCapital Bank activities, the Group's bridgehead in the international markets. • Reinforced position in the sub-Saharan Africa thanks to the partnership sealed between BMCE Bank and AFH:Bank of Africa Group, third largest banking group in the West African Economic and Monetary Union, through a 35% equity stake acquired by BMCE Bank. STRONG ACHIEVEMENTS OF THE INVESTMENT BANK • BMCE Capital Markets, a dynamic player in all market activities, with a reinforced position as a market maker for foreign exchange activities and increased volumes realised on the monetary and bond activities. • Strengthening of the position of BMCE Capital Bourse with a gain of 3pp in terms of market share to 16.6% and a 128% increase in the transactional volume. • A significant increase of BMCE Capital Gestion's assets under management to MAD 15.6 billion, allowing it to position among the first companies of its sector in parallel to the reinforcement of the products offer via the creation of new Mutual Funds covering new markets. • Creation of BMCE Capital Gestion Privee, specialized in private management and designated to wealthy customers, which has recorded outstanding performance during the first year of activity. • Noteworthy growth of 33% in BMCE Capital Titres' assets under custody to MAD 120.5 billion. • Important potential of development concerning the investments and consulting activities with (i) the initiation by Capital Invest of the first LBO operation in Morocco through its new fund "Capital North Africa" (ii) the launching by Actif Invest of the fund "Maghreb Siyaha", endowed with MAD 1 Billion of stockholders' equity and (iii) the carrying out by BMCE Capital Conseil of important consulting and IPOs operations. • Consolidation of the position of BMCE Capital Dakar as a key reference player in Africa, supported by the conclusion of new important mandates with African operators. • Positive achievements of Axis Capital, Tunisia, in all the segments of activity during the first year of operations. INCREASING CONTRIBUTION OF THE SPECIALISED FINANCIAL SERVICES • +33% rise in Salafin's Net Income, in a context of its initial public offering in November 2007. • +70% growth in Maghrebail's contribution to the consolidated net earnings - group share, boosted by a rise of leasing transactions. • +14% increase in the contribution of Maroc Factoring, leader of factoring activities, to the consolidated Net Banking Income. RECENT EVENTS 2008 • Acquisition of another 5% equity stake of BMCE Bank by the French Group Credit Mutuel - CIC, which holds now 15%. • ISO 9001 certification of BMCE Capital's Trading Room besides the renewal of the certification of Recovery, Project Finance, Loans to Individuals, Custody, Electronic Payment, and Foreign activities. • Launching by BMCE Capital Gestion, the asset management company of the Group, of the first Maghreb Mutual Fund, promoting the birth of new investment opportunities in the maghreb stock exchanges. • Successful raising of a 10 year subordinated bond of 1 billion DH on the domestic market alongside a EUR 70 million perpetual subordinated debt concluded with IFC, subsidiary of the World Bank, illustrating the strong innovation culture of the Group. • BMCE Bank awarded, as "Learning Company", during the 3rd edition of the HR Trophies organised in Paris, for its actions in terms of knowledge sharing, transfer and capitalisation. CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31ST, 2007 in thousand MAD ASSETS 2007 2006 CASH, CENTRAL BANKS, TREASURY, GIRO ACCOUNTS 8 084 789 7 883 528 LOANS TO CREDIT INSTITUTIONS AND EQUIVALENT 19 720 186 14 324 319 . Demand 6 101 288 3 645 771 . Time 13 618 898 10 678 548 LOANS AND ADVANCES TO CUSTOMERS 51 827 089 39 411 120 . Cash and consumer loans 25 994 119 19 248 713 . Equipment loans 10 788 743 8 002 998 . Mortgage loans 11 411 716 7 747 591 . Other loans 3 632 511 4 411 818 LEASING AND RENTED OPERATIONS 6 257 388 5 631 331 ADVANCES ACQUIRED BY FACTORING 878 057 742 716 TRANSACTION AND MARKETABLE SECURITIES 13 010 707 11 721 359 . Treasury bonds and equivalent securities 3 852 087 2 877 869 . Other debt securities 2 716 685 1 572 015 . Title deeds 6 441 935 7 271 475 OTHER ASSETS 3 285 502 1 536 308 INVESTMENT SECURITIES 799 574 27 . Treasury bonds and equivalent securities 733 924 27 . Other debt securities 65 650 EQUITY INVESTMENTS OF NON CONSOLIDATED AFFILIATES 842 151 1 635 969 SECURITIES CONSOLIDATED BY THE EQUITY METHOD 184 577 184 634 . Financial companies 184 577 184 634 . Other companies SUBORDINATED LOANS INTANGIBLE FIXED ASSETS 268 155 140 640 TANGIBLE FIXED ASSETS 1 972 055 1 840 684 GOODWILL ON ACQUISITION 19 607 21 297 TOTAL ASSETS 107 149 837 85 073 932 in thousand MAD Liabilities 2007 2006 CENTRAL BANKS, TREASURY, GIRO ACCOUNTS LIABILITIES TO CREDIT INSTITUTIONS AND EQUIVALENT 9 143 598 5 013 327 . Demand 2 580 845 690 716 . Time 6 562 753 4 322 611 CUSTOMER DEPOSITS 81 969 131 67 618 132 . Demand deposits 41 277 769 34 392 889 . Savings deposits 12 420 227 10 985 108 . Time deposits 23 817 614 17 794 638 . Other deposits 4 453 521 4 445 497 DEBT SECURITIES ISSUED 816 407 1 076 635 . Negotiable debt securities 816 407 816 807 . Bond loans - 259 828 . Other debt securities issued - OTHER LIABILITIES 5 521 587 2 818 211 GOODWILL ON ACQUISITION CONTINGENT LIABILITIES 178 057 69 823 REGULATED PROVISIONS SUBSIDIES, ASSIGNED PUBLIC FUNDS AND SPECIAL GUARANTEE FUNDS SUBORDINATED LOANS 1 002 576 1 020 368 PREMIUMS RELATED TO CAPITAL 4 632 594 4 281 611 Capital 1 587 514 1 587 514 SHAREHOLDERS UNPAID-UP CAPITAL (-) CONSOLIDATED RESERVES, REVALUATION RESERVE, 897 293 682 951UNREALISED EXCHANGE GAINS/LOSSES DIFFERENTIALS AND DIFFERENCE INEQUITY METHOD . Group share 456 281 343 870 . Minority interests 441 012 339 081 NET INCOME FOR THE YEAR (+/-) 1 401 080 905 360 . Group share 1 273 857 834 069 . Minority interests 127 223 71 291 TOTAL LIABILITIES 107 149 837 85 073 932 CONSOLIDATED OFF-BALANCE SHEET AS OF DECEMBER 31ST, 2007 in thousand MAD Off- Balance Sheet 2007 2006GIVEN COMMITMENTS 32 064 438 12 344 386 Financing commitments on behalf of credit institutions and 34 144 37 985equivalentFinancing commitments on behalf of customers 23 525 965 5 058 687Guarantee commitments given to credit institutions and 2 593 172 2 075 608equivalentGuarantee commitments given to customers 5 911 157 5 172 106Securities repos purchased -Other securities to be delivered - RECEIVED COMMITMENTS 5 165 710 2 162 392Financing commitments received from credit institutions and 231 937 -equivalentGuarantee commitments received from credit institutions and 4 336 776 2 130 545equivalentGuarantee commitments received from state and various guarantee 596 997 31 847bodiesSecurities repos sold -Other securities to be received - CONSOLIDATED INCOME STATEMENT AS OF DECEMBER 31ST, 2007 in thousand MAD 2007 2006 BANK OPERATING REVENUES 8 812 248 7 035 036 Interests and assimilated revenues on transactions with credit 664 208 377 398institutionsInterests and assimilated revenues on transactions with 2 778 018 2 238 321customersInterests and assimilated revenues on debt securities 244 646 240 419Revenues on title deeds 88 954 84 119Revenues from leased and rented fixed assets 2 565 628 2 310 543Fees on provided services 825 730 638 474Other banking revenues 1 645 064 1 145 762 BANK OPERATING EXPENSES 4 339 538 3 428 543 Interests and assimilated expenses on transactions with credit 474 111 317 461institutionsInterests and assimilated expenses on transactions with 1 215 921 854 883customersInterests and assimilated expenses on debt securities issued 40 930 45 916Expenses on leased and rented fixed assets 2 095 602 1 831 945Other banking expenses 512 974 378 338 NET BANKING INCOME 4 472 710 3 606 493Non-Banking operating revenues 622 137 173 129Non-Banking operating expenses 66 869 12 181GENERAL OPERATING EXPENSES 2 538 000 2 125 664Staff expenses 1 302 010 1 055 029Tax expenses 48 871 41 402External expenses 975 437 801 029Other general operating expenses 8 680 6 010 Allowances for depreciation and provisions for tangible fixed 203 002 222 194assets ALLOWANCES FOR AMORTISATION ON GOODWILL ACQUISITION 6 479 8 999GOODWILL ACQUISITION WRITE BACKS ALLOWANCES FOR PROVISIONS AND LOAN LOSSES 1 088 428 867 746 Allowances for non performing loans and commitments 540 551 584 945Loan losses 106 740 221 060Other allowances for provisions 441 137 61 741PROVISION WRITE-BACKS AND RECOVERY ON AMORTISED DEBTS 747 521 603 430 Provision write-backs on non performing loans and commitments 327 154 446 396Recovery of amortised debts 20 446 34 281Other provision write-backs 399 921 122 753 CURRENT INCOME 2 142 592 1 368 462Non-current revenues 6 256 636Non-current expenses 1 636 29 682 PRE-TAX EARNINGS 2 147 212 1 339 416Corporate tax 762 499 456 256 NET EARNINGS OF COMPANIES ACCOUNTED FOR BY FULL CONSOLIDATION 1 384 713 883 160SHARE IN NET INCOME OF COMPANIES ACCOUNTED FOR BY EQUITY METHOD 16 367 22 200Financial companies 16 367 22 200Other companies NET EARNINGS FOR THE YEAR 1 401 080 905 360 . Group's equity 1 273 857 834 069 . Minority interests 127 223 71 291 CONSOLIDATED MANAGEMENT BALANCE STATEMENTS AS OF DECEMBE 31ST, 2007 in thousand MADEARNINGS FORMATION TABLE 2007 2006 + Interest and equivalent revenues 3 629 435 2 791 203 - Interests and equivalent expenses 1 730 549 1 216 998INTEREST MARGIN 1 898 886 1 574 205 + Revenues from leased and rented fixed assets 2 565 628 2 310 543 - Expenses on leased and rented fixed assets 2 095 603 1 831 945 PROFIT FROM LEASING AND RENTING OPERATIONS 470 025 478 598 + Fees received 924 846 736 399 - Fees paid 106 739 66 926 MARGIN ON FEES 818 107 669 473 +/- Income from operations on transaction securities +/- Income from operations on marketable securities 1 080 978 687 877 +/- Income from exchange transactions 110 956 110 918 + Income from derivatives transactions -3 383 -8 179 INCOME FROM MARKET TRANSACTIONS 1 188 551 790 616 + Other miscellaneous banking revenues 191 045 168 652 - Other miscellaneous banking expenses 93 904 75 051 NET BANKING INCOME 4 472 710 3 606 493 +/- Net income from equity investments 441 978 110 477 + Other non-banking operating revenues 158 687 46 808 - Other non-banking operating expenses -46 608 -6 936 - General operating expenses 2 538 000 2 125 664 GROSS OPEARTING INCOME 2 488 767 1 631 178 +/- Allowances for non performing loans and commitments (net -308 541 -322 047of write-backs) (net of write-backs) + Other allowances net of provisions write-backs -31 155 68 330 + Allowances net of write backs on goodwill acquisition -6 479 -8 999amortisation CURRENT INCOME 2 142 592 1 368 462 NON-CURRENT INCOME 4 620 -29 046 - Tax 762 499 456 256 NET EARNINGS OF COMPANIES ACCOUNTED FOR BY FULL CONSOLIDATION 1 384 713 883 160 16 367 22 200 SHARE IN NET INCOME OF COMPANIES ACCOUNTED FOR BY EQUITY METHODFinancial companies 16 367 22 200Other companiesNET EARNINGS FOR THE YEAR 1 401 080 905 360 . Group's equity 1 273 857 834 069 .Minority interests 127 223 71 291 CONSOLIDATED CASH FLOW STATEMENT AS OF DECEMBER 31ST, 2007 in thousand MADCASH FLOW 31/12/2007 31/12/2006 +/- NET EARNINGS FOR THE YEAR 1 401 080 905 360 + Allowances for depreciation and provisions for intangible and tangible 28 498 175 656fixed assets + Allowances for provisions for equity investments depreciation 5 224 13 776 + Allowances for provisions for general risks + Allowances for regulated provisions 7 121 2 058 + Non-current allowances - 1 000 - Provision write-backs 57 262 18 731 - Capital gains on disposals of intangible and tangible fixed assets 77 947 5 177 + Capital losses on disposals of intangible and tangible fixed assets 193 21 - Capital gains on disposals of equity investments 630 100 126 321 + Capital losses on disposals of equity investments 27 514 5 244 - Write-backs of investment subsidies received +/- FINANCING CAPACITY 704 321 952 886 - Dividend distributed 399 477 368 557 +/- CASH-FLOW 304 844 584 329 ERNST & YOUNG KPMG37, Bd Abdellatif Ben Kaddour 11, Avenue Bir KacemCasablanca Soussi, RabatMorocco Morocco STATUTORY AUDITOR'S REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31ST 2007 This is a free translation into english of the Statutory Auditor's report on theconsolidated financial statements issued in the french language and is providedsolely for the convenience of english speaking readers. The Statutoruy Auditor'sreport on the consolidated financial statements includes informationspecifically required by Moroccan law in all audit reports. This report on the consolidated financial statements should be read inconjunction with, and construed in accordance with, Moroccan law andprofessional auditing standards applicable in Morocco. We have audited the consolidated balance sheet of the Group "Banque Marocainepour le Commerce Exterieur" (BMCE-BANK) for the year ended December 31st 2006,the consolidated income statement, the consolidated cash flow statement andnotes to consolidated financial statements as attached to this report. Theseconsolidated financial statements have been prepared under management ofBMCE-BANK responsibility. Our role is to express an opinion on theseconsolidated financial statements based on our audit. We conducted our audit in accordance with the professional standards applicablein Morocco. Those standards require that we plan and perform the audit to obtainreasonable assurance about whether the consolidated financial statements arefree of material misstatement. An audit includes examining, on a test basis,evidence supporting the amounts and disclosures in the consolidated financialstatements. An audit also includes assessing the accounting principles used andsignificant estimates made by the management, as well as evaluating the overallconsolidated financial statements presentation. We believe that our auditprovides a reasonable basis for our opinion. In our opinion, the consolidated financial statements as referred above ofBMCE-BANK for the year ended December 31st 2006, give, in all their materialaspects, a true and fair view of the assets, liabilities and financial positionof the group, and of the consolidate income of its operation and cash flows forthe year ended December 31st 2006, in accordance with accounting principlesdescribed in the notes of financial statements. Casablanca, March 18th, 2008 The Auditors ERNST & YOUNG KPMBachir TAZI Jamal Saad EL IDRISSIPartner Partner -------------------------- This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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