Morocco’s Attijariwafa Bank half-year profits plunge by 57.5%

MOROCCO – Attijariwafa Bank, one of Morocco’s biggest lenders, has reported a 57.5% drop in first-half net profit attributable to shareholders to 1.2 billion dirhams ($130 million).

Attijariwafa however noted that its net banking income for the first half of 2020 rose 5.1% to 12.4 billion dirhams.

The bank which is part of king Mohammed VI’s holding company the SNI cited a surge in pandemic-related risks as the reason for the decline in profits.

Operations in H1 2020 were penalized by a cost of risk that peaked at MAD3 billion (About US$ 323.12 million) , up 233.1% compared to H1 2019.

The Bank also revealed that it had deferred payments on loans for 210,000 customers in line with the bank’s decision of cushioning its clients from the adverse effects of the corona virus pandemic.

Attijariwafa operates subsidiaries in Cameroon, Congo-Brazzaville, Egypt, Gabon, Ivory Coast, Mali, Mauritania, Senegal, Tunisia and Togo as well as branches in Europe and the Gulf.

Like many other African banks, Attijariwafa experienced a “significant deterioration in credit risk” due to the pandemic and had to set funds aside to deal with the risks.

As a reminder, Attijariwafa Bank was already in a fragile context before the coronavirus pandemic broke out, according to data from Capital IQ.

The progression of its net income has been very weak over the last three years. From +13.3% at the end of 2017, it dropped to only +5.8% in 2018 and +1.9% at the end of 2019.

Morocco’s Attijariwafa did not declare any dividends this year in compliance with a directive from Morocco’s central bank.

Bank Al Maghrib, Morocco’s Central Bank gave the directive in May asking Banks to withhold dividends this year so they are better placed to deal with any fallout from the COVID-19 pandemic.

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