Capital Intelligence (CI) has affirmed the ratings of SociÉtÉ GÉnÉrale
The rating is constrained by very tight liquidity – despite improvement in 2013 – in respect of the loans to customer deposits ratio, a low liquid assets ratio and higher non-performing loans (NPLs). SGMA's Foreign Currency Ratings (FCR) are affirmed at 'BBB-' Long-Term and 'A3' Short-Term. The FCRs are constrained by CI's internal assessment of sovereign credit risk. The Outlook for the FCR is maintained at 'Stable'. The Support Rating remains at '2', reflecting majority SG ownership.
SGMA, majority owned by
NPLs increased by a higher level in 2013 on the back of continued challenges in the Moroccan economy. SGMA's higher than sector average NPL ratio is partly due to a more conservative policy compared to other domestic Moroccan banks. That said, the ratio is on the high side, although mitigated by an adequate provisioning coverage.
The Bank's liquidity profile improved slightly in 2013 as customer deposit loan growth outpaced loan growth for the first time in some years. Despite the fall, the ratio of loans to customer deposits is considered very high. Liquid assets also rose in 2013, but the base of liquid assets remains small. The overall liquidity profile is supported by a reasonable base of medium and long-term funds, as well as subordinated debt. Moreover, capital adequacy continued to improve in 2013 and the capital adequacy ratio (CAR) is at a sound level.
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