Is Bank of Africa’s Othman Benjelloun planning for his retirement?

By Bilal Mousjid
Posted on Monday, 9 May 2022 12:07

Othman Benjelloun at the China-Africa Forum in Marrakech, November 2017. © Jean-Michel Ruiz/CAIF for JA.

Othman Benjelloun’s taste for mystery is matched only by his thirst for development. Although the 91-year-old Bank of Africa’s patriarch has no plans to retire, the question of his succession is coming up again.

“He forgets his age. He should not be reminded of it,” says one of Othman Benjelloun’s lieutenants. At 91, the second richest man in Morocco, according to Forbes, continues to preside over the destiny of the Bank of Africa group (BOA, formerly BMCE BOA), which unveiled a solid performance for 2021 at the end of March.

With a net result of some 2bn MAD ($199m), up 47% compared to 2020, his group even boasts of a “record level never reached”, as regards results excluding subsidiaries, which represented 1.5bn MAD in 2021.

Bank of Africa’s name has recently been associated with a scandal involving an investigation into fraud and falsification of banking documents as part of the Babour Sghir case, the member of parliament accused of defrauding people of €30m through loans and overdraft facilities, but the bank intends to continue its momentum. During the presentation of the results, the focus was on development in the kingdom and sub-Saharan Africa. Two bond issues are expected to serve these ambitions: one for an amount of 1bn MAD through a public offering and the other through the “unprecedented issue” of a social bond for 500m MAD.

“Othman Benjelloun has always been resolutely turned towards the future. He projects himself into 2030, 2050,” says the former royal advisor Mohamed Kabbaj, who sits on BoA’s board as an independent director, to illustrate what drives the Moroccan tycoon.

Patrimonial succession

2022 should therefore have started under the best auspices for Morocco’s third largest banking group and its tutelary figure. However, this was before persistent rumours surrounding the latter’s succession started spreading. Combined with the age of its CEO, the bank’s strategic nature has indeed fuelled speculation about its future for several weeks.

This talk has further amplified following the recent merger of two family holdings (FinanceCom and HBM), which gave birth to O Capital Group. This new company is endowed with 1bn MAD in capital and gathers – apart from the bank – the Benjelloun family’s activities in the telecoms, transport, tourism, agriculture and communication sectors.

What was behind this manoeuvre, especially since no one ever thought that the billionaire’s heirs would take over the reins of the bank, the flagship of the Benjelloun empire? His wife Leila Mezian Benjelloun, who is the head of the BMCE Bank Foundation, does charitable work. His daughter, Dounia, is a documentary and advertising film producer, while his son, Kamal, is an anthropologist by training and works in the environmental field.

Nevertheless, by making his wife and children co-shareholders of the holding company at the head of the Benjelloun empire – resulting from the merger of Holding Mezian Benjelloun and FinanceCom – in May 2021, the Fez native has indeed completed his patrimonial succession.

A taste for secrecy

As for the bank, no project has been officially announced, neither by BOA nor by Benjelloun himself. One of the businessman’s former associates considers this subject “secondary”, as the financial institution’s future is assured.  “The group’s structure is built in such a way that in the event of Othman Benjelloun’s death, his heirs will keep control over BOA, through O Capital,” he says.

Who would run the bank in the event of the patriarch’s death? As a matter of fact, alongside the Benjelloun family, which holds 35.5% of the capital [8.02% directly through O Capital and 27.47% via Royale Marocaine d’Assurance (RMA) and Société Financière de Crédit du Maghreb, another subsidiary of the holding company], several shareholders could reshuffle the cards.

As of 31 December 2020, the Moroccan banking group’s shareholders include institutional investors such as the British CDC Group (now British International Investment; 5.38%), Morocco’s Caisse de Dépôt et de Gestion (CDG; 8.32%), France’s Banque Fédérative Crédit Mutuel-CIC (24.56%) and the Moroccan insurance and provident group MAMDA-MCMA (5.01%). The remainder is made up of the free float of the company’s shares and a small employee stake.

However, it seems unlikely that a scenario involving changing the balance of power in the shareholding will take place. Benjelloun himself is quite a private person and does not talk a lot about his indissociable “business.” A few weeks ago, he half-heartedly told the local press that a new strategy for the former Moroccan Foreign Trade Bank – founded in 1959 under the Abdellah Ibrahim government, and which joined Benjelloun’s empire in 1995 – would be unveiled in September. This strategy has been developed for more than a year with the McKinsey consultancy firm.

New staff

In the meantime, Benjelloun is placing his people in the bank. Discreetly installed last November, the group’s new staff has given a glimpse of the main points of its future strategy. Attached to the president via a “presidential committee”, three poles headed by three distinct executive directors have been created. The former wali Mounir Chraibi, who joined the bank in 2010, has become director of operations and pilots. The group’s financial activities are managed by Driss Benjelloun, while Khalid Laabi oversees risk management.

Bank of Africa CEO Amine Bouabid, another well-known face of the group, has been appointed to head the Africa division (which includes BOA Afrique, as well as La Congolaise de Banque, and the Banque de Développement du Mali). Finally, Khalid Nasr is in charge of the Banque Maroc division, headed by Omar Tazi, and the recovery and other special missions division, led by Mfadel El Halaissi (currently in detention in connection with a case of fraud and falsification of banking documents). For his part, Brahim Benjelloun-Touimi will remain director-general in the new organisation chart.

Benjelloun restructured his group by creating the two divisions Africa and Banque Maroc so that it would be able to compete in the race south of the Sahara against its main Moroccan competitors and strengthen its position in the kingdom. Today, BOA, Morocco’s leading institutional investor, is not only present in 20 African countries outside Morocco, but also in Europe, Asia and Canada, with 6.6 million customers and nearly 2,000 physical branches.

Continental dynamics

Furthermore, one of the pioneers of the sub-Saharan expansion of Moroccan banks believes that Africa is part of the future. At least that of his group. “I will always remember a conversation I had with Othman Benjelloun in 2007: ‘In 2030 or 2040, he told me, I would like to be present in 50 African countries’,” says a person close to the CEO.

After setting his sights on Mali’s BOA Group in 2008, which has been present in several sub-Saharan African countries since 1982, Benjelloun quickly expanded his banking group’s footprint in West Africa (Côte d’Ivoire, Burkina Faso, Benin, Mali, Niger, Senegal, Togo and Ghana), East Africa (Rwanda, Uganda, Kenya, Tanzania and Djibouti), Central Africa (DRC) and Southern Africa (Madagascar). In 2021, more than 40% of the group’s net income came from the continent.

This momentum is expected to accelerate. According to our information, the strategy being prepared aims to strengthen BOA in West Africa, in parallel with a redeployment in the East, and even target new acquisitions.

The history of Morocco

In the meantime, the billionaire also wants to leave his mark on the kingdom’s history. Benjelloun recently associated his bank, within the context of the pandemic, with the vaccine manufacturing plant whose construction was launched by Mohammed VI in January in Benslimane, in the Casablanca region.

“He is attracted by great destinies, projects and ideas,” says Kabbaj. However, success is not always forthcoming. The Mohammed-VI-Tanger-Tech city, a project announced in 2016 as the future Shanghai of Morocco, which was supposed to house 200 factories for an investment of $10bn, has still not been built.

Under construction on the Bouregreg bank since 2018, the Mohammed-VI tower is another one of Benjelloun’s ambitious projects. 250 metres high and 55 floors high, the bank-financed building is expected to finally be completed this year, despite a series of setbacks.

Numerous negative criticisms have been directed against this project to build “the largest tower in Africa”, which is very far from the Bank of Africa’s core business. Still, those close to the indomitable financier acknowledge that “The Mohammed-VI tower, whether we like it or not, will remain for centuries after Othman Benjelloun’s death”.

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