Interview: Tariq Sijilmassi, Chief executive, Crédit Agricole du Maroc
Tarik Sijilmassi looks relaxed and poised as he sits down ready to answer questions , but he makes it clear that he will not talk about politics. Having worked in banking for the past 30 years, the chief executive of Crédit Agricole du Maroc (CAM) and HEC business school graduate has become a major figure in the country’s economic life. Known to close friends as ‘Sejil’, he was born in Rabat and works in the heart of the city, which has not hampered his understanding of the problems of the bank’s largely rural clientele.
Today, the banking group – which is 75% state-owned, with 15% held by insurers Mamda-MCMA and 10% by the Caisse de Dépôt et de Gestion – is doing well. Capitalising on its positive results, CAM, one of the main funders of the Plan Maroc Vert launched in 2008, is setting out its new ambitions to expand its operations to sub-Saharan Africa and share its expertise there.
Your group used to make losses, but it has gradually become profitable, as your 2016 and first quarter 2017 results show. How did you get things back on an even keel?
Tariq Sijilmassi: When I took over the reins of the company in 2003, our branches in the rural areas were mainly focused on their public service mission, and this had a negative impact on the bank’s profitability. Today, thanks to a multichannel banking model, the profitability ratio in these areas is higher than that of the big cities, where we are competing with other banks.
Basically, we have focused our activities based on our clients’ profiles. We offer microcredits to small farmers through the Ardi Foundation, while the services of our meso-credit subsidiary Tamwil El Fellah, which we manage in partnership with the state, go towards medium-sized farmers who are not eligible for traditional bank financing. Lastly, we offer agribusiness financing, and with that we can say a real revolution has occurred. For some years now, we’ve had only one client, and one with a high risk profile. But now farmers have become an interesting group for traditional banks. We are trying to maintain a balance between these different targets, which helps us to maintain a comfortable financial situation.
You have been criticised for providing only a few insurance products. Are you satisfied with your partnership with the insurer Mamda?
Mamda and CAM feed off each other. For example, we send them clients for drought insurance. But I think that neither of us is totally happy with our level of cooperation. We want more because we see that there is huge potential. However, when Morocco is going through difficult times, the joint action taken by Mamda and CAM, against the backdrop of the provisions made by the Plan Maroc Vert, help to avoid any disasters. As a result, during the last drought, Mamda paid out D1bn ($106.4m), the state launched a global programme worth D5bn and CAM put in place approximately D1.5bn of special financing for the planting of late crops. This shows that working together bears fruit.
What is the latest on the bank recapitalisation announced some time ago? Do you still have plans to list on the stock market?
CAM has fought hard to reach a level of capital that complies with the current regulations. We are in good standing in regard to the solvency ratio, but in Morocco the banking sector is particularly strong and resilient, with levels of capitalisation that far exceed the regulatory requirements. As a result, we want to go beyond the legal requirements and seek an extra level of security, as our peers have done. Our past and future subordinated debt issuance give us a solvency ratio between 13.5% and 14%. With regard to the Tier 1 ratio, we are at 9%. And we can strengthen this through the injection of capital, which could happen through the bank’s listing on the stock market. It is up to the stakeholders to decide and choose a date. What I can say is that we’ve met all the necessary prerequisites for listing.
So CAM will go public in 2018?
I’d say more likely in 2019, but this is not an official announcement. Once again, it does not depend on me. We are doing our part: we are releasing quarterly reports and we have put in place the necessary internal tools. And I would like to remind you that, according to the law that set up CAM, the state has to remain a majority shareholder and maintain at least 51% of the shares. For now we have 75%, which still leaves us a good capitalisation margin without the need for new regulations.
You were part of King Mohammed VI’s delegation during his recent African tours. Do you have any plans for sub-Saharan Africa?
We’ve been looking at this region for some years now while asking some fundamental questions. Yes, we want to go there, but we have to know how and why. There are three Moroccan banks –Attijariwafa, BMCE and BCP – that are already well established in many African countries, and they often control a significant share of the market. So to introduce a fourth bank may not necessarily be relevant, albeit the need for financing in rural areas has to be addressed.
Countries in sub-Saharan Africa want to embark on key changes in their agricultural policies and the need for a financial partner is becoming increasingly obvious. Nevertheless, Morocco’s agriculture minister has implemented the Adaptation of African Agriculture initiative, and we have decided to be a partner for this initiative. For us, our goal is not to make equity investments in local banks because we don’t want to shoulder the responsibility of their financial health. What we can and want to do is to enter into partnerships to help deploy models that have worked well in Morocco.
Have you already started the process?
We have signed agreements with about 15 establishments. The idea is to build a network of agricultural banks in Africa that will share their best practices, in order to export some of ours and learn from others. When it comes to digitalisation, for example, we can learn from banks in anglophone East Africa. So that is how I envision our roll-out into Africa, using the right expertise and project partnerships. We signed an agreement with a subsidiary of Natixis – Mirova – which manages a $300m grant from the United Nations to fund projects combating land degradation. CAM will be a distribution mechanism for these funds.
This article came from the November 2017 print edition of The Africa Report