Over recent year Moroccan banks have made huge investments in sub-Saharan nations as the North African nation seeks to establish itself as the continent’s financial hub.
Several banks from the country have acquired or increased their investments in a rapid number of fast growing sub-Saharan African economies, with the county’s financial institutions already generating more than a quarter of their revenues from sub-Saharan Africa.
This number is expected to grow to half its annual revenue by 2020.
Morocco has established itself as a bastion of stability on the doorstep of an often-turbulent Northern Africa region that was marred with violence during the Arab Spring.
The country’s burgeoning economic and commercial links—across the continent and beyond—and expanding contributions to regional political stability and security, make it an attractive portal for investors seeking a footprint across Africa.
A report by alifarabia.com, published by zawya.com, says that Moroccan banks have made cross-border deals in at least 22 countries in Africa.
Some of the Morrocan banks that have ventured into the region include Attijariwafa Bank, which bought Credit Agricole’s banking network in five West Africa countries in March; Banque marocaine du commerce extérieur (BMCE), which increased its stake in Bank of Africa; and Banque Centrale Populaire, which holds a 50-percent stake in Atlantic Financial Group and has established an Atlantic international business network.
The country’s central bank, Bank Al Maghrib (BAM), is however getting worried that these investments could expose the country’s financial sector to contagion risk due to the high levels of non-performing loans in other African countries.
The regulator is now looking to reign in further expansion by local banks and encourage them to manage their risk profiles instead.
“The rise of pan-African banks opens new channels for transmission of macrofinancial risks and other spillovers across home and host countries. Together with the benefits, cross-border banking may also bring new channels through which the contagion of negative shocks can be transmitted,” the International Monetary Fund said, according to alifarabia.com.
