Moody's Investors Service has today placed the ratings of 3 Moroccan banks on review for possible downgrade in light of its global review of systemic support indicators and stress testing for the banking systems.
Moody's previously used the local currency deposit ceiling (LCDC) as the main input for its assessment of the ability of a national government to support its banks. Although anchoring the probability of support at the LCDC is appropriate in many circumstances -- regarding the provision of liquidity to a selected number of institutions over a short period of time -- this might overestimate the capacity of a central bank to support financial institutions in the event of a banking crisis becoming both truly systemic and protracted. This approach is outlined in the Special Comment entitled "Financial Crisis More Closely Aligns Bank Credit Risk and Government Ratings in Non-Aaa Countries", which was published in May 2009.
The review of the local currency deposit ratings will look at the extent to which Morocco's ability to provide support to its banking system, if needed, is converging with the government's own debt capacity as a result of the ongoing global economic and credit crisis. Moody's will refine its assessment of systemic support available from the Moroccan government to capture the impact of the erosion of the local economy's underlying credit fundamentals and the reduced fiscal policy flexibility on the government's ability to support the banking sector.
Factors that Moody's will consider in its assessment of systemic support include the size of the banking system in relation to government resources, the level of stress in the banking system, the foreign currency obligations of the banking system relative to the government's own foreign exchange resources and changes to the government's political patterns.
Moody's is also placing all Moroccan banks' BFSRs on review for possible downgrades as a result of their vulnerable capital positions amid global credit woes. Although Moroccan banks are not materially exposed to foreign markets and "toxic" assets, an economic slowdown is expected, with likely asset quality deterioration, putting further pressure on already weakening capital ratios.
The following rating actions were taken:
(i) Attijariwafa bank's Baa1/P-2 GLC deposit ratings and D+ BFSR (mapping to a Baa3 baseline credit assessment -- BCA) were placed on review for downgrade. The Ba2/NP FC deposit ratings (constrained by the FC deposit sovereign ceiling) remain unchanged with a stable outlook.
(ii) BMCE Bank's Baa1/P-2 GLC deposit ratings, D+ BFSR (mapping to a Baa3 baseline credit assessment -- BCA), and Baa2 FC subordinated unsecured debt rating were placed on review for downgrade. The Ba2/NP FC deposit ratings (constrained by the FC deposit sovereign ceiling) remain unchanged with a stable outlook.
(iii) Credit du Maroc's Baa2/P-2 GLC deposit ratings and D+ BFSR (mapping to a Ba1 baseline credit assessment -- BCA) were placed on review for downgrade. The Ba2/NP FC deposit ratings (constrained by the FC deposit sovereign ceiling) remain unchanged with a stable outlook.
The Banking industry in Morocco can best be described as non responsive and non customer service oriented. Much like Royal Air Maroc and much of the tourism industry here, there is no real concept of customer care. When you go to a Bank, you are treated rudely, even if you are there to deposit money. It is absolutely mind boggling that any of these banks are still in business.
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Moody's Investors Service has today placed the ratings of 3 Moroccan banks on review for possible downgrade in light of its global review of systemic support indicators and stress testing for the banking systems. 
