Moroccan bank BMCE reported a 3.4% drop in its first-half net profit due to higher debt provisions.
Net income fell to 453.4 million dirhams ($58.6 million) despite a 7.6% increase in revenue to 3.3 billion dirhams, it said in a statement.
Debt provisions rose to 271.81 million dirhams from 93.81 million in the same period last year when the bank saw its net profit jump 24%.
“They came in relatively better than we expected. Traders in the market had feared it would be badly hit by the global economic downturn as BMCE is the most local bank exposed to the international crisis,” a Casabalanca-based analyst said.
BMCE derives 24.6% of its revenue from its banking and financial affiliates in Africa and Europe.
It acquired a 42.5% stake in Mali-based Bank of Africa last year as part of an overseas expansion drive.
BMCE aims to take control of Bank of Africa's network and expand the group's presence to include every African country within 10 years.
In Morocco BMCE expanded its branch network as falling interest rates allowed more Moroccans to buy homes, cars and consumer goods on credit.
BMCE said it opened 92 new branches in the first six months of 2009 to beef up its network to 521 having added 31 new branches in the first six months of 2008.
The government expects Morocco's economy to grow by about 6% this year from 5.8% last year as higher farming yields offset the impact of the global crisis on exports and tourism. BMCE's client deposits grew to 88 billion dirhams in the first half of the year from 84 billion, while client credits expanded 13.3% to 60.7 billion.
BMCE's shares were trading 0.2% lower at 235.50 dirhams earlier on Monday. The price has fallen 13.6% so far this year, which compares with a 3.2% decline for the whole of 2008.
The Casablanca bourse MASI index has fallen 0.5% so far this year, after a 13% loss last year. (Reuters)