BCP Absorbs BP Casa, Sets Stage for New Growth
[The North Africa Journal | Banking] BCP Bank has absorbed Moroccan peer BP Casablanca, in a transaction officially endorsed by Stock Exchange authorities. CFG Analysts (Casablanca Finance Group) say this transaction marks a strategic turning point for BCP as it will give the bank a direct presence in deposit-taking and lending to retail customers.
Historically BCP’s core business was to manage the cash surpluses of the BPR branch network and it only developed into financial intermediation after 2000, focusing exclusively on large corporate clients. The merger will become effective at end-October 2010 and the 2010 consolidated financial statements will report the merged entity retrospectively as from January 1, 2010. BCP will increase its capital by 312,500 new shares to be allocated to shareholders in BP Casablanca at an exchange ratio of 10 BCP shares for every 32 BP Casablanca shares.
CFG Analysts believe this merger is in line with the same strategy of diversifying the bank’s sources of revenue with the ambition to turn BCP into a universal bank covering all segments of the business. BP Casablanca has a 12.4% market share in deposits and 11.4% in lending through a network of 159 branches. Its profitability is characterised by a predominance of interest income, a cost-to-income ratio broadly in line with the market average, low cost of risk and high returns on equity. To read more, click here | Or subscribe here.