Ratings agency, Fitch, has affirmed Bank of Africa's (BOA) Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDRs) at 'BB' with Stable Outlooks.

It has also affirmed BOA's Government Support Rating (GSR) at 'bb' and Viability Rating (VR) at 'bb-'.

According to the UK based firm, BOA's IDRs are driven by potential support from the Moroccan authorities, as reflected in the bank's GSR of 'bb'. The Stable Outlooks mirror those on the sovereign ratings.

“BOA's VR considers its solid franchise in Morocco and its pan-African presence, which brings diversification benefits to the business model. BOA's healthy performance and sound funding and liquidity are balanced by weaker, but improving, capital ratios and asset quality. Its National Rating reflects its creditworthiness relative to other Moroccan issuers'”.

Solid Franchise

The ratings agency said BOA has a solid franchise and domestic systemically important bank status in Morocco with a 14% market share.

It operates across 32 countries, mostly in Africa, with contributions from operations outside Morocco representing about half of the group's net income.

Higher Risk Profile Than Peers

It explained that BOA's risk profile is higher than domestically-focused peers' due to a large presence in higher-risk markets outside Morocco.

However, risks are mitigated by improved risk controls across the group and cautious growth. Ongoing efforts to clean up the balance sheet, including reducing legacy exposures and strengthening asset quality, reinforce the bank's overall risk profile.