RABAT, Feb 11 (Reuters) - Banque Centrale Populaire (BCP) , one of Morocco’s three biggest banks is preparing to invest 400 million dirhams ($41 million) in an Islamic subsidiary, a director of the bank said.
Islamic banks and insurers are being established in Morocco after the government and parliament adopted legislation allowing Islamic financing in its domestic market.
Morocco’s central bank has also set up a central sharia board with the country’s body of Islamic scholars to oversee the nascent industry. Sharia boards vet Islamic finance products to check they are sharia compliant.
Islamic banks are called participative banks under the Moroccan legislation.
“Once we get the authorisation, we will launch an Islamic subsidiary as soon as possible in 2016 with Guidance Financial Group,” Laïdi El Wardi, BCP’s retail banking director told Reuters on Thursday via email.
BCP’s subsidiary will be called Banque Participative du Maroc, in which the bank will control an 80 percent stake, with Guidance Financial Group owning the remainder.
The partners are planning to invest 400 million dirhams to begin with in the Islamic offshoot, BCP said.
Guidance Financial Group, a subsidiary of Geneva-based Capital Guidance, was created in 2000 to invest in the growing Islamic financial industry.
“Legally, the subsidiary exists already and we have asked the central bank for the authorization,” El Wardi said.
BCP’s director said it will take time to build a strong Islamic finance industry in Morocco as operators will have to offer Moroccan customers adequate products.
El Wardi said surveys had shown there was strong demand for Islamic products among Moroccans, and expectations were high.
Qatar International Islamic Bank (QIIB) said in December it had signed an agreement with Moroccan lender Credit Immobilier et Hotelier S.A. (CIH Bank) to set up an Islamic bank in Morocco. Morocco’s Attijariwafa Bank has also been developing its own participative subsidiary called Dar Assafaa.
Mohamed Benchaaboun, BCP’s CEO told Reuters in 2014 that BCP may raise up to $500 million in short-term debt on the international markets. Moroccan companies are turning to international debt due to a shortage of domestic liquidity.
“We still planning to do it, it was postponed because of the current context, slowing credit growth and recent liquidity relaxation,” El Wardi said. ($1 = 9.6580 Moroccan dirham) (Editing by Alexander Smith)