October 5, 2018 / 4:38 PM / 8 months ago

Morocco’s CFG Bank expects to return to profit in 2021

MARRAKECH, Morocco, Oct 5 (Reuters) - Moroccan lender CFG Bank expects to return to profit in 2021 after four years of losses as it sought to develop retail banking operations, its CEO said on Friday.

CFG is an investment bank offering brokerage, asset management and corporate financial services. It started delivering retail banking services in 2015 targeting mainly retail customers.

“In the business plan we had in mind that we will lose money for few years before achieving balanced earnings,” CEO Younes Benjelloun told Reuters in Marrakechh.

“In 2020 we are likely to make profit but in 2021 we will be profitable for sure, in line with our business plan.”

Once profitability is restored, CFG will consider an initial public offering (IPO), he said.

“We cannot be an investment bank that convinces people to go public without going public ourselves,” Benjelloun said.

CFG’s losses deepened by 5 percent year on year to 51.5 million Moroccan dirhams ($5.4 million) in the first half.

Benjelloun attributed the losses to “heavy investment” in IT, network development and the addition of 200 employees.

He said the bank will increase the number of its branches in Morocco from the current 14 to 20 by 2020.

The bank has raised 600 million dirhams over the past two years through two capital increases to support its development plan.

“For the time being, we have the right amount of capital for the next four to five years,” Benjelloun said.

Benjelloun ruled out plans to set up commercial banks in sub-Saharan Africa — where Morocco’s biggest lenders, Attijariwafa Bank, BMCE and BCP, have made inroads — but said it CFG remains open to brokerage or asset management activities in African markets. ($1 = 9.4697 Moroccan dirham)

Reporting by Ahmed Eljechtimi Editing by Ulf Laessing and David Goodman

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