BMCE BANK OF AFRICA

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Financial communication

30 June 2017

FIRST HALF 2017 PERFORMANCE: A GROWTH DRIVEN BY THE CORE BUSINESS

BMCE Bank's Board of Directors, chaired by Mr Othman BENJELLOUN, met on Friday 29 September 2017 at the Bank's head office in Casablanca. It examined the business activity of the Bank and of the Group for the first half ended 30 June 2017 and drew up the financial statements for the period in question.

The first half 2017 financial statements under IAS/IFRS are published on the Bank's website www.bmcebank.ma.

Upward trend continues in first half after the exceptional performance registered in first half 2016.

Improvement in the risk profile, as can be seen by (i) a decline in the cost of risk (ii) a drop in non-performing loans and (iii) increased coverage.

Commercial position bolstered with market share gains in loans and deposits in first half 2017.

CONSOLIDATED FINANCIAL STATEMENTS

MAD 320 billion

Total assets

+4.5%

MAD 195 billion

Customer Deposits

+3%

MAD 1.3 billion

Net income attributable to shareholders of the parent company

+3%

PARENT FINANCIAL STATEMENTS

MAD 218 billion

Total assets

+6.6%

MAD 126 billion

Customer Deposits

+3.5%

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FINANCIAL COMMUNICATION

Tel: +212 522 49 80 03/+212 522 46 28 06 - Fax: +212 520 20 50 54 - E-mail: relationsinvestisseurs@bmcebank.co.ma

IMPROVEMENT IN FIRST HALF 2017 RESULTS IN LINE WITH THE GROUP'S GOALS

CONSOLIDATED RESULTS: A REMARKABLE PERFORMANCE BY THE CORE BUSINESS DESPITE UNCHANGED NET BANKING INCOME

Net income attributable to shareholders of the parent company rose by 3% to MAD 1,288 million in first half 2017 due to a strong performance by the core business as well as a major effort at risk control.

The Group is increasingly international as illustrated by an 18% increase in the contribution from overseas operations, which now account for 41% of net income attributable to shareholders of the parent company versus 36% at 30 June 2016.

Consolidated net banking income broadly unchanged (-0.2%) at MAD 6,691 million, due to a 51% decline in income from market operations as a result of the exceptional fixed income returns registered the previous year with lower interest rates having had a positive impact on the mutual fund portfolio's valuation.

Net banking income broadly unchanged despite a healthy performance by the core banking business with net interest income up 8% and fee income 5% ahead.

9% increase in the contribution from overseas operations to consolidated net banking income, primarily due to sub-Saharan Africa, which accounts for 44% of Group revenues

Consolidated total assets grew by 4.5% to just under MAD 320 million with customer loans (+6.7%) accounting for 60% of the total. Consolidated customer deposits increased by 2.9% in first half 2017, accounting for 61% of consolidated total liabilities.

Growth in general operating expenses was contained at +4% to MAD 3,721 million versus MAD 3,561 million at 30 June 2016. By comparison, general operating expenses rose at an average annual rate of more than 8% over the period 2012-16.

2.5 percentage points increase in the cost-to-income ratio to 55.6% at 30 June 2017 versus 53.1% at 30 June 2016, mainly due to consolidated net banking income being unchanged.

PARENT RESULTS: MARKET SHARE GAINS AS A RESULT OF THE BANK'S STRONG COMMERCIAL PERFORMANCE

3.4% growth in parent net income to MAD 1,111 million in first 2017 as a result of a strong commercial performance and better risk control.

4.1% decline in parent net banking income to MAD 3,418 million due to a fall in income from market operations after the exceptional performance seen last year. If market operations were excluded, net banking income generated by the commercial network rose by 8.4%, accounting for 80% of overall net banking income.

Net interest income rose by 12%, fee income by 10% and other net income by 31% due to an increase in dividends to MAD 629 million in first half 2017.

General operating expenses rose by 6.4% versus +6.6% on average over the period from 30 June 2012 to 30 June 2016, to MAD 1,756 million in first half 2017, with 20 or so new branches opened since June 2016. In addition, the number of employees rose by almost 3% i.e. +142 employees.

Parent cost-to-income ratio increased to 51.4% at 30 June 2017 versus 46.3% at 30 June 2016 due to a number of extraordinary items which negatively impacted the Bank's net banking income.

Strong commercial performance as illustrated by market share gains in domestic customer loans and deposits. The Bank's share of the loan market rose by 80 basis points to 15.4% while its share of the deposit market increased by 30 basis points to 14.8% in first half 2017.

BMCE Bank's outstanding customer loans grew by 8.7% and its outstanding customer deposits by 3.2% in first half 2017, outperforming the industry which registered increases of 2.2% and 0.8% respectively.

RISK PROFILE: NON-PERFORMING LOANS DECLINE AND LOAN-LOSS PROVISIONING BOLSTERED

Improvement in the Group's risk profile with the consolidated cost of risk down 40% to MAD 633 million, its lowest level since 2011 and a cost of risk ratio of 0.68% versus 1.26% at 30 June 2016.

Group determined to deliver sustainable growth without any deterioration in asset quality as can be seen in non-performing loans, which registered a modest fall in first half; the non-performing loan ratio declined from 8.3% at 30 June 2016 to 7.7% at 30 June 2017.

NPL coverage ratio at Group level satisfactory at 64% at 30 June 2017 versus 60% at 31 December 2016; solid increase to ensure adequate provisioning of non-performing loans.

Net cost of risk at the parent level declined - additional net provisions fell by 46% year-on-year from MAD 520 million to MAD 281 million at 30 June 2017.

Forthcoming Meeting

Monday 2^nd October 2017 at 15:30

Meeting with Analysts and the Press:

BMCE Bank Group's first half 2017 results presentation

BMCE Bank Group's consolidated financial statements (In Million MAD)

Net income attributable to shareholders of the parent company

+3%

1,250                     1,288

June 2016            June 2017

Net banking income

-0.2%

6,705                     6,691

June 2016            June 2017           

Total assets

+4.5%

305,923 319,723

June 2016            June 2017           

Net income attributable to shareholders of the parent company 

by geographical region at 30 June 2017

Morocco 59%

Africa 34%

Europe 7%

STRONG COMMERCIAL PERFORMANCE

PERSONAL AND PROFESSIONAL BANKING - ENTERING NEW MARKET SEGMENTS

Range of banking services for Young Professionals enhanced by launching an on-demand loan for Young Professionals as well as an adjustable-rate mortgage loan with an interest rate ceiling and floor.

Ongoing growth (+4% year-on-year) in the number of bank-insurance contracts sold across all bank-insurance product offerings.

Continued growth in the number of international payment cards distributed in first half 2017, primarily due to the commercial success of the Premium card range, particularly the BMCE Gold card, enabling card-holders to make foreign currency-denominated payments via a number of channels - small business and e-commerce - as well as withdrawing foreign currency from ATMs when abroad.

New range of products and services for entrepreneurs including cash flow finance, support for public and private sector tenders, day-to-day management of ordinary operations and business payment solutions.

Introduction of a dynamic link for entrepreneurs on the Bank's website and digital graphics posted on social media dealing with issues related to business management.

Crédit Joker PL launched, a new innovative product for self-employed professionals, consisting of a pre-approved amortised loan of up to 30,000 dirhams, disbursed immediately upon receipt of the customer's application via a number of different channels such as branches, the Customer Relationship Centre (CRC) or BMCE Direct.

Deposits from Moroccans living abroad rose by 7.6% to MAD 18.9 billion, resulting in a 10.7% market share at 30 June 2017, up 27 basis points compared to 30 June 2016.

'Welcome days' organised in 85 branches across the network providing a warm welcome to the Moroccan dispora and stands at the main entry points.

MRE First launched, a package for Young Moroccan diaspora, providing them with a range of rewarding and high valued-added products and services.

CORPORATE BANKING - ONGOING IMPROVEMENT IN COMMERCIAL PERFORMANCE

Corporate loans grew by 9.3% to MAD 77.5 billion at 30 June 2017 versus MAD 70.9 billion at 31 December 2017, outperforming the banking industry which registered growth of only 3%. As a result, the Bank registered a 0.84 percentage points increase in market share compared to 31 December 2016 to 15.4% at 30 June 2017.

Corporate deposits grew by 2.6% to MAD 33 billion at 30 June 2017 versus MAD 32.2 billion at 31 December 2017, outperforming the banking industry which registered a 3.4% decline. As a result, the Bank registered a 1.45 percentage points increase in market share compared to 31 December 2016 to 19% at 30 June 2017.

Investment loans, including real estate development finance but excluding finance companies, rose by a substantial 11.5% to MAD 18.4 billion versus MAD 16.5 billion at 31 December 2016.

11% increase in the volume of foreign trade flows handled by Corporate Banking to MAD 81.5 billion in first half 2017 versus +7.1% at the industry level. Import flows rose by 15% year-on-year versus +7.3% at the industry level while export flows increased by 6.1% versus +6.6% at the industry level.

BMCE Bank's SME Club organised a special event for women to mark International Women's Day, attended by thirty or so female executives, finance directors, administrators and company directors.

BMCE Bank's SME product offering enhanced by the launch of: (i) Pack Business Entreprise Maîtrisé and (ii) two new corporate banking packages - Pack Casablanca Finance City for corporate customers with CFC status and Pack CM-CIC for SME customers which are also CM-CIC customers.

BMCE Bank pre-launched a new solution for financing the circular economy in partnership with FMO and the European Investment Bank. This credit facility offers an annual cash-back option on the rate of interest with free technical assistance also provided by a specialist consulting firm.

INVESTMENT BANKING - STRONG PERFORMANCE ACROSS A VARIETY OF BUSINESS LINES

BMCE Capital Bourse secured a very respectable 12.7% share of the market in a context marked by a strong recovery in trading volumes and a sharply higher equity market in 2016.

BMCE Capital Gestion continued to develop tools and upgrade its information systems for the benefit of its salesforce and its customers.

BMCE Capital Gestion Privée obtained ISO 9001:2015 certification for the second consecutive year, underlining its policy of transparency with clients and its commitment to ensure their constant satisfaction. The asset management company is the first financial institution within Morocco's wealth management industry to have obtained this certification.

Against a backdrop of a rising stock market by comparison with 2016, BMCE Capital Titres' assets under custody rose by 5% from MAD 202 billion at 30 June 2016 to MAD 213 billion at 30 June 2017.

SPECIALISED FINANCIAL SERVICES - SPECIALISED BUSINESS LINES DEVELOPED

MAGHREBAIL

Net income rose by 11% year-on-year to MAD 47.7 million at 30 June 2017.

Maghrébail's net outstandings increased by 6.5%, resulting in a 24.7% market share. Maghrébail is now the 2^nd highest ranking player in the industry.

SALAFIN

Salafin's net income rose by 4% compared to 30 June 2016 to MAD 71 million, primarily due to a 7% decline in operating expenses.

Net banking income increased by 2% compared to 30 June 2016 to MAD 185 million.

MAROC FACTORING

Maroc Factoring registered parent net income of MAD 5.3 million at 30 June 2017, down 30%.

Net banking income declined by 6% following a change in the way in which factoring is managed between the Bank and its subsidiary.

RM EXPERTS

RM Experts' performance was highly satisfactory, while advocating best practice within the industry at recovering non-performing loans. As a result, loans recovered by RM Experts totalled MAD 211.5 million at 30 June 2017 versus MAD 172 million the previous year, an increase of 23%.

This was achieved by employing new recovery techniques as well as further bolstering the company's organisational structure.

AFRICAN OPERATIONS - HIGHLY SATISFYING PERFORMANCE

BANK OF AFRICA GROUP

BOA Group's net income attributable to shareholders of the parent grew by 31% to EUR 46.3 million due to a 50-basis points improvement in the cost of risk ratio which stood at 1.1% at 30 June 2017.

Consolidated net banking income rose by 4.2% to EUR 235.9 million at 30 June 2017 versus EUR 226.4 million at 30 June 2016.

General operating expenses increased by 6.5% to just under EUR 150 million at 30 June 2017, resulting in a cost-to-income ratio of 63.6% at 30 June 2017 versus 62.2% the previous year.

BANQUE DE DEVELOPPEMENT DU MALI

Partnership agreement signed between Banque de Développement du Mali (BDM) and BMCE EuroServices (BES) to entrust to the latter international transfers by Malians living abroad. The name of this service is BDM Diaspo Transfert.

BDM maintained its status as market leader with a strong performance: (i) 13.12% growth in loans to EUR 472 million at 30 June 2017 and (ii) a 0.44% increase in total assets to EUR 1,010 million at 30 June 2017.

LCB BANK

Net banking income fell by 6% and net income by 20% to EUR 2.8 million, negatively impacted by non-recurring exceptional items

Digital banking project launched in conjunction with GNS Technologies based on an existing business model successfully employed in partnership with Damane Cash.

BMCE INTERNATIONAL HOLDING

BBI Plc London managed to maintain its recent positive trend with net banking income significantly higher (+13.1) at GBP 12.7 million at 30 June 2017 versus GBP 11.2 million at 30 June 2016.

BBI Madrid's total assets grew by 9.3% to EUR 489.7 million at 30 June 2017 versus EUR 447.7 million at 30 June 2016.

BBI Madrid consolidated its position in the trade finance business, registering 40% growth in trade finance volumes and a 52% increase in corporate loans.

CORPORATE SOCIAL RESPONSIBILITY: COMMITMENT BOLSTERED TO SUSTAINABLE DEVELOPMENT WITH A POSITIVE IMPACT

International conference on pre-school education in Morocco organised by BMCE Bank Foundation under the high patronage of His Majesty King Mohammed VI and in conjunction with the Ministry of Education on the theme of 'Ensuring a fair and high-quality system of preschool education for everyone in Morocco'.

New teaching kit, designed in conjunction with experts from the French Institute in Morocco, for use in Medersat.com's preschool classes, enhancing the existing materials and in response to recommendations made by educational supervisors and preschool teachers.

Prizes awarded to the winners of the National Competition for mastering Mandarin Chinese at a ceremony organised by BMCE Foundation and Rabat's Arts Faculty, attended by His Excellency the Ambassador of China to Morocco and the Chairperson of BMCE Bank Foundation.

BMCE Bank of Africa signs up to the Principles for Positive Impact Finance, a new finance framework based on a methodology for identifying, assessing, reporting and ensuring transparency in Positive Impact Finance activities which takes into account the three pillars of sustainable development in the decision to grant or design sustainable finance solutions.

Participated in the inaugural launch in Africa of the Principles for Positive Impact Finance, jointly organised by CFC and UNEP FI. Prior to this, an assignment was carried out with BOA Senegal aimed at developing a Resource Efficiency facility - energy, water, waste and transport - for the African market, currently being developed in partnership with the EIB.

BMCE Bank of Africa-MorSEFF awarded the 2017 Sustainable Energy Gold Award at the 26^th annual meeting of the EBRD and its Business Forum on the theme of 'Targeting Green and Inclusive Growth'.

3^rd African Entrepreneurship Award successfully launched with nearly 5,000 entrepreneurs participating from the entire African continent. The participants will be supported by more than 300 mentors hailing from thirty or so different countries around the world.

 'Top Performer, CSR Morocco', awarded by Vigeo-Eiris, a non-financial ratings agency to BMCE Bank of Africa for the 4^th consecutive year, on the basis on 7 corporate social responsibility criteria.

BMCE Bank of Africa included in the Eiris‐Vigeo Emerging 70 Index specialising in emerging countries, in recognition of its non-financial performance and its commitment to social causes.

BMCE Bank Of Africa an award winner for the 3^rd consecutive year at the CSR Arabia Awards 2017 in Dubai in the 'financial services' category

ISO 14001 certification renewed for the Bank's entire operations and BMCE Bank of Africa attains its carbon footprint targets for the second consecutive year. A 7% reduction in CO₂ emissions per employee underlines the success of its Environmental and Energy programme, supported by its ISO 14001 and ISO 50001 policies.

Since March 2017, BMCE Bank of Africa Group has been partnering the local Moroccan network of the United Nations Global Compact, underlining its commitment and support for the ten principles relating to human rights, labour standards, environmental protection and anti-corruption.

HIGHLIGHTS

Agreement reached in principle with the Emirati Central Bank to open a second representative office in Dubai in the United Arab Emirates in 2017.

MAD 1 billion perpetual subordinated bond issued with mechanisms for absorbing losses and cancelling issuer interest payments - Contingent Convertibles CoCos-.