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Morocco’s BMCE Bank, to build China’s bonds delivered the $11 billion tech city

RABAT (Reuters) – BMCE Bank is looking to build on its ties with China, to help finance the development of a new industrial city in the north of Morocco, the president and chief executive, told Reuters.

FILE PHOTO: BMCE bank President Othman Benjelloun attends the annual results news conference in the city of Rabat, March 19, 2008. REUTERS/Rafael Marchante

BMCE is one of the north African country’s largest banks, has been working with the local authorities, a company is responsible for the delivery of the 2,000-acre-plus, a new city, with more than ten years.

In the city, and be called, the City of Tech, Mohammed VI, aims to support 100,000 jobs and house 300,000 people, and is the first phase of development has been reached by the industrial investors ‘ are expected to be received from the first and plots that are coming later this year, BMCE Bank-President and CEO, Othman Benjelloun, said by e-mail.

In April, the project company has signed a memorandum of understanding with state-owned China Communications Construction Co (CCCC) and its subsidiary, China Road and Bridge Corporation (CRBC), in order for the city to develop.

In terms of financing, BMCE aims to capitalize on its network of partners in China, Benjelloun said, citing that the contracts that have been signed with the China Development Bank and its subsidiary, the China-Africa Development Fund.

“China’s public finance, it will be used as part of A drive Belt, is An initiative of the Road,” he said, referring to Beijing’s large-scale infrastructure project, which is aimed at promoting trade.

Multilateral and Moroccan banks are also expected to contribute to the project, Benjelloun added.

BMCE is the first bank in Morocco to be opened in China, where he has been working with the corporate and trade finance facility in Shanghai since the start of 2019 at the latest.

“We are of the view of Shanghai as the starting point of our Asian strategy,” Benjelloun said, expressing optimism about the prospects for the expansion into other Asian markets as well.

“We will examine our priorities for our investors and partners have to keep in mind is that the strengthening of relations between Asian countries and the African continent, it remains, for us, is the ultimate goal,” he said.

BMCE last month and raised $200 million through a capital injection by the Uk-based development finance agency, CDC Group 1.9-billion dirhams ($199 million) through an issue of new shares from a capital increase, with preferential subscription rights, at the Casablanca stock exchange.

“The strengthening of our financial position will be achieved by the use of perpetual subordinated debt and a capital increase reserved for employees,” Benjelloun said.

BMCE reported a 10% reduction in 2018, with net profit attributable to the equity holders of 1.83 billion dirhams, due to a decline in confidence among entrepreneurs in the African branches, and the rising cost of risk.

The african branches, accounted for 46% of the income, while in Morocco and Europe and is represented in 48% and 6%, respectively.

Reporting Ahmed Eljechtimi; Editing by Mark Potter

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