Sa Majesté le Roi Mohammed VI Tomorrow’s bank today C ONTENTS Presentation of the CIH BANK group 01 Key figures 12/13 Governance 14/17 Shareholding structure 18 Strategy 20 Subsidiaries and investments 21 Economic and financial environment 02 National and international economic environment 24/25 Real estate sector 26 Banking and financial environment 27 Rate market 28 Stock market 29 Activity 03 Highlights 32/33 Main balance sheet indicators for the year 2016 34/36 Financial data 04 Statutory Auditors’ General Report 40/41 Parent-company financial statements 42/45 Resolutions 46/48 The Auditor’s Report on the consolidated financial statements 49 Consolidated financial statements (IFRS) 50/54 Branch network 05 New branches 58 Branch network 59/65 Ahmed RAHHOU Chairman and CEO Chairman’s statement In 2016, CIH BANK has strengthened its position This strategy was materialized this year by the creation as a modern and digital bank, It is now considered of a subsidiary dedicated to participatory banking, as a reference in the local banking sector, while in partnership with the CDG (Caisse de Dépôt et de maintaining a significant level of commercial Gestion and Qatar International Islamic Bank. Another performance and a high level of profitability. subsidiary dedicated to the management of real estate mutual funds “AJARINVEST” has also been created The Bank has successfully deployed in one shot its together with the CDG. new Novabank system in all its branches. This major project has given unprecedented impetus to the The improvement of the efficiency and profitability digitization of customer services. of the Bank will continue to build on its model of natively digital bank, but provided with a local network At the same time, CIH Bank has pursued its multi- composed of light and efficient units which are present channel strategy by offering its retail customers, throughout the country, in order to ensure the best professionals and corporates more services through quality of service at the best cost to all its customers, its mobile application and website. In 2016, the individuals, professionals or companies. youth segment was particularly targeted thanks to the launch of a particularly innovative offer for the This technological and human banking model will market: the [CODE30] pack. At the end of 2016, enable CIH BANK to cope with market developments 100,000 young people had already subscribed to and competition from both traditional players and this product, proof of its success with this customer newcomers to the industry. category. All this dynamic is in line with the new strategic plan 2016-2020, adopted by the board of directors of the bank. The objective is to strengthen CIH Bank in its development, and to permanently establish its openness towards new opportunities of universal banking. RAPPORT ANNUEL 2016 9 PRESENTATION OF CIH BANK GROUP Key figures Strategy Governance Subsidiaries Shareholding and investments structure After having successfully made its transition aiming to become a universal bank, CIH Bank is now embracing innovation. Development of digital channels, launch of new packaged offers, high value-added services, bancassurance ... CIH Bank is considered today a pioneer in the market. In addition, the CIH Bank Group can capitalize on its long-standing expertise in home loans and property development, its historical business. 01 RAPPORT ANNUEL 2016 11 01 Key figures Share capital 2.66 billion Dirhams Commercial network new branches 14 in 2016 257 branches and 9 regional Financial directorates Results Total balance sheet 2016 : 42.2 billion Dirhams 2015 : 39.3 billion Dirhams Gross operating income 2016 : 620.8 million Dirhams 2015 : 707.7 million Dirhams Net income 2016 : 452.0 million Dirhams 2015 : 471.0 million Dirhams Equity 2016 : 4.48 billion Dirhams 2015 : 4.40 billion Dirhams Commercial performance 123 600 new accounts in 2016 Total outstanding deposits 2016 : 26.52 billion Dirhams 2015 : 22.96 billion Dirhams Change in customer deposits +15.5% Total outstanding loans 2016 : 30.68 billion Dirhams 2015 : 28.0 billion Dirhams Humain capital 1 716 employees in 2016 Average age : 41 years Average seniority : 15 years Breakdown by gender 37 % Women 63 % Men RAPPORT ANNUEL 2016 13 The governance system implemented respects the general principles of corporate governance. This system is composed of control and management bodies, drawn from the Board of Directors. 02 Governance Board of directors The Board may establish within itself, with the assistance, if it deems it necessary, The Board of Directors determines the of third parties, whether shareholders or orientations of the Company’s activities not, technical committees responsible and ensures their implementation. for studying the matters it submits to Subject to the powers expressly them for an opinion. The activities of granted to the Shareholders’ Meetings these committees and the opinions or and within the limits of the corporate recommendations formulated are reported purpose, the Company shall consider during the meetings of the board. any matter affecting the proper The Board shall determine the composition functioning of the Company and settle and powers of the committees operating its business in its deliberations. under its responsibility. Members of the Board of Directors as of February 22, 2017 President Chairman and Mr. Omar LAHLOU Director of CDG’s Mr. Ahmed RAHHOU CEO of CIH BANK Finance Division Directors General Manager Mr. Karim CHIOUAR General Manager Mr. Abdellatif ZAGHNOUN of CDG of HOLMARCOM Group Mr. Yassine Abderrazik Director of CDG’s Independent Chief Executive Officer HADDAOUI Development and Strategy Directors of CIMR Division Mr. Khalid CHEDDADI Permanent representative of Massira Capital Management Mrs. General Manager National Amina BENKHADRA Office Of Hydrocarbons and Mr. Mohamed Hassan Chairman and Chief Executive Mines (ONHYM) BENSALAH Officer of HOLMARCOM Mr. Mustapha LAHBOUBI Director of CDG’s Risk Management Division Activities of the Board Committees Created by of Directors in 2016 the Board of Directors During the financial year 2016, the Board of Directors held four meetings during which it Appointments, Compensation and dealt with the following points : Governance Committee • Approval of the financial statements for the On a yearly basis, the Appointments, fiscal year 2015; Compensation and Governance Committee • Adoption of the medium-term plan 2016- gives an opinion on the recruitment, 2020; appointment, dismissal and compensation of • Approval of the 2017 Budget; the Chairman of the Board of Directors and its • The issuance of a subordinated bond of 1 members, the managers and employees of the billion Dirhams; Company. • Approval for the participation of the CIH Bank in the increase of the capital of SOFAC. President of the committee Managing Director Mr. Abdellatif ZAGHNOUN In terms of corporate governance, the Board of Directors of the 14 December 2016 made the following changes : Member of the committee Chief Executive • Redefinition of the technical committees Mr. Khalid CHEDDADI Officer of CIMR created by the Board of Directors in 4 committees : This committee held a meeting during which a. Appointments, Compensations and it reviewed the variable compensation of the Governance Committee; bank’s managers. b. Strategic Committee; c. Audit Committee; Strategic Committee d. Risk Committee; The purpose of this committee, chaired by • Updating of governance documents: charters the Chief Executive Officer, is to propose to of these committees, rules and regulations of the Board of Directors elements for reflection the Board and the Directors’ charter. and guidance concerning the positioning of In addition, the Board of Directors also co-opted the bank, the markets sought, the businesses an independent director. exercised, the strategic vision and the strategic objectives. The Board of Directors has delegated some of its powers to the Strategic Committee which decides on the following management actions: • Any granting of a loan to a customer (or group) of an amount exceeding one hundred and fifty million Moroccan Dirhams (150 MMAD) • Loan applications to companies or group of companies that are part of CDG group, for which the total outstanding debt exceeds a hundred million Dirhams (100 MMAD) for any particular transaction or for all transactions over a one-year period ; RAPPORT ANNUEL 2016 15 • Loan application to related parties, regardless • The Strategy Committee meets of the amount, in accordance with the provisions monthly and whenever necessary. of Article 51 of the circular of the Governor of Bank Al-Maghrib No. 40/G/2007 relating to the internal control within President Chief Executive credit institutions; of the Committee Officer of CIH Bank • Acquisition of assets, investment decision M. Ahmed RAHHOU for an amount exceeding seventy-five million Dirhams (75MMAD) ; President Managing Director Of the • Disposal of assets by CIH BANK elements for of the Committee CDG (Caisse de Dépôt et de an amount exceeding twenty million Dirhams (20 M. Abdellatif Gestion) MMAD); ZAGHNOUN • Any decision on amicable settlement of credit cases whose net debt (gross debt net of President Chief Executive provisions and reserved premiums) is greater of the Committee Officer of CIMR than twenty million Dirhams (20 MMAD) ; M. Mohamed Hassan • Any matter considered important by the Board BENSALEH of Directors. Member Chief Executive Furthermore, to enable the Board of Director of the Committee Officer of CIMR to approve certain