BELIEVE IN FINANCIAL REPORT 2019 attijariwafabank.com CONTENTS P.01 MACROECONOMIC P.02 ENVIRONMENT BANKING AND FINANCIAL ENVIRONMENT P.03 ANALYSIS OF P.04 GROUP RESULTS GLOBAL RISK MANAGEMENT P.05 CONSOLIDATED FINANCIAL P.06 STATEMENTS PARENT COMPANY FINANCIAL STATEMENTS ATTIJARIWAFA BANK : AN INTERNATIONAL BANKING AND FINANCIAL GROUP EuropeEurope NorthAfrique Africadu Nord CAEMCCEMAC WAEMUUEMOA MACROECONOMIC ENVIRONMENT WORLD GLOBAL GDP GROWTH After improving in 2018, global business activity stalled in 2019. and 2020F. This sluggishness was experienced by the majority GDP growth fell year on year from 3.6% to 2.9%, according of developed economies. to the latest estimate of the International Monetary Fund (IMF). The slowdown was due largely to trade disputes and In developing countries, growth slowed to 3.9% in 2019, but the geopolitical situation of certain countries. it is expected to rebound to 4.6% in 2020F. However, the In developed countries, GDP growth slowed to 1.7% in 2019 outlook varies significantly from one country to another. GDP Growth 2018 2019E 2020P World 3.6% 2.9% 3.3% Developed countries 2.2% 1.7% 1.7% Eurozone 1.9% 1.2% 1.3% France 1.7% 1.3% 1.3% Germany 1.5% 0.5% 1.1% Spain 2.4% 2.0% 1.6% United Kingdom 1.3% 1.3% 1.4% United States 2.9% 2.3% 2.0% Japan 0.3% 1.0% 0.7% Emerging and developing countries 4.5% 3.7% 4.4% North Africa and Middle East 1.1% 0.1% 2.7% Sub-Saharan Africa 3.2% 3.3% 3.5% Source : IMF (January 2020) Oil prices declined from an annual average of $71.05 in 2018 countries (1.5%) and emerging economies (4.7%). to $64.34 in 2019. Inflation remained low, both in developed AFRICA NORTH AFRICA According to the latest estimates from the African Development Surface area GDP per capita (2019 DATA) (km²) Population (m) (USD) Bank, African economies continue to recover, with GDP Tunisia 163,610 11.6 3,565 growth of 4.0% in 2019 and 4.1% in 2020F. This performance Mauritania 1,030,700 4.1 1,287 is due mainly to East Africa (+5.9% in 2019 and 6.1% in 2020F), Libya 1,759,540 6.6 8,852 Egypt 1,001,450 96.6 NA North Africa (4.4% in 2019 and 4.3% in 2020F) and, to a lesser Source : IMF extent, other regions on the continent. ECONOMIC ENVIRONMENT Economic indicators in Africa, by region GDP (%) Inflation In North Africa, GDP growth came to 4.4% in 2019, accounting 2019E 2020P 2019E 2020P for 1.6% of total growth in Africa, according to AfDB estimates. Africa 4.0% 4.1% 9.2% 8.1% Nonetheless, growth in North Africa remains erratic because Central Africa 3.6% 3.5% 4.7% 4.1% East Africa 5.9% 6.1% 12.5% 11.4% of the economic situation in Libya. North Africa 4.4% 4.3% 9.2% 7.4% Southern Africa 2.2% 2.8% 7.1% 6.6% It was the other countries in the region that drove North West Africa 3.6% 3.6% 9.7% 9.1% African GDP growth: Algeria (2.6% in 2019), Tunisia (1.5% AfDB – June 2019 in 2019), Egypt (5.5% in 2019) and Morocco (2.6% in 2019). This section describes the main changes in 2019 in the economic By contrast, Libya experienced negative GDP growth of environments of the countries where Attijariwafa bank –19.1% in 2019. does business. Inflation in North Africa remains high (9.2% in 2019 vs. 12.8% The region’s inflation rate declined to 0.6% in 2019, though in 2018), but it is expected to fall back to 7% by 2020. This it is expected to rise to 1.6% in 2020. The decline was due to improvement is due mainly to lower inflation in Libya (4.2% lower food prices in most WAEMU countries. The WAEMU’s in 2019 vs. 9.3% in 2018 and 8.9% in 2020F) and Egypt (11.4% budget deficit narrowed to –3.0% in 2019. in 2019 vs. 14.4% in 2018 and 8.4% in 2020F). In 2019, the monetary policy committee decided to leave Key economic indicators, by country at 2.5% the minimum interest rate for tenders relating to Budget Current account liquidity operations, and to leave the marginal lending rate GDP (%) Inflation (%) balance (%) balance (%) at 4.5%. The ratio for legal reserves applicable to WAEMU 2019E 2020F 2019E 2020F 2019E 2020F 2019E 2020F banks was left unchanged, at 3.0%. Tunisia 1.5 2.4 6.6 5.4 -3.7 -2.8 -10.4 -9.4 Mauritania 6.6 5.9 3.0 3.4 0.0 0.4 -13.7 -20.1 Libya -19.1 0.0 4.2 8.9 -28.9 -32.3 -0.3 -11.6 Egypt 5.5 5.9 11.4 8.4 -7.6 -7.1 -3.1 -2.8 IMF – November 2019 EMCCA The region’s budget deficit came to –4.8% in 2019, compared (2019 DATA) Surface area Population GDP per with –6.0% in 2018. It was weakened mainly by high budget (km2) (m) capita (USD) balances in Libya (–28.9% in 2019) and, to a lesser extent, Cameroon 475,440 25.5 1,386 Congo 342,000 4.6 1,772 Egypt (–7.6% in 2019). Gabon 267,667 2.0 8,423 Source : FMI ECONOMIC ENVIRONMENT WAEMU GDP growth in 2019 in the Economic and Monetary Community Surface area Population GDP per of Central Africa (EMCCA) came to 2.7% (vs. 1.7% in 2018), with (2019 DATA) (km2) (m) capita (USD) Benin 112,622 11.9 969 3.0% expected in 2020F. Recovery in 2019 was due mainly to Burkina Faso 274,200 20.0 799 solid performances in the oil sector, and to steady activity in Ivory Coast 322,463 26.3 1,893 the non-oil sector. These contributed to regional economic Niger 1,267,000 19.9 465 Mali 1,240,192 20.2 858 growth of 1.4 points and 1.9 points, respectively. Senegal 196,722 17.1 1,145 Inflation rose 2.5% in 2019 but remains within EMCCA norms. Togo 56,785 8.1 708 Source : IMF Higher prices are attributable to strong domestic demand, which is supported by robust non-oil activities and government ECONOMIC ENVIRONMENT revenue. The budget balance totaled 0.8% of GDP in 2019. According to the latest IMF figures, GDP growth of the West Key economic indicators, by country African Economic and Monetary Union (WAEMU) remains Current steady, up 6.4% in 2019 and 6.5% in 2020F. This growth was GDP (%) Inflation (%) Budget account boosted mainly by the tertiary and secondary sectors, and balance (%) balance (%) by domestic demand. 2019E 2020F 2019E 2020F 2019E 2020F 2019E 2020F Cameroon 4.0 4.2 2.1 2.2 -2.3 -2.1 -3.7 -3.5 Key economic indicators, by country Congo 4.0 2.8 1.5 1.8 8.6 8.4 6.8 5.3 Gabon 2.9 3.4 3.0 3.0 1.6 0.9 0.1 0.9 Budget Current GDP (%) Inflation (%) account IMF – November 2019 balance (%) balance (%) 2019E 2020F 2019E 2020F 2019E 2020F 2019E 2020F In 2019, the regional central bank (BCAS) elected to maintain Benin 6.6 6.7 -0.3 1.0 -2.3 -1.8 -6.1 -5.8 its prime rate at 3.50% and its marginal lending facility Burkina Faso 6.0 6.0 1.1 1.4 -3.0 -3.0 -5.7 -4.0 rate at 6.0%. Ivory Coast 7.5 7.3 1.0 2.0 -3.0 -3.0 -3.8 -3.8 Niger 6.3 6.0 -1.3 2.2 -4.2 -3.0 -20.0 -22.7 Mali 5.0 5.0 0.2 1.3 -3.0 -3.0 -5.5 -5.5 Senegal 6.0 6.8 1.0 1.5 -3.0 -3.0 -8.5 -11.1 Togo 5.1 5.3 1.4 2.0 -2.7 -2.1 -6.3 -5.5 IMF – November 2019 FINANCIAL REPORT 2019 9 GDP in 2018 MOROCCO Primary activities Taxes on products 12% • In 2019 economic growth rose 2.6% thanks to: net of subsidies 12% - a 3.3% rise in nonagricultural GDP in 2019, aided by improved value-added in tertiary activities (3.2%) and Secondary by growth in the secondary sector (3.6%); activities 26% - a 4.3% decline in value-added agricultural activity in Activités 2019, impacted by lower cereal production (52 million tertiaires quintals in 2019, down 50% from the previous harvest). 50% • Inflation nearly unchanged in 2019 (+0.2%), with a rise to +1.1% expected in 2020. Domestic economic growth hurt by unfavorable weather conditions • A contrasting macroeconomic context: In 2019, Moroccan GDP rose 2.6%. This growth comprises - budget deficit unchanged, to –3.7% of GDP in 2019 and 2020; a 3.3% rise in nonagricultural GDP and a 4.3% decline in - trade deficit down 9.5%, with exports increasing more agricultural value-added. The primary sector’s negative than imports; performance was mainly the result of unfavorable weather conditions. Cereal production came to 52 million quintals, - slight rise in sovereign debt, to 66.2% of GDP in 2019, down 50% from the 2018 harvest. compared with 65.3% in 2018: Moroccan sovereign bond issue of €1 billion (12 year maturity, spread of 140 basis The nonagricultural sector, in contrast, enjoyed steady points, coupon of 1.5%); growth thanks to higher value-added in the secondary (3.6%) and tertiary (3.2%) sectors.