Two Moroccan banks contemplate merger

Two Moroccan banks, Credit Immobilier et Hotelier (CIH) and Banques Populaires (BP) are contemplating merger as one of many options, under study, to live up to the state's ambitions in terms of social housing and tourism by year 2010, says the Moroccan Conjuncture Centre's (CMC) newsletter.

With BP group holding 20 percent of CIH capital, this merger is being examined as one of the strategic restructuring options to consolidate CIH's position in the banking sector, adds the newsletter, dedicated to public financial institutions.

CMC recalled that housing and tourism sectors, CIH's main niches, have suffered from "a difficult economic situation," which caused the bank's overall credits to shrink, adding that "CIH has undergone, during the second half of the 90s, a financial crisis that threatened the bank's very existence."

CMC further recommended "clear governance and internal transparent management" that must go beyond "a mere financial adjustment," calling for the creation of an independent judicial body in charge of loan recovery.