Fitch Affirms BMCE Capital Gestion at 'Highest Standards(mar)'

Wed Jul 2, 2014 11:44am EDT

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(The following statement was released by the rating agency) PARIS, July 02 (Fitch) Fitch Ratings has affirmed BMCE Capital Gestion's (BKG) National Asset Manager Rating at 'Highest Standards(mar)' with Stable Outlook. KEY RATING DRIVERS The rating reflects the robustness of BKG's investment and operational infrastructure, which is supported by an advanced integrated IT platform. It also reflects a well-established, growing franchise, which benefits from the strategic commitment of BMCE Bank, the parent of BKG. The asset manager differentiates itself from domestic peers by its technology and capacity to innovate. The rating also reflects the organisation's staffing depth and solid control framework. BKG's 'Highest Standards(mar)' rating is based on the following category scores: Company: Highest Controls: Highest (revised from High) Investments: Highest Operations: Highest Technology: Highest Asset manager operations in the 'Highest Standards (mar)' category demonstrate an investment platform and operational framework that Fitch considers superior relative to the standard applied by domestic institutional investors. Company: As the third-largest asset manager in Morocco, BKG has a long track record and well established market presence, supported by the banking network of BMCE Bank. BKG is highly profitable and outsources to BMCE Capital, the investment bank of BMCE Group, support functions such as IT and risk management. Depth, adequacy, stability and targeted recruitment characterise BKG's staffing. Controls: BKG has an effective risk and governance framework that is well embedded in the business but also benefits from the independent oversight from risk functions and committees. Documented procedures and controls and formal reporting mechanisms further support the effectiveness of the control environment. The roll-out of the Sophis Value system has helped embed BKG's investment risk and client guideline monitoring programmes within the core system. The completion of the limit set-up in Sophis Value and an increased focus on internal controls and management reporting has led Fitch to revise the category score to Highest from High. Investments: BKG's investment processes are supported by staffing and IT resources, which fully meet the requirements of the funds managed. Investment decision-making and monitoring are formalised and conducted as a team. In Fitch's view, BKG's investment teams have the skills and capacity to manage the more sophisticated products that are expected to be launched in the next few months. Operations: Investment operations are scalable and robust, allowing BKG to manage increased volumes and more sophisticated or customised products. Reporting to investors provides regular and appropriate information for all client segments. Client and management reporting capabilities were enhanced so far in 2014, positioning BKG ahead of its peers. Technology: BKG benefits from an international-standards technological platform built around Sophis Value. Data-warehouse and system interfaces (with accounting system) further support the front-to-back office system integration. BKG's IT project includes an upgrade of Sophis Value . BKG differentiates itself by its ability to innovate through advanced technology. Created in 1995, BKG is a subsidiary of BMCE Bank, the third-largest bank in Morocco, which is 32%-owned by the Moroccan holding company FinanceCom and 25% by the Banque Federative du Credit Mutuel. At end-December 2013, BKG was managing MAD37.3bn worth of assets, on behalf of domestic retail clients, corporates and large institutional investors. In line with the overall local market, most of these assets are concentrated in domestic fixed income and money market assets (95%). At end-June 2014, BKG employed 37 people, including ten investment professionals. RATING SENSITIVITIES The rating may be sensitive to material adverse changes to any of the aforementioned rating drivers, notably through weakened financial conditions, material operational loss, heightened staff turnover or deterioration of processes and policies. A material deviation from Fitch guidelines for any key rating driver could cause the rating to be downgraded. Contact: Primary Analyst Manuel Arrive, CFA Senior Director +33 1 44 29 91 77 Fitch France S.A.S. 60 rue de Monceau Paris 75008 Secondary Analyst Francois Vattement, CFA Associate Director +33 1 44 29 92 75 Committee Chairperson Ian Rasmussen Senior Director +1 212 908 0232 Media Relations: Elaine Bailey, London, Tel: +44 203 530 1153, Email: Elaine.Bailey@fitchratings.com. Additional information is available on www.fitchratings.com Applicable criteria, 'Asset Manager Rating Criteria, dated 22 April 2013, are available at www.fitchratings.com. Applicable Criteria and Related Research: Asset Manager Rating Criteria here Additional Disclosure Solicitation Status here ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. 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