Bahraini investment firm Al Baraka Group (ABG) is leaving Morocco’s capital market. The firm is selling its stakes in the Moroccan Islamic banking group Bank Al-Tamweel Wa Al-Inma S.A (BTI).
According to news reports, Al Baraka Group has locked regulatory approval from the Central Bank of Bahrain to sell 43.65% shares in BTI to the Moroccan banking group Bank of Africa (BoA).
BTI Bank was a joint venture between BMCE – which would later change its name to BoA – and the Al Baraka Group. BoA was already the majority shareholder of BTI Bank when it was first created in 2017, with 51% of shares.
The transaction still hinges on regulatory approval from Morocco’s capital market authorities, reports indicate.
In addition to pulling out of the Moroccan market, the investing group also liquidated its 83.07% shares in Saudi-based Itqan Capital to a Saudi private investor. The deal already gained approval from the Saudi central bank.
Commenting on the news, ABG’s Chief Executive Houssem Ben Haj Amor said: “The exits reflect ABG’s strategy to consolidate our resources in order to enhance efficiency and results.”
He continued: “By refocusing on core business lines, we look to further strengthen performance and returns for our shareholders.”
The creation of BTI Bank in 2017 coincided with the emergence of Islamic or participative banking in Morocco. In January of the same year, Morocco’s central bank, Bank Al-Maghrib, approved the creation of Islamic banking groups.
Since its creation in Morocco, Islamic banking has been the fastest-growing sub-banking sector. Between 2019 and 2020, the sector grew a staggering 75% and attracted the attention of regional investors.
Islamic financing promises to increase Morocco’s financial inclusion track as it mainly targets the unbanked and underbanked populations who refrain from resorting to conventional banking services because of their non-compliance with the Sharia law.
However, despite its impressive growth rate, Morocco’s Islamic financing sector remains in its infancy and lags behind regional peers.
