OREANDA-NEWS. Fitch Ratings has downgraded Attijariwafa Bank's (AWB) and BMCE Bank's (BMCE) Long-Term Local Currency Issuer Default Ratings (IDRs) to 'BB+' from 'BBB-'. The two banks' Long-term National Ratings have been affirmed at 'AA-(mar)'.

Fitch has also affirmed Societe Generale Marocaine de Banques's (SGMB), Banque Marocaine du Commerce et de l'Industrie's (BMCI) and Eqdom's National Ratings. The Outlooks on all Long-Term Ratings are Stable.

The rating actions follow Fitch's downgrade of Morocco's Long-Term Local Currency IDR to 'BBB-' from 'BBB' as a result of which it is now equalised with Morocco's Long-Term Foreign Currency IDR. This was driven by the change in Fitch's sovereign rating criteria (for more details see 'Fitch Applies Criteria Changes to Morocco's Ratings' dated 22 July 2016 at www. fitchratings. com).

The Long-term Foreign Currency IDRs, Support Ratings and Viability ratings of these entities are unaffected by this rating action.

A full list of rating actions is at the end of this rating action commentary.

KEY RATING DRIVERS - DOMESTIC SYSTEMATICALLY IMPORTANT BANKS

IDRS, NATIONAL RATINGS, SUPPORT RATING AND SUPPORT RATING FLOOR

AWB's and BMCE's IDRs, National Ratings, Support Ratings (SRs) and Support Rating Floors (SRFs) reflect a moderate probability of support from the Moroccan authorities. AWB's and BMCE's Long-Term Local Currency IDRs have been downgraded following the rating action on the sovereign Long-Term Local Currency IDR. The Stable Outlooks on the banks' Long-Term IDRs reflect the Outlook on the Moroccan sovereign's Long-Term IDRs.

Fitch believes that the Moroccan authorities would have a high propensity to support AWB and BMCE if needed, given the two banks' systemic importance in the country. However, Fitch views the probability of support as only moderate given Morocco's financial strength (BBB-/Stable). As a result the entities' Long-Term Local and Foreign Currency IDRs and SRFs continue to be rated one notch lower than the Moroccan sovereign's Long-Term IDRs, reflecting the banks' high systemic importance.

KEY RATING DRIVERS - MOROCCAN FOREIGN-OWNED BANKS AND BANK'S SUBSIDIARY

NATIONAL RATINGS, SUPPORT RATINGS

BMCI's and SGMB's National Ratings and SRs reflect a high probability of support from the respective banks' majority shareholders, BNP Paribas (BNPP, A+/Stable) and Societe Generale (SG; A/Stable), if required. However, BMCI's and SGMB's SRs continue to be constrained by Morocco's Country Ceiling of 'BBB'. All ratings have been affirmed, as these entities' relative positions in the country have not changed as a result of the sovereign rating action.

Eqdom's ratings are based on a high probability of support from SGMB's ultimate majority shareholder SG in case of need. Eqdom's main shareholders are SG Consumer Finance (SGCF, 100%-owned by SG) and SGMB (AAA(mar)/Stable; 57.4%-controlled by SG). Their stakes in Eqdom are 34.9% and 18.8%, respectively. All ratings have been affirmed as Eqdom's relative position in the country has not changed as a result of the sovereign rating action.

RATING SENSITIVITIES

DOMESTIC SYSTEMATICALLY IMPORTANT BANKS

IDRS, NATIONAL RATINGS, SUPPORT RATING AND SUPPORT RATING FLOOR

AWB's and BMCE's IDRs, SRs and SRFs would be sensitive to a change in Fitch's view of the Moroccan state's willingness or ability to support the banks. These ratings are also sensitive to a change in Fitch's assumptions around the availability of sovereign support for Moroccan financial institutions should any progress be made towards providing a framework for resolving banks, including a bail-in tool.

AWB's and BMCE's National Ratings would be downgraded if the sovereign is downgraded by multiple notches or if the Moroccan state's willingness to support AWB and BMCE diminishes, most probably as a consequence of reduced systemic importance. Both scenarios are unlikely in the near future.

MOROCCAN FOREIGN-OWNED BANKS AND BANK'S SUBSIDIARY

NATIONAL RATINGS, SUPPORT RATINGS

A downgrade of BMCI's, SGMB's and Eqdom's National Ratings and SRs remains sensitive to a reduction in ownership, in integration with or in strategic importance to their respective parents.

A downgrade of SGMB's and BMCI's National Long-Term Ratings and their SRs would result from a multiple-notch downgrade of SG's and BNP Paribas' Long-Term IDRs, which Fitch views as highly unlikely. A one-notch downgrade of SG's Long-Term IDR would lead to a downgrade of Eqdom's National Long-Term Rating. An upgrade of Eqdom's National Ratings could result from stronger integration with SGMB. Eqdom's SR would also be downgraded if SG's Long-Term IDR is downgraded.

BMCI's, SGMB's and Eqdom's SRs could also be downgraded if Morocco's Country Ceiling is revised downwards by at least two notches. An upgrade of BMCI's and SGMB's SRs would result from a two-notch upward revision of Morocco's Country Ceiling.

The rating actions are as follows:

Attijariwafa Bank

Long-Term Foreign Currency IDR: unaffected at 'BB+'; Outlook Stable

Short-Term Foreign Currency IDR: unaffected at 'B'

Long-Term Local Currency IDR: downgraded to 'BB+' from 'BBB-'; Outlook Stable

Short-Term Local Currency IDR: downgraded to 'B' from 'F3'

National Long-Term Rating: affirmed at 'AA-(mar)'; Outlook Stable

National Short-Term Rating: affirmed at 'F1+(mar)'

Support Rating: unaffected at '3'

Support Rating Floor: unaffected at 'BB+'

Viability Rating: unaffected at 'bb-'

BMCE Bank

Long-Term Foreign Currency IDR: unaffected at 'BB+'; Outlook Stable

Short-Term Foreign Currency IDR: unaffected at 'B'

Long-Term Local Currency IDR: downgraded to 'BB+' from 'BBB-'; Outlook Stable

Short-Term Local Currency IDR: downgraded to 'B' from 'F3'

National Long-Term Rating: affirmed at 'AA-(mar)'; Outlook Stable

National Short-Term Rating: affirmed at 'F1+ (mar)'

Support Rating: unaffected at '3'

Support Rating Floor: unaffected at 'BB+'

Viability Rating: unaffected at 'b+'

Banque Marocaine pour le Commerce et l'Industrie

National Long-Term Rating: affirmed at 'AAA(mar)'; Outlook Stable

National Short-Term Rating: affirmed at 'F1+(mar)'

Support Rating: unaffected at '2'

Societe Generale Marocaine de Banques

National Long-Term rating: affirmed at 'AAA(mar)'; Outlook Stable

National Short-Term rating: affirmed at 'F1+(mar)'

Support Rating: unaffected at '2'

Eqdom

National Long-Term Rating: affirmed at 'AA(mar)'; Outlook Stable

National Short-Term Rating: affirmed at 'F1+(mar)'

Support Rating: unaffected at '2'