ACTIVITY REPORT 2012

Transcription

1 ACTIVITY REPORT 2012

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3 His Majesty King Mohammed VI, Long May He Reign

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5 TABLE OF CONTENTS Message from the Chairman National and International Economic Environment Emerging and Developing Countries: Engines of World Growth Domestic Economy: Growth Driven by Non-agricultural Activities Banking Activity: An Increasing Pace of Constantly-sustained Deposits and Credits Groupe Banque Populaire Highlights Presentation Key Indicators BCP Share: Safe bet Group Values Key Dates Human Capital at the Service of Performance An Information System at the Core of Group Development Strategy Corporate Governance Governance Rules in Line with Best Practices A Dynamic Risk Management Mechanism Group Activity Individual Customers: Tailor-made Offers Private Banking: The Privileged Partner of High Net-worth Customers Financial Inclusion: Certain and Indisputable Experience Marocains du Monde (Moroccans Residing Abroad): Serving to Develop New Partnerships Professionals: Greater Proximity and a Wider Range of Offers SME: Strengthened Commitment and Support Corporate Banking: A Lever of Growth for Large Corporations Market Activities and Trade Finance: A Continuous Dynamic Subsidiaries: Renewed Growth at the Service of Synergies Financial Statements Activity Report

6 Message from the Chairman The year 2012, which we resolved would be a year of high performance, ended with remarkable results. Despite an economic climate which continues to be less than favourable, Groupe Banque Populaire has realised signficant progress in commercial and financial performance. Its consolidated net results amounted to MAD 3.2 billion, thereby showing a growth rate of 5.6% over the preceding year. The result of satisfying growth among all the components of the Group s net banking income which progressed during the course of 2012 by 13.3% for a total of MAD 11.5 billion this performance is also the result of a proactive policy of streamlining costs within the different entities of the Group and of overcoming risks encountered in various business-lines. In addition, it contributes to the further strengthening of the Group s consolidated shareholders equity an increase of 11.2% to MAD 30.9 billion and thus provides the Group with the capacity to pursue its development and expansion ambitions with serenity. In this sense, 2012 was marked by major events which have contributed, on the one hand, to the consolidation of the Group s development on a national scale and, on the other hand, to its expansion into new territories. On an institutional level, 2012 was marked by three noteworthy events. The first relates to the transfer of State funds from Banque Centrale Populaire in order to benefit Banques Populaires Régionales. The second concerns the entry of capital into this same Banque Centrale Populaire from leading Financial Institutions; i.e. from Groupe BPCE and from the International Finance Corporation, a subsidiary of the World Bank Group. The third event was the meeting of the 8th Congress of Banques Populaires which coincided with the International Year of Cooperatives. If the first definitively asserted the cooperative and mutualist character of the Group while confirming our aim to perpetuate a business model whose efficiency, relevance and resilience are clearly evident, the second opened Banque Centrale Populaire to an international context by allowing it not only to benefit from the scope of these partners, but also by strengthening its governance. By organising the 8th Congress, we wished to revive a Group tradition: that of creating a space for public exchange where Banques Populaires, key players strongly committed to the socio-economic development of our country, open themselves to the

7 All of these important achievements converge in a single goal, that of allowing the Groupe Banque Populaire to extend its range in order to realise more efficiently its original mission : to foster Financial Inclusion, sustain the fabric of small and medium-sized businesses and support those structural projects which create the nation s wealth. national and international environment and examine the changes these environments entail. The 8th Congress was followed, some months later, by the Congress of the International Confederation of Banques Populaires in Marrakesh, which did us the honour of conferring upon us the heavy responsibility of assuming the Presidency of this organisation whose primary mission is to promote the values of financial cooperatives and reinforce partnership mechanisms amongst them. With regard to external growth, 2012 was marked by the takeover of a major banking network of the Groupe Banque Atlantique, which extends to 7 West African countries. This operation will certainly allow Groupe Banque Populaire to establish new sources of growth, and also to repeat its successes in Sub-Saharan Africa. Expectations with regard to this strategic partnership are very significant. In particular, they concern the support of Moroccan businesses in countries where the Banque Atlantique network is installed and the deployment of financial inclusion and support mechanisms as well as support for the development of the system of small and medium-sized businesses. All of these important achievements converge in a single goal, that of allowing Groupe Banque Populaire to extend its range in order to realise more efficiently its original mission: to foster Financial Inclusion, sustain the fabric of small and medium-sized businesses and support those structural projects which create the nation s wealth. To conclude, there is no need to reiterate that all of these achievements and development perspectives are the result of the sustained efforts and commitment of the highly-skilled people who form the Group. It is to pay tribute to them that the Activity Report for 2012 has been enhanced by photographs taken by Group personnel, a highly original initiative which illustrates the strong sense that all our employees have of belonging to the great Banque Populaire family. Mohamed BENCHAABOUN Activity Report

8 Message from the Chairman

9 NATIONAL AND INTERNATIONAL ECONOMIC ENVIRONMENT

10 NATIONAL AND INTERNATIONAL ECONOMIC ENVIRONMENT Emerging and Developing Countries : Engines of World Growth At the end of 2012, the world economy still seemed mired in structural problems. After four years of crisis, it worsened once again, notably with the return of recession inside the Eurozone. According to an IMF note dated January 2013, the global GDP slowed in 2012, with a growth-rate of 3.2% as compared to 3.9% in The Eurozone GDP ended the year with a drop of 0.4% in contrast to the +1.4% of the preceding year.

11 This decline owes to the bad economic performance of Italy (-2.1% versus 0.4% in 2011) and Spain (-1.4% versus 0.4% in 2011). For their part, the German and French economies experienced only modest growth (0.9% in Germany versus 3.1% in 2011, and 0.2% in France versus 1.7% in 2011). The United States, meanwhile, enjoyed a growth-rate of 2.3% in 2012 (1.8% in 2011). The GDP of those engines of global growth, emerging and developing countries, was marked by a sustained increase of 5.1% in 2012 although it experienced a relative slow-down rate of 6.3% the preceding year. Concerning the Middle East and North Africa, the GDP of these regions showed a rise of 5.2% in 2012 (3.5% in 2011). Activity Report

12 NATIONAL AND INTERNATIONAL ECONOMIC ENVIRONMENT Domestic Economy : Growth Driven by Non-agricultural Activities In this context of international constraint, the national economy ended the year 2012 with a volume growthrate of 2.7% as compared to 5% in This situation owes essentially to the bad performance of primary activities which, in effect, underwent a reduction in their added value of 8.7% as opposed to a growth of 5.1% in The added value of non-agricultural activities ended 2012 with an increase of 4.8% (compared to +5.3% in 2011). Altogether, the value-added progress of the tertiary sector is estimated at 5.7% (compared to 6% in 2011). For its part, the secondary sector progressed by 3.2% (4% in 2011). The principal mechanism of economic growth consisted of final domestic consumption, whose volume growth grew by 4.8% (versus 6.7% in 2011) and contributed to GDP growth by some 3.7 points. Public consumption increased by 5% (4.6% in 2011), providing a positive contribution of 0.9% to the change in the GDP. Household consumption, meanwhile, slowed its progressive growth to 4.8% (7.4% in 2011), thus decreasing its participation in GDP growth to 2.8 points (4.2 points in 2011). should be noted: A slackening of remittances by Moroccans Residing Abroard (MREs) and of travel receipts: at the end of December 2012, MREs were compressed by 3.9% to the amount of MAD 56.3 billion, compared to +7.8% at the end of December Tourist receipts diminished somewhat less, by 1.5%, for a total of MAD 58.2 billion, as compared to +4.8% in On the other hand, receipts from private foreign investments rose by 3.1% to MAD 31.4 billion as compared to -22.5% at the end of 2011; Control of the rise in the consumer price index: a 1.3% rise in the CPI during 2012 (2.2% for food products and 0.6% for non-food products); Virtual stagnation of the unemployment rate, which increased from 8.9% during the course of 2011 to 9% during Trend (in %) of economic growth ( ) For its part, the GFCF grew by 2.7%, thereby maintaining its contribution to GDP growth at 0.8%. Foreign Trade in Goods and Services (in volume) experienced a slight increase of 0.8% in exports (compared to 2.1% in 2011) while imports noticeably slowed down, with an increase of 1.6% (5% in 2011). This explains why the external balance of trade was negative, on the order of -0.5 points a relative relief, however, over the preceding year (-1.5 points). Regarding the macro-economic plan, the following major observations 10 Average across period: 4.6% 7,8 8 6,3 6 5,6 4,8 4, ,3 3 3,7 2,7 2, Source: Ministry of Finance and the Office of the High Commissioner for Planning 4,8 2013p

13 Banking Activity: An Increasing Pace of Constantly-sustained Deposits and Credits On the banking level, credits to the economy rose by 5%, to MAD billion, a net slowdown compared to the preceding year when they underwent an increase of 10.3%. The rise in such debts was driven by: - An increase in consumer credit to MAD 39.6 billion; - A 7.8% growth in accounts receivable and in liquidity loans to MAD billion; - A rise in property loans of 6.1%, to MAD 220 billion, whereas investment loans declined by 2% to MAD 138 billion. Debts in arrears increased by 9.1% to MAD 35.5 billion, resulting in a litigation rate of 4.9%. Savings accounts maintained a sustained growth rate, increasing by 8.2% to MAD billion (9.5% in 2011). Demand deposits were marked by an increase of 4.2% to MAD billion (7.7% in 2011). In contrast, term deposit accounts and savings certificates decreased by 0.9%, to MAD billion. Finally, it should be noted that the economic debt/bank deposit ratio, which was confined within a range of 80% to 89% between 2001 and 2007, crossed the threshold of 100% beginning in In 2012, this rate grew to 115% despite efforts by Bank Al-Maghrib to enhance the level of bank liquidity, notably by reducing the lending rate to 3% and the monetary reserve to 4% during the course of the year. Bank deposits ended the year with an increase of 4.6%, or MAD billion (7.1% the preceding year). Trend of BAM reference rate Trend of the monetary reserve ratio 7,00% 6,50% 6,00% 5,50% 5,50% 5,00% 4,75% 4,25% 3,75% 3,50% 3,25% 3,25% 3,00% 3,00% 15% 16% 12% 23% 20% 18% 24% 25% 17% 15% 14% 12% 10% 10% 8% 6% 4% Activity Report /06/ /11/ /02/ /03/ /04/ /09/ /03/ /11/ /03/ /09/ /12/ /03/ /03/ /12/ /10/ /12/ /08/ /10/ /11/ /02/ /06/ /10/ /10/ /12/ /09/ /01/ /01/ /07/ /10/ /04/ /09/2012 Source: Ministry of Finance and the Office of the High Commissioner for Planning 13

14 Message from the Chairman

15 GROUPE BANQUE POPULAIRE

16 GROUPE BANQUE POPULAIRE Highlights Opening of BCP capital to strategic partners : French group Banque Populaire Caisse d Epargne (BPCE); International Finance Corporation (IFC). State transfer to BPR of 10% of BCP capital, thus reducing its participation to 6%. This operation strengthened the mutualist nature of the Group. Holding of the 8 th National Congress of Banques Populaires; Assumption by the Group of the Presidency of the International Confederation of Banques Populaires (Confédération Internationale des Banques Populaires, or CIBP); Strategic partnership between BCP and AFG for the development of banking activities in the seven countries of the West African Economic and Monetary Union; Renewal for the 4 th consecutive year of the investment grade attributed by Standard and Poor s (BBB-/A-3).

17 Presentation Key Indicators Key figures for Groupe Banque Centrale Populaire Consolidated financial indicators (in billion MAD) Total balance sheet 215,2 237,4 271,4 Consolidated Shareholders Equity 27,1 27,9 30,9 Net Banking Income 10,0 10,2 11,5 Consolidated Net Income 3,1 3,0 3,2 BUSINESS ACTIVITY INDICATORS (in billion MAD and in number) Debts to Customers Local Customers MLA Customers Financial Resources Including : Customer debts Securities portfolio Branch Offices in Morocco ATMs Bank cards Number of customers 169,8 102,0 67,5 194,3 146,1 38, ,6 112,6 71,0 220,9 170,5 41, ,9 127,7 74,2 249,9 184,2 52, Market Share Customer Deposits Lending to the Economy ,0% 28,0% 27,9% 23,2% 24,3% 24,1% Other Indicators Shareholders Staff Banques Populaires Régionales Foundations Specialized Subsidiaries Banks Abroad Offshore Bank Micro-credit Offices Micro-Credit Beneficiaries (in number) * (*) The holding company Atlantic Business International controlling 7 Banks. Principal Ratios Activity ratio Resource ratio (including debt securities & external borrowing) Risk ratios Minimum solvency ratio Risk division ratio (in million MAD) Rate of outstanding debts ,7% 13,4% ,3% 90,0% 12,7% ,6% 91,7% 12,1% ,9% Activity Report

18 GROUPE BANQUE POPULAIRE Groupe Banque Centrale Populaire posted good commercial and financial results at the end of 2012; this bolstered its position and further confirmed the efficiency of its strategic orientations along various business lines. of the domestic economy. For its part, the Group share of net income amounted to MAD 1.9 billion, representing a growth of 2.7%. Net Banking Income: +13.3% to MAD 11.5 billion Despite an unfavourable economic climate, net banking income rose to MAD 11.5 billion, a notable increase of 13.3%. This performance was driven by a sustained growth of all components of the NBI. It is a testament to the solidity of the Group s business-model and of its multi-sector vocation: fee margins +35.3%, market activity results +11.4% and interest margins +10%. Operating Ratio : 46.6%, improved by 202 bp The result of ongoing resource optimisation and process improvement, the operating ratio saw a significant rise of 202 basis points, to 46.6%, as well as the maintenance of investment efforts to keep pace with development and an increase in Group staff, hiring nearly 810 new employees. Gross Operating Income : +17.7% to MAD 6.1 billion Gross operating income leaped by 17.7% to MAD 6.1 billion owing to the good performance of the NBI and enhanced operational efficiency. This also reflects the capital-building potential of the Banque Populaire model. Consolidated Net Income : +5.6% to MAD 3.2 billion Consolidated Net Income reached MAD 3.2 billion, a growth of 5.6%, despite a proactive policy aimed at improving the level of coverage of outstanding debts by provisions. The coverage rate reached 77%, compared to 63% a year earlier. Moreover, on a social basis, the Group put together an additional envelope of MAD 300 million to cover general risks, raising its loans outstanding to MAD 1.1 billion. This provision figures within the context of guaranteeing the Group secure development and of upholding its commitment to provide financing for the leading sectors Consolidated Shareholders Equity: +11.2% to MAD 30.9 billion The Group continued to reinforce its capital base with Consolidated Shareholders Equity which rose by 11.2% to MAD 30.9 billion. This owed notably to consistent financial results on the one hand and to the opening of BCP capital to its institutional partners for the support of strategic development, on the other hand The total balance sheet reached MAD billion, a clear growth of 14.4% representing an additional MAD 34 billion. Deposit Collection: +10% to MAD billion, or 27.9% of the market. Benefiting from an economic model which successfully mobilises savings and is supported by a wide network of local branches, customer deposits currently amount to MAD billion, reflecting a sustained growth of 10%. On the domestic market, the Group saw individual customer deposits rise by 5.6% to MAD billion, representing an additional collection of MAD 7.6 billion, and also saw its base-point position improved, rising by 30 basis points to 31.1%. This commercial momentum was accompanied by the ongoing optimisation of collection costs, with a resource share amounting to 35.6%, an improvement of 109 basis points and of 287 basis points over GBP has thus consolidated its position as the leading collector of deposits, with a 27.9% share of the Moroccan market, representing an increase of 102 basis points over the past three years. Such performance owes to a policy of proximity at the service of the banking system. In 2012, the Group offered the most extensive network in Morocco, consisting of 1,145 branch offices; supported by 604 additional cashpoints and 1,323 ATMs, this network offers 3 million bank card holders a range of highly diversified services.

19 Thanks to the image and reputation of Banque Populaire, an extensive distribution network and the strong motivation of its sales force, the Group has maintained its commercial momentum and attracted 538,000 new customers, bringing the Moroccan customer portfolio to 4.2 million. Deposits by Moroccans Residing Abroad (MLA): +4.5% to MAD 74.2 billion The Group consolidated its position as leader of the market for Moroccans Residing Abroad (MLA), with the volume of deposits reaching MAD 74.2 billion, representing a growth-rate of 4.5%. This performance is principally explained by the diversification of remittance channels, efficient local services and the commercial dynamism offered equally in Morocco and abroad. Individual Customer Loans: +8% to MAD billion, 24.1% market share Individual customer loans reached MAD billion, an increase of 8%. The additional distribution on the domestic market rose to MAD 6.6 billion in 2012, reflecting the active commitment of the Group to financing the real economy. This growth took place in the context of a policy of allying development and security, with a rate of outstanding debt at 3.9%. A leading player on the private market, the Group posted customer loans amounting to MAD 51.8 billion domestically, representing a rise of 6.4%, thus cornering one-fourth of the domestic market (25.6%). This dynamic policy of distribution will be further strengthened by support for the development of regional economies by making use of an employment ratio situated at 94.1%. Standard & Poor s: Renewed Investment Grade In its report published on 24th January 2013, Standard & Poor s renewed its confidence in GBP by granting it, for the fourth consecutive year, a BBB-/A-3 rating. This is the best rating within the Moroccan and North African banking sector and one of the best ratings given to 17 Arab banks in the Mediterranean. A true sign of confidence for investors, this rating once again attests to the role played by the Group and its strong commercial position within the Moroccan banking system, in particular with regard to savings mobilisation, transfers from Moroccans Residing Abroad and financing the national economy. The Group benefits from a high measure of financial flexibility thanks to the Support Fund supplied by BCP and Banques Populaires Régionales for the purpose of guaranteeing their solvency, as the rating agency notes. Additionally, the position of the Group in terms of risk was judged as adequate by Standard & Poor s, with a good level of resistance to the economic crisis. The internal policy of the Group with regard to the consolidation of Shareholders Equity, its management and prudent strategy as well as its good funding profile and solid liquidity further support the rating agency report. Principal indicators of Banques Populaires Régionales in 2012 (in million MAD) BPR Number Customer Shareholders Net Resources Capital Deposits Equity Profits Staff Number of of branch ATMs offices Centre-South El Jadida-Safi Fez-Taza Laayoune Marrakesh-Beni-Mellal Meknes Nador-Al-Hoceima Oujda Tangier-Tetouan Rabat-Kenitra Activity Report

20 GROUPE BANQUE POPULAIRE BCP Share: Safe bet 2012 : A Year featureless for the MASI After a difficult 2011, the stock market continued its slide with a decline in the MASI of % to 9, points. This rating downturn appears to reflect a difficult economic context, channelling savings towards lower-risk assets. Based on the evolution of all stocks listed on the Index, the following three main phases can be identified : Highest level of 2012 : 11, Phase II : -20,49% 90 Phase I : +3,73% Phase III : +2,91% Dec - 11 Jan -12 Feb- 12 Mar - 12 Apr - 12 May -12 Jun - 12 Lowest level of 2012 : 9, Jul - 12 Aug - 12 Sep - 12 Oct -12 Nov - 12 Dec - 12 The first phase, which lasted from the beginning of the year to 1st March, saw the Index perform at 3.73%, reflecting investor interest in certain stocks before their results were published. The second period, between 1 st March and 19th October, was one in which the MASI downturn accelerated, with a loss of 20.49%. This under-performance may be explained by: The publication of generally disappointing annual and semestrial results; Growth inhibited by a generally unfavourable agricultural season (inadequate rainfall); A slow-down in public investment due to the delayed adoption of the Financial Act for From 20th October, the market entered a third stage of technical rebound, justified by the expectations of market participants that buyers would return before the end of the year. This movement gave rise to a 2.91% gain. BCP Share Price Performance Throughout 2012, BCP share price performance was exemplified by it resilience in a strongly bearish market. BCP shares lost only 0.81% of their value, thus outperforming the MASI by 14.3 points and the Index of Banking Shares by 10.8 points. This testifies to the confidence enjoyed by the Bank on the part of diverse investors, both institutional and private. With a volume of MAD 2.16 billion in 2012, the fourth largest market capitalisation in Morocco attracted 7.3% of all transactions made on the Central Market in With regard to over-the-counter transactions, 10% of BCP capital was exchanged in a State sale operation to BPR.

21 Finally, the year 2012 was marked by entry of BPCE and IFC into BCP funding round to the amount of 5% each Highest level in 2012: MAD Lowest level in 2012: MAD /12 30/1 29/2 31/3 30/4 31/5 30/6 31/7 31/8 30/9 31/10 30/11 31/12 MASI BCP Group Values A Mutualist Bank with a Regional Structure Groupe Banque Populaire consists of a series of bodies operating together and is made up of the Banques Populaires Régionales (BPR), with a vocation to enhance cooperation; Banque Centrale Populaire (BCP), which is the central body of the Group and is listed on the stock exchange; specialised subsidiaries; Public Interest Foundations; and banks and representative offices abroad. It derives its force from the values of solidarity and mutuality as well as from an organisation unique in Morocco. A National Mission of Proximity Its primary task is to strengthen banking use nationwide, contribute to economic development and play the role of lever in regional and national growth. A Universal Bank The Group works closely with all types of customers, whether large corporations, small and medium-sized businesses, professionals, individuals residing in Morocco or Moroccans residing abroad. Thanks to this proximity network in Morocco and abroad, the Group offers all its customers innovative financial products adapted to their specific needs. It is also involved in assisting structure-enhancement programmes initiated by public authorities such as the Pacte National pour l Emergence Industrielle (National Pact for Industrial Emergence) and the Plan Vert Maroc (Green Morocco Plan), etc. Along the same lines, the Group continues its development strategy in the business of finance and investment banking. A Corporate Citizen The promotion of collegial governance, a strong commitment to fostering the socio-economic development of Morocco, the proximity and cooperative character of its banks, the stimulation of bank use by a wider number of people, the significant implications of the activities conducted by its Foundations, its ethical commitment to all its customers, policymakers, suppliers, human capital and other partners, its respect for the environment and sustainable development all these citizen values constitute the richly diverse identity of Banque Populaire and confirm the coherence of its acts, with the firm conviction of its having acted for the good of all, ACCOMPLISHED FOR YOU. Adherence to the full range of these citizen values will in the future, as it has in the past, continue to be the driving force of the Group on the national banking scene. Activity Report

22 GROUPE BANQUE POPULAIRE Communication at the Service of the Group's Values As a leading player in the national economy with a vocation to uphold its values of solidarity, proximity, exemplary citizenship and high performance, Groupe Banque Populaire has always been resolutely committed to undertakings of societal import. In its role of standardbearer for the Group, the Corporate Communication Department plays a major part in promoting these values. The year 2012 was therefore marked by the Ana Chaabi/Je Suis Populaire ( I Am Popular ) campaign in which both stars and ordinary people proclaimed their popularity as a way for the Group to underscore the relationship of confidence and recognition implied by its actions. Corporate Communication was equally involved in a wealth of event-planning, beginning with the organisation of the Eighth GBP Congress. This event was highly symbolic, revealing not only the developmental perspectives of the Group but also the cohesion of its teams and the esteem in which it is held by the market. Another event, another symbol: the organisation in Marrakesh of the Twenty-eighth Congress of the International Confederation of Banques Populaires (CIBP), at the end of which the President of the Group, Mr. Mohamed Benchaaboun, was selected to head this international institution for a period of three years. His mandate will essentially consist of promoting the values of cooperative banks throughout the world and strengthening partnership mechanisms amongst them. In terms of press relations, Corporate Communicationhas supported all institutional activities initiated by different business lines within the Group, with particularly favourable media coverage. As part of the same dynamic, the Financial Communication and Sponsoring Services contribute to reinforcing the image of GBP as an especially productive, ecologically-responsible and resolute Group in touch with the needs and concerns of its environment.

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24 GROUPE BANQUE POPULAIRE Key Dates 25th May 1926 Dahir (decree) enacting the creation of an organisational model of the Bank. 2nd February 1961 Re-shaping of the Crédit Populaire du Maroc International expansion with the creation of Banque Chaabi du Maroc (BCDM) in Paris The Group creates specialised business-line subsidiaries to broaden the range of customer services Reform of Crédit Populaire du Maroc in terms of: Expanding the regional dimension of the Banques Populaires Régionales; Widening of the Executive committee prerogatives Listing of Banque Centrale Populaire on the stock exchange Takeover of the Upline Group investment bank in order to develop its investment banking services Minority cross-holding OCP/BCP taken out for the purpose of consolidating the respective market positions of both Groups; Merger of the Fondation Banque Populaire pour le Micro-Crédit and the Fondation Zakoura Micro-Crédit; Taking out of majority equity interest of 53% in the capital of Maroc Leasing Materialization of the stakes taken out by Banque Centrale Populaire in international banks such as British Arab Commercial Bank [United Kingdom] Union des Banques Arabes et Françaises [France] and the Arab Italian Bank [Italy]; Banque Centrale Populaire consolidates the accounts of the different bodies of Crédit Populaire du Maroc and subsidiaries further to the amendments to law n amending and enacting law 12-96: henceforth BCP Group integrates Banques Populaires Régionales in addition to BCP and subsidiaries thereof; Merger between Banque Centrale Populaire and Banque Populaire de Casablanca instituting the new group as a top financial entity on the Casablanca market For the second consecutive year, Standard and Poor s awards Groupe Banque Populaire with the rating BBB-/A-3 with stable outlook Standard & Poor s reiterates its confidence in Groupe Banque Populaire by awarding it with the rating BBB- /A-3 with stable outlook for the third consecutive year. Opening of BCP capital to strategic partners: French Group Banque Populaire Caisse d Epargne (BPCE); International Financial Corporation (IFC). Strategic partnership between BCP and AFG for the development of banking activities in seven countries of the West African Economic and Monetary Union (WAEMU) Re-awarding, for the 4th consecutive year, of Investment Grade by Standard and Poor s (BBB-/A-3 rating).

25 Human Capital at the Service of Performance In a context of fierce competition, our Bank has made of its human resource policy both a means of enhancing skills and a lever of economic competitity and social progress. Relying on a well-considered strategy with multiple lines, the activities of the Human Capital Development Department aim to implement forceful innovations and to augment, on a permanent basis, the value of human resources within the Group. 1. A Dynamic Recruiting Approach and a Training Project of Fast-Paced Change In 2012, Groupe Banque Populaire began the process of reshaping its recruitment policy. Modern and proactive, this policy henceforth assures the identification of those skills best able to enhance the growth activities of our Bank while creating conditions which recognise particular talents. This is how the Group recruited 679 new and highly-skilled employees for BCP and BPRs in At present, Crédit Populaire has a total staff of 8,127 people. Facts have confirmed the efficiency of new, specific and adapted procedures. Sourcing systems are continually enriched while our appeal as an employer of choice on the market has noticeably improved. Along with an improved employee recruitment system, Groupe Banque Populaire has widened its contact with the university and professional worlds with the aim of attracting the best candidates in line with our needs. An active partnership policy has been conducted in this direction. In collaboration with the INPT, a Path of Excellence prize has been created, and a Statistical Research Prize has also been set up in tandem with INSEA (National Institute of Statistics and Applied Economics). These initiatives have allowed the most brilliant graduate students to be identified and thereby invited to join the Group. Training policy, for its part, has been marked by the development of a first Training Management Plan. This plan aims to bring the strategic operations of the Group better in line with the training it gives, thus allowing the establishment of an operational planning system. Ongoing career training development and the finalisation of new generic banking cycles, together Activity Report

26 GROUPE BANQUE POPULAIRE with improvements in the professional skills of trainers, have been areas of notable innovation. The establishment of efficient and synchronized programming, the optimisation and rationalisation of budgetary matters, and improved training to reach the level of the National Training Centre are also among the key actions undertaken during the course of this year. 2. A Constantly-Evolving Social Policy As a leading factor of cohesion, the social policy of Groupe Banque Populaire has remained focused on the involvement of staff with their jobs and on the development of their skills. Priority was given in 2012 to consolidating employee social benefits by implementing the Social Development and Loyalty Plan through such benefits as access to home-ownership, acquisition of BCP shares and assistance with social services. Added to this, the provision of adequate means to improve the replacement rate (pensions relative to last salary received); improvement in the well-being of Group staff and their families through new agreements (leisure, travel, sporting and cultural activities, summer camps, etc.); continuing improvement of our job-related system of preventative medicine and the completion of new holiday centres. 3. An Effective Social Dialogue Apart from the major social actions mentioned above, the Group as guarantor of the cohesion and social stability within our Institution remains deeply attached to maintaining social dialogue, supporting the various committees which involve our social partners and developing communication channels with, and assistance to, retired staff.

27 An Information System at the Core of Group Development Strategy In conformity with the strategic objectives of the Group, the activity of the Organisation & Information System (OIS) Pole for the year 2012 focused on the completion of its main areas of development. The OIS Pole thus worked on : Implementing the Projects Portfolio arising from the Medium-Term Plan of the Group; Improving its activity indicators; Improving the quality of services supplied bodies within the Group; Optimising business processes and related organisations. All this was done to guarantee users the availability and permanent security of the Information System (IS). Implementation of Projects Portfolio towards completing other lots (branch office management operations and management of securities) so as to ensure effective deployment during The implementation of the same banking platform at two branches of Chaâbi Bank in Europe. The effective mainstreaming of the new Credit and Guarantees Management Platform. This has allowed access to an efficient tool for the support of business units concerned with the development of loan activities, both in terms of enhancing the launch of new offers and ensuring sustained production. The production of an exchange platform which facilitates contact with Bank partners and major account clients. The start of a process to choose a platform for the management of customer relations, with a view to actual launching in The Projects Portfolio adopted in 2012 is built around several different types of projects : 1. Projects relating to the IS Master Plan. 2. Projects relating to the evolution of the current IS in order to respond to business needs by implementing new products and banking services and ensuring compliance with external regulations. 3. Projects relating to ongoing improvement of IS security. 4. Projects arising from the telecommunications and infrastructure Master Plan. Constructing the Future IS With regard to the first point, several advances were made in 2012 : The effective mainstreaming of the initial lot of the new, integrated banking platform relating to the installation of a new and enhanced model of client database management allows for greater customer visibility, possibilities of finer segmentation and advanced management of prospects. Along with this, significant advancement was made Ongoing Development of the Current IS Implementation of the Pack Entreprise. Bancassurance: Enhancement of the My Retirement ( Ma Retraite ) and My Children s Future ( Avenir Mes Enfants ) services. Implementation of several aggreements with Moroccan organisations (CMR, FAR, AMCI) aimed at providing targeted customers with improved banking services at advantageous cost. Enhancement of Moroccans Living Abroad (MLA) remittance channels: Implementation of account transfers through the French Banque Postale network. Implementation of several agreements with foreign partners specialised in remittance channelling. Improvement of the process of Western Union transfers. Improvement of the Eurogiro Service. Enhancement of SWIFT services. Implementation of new credit products: Multi- Activity Report

28 GROUPE BANQUE POPULAIRE tiered credits, advance on specialised contracts with architects, Credit Mountji aimed at business professionals, credits under contract, etc. Final establishment of the Mourabaha service. Establishment of the Mortgage Securisation Operation. Establishment of Small and Medium-Size Business funds. Establishment of the Contractual Mutual Fund (CMF). Integration of new bodies to offer improved Automatic Payment, Availability and Mass Transfer services. Enhancement of electronic services by issuing new cards and setting up new and innovative ATM services. Enhancement of ChaabiNet Services: Setting up of a company-targeted offer. Integration of new services: Payment of bills (RADEEMA, LYDEC, Maroc Telecom, schools), the ordering of electronic banking cards, customised MAD ceilings, real-time position, management workflows, delegated management, etc. Improvement of the customer experience and Website usability. Enhancement of Pocket Bank services: The offer of new services: Ordering of chequebooks, bank card blocking, MAD to ATMs and branch offices, inter-account transfer, etc. Improvement of ergonomic conditions, etc. Deployment in App Stores. Implementation of several regulatory projects regarding risk management, anti-money-laundering efforts, conformity with consumer protection laws and laws protecting personal data, establisment of a Centre to deal with incidents of non-payment, implementation of several regulatory reportings, etc. Strengthening of IS Security Security lies at the core of our daily concerns regarding the management of our IS. In this spirit, the ISO Pole began a study in 2012 to update its IS Security Masterplan in order to have a well-marked road map as well as to modernise and strengthen our Security System. The implementation of an Action Plan related to this road map is anticipated during the course of The Pole has also begun to reinforce application security and data-accessing, and to implement the PCI-DSS standard in order to further secure electronic banking activities. Since security is the affair of all aspects of business, a constant effort has been made to raise awareness of security issues among various types of IS-users. In addition, the RSSI continued to generalise the Activity Continuity Plan throughout 2012, notably amongst Group subsidiaries. Safety and response tests were also carried out. Harmonious Development of Infrastructure Recognising the need to reshape IS, consolidate the IS of subsidaries and promote the growth of our banking activity, a significant investment in modernising and increasing the capacities of our telecommunications infrastructure and hardware has been made. All this is part of the Telecommunications and Infrastructure Management Masterplan updated in In this light, the following improvements were made during the past year : Deployment of MPLS technology in more than half of the worksites; Implentation of ISDN backup; Consolidation of the Data Center; Finalisation of server virtualisation; Establishment of means to monitor lines. This investment resulted in a major optimisation of telephone and telecommunication costs and in a clear improvement in debit quality which, in turn, has had a very significant impact on time-response despite growth in the volume of activity. Improvement in Activity Indicators The impact of investments on our IS over the past years has resulted in a clear improvement in our activity indicators : Telecommunication indicators are now up to standard, with very good performances demonstrated in terms of availability, cost and time-response; Clear improvement of performance in comparison to

29 last year, especially in terms of time-response which, following the deployment of the MPSL connection, has been significantly reduced; Processing capacities have grown noticeably, allowing for increased use and the easy absorption of the 120 new branch offices opened and the 500,000 new customers acquired in 2012; The availability rate of our electronic platform has also significantly improved; the growth in the number of ATMs by 10% and the number of cards in circulation by 17.6% in 2012 occurred without any deterioration in the quality of service; Increased rate of protection against electronic fraud thanks to improvements in this area, in particular the use of relevant processes, surveillance equipment and updated security systems; Noticeable improvement in the time needed to issue electronic banking cards; Optimisation of equipment expenses for branch offices, desktop publishing and printing costs. Improved Quality of Services Provided to Bodies within the Group The consolidation of IS in Group subsidiaries continued throughout 2012, resulting in large-scale savings in terms of investment and operational costs while concentrating computer, organisational and project-management expertise within the ISO. The Pole also contributed to the integration of Groupe Banque Atlantique by making its expertise available for the implementation of areas of convergence laid down in the framework of this outside growth operation. Optimising the Functioning of Structures and Processes The Pole deployed several projects related to the re-engineering of processes and the optimising of organisational structures. The following items should be noted in this regard : The final consolidation of several processing backoffices at the BP subsidiary Shore BO; The implementation of steps to improve processes and the review of several business-related processes; The enhancement of the internal regulatory system of the Bank and of bodies within the Group; The reshaping of several organisational structures; The support given to the creation of Group ABI structures; The improvement of human resource management systems. Activity Report

30 CORPORATE GOVERNANCE

31 CORPORATE GOVERNANCE Activity Report 2012

32 CORPORATE GOVERNANCE Governance Rules in Line with Best Practices The Executive Committee of the CPM The Executive Committee is the highest organ of CPM. It consists of 5 BPR Supervisory Board chairmen elected by their peers, and 5 representatives of the Administrative Board of BCP with a mandate to : Define the strategic guidelines for the Group; Exercise administrative, technical and financial control over the organisaion and management of CPM bodies; Define and control the operating rules common to the Group; Take all measures necessary for the smooth functioning of CPM bodies and safeguard their financial health. EXECUTIVE COMMITTEE OF CRÉDIT POPULAIRE DU MAROC BANQUE CENTRALE POPULAIRE FOUNDATIONS BANQUES POPULAIRES RÉGIONALES SUBSIDIARIES Fondation Banque Populaire Banque Populaire of the Centre-South Banks and Merchant Banks Finance Companies Capital Investment Insurance & Assistance Miscellaneous Services Fondation Attawfiq Micro-Finance Banque Populaire of El Jadida-Safi CHAABI BANK 100 % VIVALIS 64,01 % (87,23%) MOUSSAHAMA I 99,86 % MAI 77,43 % BP OUTSOURCING PR. 52 % (100%) Fondation Création d Entreprises Banque Populaire of Fez-Taza BPMC 62,50 % MAROC LEASING 53,11 % MOUSSAHAMA II 60 % (100%) BP SHORE IMMO 51 % (100%) Banque Populaire of Laayoune BPMG 55,53 % CHAABI CAPITAL INV. 49 % (100%) BP SHORE BACK-OFFICE 5 % Banque Populaire of Marrakesh-Beni Mellal CIB OFFSHORE 70 % CHAABI LLD 73,62 % Banque Populaire of Meknes MEDIA FINANCE 60 % CHAABI DOC NET 31,84 % (99,97%) Banque Populaire of Nador-Al Hoceima BANK AL ÂMAL* 24,01 % (35,87%) DAR AD-DAMANE 5,71 % (52,63%) Banque Populaire of Oujda Banque Populaire of Rabat-Kenitra UPLINE GROUP 74,87 % (100%) Banque Populaire of Tangier-Tetouan ABI 50,00 % (xx%): CPM Participation Rate * Body controlled by the Group (right to a double vote) Members of the Executive Committee M. Mohamed BENCHAABOUN Chairman of CPM Executive Committee Mme Faouzia ZAABOUL Director of the Treasury and of External Finance of the Ministry of the Economy and Finance M. Ahmed ASSALHI Chairman of the Executive Management Board of Banque Populaire, Rabat-Kenitra M. Abdelhadi BENALLAL Chairman of the Supervisory Board of Banque Populaire, Tangier-Tetouan M. Ahmed ZERKDI Chairman of the Supervisory Board of Banque Populaire, Centre-South

33 M. Larbi LARAICHI Chairman of the Supervisory Board of Banque Populaire, Meknes M. Abdelhadi BERRADA EL AZIZI Chairman of the Supervisory Board of Banque Populaire, Marrakesh-Beni Mellal M. Abdellah BOURKADI Chairman of the Supervisory Board of Banque Populaire, Fez-Taza M. Abdelaziz TRACHEN Chairman of the Executive Management Board of Banque Populaire, Meknes M. Mohamed BOULGHMAIR Chairman of the Executive Management Board of Banque Populaire, Tangier - Tetouan M. Aziz ALOUANE Government Commissioner for CPM Banque Centrale Populaire (BCP) Governance System The Administration of BCP consists of supervisors representing the State, the Chief Executive Officer of OCP and 3 BPR Chairmen. The Administration has ultimate responsibility for the financial solidarity of the Bank, ensures its strategic direction and supervises the management of its activities. The Executive Committee of BCP meets three times a year (March, September and December). Members of the Executive Committee of Banque Centrale Populaire NAME AND SURNAME POSITION FUNCTION M. MOHAMED BENCHAABOUN CHIEF EXECUTIVE OFFICER CHIEF EXECUTIVE OFFICER OF BCP M. MOHAMED BELGHAZI OFFICER OF THE BOARD -- MME FAOUZIA ZAABOUL OFFICER OF THE BOARD Director of the Treasury and External Finance of the Ministry of the Economy and Finance M. MOSTAFA TERRAB OFFICER OF THE BOARD General Manager of OCP M. AHMED ASSALHI OFFICER OF THE BOARD Chairman of the Board of Directors of Banque Populaire, Rabat- Kenitra M. ABDELAZIZ TRACHEN OFFICER OF THE BOARD Chairman of the Board of Directors of Banque Populaire, Meknes M. Abdelkhalek BENDRISS OFFICER OF THE BOARD Chairman of the Board of Directors of Banque Populaire, Marrakesh-Beni Mellal M. MOHAMED BOULGHMAIR OFFICER OF THE BOARD Chairman of the Board of Directors of Banque Populaire, Tangier- Tetouan M. MOHAMED ADIB OFFICER OF THE BOARD Chairman of the Board of Directors of Banque Populaire, El Jadida- Safi M. François PEROL OFFICER OF THE BOARD Chairman of the Board of Directors of Banque Populaire and the Caisse d Epargne (Savings Bank) Activity Report

34 CORPORATE GOVERNANCE BCP Organisational Chart Chief Executive Officer Mohamed BENCHAABOUN Banques Populaires Régionales Inspectorate-General Noureddine BAROUDI ❻ Fondations Banque Populaire Executive Committee Office of the CEO Institutional Structure & Communications Group Asma LEBBAR ❹ Retail Banking & Marocains du Monde Laïdi EL WARDI Group Risks Hassan EL BASRI Corporate & International Banking Rachid AGOUMI Secretariat-General Mohamed Karim MOUNIR ❶ ❺ ❸ ❷ ❶ ❷ ❸ ❹ ❺ ❻

35 Governance System at the BPR Level Today, CPM consists of 10 Banques Régionales whose capital was held by 427,000 shareholders at the end of Whether businesses, local individuals or Moroccans Residing Abroad (MLA), craftsmen, young entrepreneurs or investors, all these components come together to form the driving force of the regional economy. In all regions, shareholders participate in the life of their BPR and keep the ties of proximity and connection alive on a daily basis. The BPRs have a dual governing structure in the manner of a limited company with a Board of Directors and a Supervisory Board. The Board of Directors is responsible for overseeing management, helping to define the strategic directions of the Bank and ensure they cohere with the strategy of the Group, and use certain special powers granted by statutes dealing mainly with clearance decisions. It verifies and presents its comments on both the Supervisory Board Report and the Report for the fiscal year at the Annual Ordinary General Meeting. Management of the BPR is ensured by a Supervisory Board which is collegially responsible for the actions and performance of the Bank. Boards of Directors and Supervisory Boards of the Banques Populaires Régionales BPR Chairman of the Supervisory Board Chairman of the Board of Directors Rabat-Kenitra Abdelhai BESSA Ahmed ASSALHI Centre-South Ahmed ZERKDI Lbachir BENHMADE Tangier-Tetouan Abdelhadi BENALLAL Mohamed BOULGHMAIR Fez-Taza Abdellah BOURKADI Ahmed Rida TADILI Marrakesh - Beni Mellal Abdelhadi BERRADA EL AZIZI Abdelkhalek BENDRISS Nador-Al Hoceima Mohamed BOUAMARA Driss RONDA El Jadida- Safi Jamal BEN RABIA Mohamed ADIB Meknes Larbi LARAICHI Abedlaziz TRACHEN Oujda El Bachir HOUCHI Rédouane ZAKAT Laayoune Mohamed Salem EL JOUMANI Ahmed EL JAMRI Activity Report

36 CORPORATE GOVERNANCE A Dynamic Risk Management Mechanism Risk Management at the core of the Internal Control Mechanism of the Group Risk management is inherent in all banking actitivies and today lies at the core of the concerns of the Group. Its primary objectives are to: Contribute to the development of the business lines of the Bank by optimising overall profitability adjusted for risks; Guarantee its sustainability by implementing an effective mechanism to analyse, measure and control risks; Ensure that risk control is a factor of competitivity for the Bank. More precisely, risk management allows risks to be identified in a clear and structured way. An organization that clearly identifies the risks to which it is exposed can then prioritise these risks and take appropriate measures to reduce losses. A risk management plan entails strategies and techniques aimed at recognising threats and contain them. In concrete terms, governance of risk management rests on three basic principles: Forceful involvement of corporate guidelines in the risk-management process, and promotion of a risk culture within the Institution; Clearly defined rules and procedures; Continuous supervision to ensure that risks are monitored and that rules and procedures are applied. The approach taken by Group follows this same logic to perfection. In fact, the GBP has constantly striven to reduce its risk profile by paying special attention to the development of standards and risk-monitoring methods and by creating an efficient operation to overcome risks in the fields and regions in which it operates. Today, the Group has a framework of risk management adapted to both its cooperative structure and its risk profile by means of which risk management is ensured by: Governance and Steering Bodies: The Committee Chairman and the Board of Directors (assisted by the Auditing Committee) which determines risk tolerance and examines the strategy of the Group in this area; An integrated architecture focused on the role of Risk Managment Committees (Risk Management and Compliance Committee, Commitments Committee, Internal Audit Commission, etc.) to establish risk policies (setting limits and establishing a monitoring system, among other items) and ensure their efficiency. Business lines which form the first line of defence of healthy risk management for the Group; Free-functioning Risk Management, responsible for the organisation and promotion of all Risk Units at the Group level; Internal supervisory bodies (Inspection, Auditing, Compliance, etc.) which form the last line of defence in matters of risk. Additionally, in particular within the framework of implementing Basel Commmittee principles, the Group has continued to strengthen the patterning of its risk identification, measure and oversight mechanism according to major areas of risk. Executive Committee Audit and Accountants Committee Top Management Risk Management and Compliance Committee Commitment Oversight Committee Investment Committee Default and Provisioning Committee Internal Control Commission Group Risk Management Management per Type of Risk Financial and Market Risks Credit Risks Operational Risks Operational Business Units

37 1. Main Achievements in 2012 In 2012, the Group strengthened its dynamic for the development of tools and methods to oversee risks. Several major projects were deployed to deal with credit risk as well as market and operational risks. The Group also significantly enhanced its oversight and risk-prevention systems by reshaping its overall commitment control processes and by reviewing in detail its consumer lending processes. Similarly, the carrying out of structural projects, such as retail rating and the implementation of various riskplatform components (ALM, credit risks, etc.), was a major accomplishment Credit Risks and Commitments Oversight In the course of 2012, the Group formalised its credit risk management policy, thereby conveying its vision of risk-taking and putting in place tools designed to keep risks at the desired level. This new approach takes into account the following elements: Reviewing consumer lending processes by updating scoring tools and procedures; Reinforcing controls applicable to sensitive credit claims (cost overruns and elapsed files) and the definition of an oversight modus operandi; Deploying real estate development oversight tools (BAPRIM and NOPRIM) in all BPRs (with new classifications integrated) and reviewing in detail the sector portfolio; Accomplishing the first phase of the prospective welfare housing study which allowed for the delineation of a policy of risk management specific to this sector and for the measurement of the primary tendencies observed in 10 Moroccan cities in terms of offer and demand related to welfare housing; A generalised system of delegated powers indexed by ratings attributed to business; The continuation of structural projects, whose modelling aspects are well under way, to rate retail customers. The place of credit risk management in the collegial governance system of the Institution and the translation into figures of risk strategy at Development Plan level; The operating principles of credit risk management which must guide our Institution and serve as a reference framework; The coordination of risk management with credit processes by covering the steps involved in entering into relations, taking risks, managing and overseeing, and dealing with settlements, both amicable and disputed. The year 2012 coincided with the fifth anniversary of the implementation of the corporate and professional rating system. A special effort was made to mark this event by updating tools and infrastructures in order to facilitate the integration of this system into the decision-making and credit risk oversight mechanism. Other, and no less important, achievements further marked the year. These include: Reshaping the Commitments Control network (mission, organisation, tools, procedures, manuals, training and support) for a better functioning of the Commitments Oversight process; Activity Report

38 CORPORATE GOVERNANCE 1.2. Market Risks The group continued to enlarge its risk-management infrastructure while ensuring constant improvement of financial and market risk oversight in compliance with best practices in this area. It also strove to adapt oversight systems to financial market volatility and to tighter liquidity conditions. Chief amongst the projects and actions accomplished were the following: Reinforcing the control system by establishing a range of procedures aimed at providing a useful framework for risk management (setting of market limits, etc.); Improving the risk-oversight control system of counterparty banking on the operations market by establishing limits based on the principle of credit risk equivalency; Continuing to improve the limit system relative to market activities based on VaR limits in order to provide adequate management of risk tolerance and exposure levels; Pursuing the convergence project towards the integration of internal models in the market-risk management system by preparing backtesting and documenting tools and controls; Stabilising different risk-management platforms devoted to daily oversight of risks independent of operational and support units Rate and Liquidity Structural Risks A huge effort was made to establish a data platform and a calculation engine specific to asset/liability management. This project, planned to last for a twoyear period, will allow the Bank to control rate and liquidity transformation risks. Similarly, the review of applicable methodological aspects have been undertaken with regard to runoff conventions, as have the launching of several key default option modelling projects. Key actions relate to: Launch of the first securisation of mortgage-backed securities to the amount of MAD one billion. Beyond this limited amount, the Bank aims to diversity its financial sources by establishing a securistation mechanism for use in case of need; Continuation of the Implementation of the ALM Tool Project with the support of external providers. Having been organised by lots, this project will allow the Bank to make use of automatic and effective analysis tools according to the nature of the actions and processes performed; Definition of the target model applicable to the interest rates which govern BCP-BPR financial relations. This new approach allows present principles to be maintained while introducing more precision into the way commercial performance is controlled according to the nature of each product; Continuation of work on the conception of new indicators to allow a more dynamic management of rate and liquidity risks, and the launching of work on default option modelling (early repayment and changes in the tax rate) Operational Risks If 2011 was devoted to revising operational riskmapping development methodology, 2012 was the year which saw the culmination of this review for a significant number of major operational processes of the Bank. Several previously-identified risks could be eliminated thanks to the improvements made in various structural areas (reshaping of back-offices, dematerialisation of value compensation, complete centralisation of the information system, among other items). New approaches to risk-mapping thus allowed for concentration on critical risk possibilities which require improvements in the control system. They allowed the identification of priority action plans which need to be set up by business lines in order to reduce risks. To improve the internal control system, more frequent meetings were held by the Commission of Internal Control. These meetings now take place on a monthly basis. This allows the Group to follow the action plans and recommendations made by the Operational Risk Board, the Audit Board or by the Inspectorate-General more precisely. Several achievements deserve emphasis: Accomplishment of risk-mapping review relative to processes critical for financial markets, insurance banks, means of payment, electronic banking and their presentation to the Internal Control Committee; Introduction of risk-mapping review into Commitment processes, securities and international transactions which should be finalised in 2013;

39 Support of subsidiaries, particularly Upline Securities, for the updating provided by and in line with the approach taken by the Group of their depositary process risk-mapping; Awareness and mentoring provided by Operational Risks Correspondents with regard to seizures. This allows medium- and long-term action plans for risk reduction to be addressed to the Internal Control Commission; Assessment of criticality services and of risk-control levels associated with services for external activities on the CPM; Association of the business-line aspects of the Activity Continuity Plan with operational risk functions in order to define a Group strategy and allow Computer Security to focus on computer-safety measures. 2- Credit Risks Credit risk management and control within the Group are constructed around the following axes: credit risk strategy; an overall policy of credit risk management; credit risk management processes and organisation, and a credit risk management and oversight system Risk Strategy Along with the strategic development axes already adopted, the Group has integrated the risk component into its three-year medium-term plan. This aims to control the cost of risk and limit its impact on profitability and on the allocation of shareholders equity, in particular by: Controlling the risk-taking process and making it more reliable; Measuring and overseeing risk for early signs of possible default; Reacting more forcefully to early indications of default and taking appropriate actions; Enhancing the efficiency of the recovery process by favouring a rapid conclusion in cases of litigation. This strategy is reflected in a definition of objectives by risk profile, particularly for businesses. It should result in improving the quality of the Group portfolio, in reducing the number and volume of sensitive exposures, and therefore in mitigating potential losses and collective financial impact Policy and Procedures Controlling credit risk within the Group is based on an extensive body of internal regulations. This body covers all areas of the credit risk process by means of information circulars, circular letters and standards establishing the extent and conditions of risk control and Activity Report

40 CORPORATE GOVERNANCE oversight activities. These regulatory texts reflect the policy adopted by the Bank on the subject and were approved by the Administration and administrative bodies in the framework of Committees and regular management meetings. The general policy of credit risk management aims to define an overall framework for activities related to such risks. Its principles are applied to ensure a tranquil development of activities within the Group. The credit policy revolves around the following principles: Safety and profitability of operations; Risk diversification; Normalisation of credit risk management at all levels of CPM; Strict selection of credit-granting dossiers; Creation of a dossier for all credit operations and its review at least once a year when businesses are concerned; Corporate and Professional rating, and scoring for individuals; Separation of credit sale functions from those involving risk assessment and control; Collegiality in the decision-making process resulting in the creation of committees at all levels of the sector; Early detection of counterparty default risks; Recovery reactivity; Accountability of commercial entities (branch offices, subsidiaries, business centres) Processes and Organisation of Credit Risk Management Entry into a Relationship The Group has always made getting to know its customers a prerequisite for all new commitments. Prescribed by BAM (cf g), this requirement is covered by the BAM Directive of 1st April 2005 concerning information which must necessarily be given in the framework of credit application appraisals. To this must be added provisions linked to non-compliance risks which require respect of these same terms. In line with these demands, the Bank has created a combination of processes to ensure a solid selection of prospects, a deeper understanding of customers from the start of their relationship with the Bank and regular oversight of customers throughout the commercial relationship. Credit Application Appraisal Credit application appraisal is structured around the analysis and evaluation of the following items: Solvency and ratings of counterparts; Trends in banking habits with Banque Populaire and with other banking institutions on the market; Analysis of the types of credit requested, their economic rationale and their coverage; Terms of present and future repayment; Overall profitability of operations conducted with the customer. Each credit application conforms to eligibility criteria set forth in relevant circulars and follows a hierarchical path (branch office, subsidiary/business centre, BPR and BPC) until a decision is ultimately taken by the appropriate department. To allow the use of the four-eye principle and ensure a timely decision, the credit application must first undergo a preliminary feasibility study by the commercial body in charge of the application before undergoing a counter-study for a second interpretation of risk. The decision-making system of the Group is based on the following principles : A collegial approach to reaching a decision; A multi-dimensional delegation chain to ensure adequacy between risk level and the risk required to make a decision; Limits of the competencies established by the group of beneficiaries; The separation of tasks between the commercial entities and those responsible for assessment, oversight and risk management as it relates to credit at both BCP and Banque Régionale levels. Apart from these procedures, the standards set forth in the circulars confine policy choices regarding commercial targeting and conquest (age limit of borrower, the maximum financing amount, the maximum length of loans, the allowable level of indebtedness, the amount of self-financing, the seniority of the relationship and price terms).

41 Organisation of Decision-Making Circuits The organisation of decision-making circuits is based on a delegation chain which corresponds to the structure and organisation of the Group. The chain consists of the following three levels : Powers delegated by the Chairman of the Board of Directors addressing BCP Committees and the Chairmen of Banques Populaires Régionales; Powers sub-delegated by the Chairmen of the Boards of BPR addressing business centres and branch offices operating in their respective areas; Powers sub-delegated by branch office managers to agency managers attached to their respective bodies. These powers are expressed according to several parameters (type of application, type of credit and maturity, customer ratings, etc.) and are inversely proportional to the risk levels (the higher the risk, the lower the said delegation). The Group decision-making system is based on the following principles : Analysis of applications by the commercial bodies instituting the requests and a second analysis of the risk carried out by the risk bodies within the BPRs and BCP; Risk prevention by means of a more significant role played by the counter-study function in filtering out applications and in decision-making; Exercise of powers within the framework of committees, indicating the collegial nature of decision-making; A multi-dimensional delegation chain which ensures adequacy between risk levels and the risk required to make a decision; Exclusion of BPR powers for credit addressing the related parties whatever the amounts entailed. The said amounts are submitted to internal credit committees meeting at BCP; Limits of the competencies established by the group of beneficiaries as set forth by Bank Al Maghrib (borrower or group of inter-connected borrowers as defined by the regulator); The separation of tasks between the commercial bodies and those responsible for assessment, oversight and risk management at it relates to the credit at both BCP and BPR levels. Decision-Making The decision-making process is structured around the following items : Reducing the workload of committess by prior filtering out applications by the counter-study on the basis of precise criteria; Preventing risk by the playing of a more significant role on the part of the counter-study. Its opinion, signed and motivated, is necessary for the appraisal of all credit applications and is a determining factor in the decision-making process; Acknowledging the primacy of Credit Committees which, having explained their decisions, can approve applications given an unfavourable or reserved opinion by the counter-study. Oversight of Relationships Customer ratings and the review of credit applications at least once a year and whenever a signficant event occurs in the situation of a customer are obligatory. This review is required whatever the type of loan granted to the customer. The initial business plans of counterparts benefiting solely from medium- or long-term credit will be met with actions to allow for corrective measures in cases of significant divergence. -The retrieval of financial statements and the timely provision of accounting documents on the part of the customer are key elements of a good relationship. The network must also ensure the retrieval of intermediary financial statements which allow regular oversight of the customer s situation in order to avoid surprises at the end of the year. Website visits need also to be made periodically to ensure close monitoring of the relationship. The network needs to inform Risk Operations of any elements it may have detected and which it may judge to have a potentially harmful impact on the customer s situation without waiting for the annual file review. Likewise, account functions (repeated or chronic over-spending, difficulties in living up to banking commitments or commitments to suppliers, etc.) must be monitored by the bodies concerned (Cf. Risk Management and Oversight section). Activity Report

42 CORPORATE GOVERNANCE Recovery Management and Provisioning The policy of the Bank with regard to recovery is based on the following principles : Grouping together in a single body all the recovery processes under the aegis of the Risk Department whose role it is to ensure prudent filtering at the time of credit granting, and permanent and regular oversight of commitments; Involving sales representatives in preventative risk management and in debt recovery when the counterparty first shows signs of difficulty; Lending first choice to amicable settlement rather than legal action; Ensuring the graduation of processes in conjunction with changes of interlocutor at critical phases; Concentrating efforts on large debts and industrialising the recovery process for the Retail Bank, in particular for debts which require massive processing; Ensuring reactivity when transferring to the Litigation Department, which can take action before the regulation deadlines, in particular with regard to cases with little possibility of recovery. Downgrading and provisioning of outstanding debts are conducted in compliance with the provisions of BAM Circular n 19/G/2002 and the instructions from Bank Al-Maghrib in the matter. Periodic follow-up of these debts is provided and reporting devised for the decision-making bodies of the Bank, particularly for the Steering Committee. At the same time as the said provisioning, the Bank established a methodology for calculating provisions according to IFRS standards. These combine a statistical approach to risk parameters and an estimate of experts regarding the hope of recovery of large debts Risk Control and Oversight Mechanism The risk control and oversight mechanism is stuctured around the following elements : Control architecture deployed within the entire credit sector; Independent assessment and oversight of the quality of risks; Close and permanent oversight of sensitive debts (overextended credit lines, overdue or unrenewed credits, unpaid debts, etc.).

43 Risk Control Mechanism Responsibility for and control of credit risk are shared among the following bodies : Operational bodies responsible for controlling the first level of tasks which fall within their scope; Entities relating to Internal Control (Inspection, Audit, Compliance, etc.); The Credit Risk Department through Risk Functions with Banques Populaires Régionales and the Directorate-General of the Risk Group of BCP; Governance and Steering bodies such as the Risk Management Committee, Executive Commitment Committee, Early Warning Committee, Default Committee, etc. The following principles guide our Commitment Control and Oversight approach : Control of commitments is the responsibility of all the players involved in the credit system; The control architecture consists of a minimum of three levels : Self-control is the first level and is exercised by the operating staff, branch office managers and those responsible for technical support, each at their own level; Second-level control is exercised a priori by the National Processing Centres based on documents submitted by the Front Office or its support network; Third-level control is exercised a posteriori by the Commitments Control agents to ensure compliance with credit-related decisions (delegation of powers, monitoring of overspending, etc.). The Audit and Inspectorate-General constitute the last link in the control chain within the framework of periodic examinations. Assessment and Oversight of Risk Quality We assess credit risk as it relates both to individual counterparties (businesses and individual customers) and to portfolios in order to enhance management of losses and limit the impact on results. We use a variety of tools and risk assessment processes for our business and individual loan portfolios. With regard to businesses, the current rating system lies at the core of the credit risk management system. Rating is, in fact, an essential element in risk assessment and credit approval. Particular attention is also paid to ensuring coherence between the decisions taken and the risk profile given by each rating as well its components in other words, to the various pieces of qualitative and quantitative information that constitute the grid. We have several rating engines relating either to customer category or the sectors in question, and our tools conform to the requirements of Basel II in terms of use and purpose. Current scoring of individual customers covers real estate loans and consumer credit. In addition, the Bank has launched a project to cover the needs of its Retail Rating System which will serve as the basis for the second instalment still needed to complete its internal rating model. In view of the strategic role which these rating tools play in our Institution (supervision of risks and development of a healthy workplace, allocation of shareholders equity funds, etc.), a special effort has been made to monitor their use and to update models (the second version of the engine was deployed in 2012). At the portfolio level, credit concentration limits have been established in order to control the concentration of unfavourable portfolio credit. An example of this concerns fixed limits for borrowers, groups of interconnected borrowers or certain activity sectors. Such limits serve to ensure that our portfolio is well diversified, that the concentration of risk is reduced and that it accords with our level of risk tolerance. These ceilings are the object of regular examination which considers the general context, the economic climate and the claims rate of the sector in question. Oversight of Sensitive Risks The aim of the sensitive risk oversight system is to identify advanced signs of potential deterioration of counterparties in order to deal with them promptly. It is of particular importance for the Bank that its commercial bodies are able to identify, as early as possible, those customers or counterparties whose financial situation has deteriorated, to place them on the Watch List and, in the most unfavourable cases, recommend appropriate provisions within the framework of the Alert Committee. Within this framework, our Bank has defined more-thanadequate procedures to evaluate asset quality regularly, review counterparties that are being monitored and suggest corrective actions if necessary. Activity Report

44 CORPORATE GOVERNANCE To this end, the Watch List, which constitutes the end-result of these monitoring actions, is itself the object of an oversight system which allows the Bank to maintain its recovery potential over time. The procedure for the management of sensible risks applies solely to the sound credit portfolio. It involves all onbalance-sheet and off-balance-sheet commitments relating to business and professional customers Trend of Exposures and of Risk Profile Beyond the regulatory aspects, credit risk can be evaluated in the light of the following three principle indicators : Trend of the portfolio in terms of rating. This reflects the portfolio structure according to different types of risk (by number and amount); Trend of risk concentration by sectors and first hundred risks; Trend of delinquent debt rates and the level of provisioning. Rating and Distribution As of 31st December 2012, rated portofolio distribution was as follows : Breakdown of CG Per Risk Category by number and amount Breakdown of SMEs Per Risk Category by number and amount 35% 30% 25% 20% 15% 18% 35% 32% 29% 21% 22% 18% Effective Outstanding 40% 30% 20% 17% 16% 39% 36% 37% 28% Effective Outstanding 10% 5% 0% 4% A 10% 10% 1% 0% 0% 0% 0% 0% B C D E F G H 10% 5% 3% 3% 0% 0% A 7% 7% 1% 1% 0% 0% B C D E F G H Analysis of the SME-CG segment of the portfolio shows a reassuring distribution in the number and amount of risks to the degree that it is concentrated on rates situated between categories A and E. The rates for categories B, C and D concentrate 86% of CG businesses rated by number, corresponding to 72% of outstanding amounts. Seventy-three percent (73%) of rated SMEs are concentrated in categories D and E, representing 67% of outstanding amounts. An examination of the VSE/PRO (Very Small Enterprise/Professional) category rated by number and by amount shows a concentration at the B-E category level, thereby revealing a level of controlled risk within this segment. The B-E profiles represent 82% of professionals, with 81% of the total outstanding amounts represented by these profiles. VSE profiles concentrate 77% of businesses and 76% of outstanding amounts.

45 Breakdown of VSE segment by rating category Breakdown of PRO by rating category 40% 35% 30% 25% 20% 15% 10% 5% 0% 4% 2% A 13% 12% 17% 16% 33% 31% 17% 14% 11% 9% 10% 9% Rating Category Number 1% 1% B C D E F G H Amount 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% 2%3% A 11% 11% Number Amount 38% 37% 20% 19% 13% 14% 9% 9% 7% 8% 1% 1% B C D E F G H Rating Category Concentration In terms of individual concentration, the first 100 CPM risks (excluding subsidiaries) represent 480 counterparties for an outstanding amounts total of MAD 99.7 billion of which 72.6 billion involve disbursement. On the rated portfolio of the first 100 risks, the rates between A and D concentrate 77% by number and 80% by outstanding amounts. 35% 30% 25% 20% Number Disbursement Credit In % of productive employment CPM (*) 15% 10% 5% 0% A B C D E F G Amount First 100 risks CPM (*) 47% 47% Counterparties qualifying under the BAM Statement (*) (*) Excluding Subsidiaries 25% As of 31st December 2012, sound credits granted to corporate bodies were broken down into 15 macro-sectors as follows : Textiles 1% Fishing 1% Extraction Industries 2% Agriculture 2% Chemicals 3% Iron and Steel Industry 3 % Transport and Communications 5% Real Estate Development 21% Financial Activities 19% Trade and Sundry Services 12% Electricity, Gas and Water 12% Construction and Public Works 4% Miscellaneous Industries 5% Hotels and Restaurants 5% Food Industry 5% Activity Report

46 CORPORATE GOVERNANCE The commitments of CPM with regard to the 15 macro-sectors are concentrated at 21% of the real estate development sector and at 19% of financial activites (compared respectively to 23% and 25% in 2011). Relative to the total commitments to enterprises, the contribution of these two sectors respectively amount to 16% (-1 point from 31/12/2011) and 15% (-4 points from last year). Overall, concentration on these two sectors has been reduced by 6 points, considering that outstanding amounts related to financial activities increased to 80% at our subsidiaries. Reflecting the economic fabric of the Kingdom, the geographical breakdown of the portfolio remains dominated by Banque Centrale Populaire and Banque Populaire of Rabat-Kenitra, which continue to represent more than 60% of overall resources. Laayoune 2% Nador - Al Hoceima 3% Oujda 4% El Jadida - Safi 4% Meknes 4% BCP 53% Rabat - Kenitra 8% Marrakech - Beni Mellal 6% Centre Sud 6% Tanger - Tetouan 5% Fez-Taza 5% Provisioning On a parent-company basis, the rate of overdue payments reached 4% of resources at the end of 2012, an increase of 0.3 points over 31st December This increase, which concerns all customer segments, reveals the effects of mounting risks in current economic circumstances. In response to this situation, our Group has raised the level of provisions beyond the required minimium by the following means: Constituting an additional provision of MAD 675 million for overdue payments to allow an increase in the coverage rate which reached 70% as compared to 59% in 2011; Providing credit risk coverage funds with a provision for general risks of MAD 300 million, thus raising the amount to MAD 1.1 billion as of 31st December Along with these provisions to cover debt, the Group has established a methodology for calculating provisions according to IFRS principles. These calculations are of two kinds: one in which provisions are made on a collective basis applicable to healthy credit, and another with an individual base applicable to overdue credit. Collective-base provisions are those constituted on the basis of one or several groups which are homogeneous in terms of sensitivity to risk trends. They are calculated to cover heathy credits which show signs of depreciation and are adopted on the basis of statistical observations, made over a six-year period, of risk parameters, in particular probabilities of default and loss rates. The Group has adopted a new methodology to estimate provisions specific to credit risk, henceforth integrated into sectors subject to monitoring. This dynamic approach consists of identifying sectors considered to be sensitive and allocating provisions justified by potential deterioration of risk indicators. Individual-based provisions are those which cover overdue payments. They are calculated by means of an individual approach based on the appraisal of hope-of-debt-recovery experts for debts over MAD 3 million, and another based on statistical modelling of hope-of-recovery debts of less than MAD 3 million.

47 As of 31st December 2012, the consolidated provisioning of the Group according to IFRS principles reached MAD 7,707 million, covering MAD 10,024 of unpaid debt. The coverage at this same date was 77%, an improvement of 13 points over 2011 as a result of additional provisioning undertaken by the Group. 3- Market Risks Aiming to organise and ensure better control of market risk, the Group has set up a risk management sytem which conforms to the principles of Basel II and those of best practices in this area. This system is based on clear guidelines and on internal policies and procedures in line with performance objectives, risk-tolerance levels and shareholder s equity Risk Strategy The strategic guidelines of the Group have the following aims : Control risk exposture; Secure the development of the market activities of the Group within the framework provided by the strategic directions of the medium-term Plan and regulatory provisions; Comply with banking regulations in the area of prudent risk management; Adopt best practices in all areas of risk management. These guidelines have been applied to the level of tolerance of the Bank with regard to market risks. Likewise, these guiding principles have been implemented through exposure limits and the delegation of powers. Levels of tolerance have been fixed so that exposure to market risks do not result in losses which would compromise the financial solidity of our Group or expose it to risks of a major or reckless sort Policies and Procedures The policies and procedures of market risk management and oversight have been formalised by taking into consideration bodies involved in the process of evaluating risk oversight and control. The Market Risk Management policy describes the process of identifying, measuring and controlling relevant market risks. The Group does not envision neutralising risk, but rather ensuring the balance between risks undertaken and anticipated performance within the framework of market activities. The risk market is managed by taking into account the overall risk management policy of the Bank, including credit risk, operational risks and overall rate and liquidity risks. More precisely, this policy describes the overall policy of market-risk management by emphasising the following points: The roles and responsibilities of governance and management bodies, as well as the duties of operational bodies involved in market-risk management; The determination and review of operational limits; The review of risks and exposures with a possible focus on type of risk; Information relating to risk-measurement methodologies and those relating to the validation of valuation models. Such validations are made on a case-by-case basis within the framework of ad hoc committees; Oversight and reporting tools. The risk-management mechanism represents the implementation of policy elements and, to this effect, encompasses other circulars regulating market activities with regard to the following items : The system of portfolio separation: the aim of this circular is to translate, according to the vision of the Group, the prerogatives of Circular 26/G/2007 relative to the calculation of shareholder s equity demands as part of market risks into a clear and formalised system which separates negotiation activities from those of a purely banking nature. The system of exposure limits and delegation of power, which defines in detail the regulations concerning these two items. It thereby regulates the powers delegated to those managers responsible for market activities. It has the following objectives: Secure operations and limit risks; Activity Report

48 CORPORATE GOVERNANCE Comply with banking regulations on internal control and prudent management; Optimise decision-making circuits; Improve profitability. The Derivatives Management System was established in 2008 and defines in detail the launching, oversight and management processes of derivatives. It thereby regulates powers delegated to those dealing with various functions of this process and the primary limits to which this activity is subject. This Circular has the following objectives: To define Bank strategy regarding derivatives; To specify the role of the various participants in the derivatives management and oversight process; To adopt position and risk-indicator limits (Delta, Maturity, etc.). Moreover, the Bank has a range of circulars and market activity managment procedures available at its different entities Market Risk Management System Players and Bodies Involved in Market Risk Management The market risk management process entails the intervention of a certain number of players as well as specific committees whose roles have previously been laid out. These consist notably of the Risk Management and Compliance Committee (CGR&C) and the Investment Committee (CP). The main players in the Risk Control System are : The Financial Risk and Market Board, a body which defines measure-of-risk methodologies, examines limits and ensures the oversight of market risks. In this capacity, its primary duties consist of the following : Ensuring the oversight of positions, limits and risks caused by various market activities; Defining methodologies related to the determination of limits, the measurement of risks and the measurement of performance; Ensuring the development, enhancement and optimisation of risk-measurement tools and systems; Editing regulatory and internal reporting for various committees and governing bodies. The Market Bank: Market Bank operations constitute the first line of self-regulation regarding market risk management. Market activity managers must : Propose a risk limit for each portfolio under management. Limits are established in relation to performance objectives and tolerance of risk. These risk limits are submitted to the Investment Committee for approval; Submit transactions beyond their level of competence for approval, following a delegation-of-powers system regulated by the internal circular. The Middle Office Directorate: The control system depends on the first level of control provided by the Middle Office Directorate, which performs operational functions on a daily basis and is completely independent from operational agents involved with market activity. Its principal assignments are as follows : Oversight and control of market operations: Updating of data, oversight of positions, compliance of operations, and variance analysis and correction; Analysis of market activity results: Harmonisation, reconciliation and oversight of performances, among other items; Oversight of risks: Compliance control related to risk policy, monitoring of limits, and analysis and oversight of coverage operations; Optimisation and development of processing facilities: Participation and assistance in conjunction with the development of information systems, new products, internal databases and management procedures, etc. Counterparty Risk and Risk Oversight Directorates: Counterparty risk management relating to market operations is regulated by a specific circular which involves all bodies, including the BPR. Each body acts within a framework of delegated responsibilities conferred thereupon by the Great Exposure Risk and Recovery Committee. Counterpart limits are evaluated on the basis of the same standards as those governing credit risk.

49 The Counterparty Authorisation and Limit Renewal Circuit has been reviewed by the Middle Office in order to optimise decision-making circuits and ensure the fluidity thereof. The Counterparty Risk and Risk Oversight Directorates take action on methodological aspects relating to banking and customer counterparty risks by devising and implementing new standards. By way of example, a specific system for banking counterparties was established to evaluate the solvency of foreign banks on the basis of a quantitative model which integrates the most relevant risk factors. The limits proceeding from this model are submitted for approval by the Investment Committee and are subject to revision in accordance with international economic trends. Market Risk Management System The aim of the Market Risk Management System is to manage and control market risk exposure in order to optimise risk/performance while preserving a market profile coherent with the Group s status as a leading financial institution which plays a significant role in financial products. Market risks related to the banking portfolio are monitored, managed and integrated into the framework of structural interest rate and liquidity risk management. With a view to providing a framework for risks involving different market activities and ensuring oversight, the Bank has adopted a system organised around the following four axes : A delegation-of-powers system which defines the process of application, validation of limits and authorisation of overstepping; Provision of a steering and arbitration service between various market activities via the Investment Committee; Provision of a follow-up and monitoring service for risk indicators by market risk control bodies and entities; A set of management and market-risk control tools. Activity Report

50 CORPORATE GOVERNANCE Applicable Limits Beyond limits applicable to all market activities, namely position limits by instrument and transaction limits, certain limits have been set up for obligatory and exchange activities. These limits are identified as follows: Maximum-size limit on bond trading, foreign exchange futures and stock options; Duration and sensitivity limits on bond trading; Stop Loss limits by tranche position relative to the open foreign exchange position and intraday transactions on own account; Short limit of foreign exchange position; Position limits by currency; Maximum position limits for exchange forward transactions and currency options; Limits of interest rate sensitivity by time buckets for exchange forward transactions, exchange swaps and currency treasury transactions; Limits by sensitivity indicators (Delta, Gama, Vega and Rhos) for foreign currency option portfolios. This system is strengthened by limits in terms of VaR (Value at Risk) just as it is by overall limits defined by risk factor or portfolio. The complete limits system is organised in the format of a grid of delegated powers which fixes limits by instrument, market and participant. The process of limit proposal and validation is guided by an internal circular. Control of limits is performed on a daily basis by the Middle Office and each month by the Global Risk Management Pole. Risk Indicator Follow-up System The follow-up of risks is performed daily by the Middle Office and Financial and Market Risk Directorate. By means of quarterly reporting, the Risk Management Committee oversees levels of exposure, yields and performance, asset-backed risks relative to market activity, and adherence to regulatory requirements and to limit mechanisms. The reports submitted to the Risk Management and Compliance Committee, in addition to an analysis of portfolio sensitivity, also include simulations in the event of extreme scenarios, taking into account portfolio structure and correlations between the different risk factors. The system of risk-reporting to the CPM takes the following two forms: A system of periodic regulatory reporting to the supervisor and supervisory authorities; A system of internal management reporting on the processes of risk oversight, internal control and the conduct of the Basel II project. The regulatory reporting system is recognised by and standardised for the entire profession. In terms of internal reporting, it focuses in particular on the following elements : Detailed schedules of Basel system implementation projects as well as advances in methodological processes, risk information system tools and convergence plans for Group subsidiaries; Risk-monitoring indicators in various fields; Proposals for improved systems of oversight and/or activities, business lines, standards and benchmarks; A review of the internal control monitoring system and possible corrective measures; Concertation projects and impact studies conducted with the supervisor and/or the profession. Market Risk Control and Management Tools Evaluation of market risk to the Bank relies on a combination of two measurement groups. The first relates to the calculation of the risk value (VaR) and the second to the use of various sensitivity measures (including stress scenarios), making it possible to fend off potential risks. The Bank has adopted a market risk management and oversight structure, including use of VaR methodogy for its entire negotiation portfolio. VaR can be defined as a technique enabling evaluation of potential loss incurred on risk positions due to variations in market rates in a definite time span and a given confidence interval. In the case of the Bank, this confidence interval amounts to 99% and one day, based

51 on historic data. This allows for day-to-day monitoring of market risk taken by the Bank in its trading activities by quantifying the level considered as maximum risk in 99 cases out of 100 after the completion of a certain number of risk factors (interest rates, exchange rates, asset prices, etc.). The method adopted to calculate the VaR is that of a historic model based on historical average returns of risk factors inherent in portfolio trading. This model implicitly takes into account the correlations between various risk factors. An overall VaR is calculated for all negotiation activities and per type of instrument. Although it constitutes a useful risk measurement, VaR must be judged with respect to its limits. By way of illustration: The use of historical data to estimate future trends may not detect all the potential events, in particular extreme ones; The choice of a one-day time-frame implies that all positions can be either liquidated or covered in the space of one day. It may be that this method does not allow the market risk in a period of extremely low activity to be taken sufficiently into account; The VaR is calculated on the basis of exposures at the end of the period and therefore does not reflect exposure existing during the course of the day. As well aware as it is of the limits of the VaR model, the Bank incorporates analyses and limits of sensitivity into its monitoring mechanism. Along with the VaR calculations, the impacts in terms of profits and losses (P/L) based on standard or historically stressful scenarios are estimated for the entire negotiation portfolio. These scenarios are chosen among the following three categories: historically proven, hypothetical and adverse scenarios. The principal indicators used are the following : Sensitivity to rate variation of +/- 25 bps (global indicators per maturity); Risk indicator of rate curb expressed in potential loss; Portfolio profitability threshold indicator (Break Even Point); Sensitivity to extreme rate variation of 200 bps; Sensitivity to price variations of +/- 1%, 5% and 10%, taking into account the correlation between the EUR and USD in the make-up of the MAD basket Trend of Exposure and Risk Profile The table given below depicts the overall VaR of negotiation activities. The share risk price, the interest rate risk and exchange rate risk are the three risk categories to which the Group is exposed. Min Max Average End December VaR (MAD million) VaR/MtM (bps) The overall VaR (1-day at 99%) of the portfolio at the end of December 2012 was MAD 13.1 million, or 0.36% of the portfolio market value and 0.06% of the total amount of shareholders equity. The VaR outside correlation is MAD 20.2 million, or a diversification effect of MAD 7.1 million of the overall portfolio which is split up among the various instruments. The VaR is primarily concentrated in the bond portfolio and instruments of title, and secondarily on exchange transactions and cash currency. This is attributable to the size of the portfolios, the high volatility of the risk factors inherent thereto and the weight thereof in comparison to the other negotiation portfolio factors. Foreign Exchange Fund The foreign exchange fund registered a quasi-stable level throughout the year 2012 combined with an increase in the volume of exchange Swaps. Net foreign currency exposure saw a sawtooth trend in the course of Despite high variation, net foreign currency exposure maintained equilibrium considering the make-up of the MAD basket and the updating of different term flows. In relation to shareholders equity, regulatory limits for overall exposure and per foreign currency were respected throughout Activity Report

52 CORPORATE GOVERNANCE Net Foreign Currency Exposure in C/V MAD Million Shareholders Equity % Shareholders Equity March June September December The VaR for exchange-trading activity reached 165 KMAD at the end of the year. Bond Fund In 2012, bond limits were reviewed and validated by administration and management bodies. The limits of duration and maximum position were strengthened by sub-limits for EURO Bond and UCTIS portfolios, and were modified to adapt to the new market volatility context. The VaR for bond activity rose to MAD 7.5 million at the end of December Shares and UCTIS The outstanding amounts of this portfolio remained practically stable in the region of MAD 3.4 billion, with a respective distribution of 10% and 90% for shares and UCTIS. The goal was to reduce the positions of shares lacking significant worth and to focus on portfolio equity values reputed to be more liquid. The VaR for activities on ownership titles represented MAD 3.7 million.

53 4- Rates and Liquidity Structural Risks In the framework of its activities, the Bank is exposed to exchange rate and structural risks stemming from credit deposit transformation mechanisms and the refinancing of banking activities. These risks are considered to be at the core of the business; as such, our Bank attaches particular importance to them in terms of follow-up and control Risk Strategy The strategy of overall risk management of exchange rates and liquidity conforms to the objective of full control over risks in the process of development planned and adopted by the Group. This strategy is based on the following guiding principles : Directing development activities in the framework of a medium-term plan while taking into account the exchange rate and liquidity risks; Maintaining a stable and varied structure of Group deposits with full control over the growth potential of our commitments; Improving progressively the overall exchange rate gap so as to maintain a balance between various activities in terms of risk profile; Developing variable rate assets to immunise one part of the balance sheet further to a negative trend in interest rates Policies and Procedures The overall risk policy is part of the Bank s classic development plans and follow-up activities. It is periodically approved by the administration and management bodies in the framework of the usual management committees and meetings of the Institution. Its guiding principles are conveyed by internal regulatory texts, through circulars and standards, which fix the extent and conditions of risk control and followup activities. With regard to the specific case of structural risk, the governance bodies are directly involved in defining the overall policy at the time the strategic guidelines are addressed to the Board of Directors. These guidelines make it possible to set objectives concerning development plans. Over the past few years, liquidity risk has become a significant component of the Group strategy and has led to a formalised policy relating to liquidity and re-financing risk. This policy sets forth the main components of the identification, standardisation and follow-up of liquidity risk in the framework of normal activity, as well as a remedial plan in the event of a liquidities crisis Risk Management Mechanism Liquidity Risk This risk can stem from the structure of the balance sheet due to gaps between the actual due dates of asset and liability items, financing needs for future activities, customer behaviour or potential disturbance in the economic situation. Liquidity risk management aims to guarantee the Bank access to the funds necessary for it to honour financial commitments when they become payable. Managing this risk entails holding liquid securities at a sufficient level and having a supply of stable and diversified funds. The securities portfolio consists mainly of Treasury Bills and, supplementarily, of liquid and UCTIS shares. Liquidity management is based on : Monitoring of different liquidity ratios according to internal requirements and banking industry regulations; Devising of a liquidities schedule based on a variety of dynamic, medium-term scenarios, as well as establishing a static liquidity schedule which provides indications on the medium- and long-term liquidities situation of the Bank; Following up on the investment portfolio and projections of cash flow. To ensure a minimum liquidity reserve, an internal limit has been set up relating to the bond portfolio; Maintaining a wide variety of financing sources and following up on deposit concentration per type of product and counterparty, with regular monitoring of the concentration of the ten largest depositors; Maintaining choice relationships with institutional investors and large corporate customers. Customer demand deposits (current and savings accounts) comprise a significant share of the overall financing of the Group, and this has turned out to be stable across the years. In addition, the branch office opening programme was prolonged into 2012 and is expected to last throughout the medium-term ( ), contributing to and strengthening the forceful Activity Report

54 CORPORATE GOVERNANCE pace of customer deposit collection. Furthermore, the Bank is an important stakeholder on money and bond markets by means of its market activities. Thanks to its position, the Bank is able to address Bank Al-Maghrib, banks and other financial institutions, occasionally in the short-term, with regard to repurchase operations. Overall Exchange Rate Risk Analysis of this risk is complex, given the need to formulate assumptions concerning the behaviour of depositors with respect to the due date for reimbursable deposits according to contract and on assets and liabilities not directly sensitive to interest rates. When the behavioural characteristics of a product differ from contractual ones, the behavioural characteristics are assessed so as to determine the real underlying interest rate risk. The assessment and calculation of general overall interest risk in performed as follows : Once per quarter upon issuance of Bank summary statements; Twice per year together with the planning process (strategic guidelines and planning phase of the medium-term financial plan) as a mechanism for final validation of the medium-term plan. This oversight mechanism is based on the following : An assessment methodology founded on the approach to gaps (dead-ends). This means a classification of assets and liabilities according to their profile and rate (fixed or variable), taking into account the factors of residual duration and future behavior (forecast approach over a three-year period and according to the medium-term assumptions); A quarterly reporting system addressed to the Risk Management and Compliance Committee on the levels of exposure to overall interest rate risks, stress tests in terms of the impact on NBI, shareholders equity and forecast trends of prudential ratios; A limit mechanism in terms of the impact of interest rate risks on Net Banking Income and shareholders equity as defined by the Risk Management and Compliance Committee and validated by the Board of Directors Trend in Exposure and Risk Profile Liquidity Risk Total assets amounted to MAD 241 billion at the end of December 2012 versus 227 billion in December 2011, or an increase of 6%. In December 2012, and relative to December 2011, resources needing cash refinancing represented MAD 11 billion; these mostly concerned credits of MAD 5.1 billion (including 3 billion for liquidity loans) and security holdings(transaction and investment) of MAD 5.7 billion. These amounts, together with a decrease in fixed-term deposits of MAD 4 billion, were principally refinanced by : Customer deposits of MAD 5 billion; Saving accounts of MAD 1.8 billion; More significant receipt of advances from Bank Al- Maghrib (+ MAD 7.5 billion); Reduction in the BAM account of MAD 0.7 billion owing to a drop in the monetary reserve rate from 6% to4%. It should be noted that the drop in the Bank s shareholders equity following the sale by the State of 10% of BCP capital to the BCRs was compensated for during the second semester of 2012 by two increases in captial: 5% for BCPE and 5% for the IFC. The progressive tightening of liquidity experienced across the banking sector for the past two years continued to accentuate in 2012 without any major impact on the CPM, which enjoyed a greater margin of manuoever than other banks thanks to the preponderance of noninterest-bearing deposits, a signficant reduction in major depositor concentration and (still-limited) recourse to the capital market. CPM resources collected from customers thus rose by 2%, increasing from MAD billion in December 2011 to billion at the end of December This rise concerned account-book accounts (+10.1) and demand deposits (+4.4%). On the other hand, long-term deposits registered a decline of 9.2% further to the nonrenewal by the Bank of the long-term deposits of some large businesses and the continued drop in savings bonds.this led to a drop in the share of interest-bearing resources compared to the overall resource structure. The CPM transformation ratio settled at 90.7% in December 2012 compared to 86.8% one year earlier

55 given the higher development of credit activity compared to customer deposits. To respond to the additional need for refinancing, CPM issued certificates of deposit amounting to MAD 3.9 billion in 2012, compared to 3 billion in However, CPM recourse to the money and bond mark remains rather limited in comparison with other banks. Overall Interest Rate Risk On 30th June 2012, the assets and liabilities profile at less than 12 months was more or less the same as that of assets and liabilities at the end of December 2012, apart from the following items : The increase in the BAM account to MAD 6.7 billion, representing 10.6 billion on 30th June This exceptional increase is, however, relative, the average required amount being only MAD 6.6 billion; The continued rise in securities resold under purchase agreements to MAD 7.5 billion; The rise in certificates of deposits by MAD 2 billion; The acquisition of ownership titles (MAD 1 billion) and of security transaction titles (1.7 billion). These operations have only a limited impact on our risk profile. Thus, in the event of a rise of 100 base points in the rate, profit increases amount to MAD 42 million compared to 78 million in December In addition, the sensitivity of profits to rate variation remained well below the limits of our risk objectives. At the end of December 2012, the risk profile showed signs of slight improvement due to the following events : Increases of capital to BPCE amounting to MAD 1.6 billion, then to the IFC amounting to 1.7 billion; A drop in the monetary reserve rate from 6% to 4% in September 2012; Continued acquisition of ownership titles for trading purposes (amounting to MAD 5.8 billion) in the short-term; Continued increase in forward exchange transactions. Our risk profile on a one-year rolling horizon was therefore positive in December 2012, with impacts reflecting along the same lines as the prospective short-term movements in interest rates. The following table shows the potential effect of an increase in rates of 100 basis points over a period of 12 months (short-term) on the net interest income and the economic value of the Bank in 2011 and The impact of such a variation represents less than 1.5% of NBI and 1% of shareholders equity. In % of productive CPM resources December 2011 June 2012 December 2012 Profit (in million) In relation to Net Banking Income 0,85% 0,46% 1,06% Economic value in short-term (in millions) In relation to shareholders equity -0,48% -0,55% -0,51% Activity Report

56 CORPORATE GOVERNANCE 5- Operational Risks According to the definition adopted by Bank Al Maghrib, Operational Risks are the risks and losses resulting from defects or defiencies attributable to procedures, personnel and internal systems or to external events. This definition includes legal risk but excludes strategic and reputation risks Strategy Risks Unlike market and credit risks, operational risks are undergone; they do not represent the counterparty of a hope of gain or expected future remuneration. In order to have complete control of operational risks, the Group has instituted an operational risk policy whose principal foundations are as follows : Being in a position to detect, as soon as possible, the risks or incidents of an opertational character which can have financial consequences and/or consequences on the Group image; Analysing potential risks and/or actual incidents, and estimating the impacts as precisely and dynamically as possible; Alerting and mobilising the principal parties concerned by said incidents whether they are at the origin of and/or are affected by the consequences; Measuring the effects of this policy and disposing of the steering tools and indicators intended for the General Management, the executive management, the business lines and various players in the mechanism to enable them to evaluate per BPR, business line and function exposure to operational risks and reduce them (cost of risk); Taking the necessary preventative and remedial actions to reduce the impact, limit the probability of incident occurrence, draw conclusions and adapt the organisational bodies accordingly Policies and Procedures Policies and procedures relating to operational risk management and follow-up are formalised while taking into account the bodies involved in the risk follow-up and control process. Given the nature of operational risks, the internal regulatory provisions imply a large number of players intervening in the: Identification and self-assessment of risks; Collection and control of incidents; Awareness and handling of the operational risk element; Use of risk cartographies in the framework of control and audit activities. The primary internal circulars which govern operational risk are thus as follows : Charter of Operational Risk Management: This defines the general operational risk management policy at the Crédit Populaire du Maroc and Group Banque Populaire; Internal Control Charter of Groupe Banque Populaire: This conveys general strategy in terms of control management and the interaction between the various players such as the Inspectorate-General, Audit, Risk Management Pole and operational functions; Risk Management linked to the Outside Activities of CPM: This provides general policy guidelines in terms of operational risk management, making it possible to outsource both a Bank activity and the resources to be implemented in order to obtain a certain degree of control of risk management amongst service providers; General Policy and Governance of the Activity Continuity Plan of Crédit Populaire du Maroc: This defines the Activity Continuity policy adopted by CPM to allow it to honour its commitments with regard to customers and suppliers alike in the event of a serious claim Risk Management Mechanism Organisation of the Operational Risk Service The organisation of the Operational Risk Service at the Group level focuses on the following points : Central function at BCP headquarters in charge of the design and steering of methodological and computer-based tools; A managed network of risk managers who function within their respective scope (BCP, BPR). They participate in the updating of the operational risk cartography and ensure the establishment of action plans to strengthen the risk control mechanism; Correspondents named per business line in the

57 framework of the loss collection protocol. These correspondents have the task of scrutinising operational losses and of keeping close account of them in the risk management tool used jointly by all CPM bodies and by certain subsidiaries; Correspondents at the subsidiary level (internal or other comptrollers) whose task it is to ensure the establishment of the methodology and tools in synergy with the mechanism adopted within the Group Use of Cartography The year 2012 witnessed the implementation of a new operational risk cartography device set up in 2011 under critical and stable operational processes, namely market activity, securities, payment methods, money, bank insurance, etc. The updating of other major processes, such as commitments and international activities, also began and will be completed in The primary aims attained by this approach consisted of the following: - A more qualitative risk assessment process allowing for concentration on an action plan which covers the most critical risks; - The harmonisation of risk assessment amongst BPRs, allowing clearer insight into risk exposure by CPM; - The concentration of BPR efforts on identifying specific risks by proposing action plans which can benefit the entire Group; - The upgrading of risk cartography to make it less awkward to concentrate on the true issues identified by trade experts. With regard to subsidiaries, methodological assistance is provided according to the specific nature of the trade and context while taking particular care to maintain overall coherence. Periodic follow-up is provided according to the progress made by each subsidiary. In this regard, it should be noted that 2012 saw the finalisation of the Upline Group operational risk cartography and the commencement of such cartographies for CIB Offshore and Dar Damane, using the methodology of the Group. For the record, the approach proceeds according to the following phases: Discovery of the process: An analysis of the mechanisms established to manage activity in terms of procedures, players, tools, etc. The identification of risk events: Starting from the various banking trades, risk identification takes place by scanning the primary potential risks run in the performance of an activity. This identification is progressively refined during the course of meetings with experts in different sectors; The measure and assessment of event risks: For each event, risk is assessed in terms of Probability of Occurrence and of Impact/Loss, in case it occurs, by means of a score-grid adaptable to BPR and subsidiaries; The assessment of means of monitoring and of risk coverage: This pertains to the evaluation of the quality of existing control mechanisms for each risk event. This rating is based on two criteria: the relevance of the control and its application. Incident Collection Process A system of operational risk incident collection now exists, based on a dual declaratory mechanism and accessible to various players in the major operational processes of the Bank. Operational Risk Correspondents (ORC) have been appointed at the BPR and BCP, their tasks being to declare any incident responding to the criteria defined by the collection procedure independently of body of origin. The ORCs of various sections enter relevant information directly into the dedicated computer system. The workflow is designed to inform hierarchical managers in real time of any events occurring within their range and to allow these managers to control the relevance of information provided by their co-workers. Several actions have been brought into play, amongst which are the following: A focus on the declaration of incidents having an important financial impact; Formalisation of a detailed methodological guide on the qualification and evaluation of incidents; Reconciliation between declared incidents and registered book losses; Activity Report

58 CORPORATE GOVERNANCE Cross-checkings are also carried out with the services in charge of quality and the follow-up of legal matters; Use of other internal tools such as the solving of computer-based incidents so as to collect the operational risks linked to asset losses and dyfunctions in the Information System. The permanent involvement of players in this process has improved the quality of declarations and the risk profile visibility of the Bank. Similarly, the system has been extended to several subsidiaries such as Maroc Leasing and the Upline Group, for which incidents are conveyed in the same computer-based tool, and has allowed the Bank to integrate them into the Group risk profile. Follow-up Mechanism for Outsourced Activities In compliance with the recommendations of BAM circular 29/G/2007 which stipulates that outsourced activities must give rise to relevant risk follow-up policies, the follow-up mechanism for outsourced activities was strengthened by the implementation of a specific evaluation method, the principal components of which are as follows : A rundown and localisation of the outsourced services in CPM by means of distinguishing centralised services (electronic payment, desktop publishing, producing chequebooks, etc.) from regional services (sorting and packaging of banknotes, transport of funds, security, etc.); A scoring analysis which allows activities to be ranked by level of risk and providers by level of risk control; Visits made by mixed operational and risk teams in order to gain a more precise idea of the level of risk control per provider with regard to the activities entrusted to providers by the Bank; Actions plans to allow for better risk control associated with outsourcing (follow-up on a company s financial health, communication of activity continuity plans, on the quality of follow-up activity, etc.). Awareness of Operational Risk A campaign of operational risk awareness was carried out amongst all Bank services, from the branch office to top management, by means of adapting support content to the people concerned. The use of specialised consultants makes it possible to remain in line with the best international practices in terms of operational risk management. Scope and Nature of Reporting Systems A reporting system now exists with the objective of providing the executive bodies of the BPRs and the Group with a consolidated view of operational risks. Internal Reporting To ensure the dissemination of a culture of control over risks, in particular operational risks, two bodies have been set up: the Risk Management and Compliance Committee and the Risk Committees of BPR. These two bodies constitute the best channels of information and alert regarding operational risk management, particularly by means of : The proposal of review or development processes: Certain risks identified in the framework of cartography and/or collection can reveal structural problems and therefore require a structural review of the processes or organisation of different services not limited to corrective actions only. An example would be the risks inherent to the activities of the trading floor which require separation between operations, processing and control by setting up front, middle and back offices. The restitution of risk cartography review. With authority over the committees cited above is an Internal Control Commission, headed by the Secretary- General, which meets each month and allows for : - all questions to do with improving the Internal Control Mechanism to be addressed; - the proposal and follow-up of all action plans stemming from dysfunctions pinpointed by risk cartography, the collection of incidents of loss, follow-up indicators, etc.; - the oversight of the progress of actions performed as a result of recommendations made by the Inspectorate-General or by the Audit Committee.

59 External Reporting The regulatory reporting canvass for collection is sent ever six months to Bank Al-Maghrib. The incidents are consolidated according to the canvass based on the information provided by the BPR correspondents. A complimentary clearing exercise and reconciliation with book losses is executed manually to fine tune the summary of consolidated losses. 6- Solvency Risk and Shareholders Equity The aim of solvency risk monitoring is to maintain an adequate level of shareholders equity corresponding to the Group risk profile in order to enable support for its activities while contributing to the creation of wealth for shareholders and corporate members. Shareholders equity demonstrates the level of solvency and the ability of the Group to cover unexpected risks while offering depositors and debtors the necessary protection. Because the Group holds sufficient capital, it has the flexibility required to foster expansion by means of internal growth and strategic acquisitions. The Group s high equity ratios are primarily attributable to the quasi-systematic and integral carrying forward of the income achieved. Activity Report

60 CORPORATE GOVERNANCE The process of evaluation of the adequacy of shareholders equity constitutes an integral part of the coherency analyses of our strategic plans which occur at least once a year upon examination of the impacts of the Medium-Term Plan on shareholders equity and prudential ratios. Since 2007, the Bank has calculated its shareholders equity according to the principles of Basel II. Therefore, in addition to covering risks relative to Pillar I regarding credit, market and operational risks, the adequacy of shareholders equity also covers other important risks of Pillar II, in particular with regard to interest rates on bank portfolios and concentration risk Shareholders Equity The Group calculates regulatory shareholders equity on the basis of consolidated data according to IFRS along with prudential filters in compliance with the guidelines set by Bank Al-Maghrib. The Group has solid financial foundations linked to the level of regulatory shareholders equity. This equity reached MAD 28,230 million on 31st December 2012 compared to 26,887 million in December 2011, or a growth of 5% due in particular to the significant amount of income carried forward Breakdown of Regulatory Shareholders (in MAD million) Dec Dec BASIC SHAREHOLDERS EQUITY Corporate capital Reserves and premiums linked to capital Minority interest Translation difference Non-distributed net income Unrealised value added on investment securities Net intangible assets (exc. Software) Debtor goodwill Prudential restatements TOTAL BASIC SE COMPLEMENTARY SHAREHOLDERS EQUITY Special guarantee fund Unrealised reserves Subordinated debts Prudential restatements TOTAL COMPLIMENTARY SE DEDUCTIONS OF STAKES TAKEN OUT TOTAL SHAREHOLDERS EQUITY

61 Regulatory shareholders equity primarily consists of basic equity (81%). The basic shareholders equity (before deductions) is split up as follows : Unrealised value added on investment securities 3% Minority interest 8% Reserves and premiums linked to capital 75% Corporate capital 6% Non-distributed net income 8% The reserves and premiums linked to capital represent the largest share of basic shareholders equity given that our policy of capitalisation and distribution is founded on our internal dynamic and cooperative structure. The sale by the Treasury of 10% of the capital of BCP to the BPRs was recompensed by increases in capital focused on foreign investors (BPCE and then IFC at 5% of BCP capital). Complementary shareholders equity amounting to MAD 5.6 billion, or 19% of the total amount of shareholders equity (exc. deductions), is primarily constituted by the following : Support fund of MAD 2.8 billion; Subordinated debt of MAD 1.5 billion Solvency Ratio The solvency ration makes it possible to measure the financial soundness of a bank. This ratio is calculated according to the circulars and guidelines issued by Bank Al-Maghrib based on rules pursuant to the adequacy of shareholders equity initiated by the Basel Committee. The Basel II standards define two principal shareholders equity adequacy ratios: the first category of shareholders equity and the ratio of the total amount of shareholders equity as follows: The first category of the shareholders equity ratio is defined as regulatory shareholders equity divided by the weighted assets according to risks. The ratio of the total amount of shareholders equity is defined as the total amount of regulatory shareholders equity divided by the weighted assets according to risks. Bank al- Maghrib requires banks to aim at 10% of the total amount of shareholders equity. At the end of December 2012, the first category shareholders equity ratio of the Bank and its ratio of the total amount were 10.10% and 12.20%, respectively. The variations are attributable to the higher increase in weighted assets (+14.6%) above that of shareholders equity (4.7%). Activity Report

62 GROUP ACTIVITY

63 GROUP ACTIVITY Activity Report 2012

64 GROUP ACTIVITY Individual Customers, Tailor-made Offers Consolidation of Gains in Resources and Jobs The Retail Bank consolidated its resources, which grew from MAD 63,697 billion in to 69,660 billion in 2012, representing an additional 2,963 billion. It thereby registered a rate of growth close to that experienced between 2010 and There was a stable tendancy with regard to jobs, with real estate loans for 2012 rising to MAD 32,393 billion (compared to 32,446 billion in 2011) and outstanding consumer loans amounting to MAD 14,328 billion in 2012 versus 14,330 billion in The Same Appetite for Banking within the Labour Force The active involvement of commercial teams combined with effective cooperation between bodies of the central and regional distribution networks allowed for the gain of 366,570 new individual and professional customers, the total TFP rising from 2,725,774 customers in 2011 to 3,092,344 in Adapting to Individual and Professional Market Segments The development strategy of Banque Populaire privileges winning over new customers and promoting customer loyalty. The year 2012 was marked by an effort to adapt to the different segments which comprise the Retail Bank, in particular young and professional customers, by making available offers adapted to their specific needs and expectations. To this end, the Bank continued to consolidate its position on the youth market by signing several partnership agreements with Moroccan universities and major institutions of higher learning. These agreements provide students in these institutions with access to a wide range of banking, para-banking and insurance services at rates that take into account the purchasing power of this group. These agreements also strengthen the policy of Groupe Banque Populaire which aims to create bridges with the world of professional training and thus foster the implementation of partnerships to promote development

65 by the following means: Assisting the financial integration of students; Creating internships in the banking and financial fields; Promoting a permanent dialogue on subjects of major concern to the Group in terms of developing competencies in the primary activities of the Group; Supporting scientific and cultural actions organised by institutions of higher learning. At present, more than 250,000 students, representing all regions of the Kingdom, can benefit from the advantages offered by these agreements. To communicate what it has on offer to the youth market, the Bank has favoured a direct approach by sponsoring and participating in events on both the national and regional levels (International Student Forum, Vocational Training Fair, Orientation Carrefour, etc.) In line with our strategy to offer the young a more complete set of services, the C POP Card was altered to make it more visually appealing to the age group and provided with an adapted management system. Offers aimed at the young were also enhanced in 2012 by a new support product, Injad Attalib, conceived in partnership with a Group subsidiary, Maroc Assistance International (M.A.I.). True to its status as an innovative Bank, and to better serve customers by ensuring first-rate security, the Group has implemented a new authentification process for the use of Banque Populaire electronic bank cards for online purchases. Conceived and deployed in partnership with Maroc Télécommerce, this new system protects BP cardholders against all attempts to usurp their identity with fraudulent intent in case of loss or theft of said card. It should be noted in this regard that the Banque Populaire is the first national banking institution to put in place this method of cardholder authentification for Internet purchases. The year 2012 was also marked by the deployment of an integrated strategy aimed at the Professional Market, one of the historic markets of Banque Populaire. This strategy aims to win back the Professional market by means of an approach based on the following elements: Adapting the banking offer to this market; Establishing dedicated and expert structures to manage the requests of players in this market; Adapting the management and evaluation tools to the risks inherent to this market; Offering a coherent and efficient communications approach. As a major player in the field of direct debit financial flows, Banque Populaire has enhanced its partnerships by signing several agreements with leading bodies. Two agreements were thus signed with the Moroccan Agency for International Cooperation ( AMCI ) and the Moroccan Pension Fund ( Caisse marocaine des retraits, or CMR ), offering them adapted solutions to the management of financial flows and facilitating their service to adherents and beneficiaries. With regard to providing Individual and Professional customers with electronic banking products, the electronic-banking portfolio rose from 2,120,825 cardholders in 2011 to 2,556,218 at the end of 2012, representing an additional 435,393 cards. The Group has a particular interest in developing and maintaining partnerships and synergies with major customers. To this end, a wide range of actions were undertaken during the course of Agreements In the framework of strengthening the privileged partnership which links Banque Populaire to the Office Chérifien des Phosphates (OCP), a promotional event was organised in tandem, initially by the Retail Bank at the principal OCP sites (at Boucraâ, Laayoune, Khouribga, Benguerir, Safi, El Jadida, Youssoufia). This meeting had a dual objective: to present, thanks to the efficiency of the teams, the banking assets and advantages which benefit OCP employees within the framework of BCP-OCP agreement, and to forge new ties amongst the regional partnership managers. Another event was jointly carried out with our General Delegation of National Security (DGSN) partner in the form of a communicatins caravan which crossed all the entire nation and involved the participation of all BPRs. Several other agreements were signed with the Ministry of Justice, the Association of Social Works for Staff of the High Commission of Planning and the National Agency of Land, Land Registry and Cartography Conservation, as well as with Palmeraie Holding. Activity Report

66 GROUP ACTIVITY Synergy Supported by CDVM approval, dated 4th April 2012, of FCP Upline Rendement Plus (Upline Capital Management) contractual funds, by training actions of the Distribution Network, by identification of potential customers and the follow-up of this highlyspecific operation. Strengthening of intra-group synergy and commercial reorganisation of the regional presence of Maroc Assistance International, particularly by means of: Introducing Commericial Sales Desks at three BPRs (Tangier- Tetouan, Fez-Taza et Marrakesh- Beni Mellal); Generalising the commercialisation of Schengen Visa and Injad Monde assistance products to all Group branch offices via the technical and business training of the sales force, the deployment of the MAI-Assur distribution platform and the launching by our Network of a communications campaign for targeted customers. Multi-Channel Banking With a view to decongesting branch offices and enhancing customer loyalty, amongst other aims, the remote banking services Chaabi Mobile and Chaabi Net, Chaabi Phone, Pocket Bank and the Customer Relations Centre (CRC) are undergoing continual enhancement and restructuring. Flagship services are MAD in real time, retrievable 24/7 from ATMs or without bankcards, and allowing the recalculation of purchasing codes on the Internet as well as online bill payment. Improvement in Remote Banking Customer Services Chaabi Mobile : customers (+16,64 %) Chaabi Net : customers (+47,88 %) Development of Mobile Banking Offers By subscribing to the Pocket Book service via Chaabi Net, customers can at any time access their account balances, pay their bills, transfer funds and block their bankcards in case of loss, all through their telephones. Development of the Customer Relations Centre CRC activities are progressively veering towards beforesale, sale and after-sale services and rely on increased use of direct marketing. The customer journey will be especially enhanced by greater acquaintance with customers on the part of CRC operators and by the setting up of the multi-channelled CRC. CRC Performance Improvement Outgoing calls: Increase of % Incoming calls: Increase of % Analysis of customer appetite indicators in terms of services and privileged channel distribution, services adapted to homogeneous segments, the use of remotebanking services as a lever effect and an improved synergy between distribution channels, all these elements ensure the long-term success of the innovative concept of Direct Banking. Branch Office Network With 100 new branch offices opened in 2012 and a total of 1,145 branch offices on 31st December 2012, the Banque Populaire network comes in first place nationally. The Casa-Rabat-Tangier axis takes the lion s share, with 45% of banking facilities in the Kingdom. The highlight of the year 2012 was the opening of the showcase branch office in Morocco Mall. ATM Network With 1,180 ATMs in 2011, the CPM closed the year 2012 with a total of 1,323, representing an additional 143 automated units. Encouraging the deployment of ATMs at external sites, Banque Populaire is a notable ATM presence at Morocco Mall. With an optimal-functioning level that approaches 100%, ATMs continue to enhance accessible services to all types of cardholders, both national and international.

67 Private Banking: The Privileged Partner of High Net- Worth Customers Private Banking Banque Populaire has today reached its cruising speed and in this way participates significantly in the GNP of the Bank. The year 2012 was marked by the development of a wide range of offers dedicated to net-worth customers and the organisation of meetings between customers and sector experts. Expanding the Range of Exclusive Products and Offers with Real Estate Business Partners In line with its mission, the Private Banking sector has assisted customers with investments by proposing diversified investment products and commodities. This has led, on the one hand, to the launch of the FCP Upline Rendement Plus, the first mutual fund to be indexed to the performance of gold and petrol. Private Banking Banque Populaire and the Asset Management Company of the Upline Capital Management Group have, in effect, brought innovations to the Management of Collective Savings market and expanded their range of products with the launch of the UCITS Upline Rendement Plus Contract. This concerns a mutual fund trust that allows customers to benefit from 100% protection of capital and a minimum return guaranteed upon maturity as well as from a performance indexed to those of gold and petrol. Upline Rendement Plus has had great success with customers, with a collection of nearly MAD 200 million. On the other hand, Private Banking-Banque Populaire has formed partnerships with major real estate developers in order to propose exclusive real estate offers to net-worth customers. Various events have thus been organised with the Palmeraie Group, the Prestigia Group and the Groupe Alliance to present real estate projects and specificallynegotiated offers to customers. Net-worth Circles: A Meeting of Customers and Experts True to its objective to satisfy customer expectations, Private Banking Banque Populaire initiated its Net-worth Circle in Offering real opportunities to share both experiences and solutions, these Net-worth Circles are periodic meetings amongst customers, partners of Banque Populaire and renowned experts. They focus on themes of current import relating to Net-worth and take place in all regions of the country, treating subjects intimately related to the expectations of net-worth customers. In 2012, Private Banking Banque Populaire held two sessions, in Casablanca and Rabat, with the theme Transmission of Family Business. These sessions were organised in partnership with the BDO accounting firm represented by the Certified Public Accountant, Mr. Zakaria Fahim. By means of these Net-worth Circles, Private Banking Banque Populaire aim to respond to customer expectations and help customers achieve their objectives, whether financial, legal or fiscal Activity Report

68 GROUP ACTIVITY Financial Inclusion: A Solid and Indisputable Experience A leading figure on the Moroccan banking landscape, Groupe Banque Populaire enjoys an image as a bank of proximity at the service of Individuals, Professionals, Moroccans Residing Abroad and Companies. It constitutes a grouping of Banks accessible to all and deeply rooted in all regions of the Kingdom. At present, we have the densest and most extensive banking network in the country with a territorial pattern corresponding to regional breakdown. This allows us to ensure efficient coverage of the entire country. This programme of network extension and densification, combined with investment in new technologies, fits into the framework of the general interest mission of our Group which aims to strengthen the regional position of the Banque Populaire Régionales and contribute to the banking use of the Moroccan population. The financial inclusion of greater numbers of Moroccans figures amongst the top priorities of Groupe Banque Populaire. It is part of our determination to contribute significantly to the economic development of the country and improve the living conditions of people with modest incomes. In this domain, our Group has deployed a Low Income Banking Strategy by establishing an adapted offer in terms of products and service fees combined with the development of new, low-cost distribution channels. These channels profit significantly from technological advances, in particular in terms of infrastructures. All these actions resulted in attracting more than 280,000 new, low-income customers in 2012, bringing the overall portfolio to more than 965,000 customers. Our ambition is to increase this level significantly and strengthen our market positon thanks to a mixedmarketing approach based on innovative technological solutions adapted to these segments of the population together with a pedagogical programme of publicity and financial education. The year 2012 was also marked by the establishment of the first Auto-Bank site in the town of Guigou, Boulemane Province. This new type of branch office figures in the framework of our financial inclusion strategy which aims to ensure optimal territorial coverage, in urban as well as rural areas. This is a means of guaranteeing everyone access to banking services and working for the economic development of our country. An Auto-Bank is a self-service banking and reception kiosk with slimmed-down format and functions. It offers a banking service adapted to an urban and suburban population, especially in terms of opening hours and service quality. This banking kiosk is fitted with new techological equipment, with two ATMs and an interactive terminal with extensive functions, allowing customers to perform regular banking operations. In addition, Groupe Banque Populaire was awarded the Financial Inclusion Trophy African Banker Awards 2012 for its Low Income Banking model. This prize gave international recognition to the efforts made by the Bank to respond to the requirements of a population previously excluded from the banking system and to develop new, low-cost channels of distribution that benefit from advances in technology.

69 Moroccans Residing Abroad (MLA): Serving to Develop New Partnerships In 2012, the MLA market continued to suffer the effects of the economic and financial crisis going on in the principal host countries. This was mainly attested to by a decrease in remittances of 4% on the national scale and the deceleration of the collection of customer resources. Despite this difficult context, the Group was able to post solid results in terms of remittances and savings mobilisation as well as in customer numbers. Remittance Activity MLA remittances channelled by the Group in 2012 amounted to MAD 23.3 billion, bringing our share of the market to 35.66% and representing an increase of 17 base points. This performance is explained by the mobilisation of commercial forces in Morocco and abroad, as well as by the implementation of new partnerships. The year 2012 hence registered a strengthening of the strategic partnership with Groupe BPCE. At the same time, the Group signed partnership agreements with new operators specialised in remittance activity in various regions of the world while also tightening the links of cooperation with its traditional partners. Finally, the Group developed new remittance platforms aimed at responding to evolving customer expectations and at reducing the cost of processing transactions. Consolidating a Leading Position in Terms of MLA Customer Deposits Thanks to the commercial dynamic of the network, customer deposits grew by 4.5%, with an additional MAD 3.2 billion and an outstanding capital of 74.2 billion. This performance allowed the Group to retain its leading position with nearly 53% of the market share. DEPOSITS OF MLA CUSTOMERS (in MAD billion) Such a trend in commercial activity is explained by : - A proximity to customers and the synergy existing amongst Group operators on the market; - A multi-channelled commercial approach; - An enhanced offer. Customer Proximity and Synergy Thanks to its permanent presence in principal host countries via its Chaabi Bank subsidiary and its representative offices, the Group has provided close assistance to its customers in Morocco and abroad. Together with the expansion of our network across the nation, Chaabi Bank has extended its operations in Europe with the opening of two branch offices in France and one in Italy, bringing the network to forty-four outlets. With such a deployment, the Group ensures proximity in principal European countries with a high immigrant concentration. In synergy with the network, the representative offices of the Group in North America, the Middle East and Asia serve to strengthen relational and promotional activities with regard to Banque Populaire products and services. Similarly, Group participation in a variety of events in Morocco and abroad has allowed all operators on the market to listen responsively to customers. Finally, the quality of service provided at various encounters with customers during the MLA Campaign in summer 2012 attests to the will of the Group to respond to the expectations of Moroccans residing abroad when they return to Morocco. A Multi-channelled Commercial Approach The year 2012 saw the launch of various commercial campaigns both abroad and in Morocco. Apart from customer loyalty already acquired, these campaigns resulted in 51,320 new relationships, bringing the portfolio to more than 851,300 customers, an increase of 4% over These campaigns were based on the classic channel outlets and on alternative channels the Internet and Customer Relations Centre. Offer Enhancement Regarding commitments, overall outstanding loans rose to MAD 8.2 billion, most of which was intended for financing the acquistion and construction of MLA housing. Finally, in the framework of its policy of winning over MLA customers and rendering them loyal, the Bank pursued efforts to improve its MLA offer called Solutions Bladi by enhancing Bladi Packs as well as by introducing new features in the Bladi Card. Activity Report

70 GROUP ACTIVITY Professionals: Greater Proximity and a Wider Range of Offers The year 2012 was marked by determined efforts on the part of the Bank to accelerate proactive development of the Professional market. Hence, the Professional portfolio grew from a total of 92,715 customers to 108,183, or an additional 15,464 customers. The Retail Bank continues to strengthen its proximity and expertise for the benefit of Professional customers, in particular through the following two major actions: The adoption of a branch office typology with a Professional vocation; The establishment of dedicated workstations with the task of bolstering recruitment within this customer segment, ensuring guidelines for commercial activity and advising Professionals on the financing of their projects (investment, operational, real estate, etc.). Adequate training (Individual and Professional Customer Curriculum) relative to the branch office business lines was provided to these new Front Office profiles in November-December In the areas of financing and support of professional business customers, the Retail Bank has put together a complete and integrated range of banking products and services under the name Al Mountij. This new offer is aimed at professional business people whatever their activity and is part of a progressive partnership approach. The Al Montij financing offer is available in the following forms: - Mountij Moubachir is essentially intended for operating purposes and can be used for specific expenses: building up inventories, improving premises, meeting various payments, etc.; - Mountij Facilité is designed to finance short-term cash-flow needs linked to business activity; - Mountij Tajhiz is for the creation and growth of very small enterprises (VSEs). Some 8,200 professionals benefited from the Mountij offer in 2012, representing an attained commercial objective of 116%. For other offers to Professionals, such as Trend Pro ( Evolution Pro ), Serenity Pro ( Sérénité Pro ) and Notary Pack ( Pack Notaire ), 96% of the fixed marketing objective was reached.

71 SME: Strengthened Commitment and Support Outstanding loans to businesses reached MAD billion in 2012, an increase of 1.8% representing 23.8% of market share. These figures are explained by the proactive strategy deployed by Banque Populaire in favour of businesses Despite an economic climate particularly unfavourable to SMEs, in 2012 Banque Populaire strengthened its participation for the benefit of this type of business for which it is, and will remain, the leading partner in Morocco. As early as January, Banque Populaire and the CGEM renewed, for the third consecutive time, the three-year SME Partnership Agreement. In additon to supporting SME development, this new framework lends greater importance to regions within the context of an advanced regionalisation process. It allows the launching of actions begun in concertation with the CGEM-Régions (regional offshoots of CGEM). 200 SME meetings were thus able to take place over a period of three days. Efforts to develop banking support for SMEs were also boosted. Banque Populaire, in fact, distinguished itself by achieving first place amongst banks participating in the IMTIAZ Programme for the development of business competivity and modernisation. This initiative has allowed a greater number of businesses to benefit from State financial aid. Driven by its determination to ensure that its SME customers benefit from State support in the framework of the National Pact for Industrial Emergence, the network of Banque Populaire business centres were highly mobilised throughout 2012, including support for the Ministry of the Economy and Finance ( MOUSSANADA ) and the Moroccan Institute for the Support of Micro- Enterprise ( INMAA ). Still within the framework of actions favouring SME development, in March Banque Populaire and the CGEM received the President of the CGPME (General Confederation of SMEs in France), accompanied by a delegation representing French enterprises. This meeting provided the occasion to present the investment opportunities offered by Morocco to French SMEs and to begin the B to B meetings planned by Banque Populaire with some fifty customer businesses. Taking advantage of the meeting in Paris of Planète PME, a yearly front-line event for SMEs in France, Banque Populaire, in partnership with CGEM, also supported and assisted the participation of Moroccan enterprises in this Fair. The year 2012 was further punctuated with several actions to promote Morocco to foreign businesses, in particular Dutch, Spanish and Italian ones. In partnership with the Italian Banca Popolare, Banque Populaire therefore organised a vast operation to establish relations between SMEs of the two countries: more than Activity Report

72 GROUP ACTIVITY Several other offers were launched in 2012, supported by massive communications campaigns: - The Global SME Pack ( Pack Global PME ) in its national and international versions: Aimed at supporting the activity of the smallest SMEs on a daily basis, this new package is unique in Morocco, distinguishing itself by offering unlimited access to its services with no provision for additional billing beyond a certain service threshold. The international version also allows for substantial savings on costs linked to import transactions. implemented in 2012 to benefit personnel responsible for assisting businesses. The development of the Business Centre network also continued with the opening of new Banques Régionales sales outlets in the Centre-South and in Fez-Taza. The results of the second reading of the business satisfaction barometer, done in the last quarter of 2012, further confirmed the high rate of satisfaction with Banque Populaire Business Centres amongst business customers. These results also highlighted the relational qualities of the personnel working at these sales outlets. - A new range of Business Cards: This responds to all company needs relating to expense account management and to high value-added offers and services borne by the bearer and his business, in particular during trips abroad. To lend greater support to SMEs in their investment process, Banque Populaire further launched a promotional campaign valid until the end of June This is based on a media campaign for the financing of medium-term investments at a rate of 5.95% before taxes. And to facilitate access to credit, the level of recourse to counter-guarantee systems deployed by the Central Guarantee Fund (CGF) has risen to the level of the Business Centre network, thus allowing a greater number of businesses which lack sufficient financial coverage to obtain the credit necessary. Thanks to this, Banque Populaire has maintained first place in terms of CGF business support systems. Along with this, BP support has continued to benefit strategic sectors of the national economy in compliance with agreements signed with the government. By way of example, the Banques Populaires Régionales participated in the International Agricultural Fair in They also favoured businesses wishing to become involved in developing agropoles. The optimisation of the distribution network also being of constant concern, a consistent training programme was

73 Corporate Banking: A Lever of Growth for Large Corporations The Corporate and Investment Bank has continued its support strategy of major enterprises by the granting of short-, medium- and long-term credit and by proposing a wide range of enhanced financial services and products which respond to all the needs of its customers. In a difficult economic context marked by the continued effects of the international crisis, the activity of the Corporate and Investment Bank has achieved sustained growth, strengthening its status as a financial partner of major enterprises with overall employment earnings in 2012 reaching MAD 50.8 billion as compared to 41.7 billion in 2011, or an increase of 22%. In the light of this, jobs disbursement increased by 18% despite the decline in the financing of investment projects on the Moroccan market, from MAD 29.4 billion to 34.7 billion. Signed commitments have also experienced a significant rise, increasing from MAD 11.4 billion to 15 billion, representing 31% growth. For their part, Resources have decreased from MAD 10.6 billion to 8.1 billion, primarily owing to the nonrenewal of certain term deposits remunerated in the past at high rates, leading to an improvement in the Resource structure at the end of December 2012 which resulted in lowering the weight of DATs from 79% to 59%. Nevertheless, the decline in term deposits amounting to MAD 2.6 billion at the end of December 2012 was largely recompensed by signficant increase in UCITS investments amounting to MAD 8 billion versus 5 billion in December Job development, combined with the increase in arrangement and syndication fees as well as a better resource structure, has had a favourable impact on income generated by the Corporate and Investment Bank. The GDP and BDF have thus grown by 15% to reach MAD 741 million as compared to 644 million in The year 2012 confirmed the expertise of Corporate and Investment Bank teams which garnered the principal role of arranger for the financing of strategic projects, notably in sectors of national priority such as the energy sector which has seen a significant upswing thanks to the development of renewable energy sources. On that point, the BDF obtained the role of lead arranger for the financing of the JLEC 5 &6 electrical power system, the most important financing project in Morocco in the past ten years, co-financed (for the first time in Morocco) by Korean and Japanese credit bodies. The Corporate and Investment Bank has thereby confirmed its vocation as model player in Project Finance. Additionally, the commercial activity of the Corporate and Investment Bank in 2012 strengthened the presence of BCP on the major enterprise segment, in particular by: Consolidating and expanding the portfolio by entering into relationships with prestigious major enterprises operating in such diverse sectors as automobiles, energy, large-scale distribution, food-processing, grains and cereals, etc; Realising several cross-selling transactions in favour of BPRs and subsidiaries of GBP, in particular the Upline Group, Maroc Leasing, CIB Offshore, etc.; Strengthening uses and drained term financial flows by corporate customers. Activity Report

74 GROUP ACTIVITY Market Activities and Trade Finance: A Constant Dynamic In spite of a difficult economic climate, the year 2012 was marked by good market performance, a fact which earned Groupe Banque Populaire a major position in all sub-funds. Money Market The money market was marked this year by a rising liquidity deficit in relation to a widening trade balance deficit. A Market Maker on the money market, BCP had a higher volume of transactions than in 2011, thus reflecting the efforts of the Bank to collect resources and improve its liquidity ratio. Bond Market 2012 was undeniably a difficult year for capital markets owing to the macro-economic situation and to significant cash-flow needs that combined with a drying-up of liquidity. Despite a major decline in allocated amounts at auctions, MAD billion in 2012 versus billion in the preceding year, Groupe Banque Populaire retained its position on the primary market (second IVT stakeholder) and as the benchmark partner of secondary market institutions (first IVT stakeholder) by ensuring a volume of transactions amounting to MAD 43 billion in this subfund. Foreign Exchange Market The volatility which characterised 2012 notwithstanding, the Market Bank confirmed its leadership status in exchange activity by means of a sustained market presence and an offer of diversified hedging instruments responding to the multiple needs of its customers. Customers of Groupe Banque Populaire entrusted the Group with a signficant volume of transactions, import as well as export, proof of the constant dynamism deployed by the Group on the Foreign Exchange and Derivatives Market. This was reflected in an increase in these activities of more than 31% over Trade Finance Activity: A Significant Increase Trade Finance activity saw a significant increase in 2012 since the overall volume of import and export payments reached MAD million, an improvement of 16% over This increase was the result of multiple mentoring and loyalty actions provided to our business customers operating in the field of International Trade. Correspondent Banking remained just as active: Banque Populaire, in fact, devoted the year 2012 to strengthening its relationships with foreign correspondents, achieved by setting up new lines of financing and negotiating better pricing policies for the benefit of our customers. These achievements illustrate the excellence of these relationships and attest to the confidence of our foreign correspondents. Today, Banque Populaire has a large network of first-rate foreign correspondents on all five continents. Banque Populaire further devoted 2012 to strengthening synergy with all of its international subsidiaries with the aim of promoting foreign trade activity amongst the countries where they are installed. BCP was furthermore granted the STP AWARD 2012 by Standard Chartered Bank for the quality of its handling of foreign transactions.

75 C M Y CM MY CY CMY K Upline.pdf 2/12/10 15:47:52 Subsidiaries: Renewed Growth at the Service of Synergies Upline Group: The Model for Merchant Banking Business Lines Synopsis Purpose and mission The Upline Group brings together and develops all the Investment Banking business lines of the Group and is actively involved in all fields of Business Banking. Business Lines - Stock-Market Trading - Financial Engineering - Asset Management - Investment Capital - Insurance and Reinsurance Brokerage Shareholding Capital : MAD BCP : 76,51% - 10 BPRs : 23,49% Total : 100,00% Governance : Board of Directors - Mr. Mohamed BENCHAABOUN : Chairman - Mr. Mohamed Karim MOUNIR : Director - Mr. Rachid AGOUMI : Director - Mr. Laïdi EL WARDI : Director - Ms Soumia ALALMI OUALI : Director - Mr. Abdeslam BENNANI : Director - Mr. Othmane TAJEDDINE : Director General Management - Mr. Rachid AGOUMI : Director & General Manager Status & Contact Details Legal Form Limited-Liability Company with a Board of Directors Date of Establishment 1992 Address 37, Bd Abdellatif Ben Kaddour, Casablanca Telephone (+212) / 61 Fax (+212) Website Activity Report

76 GROUP ACTIVITY Activity Newsflash Advice and Financial Engineering Despite a difficult economic climate, Upline Corporate Finance (UCF) experienced 38% growth in turnover and an increase of 125% in its net earnings over the preceding year. That growth in activity is the result of a strategy adopted to confront the current economic situation. The strategy is defined as follows: - a sustained origination approach allowing UCF to sign mandates for different types of transactions and in different activity sectors; - BCP assistance in its strategic operations (increases in capital and external growth); - participation in various events that allowe UCF to enhance its position and its consultative involvement in market transactions. That explains the success with which Upline Corporate Finance met the various tasks entrusted to it during the course of The combination of these efforts enabled Upline Corporate Finance to increase its market share in different segments to : Bond issues : 30%; Treasury bills : 36%; Capital increases : 39%. Stock-Market Trading 2012 witnessed a transactional volume of approximately MAD 20 billion, despite a nearly 41% decrease in global market volume. The market share attained by Upline Securities on 31st December 2012 was of the order of 16.41%. As for Online Stock Market activities, it was able to maintain its market share in terms of the number of orders. Thanks to the Groupe BP dynamic and continuous improvement in its offer of services, Upline Securities saw the number of subscribers increase slightly despite the disaffection of individual investors, the collapse of volume and the entry onto the scene of new Online Stock Market players. Analyses & Research The Analyses and Research Division of the Group assists various market participants. Composed of market specialists (shares, rates, exchange, etc.), the team provides customers with publications at regular intervals as well as with specific updates that, in particular, allow them to follow variations and forecasts concerning various listed securities, indices, and macro-economic and sectorial indicators. Those publications include 08H55, Upline Daily, Upline Weeky, Upline Eco-Flash, Upline Monthly, Upline Yearly, Investor Guide and Snapshot in addition to securities and sectorial updates, etc. Asset Management Sustained development of outstanding loans increased market share at the end of 2012 to 9.16%, compared with 8.67% the preceding year. The dynamism of that activity confirmed Upline Capital Management's position amongst the Top 4 collective-management companies, placing it fourth out of 18 such companies while noticeably reducing the gap between itself and the third-place company and significantly widening the gap separating it from the fifthplace player. Furthermore, 2012 was marked by the launch of several new funds, including a dedicated equity fund on behalf of a major trading-floor institution and two general public contractual funds of guaranteed capital and of guaranteed capital and yield. The two latter funds concern contracted mutual funds of Upline Capital Guarantee, designed specifically for targeted legal entities and institutions, and contracted mutual funds of Upline Rendement Plus which is primarily designed for individuals. Investment Capital In the framework of its strategy to support economic development projects in Morocco, Groupe Banque Populaire (GBP) a pioneer in the Investment Capital sector has set up several general and sectorial investment funds while also structuring new funds to assist government efforts to develop sectors with high growth potential: Infrastructure, Tourism, Residential and Industrial Property, Logistics, Agri-Foods, etc. By means of those general and sectorial funds, which involve varied yield and risk, the Group covers all growth sectors of the Moroccan economy : funds of funds, infrastructure funds, tourism funds, funds for industrial and logistical real estate, funds for new information technologies, agricultural funds and several general funds such as capital development and transmissions, etc. The activity of those funds is managed by several fund-management companies grouped together within Upline Alternative Investments. With assets under management totalling MAD 6.2 billion at the end of 2012 an increase of 2.5 billion during the period Upline Alternative Investments is the leader of the Investment Capital market in Morocco.

77 Insurance Brokerage For Upline Courtage, the insurance consultant for the Group, 2012 was marked by a change in corporate name, the signing of a co-brokerage agreement with one of the leading trading-floor insurance consultants for the management of major account insurance portfolios, and a reorganisation that resulted in a new structure to support the development strategy adopted since the company linked up with the Upline Group. The commercial effort of the Group network, combined with the innovation skills demonstrated by the Upline Courtage teams, particularly in the bancassurance field, resulted in an increase of 30% in the overall amount of premiums collected in the period In terms of performance, turnover for 2012 composed of traders fees rose by 14% over the preceding year. Upline Group In its function as a holding company, the Upline Group consolidates all subsidiaries operating within the business lines given below; its net earnings consist mainly of dividends from these said subsidiaries. The amount uplifted in 2012 in respect of financial year 2011 increased by nearly 76% over that of The dividends thus received in 2012 amounted to MAD 65 million. Net profits for the Upline Group, highly impacted by this rise in dividends, saw a significant leap from the preceding year: an increase of 126% to stand at MAD 68.5 million. Some Consolidated Indicators of the Group Lines Turnover Trend Net Earnings Trend Financial Consulting and Engineering MAD million ä % MAD 8.76 million ä + 125,46% Asset Management MAD million ä % MAD million ä + 18,97% Investment Capital MAD million ä % MAD million ä + 11,76% Stock-Market Trading MAD million æ 38.39% MAD million ä + 50,28% Insurance Brokerage MAD 31.6 million ä % MAD million ä + 8,58% Consolidated Turnover Upline Group ended 2012 with a consolidated turnover approximating MAD 200 million. That performance was rooted in the growth the indicator has experienced since 2009, the year when the Upline Group joined the Groupe Banque Populaire fold. By moving from MAD 75 million in 2009 to somewhat more than 200 million at the end of 2012, the consolidated turnover of the Upline Group experienced growth of +167% within this period, an annual average growth of approximately +42%. Such a remarkable performance on the part of the Group was made possible thanks in particular to the professionalism of the teams operating within the various business lines of the Group, as well as to the beneficial effect of synergy with GBP. Consolidated Net Earnings The Net Share of the Group in line with IFRS standards was nearly MAD 73 million at the end of 2012, thus marking the crowning achievement of efforts made since 2009, a year in which that same indicator never rose above MAD 17 million. Such undeniable progress at once the result of growth in turnover and effective control of General and Operational Expenses ensured approximately +330% growth for the indicator between 2009 and 2012, with a average growth rate of +78%. Shareholders Equity By undergoing the positive impact of the earnings indicators given above, IFRS shareholders equity reached nearly MAD 649 million at the end of 2012, representing a significant growth of +18% over 2009, at which time this same indicator never rose above 548 million, for additional net earnings of MAD 101 million between 2009 and Activity Report

78 GROUP ACTIVITY Maroc Leasing : Pioneer of the Leasing Sector Synopsis Purpose and mission Maroc Leasing specialises in the lease financing of fixed and moveable assets for professional, commercial or industrial use. Strengthened by the backing it receives from Groupe Banque Populaire, Maroc Leasing operates throughout Morocco, making it the leading distribution network in the country. Principal Products - Equipment Leases - Property Leases - Lease-Back Shareholders Capital in MAD : MAD - B.C.P : 53,11% - CIH : 34,02% - TAIC : 5,74% - Others : 7,13% Total : 100,00% Governance : Board of Directors - Mr. Mohamed BENCHAABOUN : Chairman - Mr. Ahmed RAHHOU : Deputy Chairman - Mr. Mohamed Karim MOUNIR : Director - Mr. Laïdi EL WARDI : Director - Mr. Mohamed MESKINE : Director - Mr. Lotfi SEKKAT : Director - Mr. Younes ZOUBIR : Director - Mr. Zied EL ARFAOUI : Director General Management - Mr. Aziz BOUTALEB : General Manager - Mr. Mohamed LADID : Deputy General Manager Status & Contact Details Legal Form Limited-Liability Company with a Board of Directors Date of Establishment 21/04/1965 Address 57, Angle Rue Pinel, Bd Abdelmoumen Casablanca Telephone (LG) Fax Website

79 Activity Newsflash At the end of financial year 2012, the leasing sector had achieved a total volume of MAD billion. Maroc Leasing, the leader in the sector, had an earned net income of MAD billion, representing 26.71% of the market. The principal activity indicators for Maroc Leasing are as follows : Outstanding Amounts MAD 11.4 billion ä + 2,5 % Operating Revenues MAD 3.8 billion ä + 7,4 % NBI MAD 230 million ä + 26,3 % Net Earnings MAD 60 million æ % Operating Ratio 31,5% æ - 5,9 Pts Outstanding Amounts Outstanding amounts came to MAD 11.4 billion, showing 2.5% growth over financial year It should be noted that, at 63.29%, equipment leasing remains the primary source of outstanding amounts for the company, representing MAD 7.2 billion in respect of financial year Operating Revenues Operating revenues amounted to MAD 3.8 billion, an increase of 7.4% over financial year That growth is largely explained by a rise of 7.68% in capital assets from leased property, the volume of which grew by 2.30% as against the end of Net Banking Income NBI experienced significant growth of 26.28% to reach MAD 230 million, compared with MAD 180 million at the end of That improvement is owed to the input of operating revenues, which compensated for the increase in operating costs (6.37%). Net Earnings Net earnings amounted to MAD 60 million, compared with 64.4 million at the end of the preceding financial year. Despite a clear growth in NBI, net earnings decreased by 7.15% owing essentially to the combined effects of actuarial provision for unrealised loss amounting to MAD 20 million and a social-cohesion tax of MAD 0.97 million. Operating Ratio The operating ratio was 31.5% versus 37.4% in Net Banking Income and operating costs grew disproportionately, their respective rates being 26.28% and 7.4%. The improvement in that ratio is explained in large measure by efforts made by the company to enhance productivity and to control operating costs. Activity Report

80 GROUP ACTIVITY Chaabi International Bank Offshore : The Group s platform for offshore credit Synopsis Purpose and mission Provide clients with all banking and offshore-credit transactions, serve as the Group s platform for financing, promoting foreign trade, and outsources investments. Main products - Opening and managing foreign-currency accounts - Transferring and repatriating funds - Investments made in foreign currencies and hedging against foreign-exchange risks - Forfaiting and mobilising export credits - Foreign-currency financing of international trade - Issuing sureties and guarantees - Financing investments and the operation of businesses in free-trade zones. Shareholding Capital : USD - BCP : 70% - BP TANGER-TETOUan : 10% - BP CENTRE SUd : 10% - BP NADOR - AL HOCEIMa : 10% Total : 100% Governance : Board of Directors - Mr. Rachid AGOUMI : Chairman of the Board - Mr. Mohamed Karim MOUNIR : Director - Mr. Mohamed MESKINE : Director - Mr. Abdeslam BENNANI : Director - Ms Hanane EL BOURY : Director - Mr. Lbachir BENHMADE : Director - Mr. Mohamed BOULGHMAIR : Director - Mr. Driss RONDA : Director - Mr. Othmane TAJEDDINE : Director General Management - Mr. Abdelwafi ATIF : General Manager Status & contact details Legal form Limited-Liability Company with a Board of Directors Date of creation 03/03/2005 Address Lot 45-d Zone Franche d Exportation Route de Rabat Tanger - Maroc Telephone /50 Fax

81 Activity newsflash As regards financial 2012, CIB Offshore s activity and results indicators have posted a clear improvement was also marked by the acceleration of the development of synergies with the Group s various entities, including the Atlantic Business International subsidiaries. The latter are the subject of special attention, with the aim of exploring new opportunities. Productive jobs USD 827 million ä + 13 % Resources USD 816 million ä + 13 % Net Banking Income USD million ä + 39 % Net result USD million ä + 45% Balance-sheet total USD 830 million ä + 25 % Own Funds USD 12 million ä + 36 % Productive jobs Productive jobs increased by 13% with respect to financial year 2011, i.e. USD 827 million. That increase is attributable in large measure to the diversification of CIB Offshore s activities, as well as the search for new niches of profitability. Net profit As with net banking income, so with net profit, which from 2011 to 2012 increased by 45% to reach USD 4.75 million. That improvement is explained in large measure by the rise in Net Banking Income, combined with control of general operating costs. Overall resources Overall resources increased by 13% with respect to the end of 2011 to stand at USD 816 million. That increase comes essentially from the rise in demand deposits by 274%. Balance-sheet total and Own Funds At the end of 2012, CIB offshore posted a balancesheet total of USD 830 million, a rise of 25% over the previous year. Own funds have increased by 36% to stand at USD 12 millions. Net Banking Income Net Banking Income posted an improvement of 39% compared with the end of 2011, reaching USD million. 62% of that Net Banking Income is made up of loans to credit establishments, and 22% is made up of margins on credits to clients. Activity Report

82 GROUP ACTIVITY Chaabi LLD : Characterised by consolidation Synopsis Purpose and mission CHAABI LLD operates in the long-term rental sector and offers flexible solutions that combine the purchasing and management of vehicles. It offers a whole range of advantageous services for a flat-rate monthly rent calculated on the basis of duration and mileage that are fixed at the outset. Principaux produits - LLD Pack pro - LLD Pack Avantage - LLD Pack Select Shareholding Capital : MAD BCP : 73,62% - FONDS MOUSSAHAMA i : 10,00% - MAROC Leasing : 1,38% - AKWA Group : 15,00% Total : 100% Governance : Board of Directors - Mr. Rachid AGOUMI : Chairman - Mr. Mohamed Karim MOUNIR : Director - Mr. Laïdi EL WARDI : Director - Mr. Abdeslam BENNANI : Director - Mr. Mohamed MESKINE : Director - Mr. Aziz BOUTALEB : Director - Mr. Choukri OIMDINA : Director - Mr. Youssef IRAQI Houssaini : Director General Management - Mr. Mohamed AMIMI : General Manager Identification & contact details Legal form Limited-liability company with board of directors Date of creation 2004 Address 1, Rue Chella (Ex Avignon) Casablanca Telephone / Fax Website

83 Activity newsflash Financial year 2012 was marked by the search for structuring projects that aimed at consolidating the financial situation, improving quality of service, and strengthening synergy with the Group. Those projects, as well as the implementation of best practices in terms of governance, enabled confirmation of a return to profitability of the LLD subsidiary, which has posted positive results for two successive years. Chaabi LLD s main activity indicators at the end of 2012 are as follows: Fleet vehicles æ - 7,25 % Turnover MAD 125 million æ % Operating profit MAD 14.5 million ä + 68 % Gross operating profit MAD 60 million ä + 3 % Net profit MAD 2.7 million æ - 1,34 % Commercial activity With an automobile market up by 16.2% at the end of December 2012 (130,316 units registered) compared with the same period in 2011, and with an LLD fleet of almost vehicles, Chaabi LLD delivered 571 vehicles in 2012, which brought its fleet to vehicles. Moreover, the offers made stood at 3 429, as against for the same period in 2011, i.e. a rise of 34%. Consolidating the financial situation For 2012, the gross operating profit rose by 3% over In the same vein, the operating profit rose by 68% to reach MAD 14.5 million, as against MAD 8.6 million in Net profit was MAD 2.7 million. Activity Report

84 GROUP ACTIVITY Banque Populaire Maroco-Centrafricaine : sustained growth Synopsis Purpose and mission Banque Populaire Maroco-Centrafricaine is incorporated under Central African Republic law. It emerged from a Memorandum of Understanding signed on 13 February 1989 between the Kingdom of Morocco and the Central African Republic, with a view to strengthening the economic and financial links between the two countries. As reference shareholder, BCP provides management for the bank by redeploying qualified executives to its subsidiary. The BPMC s main mission is to provide banking services to the population and to take part in the development of SMEs / SMIs. The BPMC aims its works at the following sectors: handicrafts, agriculture, foreign trade, etc. Main products - LLD Pack Pro - LLD Pack Avantage - LLD Pack Select Shareholding Capital in MAD : 10 Mds FCFA - Banque Centrale Populaire : 62,50% - The Central African State : 37,50% Total : 100% Gouvernance : Conseil d'administration - Mr. Laïdi EL WARDI : Chairman - Mr. Abdeslam TAHRI : Director & General Manager - Mr. Mohamed Karim MOUNIR : Director - Mr. Mohammed BELGHAZI : Director - Mr. Mohamed MESKINE : Director - Mr. Valentin Mahamat TAHIR : Director - Mr. Cyriaque SAMBA-PANZA : Director - Mr. Albert BESSE : Director General Management - Mr. Abdeslam TAHRI JOUTEI : Director & General Manager Identification & contact details Legal form Limited-liability credit and banking company Date of creation 1990 Address Rue Guérillot - BP 844 Bangui - République Centrafricaine Telephone (21) / / Fax (21)

85 Activity newsflash For financial year 2012, the Banque Populaire Maroco-Centrafricaine s activity was marked by : a considerable increase in the number of accounts opened setting up the Transfert Centrafricains Résidents à l Etranger (Transfers for Central Africans Resident Abroad) application in collaboration with Chaabi Bank capital increased to FCFA 10 billion. Jobs FCFA billion æ + 8,93% Resources FCFA million ä + 14,78% Market share - deposits 18,58% ä + 2,23 % Market share - jobs 27,02% ä + 7,95 % Net Banking Income FCFA billion ä + 5,02% Balance-sheet income FCFA billion ä + 11,39% Net Own Funds FCFA billion ä + 14,25% Net profit FCFA billion ä + 5,69 % Operating co-efficient 21.78% ä + 3,16 Pts The analysis of the BPMC s situation at the end of financial year 2012 shows that the main indicators have remained positive. Average resources reached FCFA billion, showing a rise of 14.8% due mainly to receiving foreign funds aimed at financing various infrastructure projects and at supporting the government s actions in regard to securing the hinterland. In terms of market share for deposits, that assessment showed an increase of 2.23% to 18.58%. The high demand from clients for investment credit enabled productive jobs to increase by 8.9%, thus giving rise to an additional figure of almost FCFA 3 million. That growth went together with growth in the market share for jobs, which rose from 25.03% in 2011 to 27.02% at the end of Net banking income recorded growth of 5.02%, rising from FCFA billion in 2011 to FCFA billion in 2012, thanks to a remarkable improvement in banking operation products. The operating co-efficient fell by 3.16 points to reach 21.78% at the end of 2012, as against 18.62% in The balance-sheet total rose from FCFA billion to FCFA billion in 2012, an increase of 11.4%. Net own funds increased by 14.25% to reach FCFA billion. Net profit stood at FCFA billion, an increase of 5.69% over financial year Activity Report

86 GROUP ACTIVITY Banque Populaire Maroco-Guinéenne : confirmed development Synopsis Purpose and mission The Banque Populaire Maroco-Guinéenne is incorporated under Guinean law as a co-operative banking and credit society with variable capital. The BPMG was set up as part of developing South-South relationships, taking part in promoting the economy of the Republic of Guinea, and supporting commercial exchanges between the Kingdom of Morocco and the Republic of Guinea. In accordance with statutory provisions and other technical establishment and assistance agreements signed between the two governments, the Groupe Banque Populaire s strategy for the BPMG is centred on transferring its proven know-how in the fields of banking provision for the population, financing SMEs / SMIs, handicrafts, and fishing. Shareholding Capital in MAD : GNF 50 billion - BCP : 55,53% - Guinean State : 43,24% - Others : 1,23% Total : 100% Governance: Board of Directors - Mr. Emmanuel GNAN : Chairman - Mr. Laïdi EL WARDI : Deputy Chairman - Mr. Mohamed Karim MOUNIR : Director - Mr. Mohammed BELGHAZI : Director - Mr. Mohamed MESKINE : Director - Mr. Ahmed IRAQI Houssaini : Director & General Manager - Mr. Ansoumane CONDE : Director - Mr. Souleymane YELETA DIALO : Director - Mr. Mamadou Cellou BARRY : Director General Management - Mr. Ahmed IRAQI Houssaini : Director & General Manager Status & contact details Legal form Limited-liability company with variable capital Date of creation 1991 Address BPMG - BP 4400, Bd du Commerce Conakry1 République de Guinée Telephone / / / / Fax / / 25 52

87 Activity newsflash For the Banque Populaire Maroco-Guinéenne, 2012 included several major events: - capital increase from GNF 45 to 50 billion - dividends paid for the 5th consecutive year - carrying out significant change and transfer operations with positive repercussions on profit. Furthermore, the network continued to be extended by the opening of two new banks, thus bringing the total number of operational banks to fifteen. Analysis of the bank s results for financial year 2012 showed an increase in the main operating components. Productive Jobs GNF billion ä + 16,97 % Average resources GNF billion ä + 61,8 % Market share - deposits 4,40% ä + 0,90 Pt Market share - jobs 3,40% ä + 2,2 Pts Net Banking Income GNF billion ä + 6,32 % Operating Co-efficient 33.83% æ - 3,7 Pts Balance-Sheet Total GNF billion ä + 9,85 % Net Own Funds GNF billion ä + 16,42 % Net profit GNF billion ä + 4,81 % 2012 showed a significant increase in overall resources of 61.8% as compared with the end of 2011; that enabled a 0.90 point increase to be registered in the market share for deposits. In terms of productive jobs, market share rose considerably to reach 3.4%, a rise of over 2 points over The increase took the form of an 18% rise in jobs, due mainly to an increase in credits granted. The operating co-efficient improved by 3.70 points, rising from 37.53% to 33.83% at the ends of Bank operating revenue recorded a significant rise of 22.20% with respect to 2011, in spite of the fall in the margin on foreign-exchange transactions and in the rate of transfer commission arising from strong competition between banks and the coming together of the official and parallel markets. Operating costs increased by almost 266% because of the upwards revision of remunerations rates for savings and term-deposit accounts. Net Banking Income rose from GNF billion to GNF billion, an increase of 6.32%. Net profit stood at GNF billion, up by 4.81% over That enabled consolidation of the bank s net own funds, which rose from GNF billion to GNF billion in 2012, an increase of 16.42%. Activity Report

88 GROUP ACTIVITY Chaabi Bank : a European bank serving Non-Resident Moroccans (NRMs) Synopsis Purpose and mission Chaabi Bank was set up in 1972, and provides a Groupe Banque Populaire presence in the main destination countries for our fellow Moroccans in Europe: France, Belgium, Spain, Italy, Germany, and the Netherlands. Until the start of the 1990s, Chaabi Bank s mission consisted of promoting transactions for the collection and transfer of NRMs savings to Morocco. That mission was subsequently widened to exercising other commercial-banking activities, in order to provide better support for that clientele. Obtaining the European Passport in 2007 and rolling out the Chaabi Bank brand in Europe constituted a significant step in the development of the subsidiary, as well as placing it at the centre of the Group s strategic plan. Main products - Fund transfer - Collecting resources - Granting credits - Carrying our banking transactions Shareholding Capital : EUROS - BCP : 99,74% - Various : 0,26% Total : 100,00% Governance : General Management - Mr. Mohamed BENCHAABOUN : Chairman - Mr. Khalid YACINE : Director - Mr. Mohamed Karim MOUNIR : Director - Mr. Hassan EL BASRI : Director - Mr. Rachid AGOUMI : Director - Mr. Laïdi EL WARDI : Director - Mr. Hassan EL ATTAR Sofi : Director - Mr. Mustapha KHYAR : Director General Management - M. Khalid YACINE : Director & General Manager Identification & contact details Legal form Limited-Liability Company with Board of Directors Date of creation 1972 Address 49, avenue Kléber Paris / France Telephone (+33) Fax (+33) Website

89 Activity newsflash In spite of a gloomy European environment, Chaabi Bank s economic activity in 2012 continued to grow, particularly in respect of more significant development in the local banking activity, thanks to the enrichment and modernisation of its offer. Thus, two major events that give reasons to hope for the future should be kept in mind: the launch of property financing that is compatible with Islamic finance, and the marketing of the Injad Achamil Europe product saw the opening of a branch in Bordeaux, the refurbishment of the Clichy branch, refitting the Antwerp branch, and starting work on rebuilding the head office in Brussels (Belgium). In financial year 2012, Chaabi Bank continued to work to achieve gains in performance and effectiveness, in branches and in central departments alike. Several organisational worksites have been launched in order to bring the bank up to date (regulatory operational model), as well as improving the quality of customer service. In addition, with a view to strengthening commercial teams, colleagues have benefited from training programmes tailored to their new profession. Thus, main indicators have changed as follows : Resources euros ä % Jobs euros ä % Transfers euros æ % Clients At the end of 2012, CHAABI BANK had over accounts, including over for France, for Belgium, for Spain, and for Italy. The allocation rate for the 2012 period was 10% overall, with an average of 3% on the European market. The annual commercial effort took the form of a net addition, at the end of 2012, of accounts representing 20% of stock. It should be noted that 16% of those new accounts come from Islamic financial activity, and represent 30% of additional resources. Resources Outstanding deposits across all categories stood at at the end of 2012, an increase of 18.1% with respect to the end of December Going into detail, resources increased by 21.8% for Private Individuals and 6.7% for Businesses. Note that outstanding amounts from Islamic finance resources stood at at the end of Jobs The additional amount due to productive jobs rose to , thus contributing to the 16.7% increase in outstanding amounts, which stood at at the end of The job co-efficient increased by 1.5 points to 39.2%, whilst the rate of outstanding credits fell by 10 points to 8.7%. Transfers At the end of 2012, transfers accounted for over one billion euros, a fall of 9.5% over the same period the previous year. That fall is explained by the cessation of the transfer channel by TIP in France. Expressed in figures, recorded transfers represented transactions. CHAABI BANK branches contributed up to 62% of the volume of transfers towards the Group, as against 69% at the end of That fall in the branches share is explained by the Bladi Bolletino transfer solution in Italy. Net Banking Income euros ä + 5,92% Balance-Sheet Total euros ä + 14,95% Net profit euros æ - 79,51 % Own Funds euros ä + 0,50 % Net Banking Income The statement of accounts at 31 December 2012 showed Net Banking Income of , a rise of 6% over 2011, when it stood at That increase comes mainly from bank operating revenue, which rose from at the end of December 2011 to in 2012, a rise of That performance is due mainly to income from means of payment (+41%), various commission payments (+30%), and income from transactions with clients, which rose by 5% with respect to December Net Profit The net profit at the end of December 2012 stood at , as against in That result takes account of corporation tax of Own Funds At the end of December 2012, own funds stood at , a slight increase of 0.5%. Activity Report

90 GROUP ACTIVITY Bank Al Amal : the bank of NRM entrepreneurs Synopsis Purpose and mission BANK AL AMAL was set up in 1989 in order to contribute to the financing of investment projects by Moroccans resident abroad. The Bank carries out its financial mission nationally, by taking part in the financing of projects with high added value in Morocco and borne by NRM entrepreneurs. Shareholding Capital : MAD A-class shareholders (double voting rights) - BCP : 23,91% - 10 BPR : 11,86% - AttijariWafa bank :1,73% - Total A : 37,50% B-class shareholders - NRMs : 62,45% - BCP : 0,05% - Total B : 62,50% - Capital A+B : 100,00% Governance : Board of Directors - Mr. Laïdi EL WARDI : Chairman - Mr. Mohamed Karim MOUNIR : Director - Mr. Hassan EL BASRI : Director - Mr. Mohamed MESKINE : Director - Mr. Jalil SEBTI : Director - Mr. Mohammed KHIHAL : Director & General Manager - Mr. Abdelkader AIT OUAÂDDOU : Director - Mr. Bouchaib RAMI : Director - Mr. Mustapha SALAMA : Director - Mr. Jabeur CHEIKH : Director - Mr. Abdellah HANIY : Director - Mr. Tahar TANOUTI : Director General Management - Mr. Mohammed KHIHAL : Director & General Manager Status & contact details Legal form Limited-Liability Company with Board of Directors Date of creation 1989 Address 288, Bd ZERKTOUNI - Casablanca Telephone Fax Website

91 Activity newsflash Occupying a position as the specialist Bank for Non-Resident Moroccans, BANK AL AMAL complies in full with the financial mission that has been assigned to it, and which essentially covers investment projects borne by NRM entrepreneurs. At the end of 2012, the number of investment projects (borne by NRM entrepreneurs) financed by the bank reached 1 118, with an overall investment amount of MAD 8.3 billion, thus contributing to the creation of direct jobs. Changes in the main indicators for 2012 are as follows : Productive jobs MAD æ - 0,18% Net Banking Income MAD ä % Net profit MAD æ - 17,28% Own Funds MAD ä + 2,74% Balance-Sheet Total MAD ä + 1,05% Net Banking Income rose by 4.4% to reach MAD The net profit rose to MAD Own funds recorded an improvement of 2.74% under the effects of the profits made Activity Report

92 GROUP ACTIVITY BP Shore : towards outsourcing of the Group s back-office activities Synopsis Governance : BP Outsourcing Process (Holding) - Mr. Mohamed Karim MOUNIR Chairman General Manager - Mr. El Mostapha BEDDARI Additional General Manager BP Shore Back Office - Mr. Mohamed Karim MOUNIR Chairman of the Board of Directors - Mr. Abdelilah EL OUARDI General Manager BP Shore Immo - Mr. Mohamed Karim MOUNIR Chairman General Manager - Ms Wafaa DEHLI Additional General Manager Status & contact details (Holding) Legal status Limited-Liability Company with Board of Directors Date of creation 2012 Address 9-9bis, Rue d'oran Rez-de-chaussée- Quartier Gauthier - Casablanca Telephone (+212) / (+212) Fax (+212)

93 Financial year 2012 was marked by setting up and bringing into operation certain structures selected as part of the project to re-engineer back offices. To that end, the activity of the holding company and of the operational structures was as follows : BP OUTSOURCING PROCESS The activity of the firm BP Outsourcing Process was focused essentially on the management of its subsidiaries pooled support services and activities, which enabled those subsidiaries to refocus on the operational aspects of their core businesses. The support activities dealt with concerned the administrative handling of human resources, maintaining accounts for various entities, the management of expenses, as well as treasury management. BP SHORE BACK OFFICE The current structure of BP Shore Back Office includes two CTNs (CTN = Centre de Traitement National - National Processing Centres): CTN Flux domestiques The Flow activity was characterised by : from 1 April 2012 to 31 December 2012, handling securities worth over 4.8 million (cheques, standard bills of exchange) CTN Crédits From 1 April 2012 to 31 December 2012, the creditdossier processing activity covered transactions for the 7 BPRs deployed and BCP network, i.e. an average of transactions / day. BP SHORE IMMO That subsidiary s activity was marked by carrying out and taking direct responsibility for almost thirty operations involving building or fitting out head offices, central sites, or branches, including, in particular : The completion of some of the Group s property projects, and the closure of operations that had already been completed and handed over during financial year 2012 (17 projects, accounting for an implementation budget of MAD 344 million) carrying out work to implement significant property projects (24 projects with an overall budget of more than MAD 667 million) continuing or starting building and fitting-out work on head offices and branch offices, that work having been started in the previous financial year launching new property projects (20 projects with an overall budget of more than MAD 720 million); monitoring multitechnique maintenance contracts ah the head offices of some BPR and group subsidiaries. - clear improvement in the activity: +5% for cheques - +17% for standard bills of exchange. Indicators BP Shore IMMO BP Shore BO BP OP Turnover MAD MAD MAD Net profit MAD MAD MAD Activity Report

94 GROUP ACTIVITY Fondation Banque Populaire: Education, Culture, and social work as priorities Synopsis Purpose and mission Promoting culture and raising awareness of environmental protection, as well as supporting education and protecting heritage Supporting significant events, such as main national festivals as well as local and regional initiatives Consolidating cultural links with Non-Resident Moroccans. Governance : Board of Directors - Mr. MOHAMED KARIM MOUNIR : Chairman of the Board of Directors - Ms Asma LEBBAR : Director - Mr. Mohamed MESKINE : Director - Mr. Abdelatif ZAKHBAT : Director & General Secretary - Mr. Ahmed ASSALHI : Director - Mr. Mohamed BOULGHMAIR : Director - Mr. Lbachir BENHMADE : Director General Secretary - Mr. Abdelatif ZAKHBAT : Director & General Secretary Identification & contact details Legal form Non-profit-making association recognised as being in the public interest Date of creation 1984 Address Espace Porte d'anfa 17 rue Bab Mansour porte -B- Casablanca Sector of activity Associative Support in the area of Culture, Social Projects, the Environment, and Heritage. Telephone /98 Fax Website Activity newsflash In 2012, the Fondation Banque Populaire FBP took part in most cultural events, thus showing its attachment to culture, to education, and to social actions, as well as its commitment to supporting the irreversible movement towards promoting, diffusing, and protecting the environment as well as the country s heritage. An essential partner at festivals and other cultural events. The FBP has accomplished its mission in relation to sociocultural development by renewing its participation in most festivals organised at national level, taking account of regional specificities and particularities. It has also been present in all the regions of Morocco, by supporting the Voix des Femmes festival in the north, and by supporting the Fes Festival of Sacred Music and a number of other festivals, such as the Marrakesh Festival of Popular Arts and the Oujda Raï. Equine activity also held our Foundation s interest: it was a major partner in the El Jadida Horse Show, a celebration of an animal of which the symbolism is rooted in Moroccan values and traditions. Aware of the importance of supporting film development in Morocco, the FBP sponsored the 12th edition of the Festival International du Film de Marrakech (FIFM - Marrakesh International Film Festival), the fame of which goes beyond borders thanks to screenings of high-quality films as well as the presence of personalities of international renown. As regards the Moroccan diaspora, the Fondation Banque Populaire sponsored a television programme called

95 DIASPORAMA, broadcast on channel 2M in 12 episodes and dedicated to famous Moroccans living abroad who belong to the world of art and culture. After its success in London, our Foundation organised two presentations of the play BNAT LALLA MENNANA by the Troupe Takoon, in Paris and Madrid, respectively. A Foundation at the service of the Environment. The 2012 Clean Beaches programme allowed a bringing together of actions by several intervenors from civil society as well as public and private bodies that contribute to showcasing and protecting the coasts of Morocco. Our Foundation rolled that programme out in the field in the form of a series of concrete and effectives actions for beaches that were clean, well-equipped, secure, and run for the welfare of the summer population. In that way, the Foundation worked to raise awareness of the fragility of the coastal environment and of the need to change behaviour patterns to preserve that environment, by producing a guide to good citizenship along the coastline. The Foundation implemented an action plan covering four beaches (Haouzia at El Jadida and Sidi Rahal at Settat, as well as Kariat Arekmane and Ras Lma at Nador). The beaches at Haouzia and Sidi Rahal had their Label Bleu (Blue Mark) status renewed. Schools in Agadir and Tangier have retained the label vert (green mark), and consolidate their commitment as part of the eco-schools project initiated by the Mohammed VI Foundation for the Protection of the Environment. They are moved by the desire to teach pupils the fundamental concepts that will enable them to place a leading role in that field. A pioneering operator in emancipating the national education system The FBP distinguished itself from other large businesses by setting up and administering two schools that confirmed once again, regardless of the domain being academic or extracurricular, their position as regional leaders amongst other schools.. That performance also extended to the extracurricular activity of the schools, which were able to carry off several prizes in 2012 (Mathematics Olympiads, 1st prize in the Plaisir de lire (Pleasure of reading) competition, theatre, tales, sport, etc.) In parallel, the Foundation carried out concrete actions in that field through its support to lycées that make provision for Classes Préparatoires aux Grandes Ecoles (CPGE Preparatory Classes for entrance to Grandes Écoles), and by launching a national project aimed at upgrading computer centres ahead of their connection to the internet. That wide-ranging action comes after the success of the operation on publishing the annals of preparatory classes. Furthermore, the Foundation continues to sponsor activities organised by Moroccan schools of engineering (INPT, ENIM, etc.), and to provide assistance to NGOs like the Fondation Academia and the Fondation Ténor for Culture, as part of a social-action project called Mazaya that is aimed at underprivileged and out-of-school children, with a view to helping them make music their profession. Strong commitment to publishing The FBP continues to support the world of books through its participation in two Book Fairs organised in Morocco: the one in Tangier, which brought together a wide range of national and international publishers, Spanish ones in particular, and the Salon du livre et de l édition (Siel Book and Publishing Fair) in Casablanca which as in previous years was a clear success. In the course of 2012, the Foundation took the initiative and published a luxury volume containing a selection of photographs from the Flandrin collection, with a view to unveiling certain aspects of the contemporary history of Morocco under the Protectorate, and thus contributing to the field of publishing beautiful books. Preserving heritage: every person s duty The Foundation continues to enrich its collection of works of art by purchasing paintings by great Moroccan artists, with the aim of promoting the plastic arts in Morocco. In that vein, a programme of itinerant regional exhibitions is being set up. A patron of choice in the social field Out of concern for its social environment, the FBP committed itself to concrete humanitarian actions, such as support for the Al Ihssane association, which takes responsibility for abandoned children under school-going age, the Dar Al Bir Li Talibat facility at Zayou In Nador province, help for the national observatory for children s rights, contributions to various projects set up by AMSAT (Association Marocaine de Soutien et d Aide aux Personnes Trisomiques - Moroccan Association for Support and Help for People with Trisomy), etc. As part of the DID programme (DID = Développement Intégré de Douars - Integrated Development of Habitations), carried out in partnership with the Fondation Zakoura, four douar houses have been built in the following regions: Doukkala, Souss Massa, Azilal, and Bouarfa. Building will soon begin on a fifth house. Those premises are fitted out and equipped to provide a range of services to the rural population: raising awareness of health amongst women, school support, literacy, etc. A strong and permanent link with NRMs Le site de la FBP a pour mission The FBP s web site at has the task of informing visitors about Moroccan socio-cultural reality on a daily basis, and, in parallel, to shine a spotlight on the life experiences of NRMs. The site is updated daily, and is very rich in information on the various subjects that it covers. It responds to the need to take account of the new reality of our diaspora, which is experiencing a changing of the generations and with whom we wish to maintain a strong and permanent link. Activity Report

96 GROUP ACTIVITY Fondation Création d Entreprises : A constant commitment to entrepreneurship Synopsis Purpose and mission The Fondation Création d Entreprises (FCE) is a not-profit-making association recognised as being in the public interest on 27 June Its mission consists of : - working to spread a modern, public-based entrepreneurial culture amongst project bearers - promoting and facilitating investment at regional and national level - facilitating access to finance for bearers of supported projects - encouraging the sustainability of businesses that benefit from its services - ensuring local proximity, thanks to its network of Regional Offices - contributing to a watch on setting up businesses at regional and national level. Main products Local clientele - assistance for bearers of business ideas - pre-set-up support for bearers of business plans - post-set-up monitoring of businesses recently set up. Non-Resident Moroccans Clientele - Pack Assist / Invest / services dedicated to NRMs in host countries - Pack Dalil / Invest / services dedicated to NRMs in Morocco Governance : Board of Directors - Mr. Mohamed Karim MOUNIR : Chairman of the Board of Directors - Mr. Laïdi EL WARDI : Director - Mr. Rachid AGOUMI : Director - Mr. Mohamed MESKINE : Director - Mr. Mohamed BOULGHMAIR : Director - Mr. Abdelkhalek BENDRISS : Director - Mr.Ahmed ESSALHI : Director General Secretary - Mr. Abdelhak MARSLI : General Secretary Status & contact details Legal form Non-profit-making association regulated by the Dahir of 15 November 1958, recognised as being in the public interest. Date of creation 1993 Address 7, Bd Moulay Youssef-1 er étage Casablanca Telephone / / Fax / Website

97 Activity newsflash As part of its activity to raise awareness and to support young Resident Moroccans and NRMs to turn their plans into reality, The Fondation Création d Entreprises has initiated several actions. For the local market: launching the call for Innovative projects agreement signed with the Ministry for Industry, Trade, and New Technologies training ISCAE scholarship holders. For the NRM market : launching the ACEDIM Programme (ACEDIM = Accompagnement à la Création d Entreprises de la Diaspora avec le Partenaire ACIM Support for Setting up Businesses in the Diaspora with partner ACIM) with the FCE, taking part in the 8th GBP Congress and signing the agreement with the Ministry for NRMs launching the PACEIM Programme (PACEIM = Programme d Accompagnement à la Création d Entreprises Innovantes au Maghreb avec l IRD France Programme to Support the Setting up of Innovative Businesses in North Africa with IRD France). Activity The FCE s activity for 2012 covered support actions benefiting project bearers or bearers of business ideas, as against and 2 951, respectively, over the same period in 2011, an increase of 16% and 1%, respectively. The FCE s client portfolio reached project bearers, including 648 drained off thanks to the call for projects. Of that total, there are 500 clients from the NRM population; representing a little less than 17% of the whole portfolio. Performance indicators Financial year 2012 experienced a clear improvement of 8% in the number of start-ups, i.e. 221, as against 205 in Of the 221 entities created, 50 are due to investors from the NRM population. It should be noted that since 2005, the FCE has support businesses set up financially, with an overall investment envelope of about 1 billion dirhams. The average investment is MAD per business, the average number of jobs created is almost 5 posts per business, i.e. a total of direct jobs created and a credit envelope representing 45% of total investments. It should be noted that the FCE carried out a study that covered businesses that it supported, with a view to drawing conclusions that are relevant as regards their sustainability. The study shows : 514 businesses financed by BPRs - 84% are active and maintain good relations with BPRs - 16% have repayment problems. 572 businesses set up with self-financing: 437 were contacted, of which 64% continue to carry out their activities (312 maintain business relations with the BP) 182 businesses financed by other banks: 103 were approached, of which 95% are still active. In sum, for over 5 years now, 77% of the businesses covered by the study have been active, which constitutes an exploit with regard to experience. Activity Report

98 GROUP ACTIVITY Maroc Assistance Internationale: A leader in providing assistance to residents and NRMs Synopsis Purpose and mission MAI is an assistance pioneer in Morocco. Its aim is to support its policyholders in the following areas : - medical assistance for persons who are sick or injured - technical assistance for vehicles - assistance in case of death - legal assistance abroad. Shareholding Capital : MAD BCP :77,43% - Private : 22,57% Total : 100,00% Governance : Board of Directors - Mr. Mohamed BENCHAABOUN : Chairman - Mr. Mohamed Karim MOUNIR : Director - Mr. Laïdi EL WARDI : Director - Mr. Hassan EL BASRI : Director - Mr. Khalid YACINE : Director - Mr. Hassan EL ATTAR Sofi : Director - Mr. Mohamed MESKINE : Director General Management - Mr. Abdellah HAMZA : General Manager Status & contact details Legal form Limited-liability company with a board of directors Date of creation 1976 Address 25, Bd Rachidi - Casablanca Telephone Fax Website

99 Activity newsflash During financial year 2012, Maroc Assistance Internationale maintained its dominant position in the Assistance market in Morocco. Its market share was 47%, due in particular to an improvement in premiums in the local and NRM markets alike. The main activity indicators for Maroc Assistance Internationale at the end of 2012 are: Premiums issued MAD 357 million ä % Technical profit MAD 58 million ä % Net profit MAD 36 million ä % Own funds MAD 186 million ä % Sustained growth in the local market MAI s overall turnover increased from MAD 326 million to MAD 357 million, up by 9.5% with respect to That change comes essentially from sales in the local market, which rose by 17.1% to MAD 118 million, thanks to strong growth recorded over two segments : the insurance-companies segment, of which sales have increased significantly: MAD 19 million in 2012, as against MAD 10 million in That allowed for a contribution of over 5% to turnover, as against 3% in 2011, a rise of 2 points ; the banking-clientele segment, of which premiums increased by 11.4%, i.e. MAD 48 million in 2012 as against MAD 43 million in That increase is due to growth in sales of GBP contracts. That performance took place in the local market, and saw its contribution to MAI s overall turnover rise from 31% in 2011 to 33% in 2012, an improvement of 2 points in the sales structure. Organisational performance improving Permanent cost optimisation and rigorous risk management also contributed to the increase in MAI s technical profit by 15.8% to MAD 58 million. After accounting for corporation tax (MAD 23 million), the company s net profit at the end of 2012 stood at MAD 36 million, a net increase of 10%. Solid financial structure The company s own funds stand at MAD 186 million, i.e. 40% of the balance-sheet total. That level enables MAI to post prudential ratios that are higher than the minimum required, in particular with a solvency-margin rate of 237%. The financial profitability of own funds was maintained at over 24%. Activity Report

100 GROUP ACTIVITY Vivalis Salaf : Sustained progress Synopsis Purpose and mission Presenting clients with a wide range of credit offers and responding to the immediate expectations of beneficiaries Main products - Personal loan - Car Loan - Rent with Option to Buy Shareholding Capital : MAD 177 M - GBP : 87,22% - RMA-AL WATANYA : 3,40% - MAGHREBAIL : 2,57% - Others : 6,81% Total : 100,00% Governance : Board of Directors - Mr. Mohamed BENCHAABOUN : Chairman - Mr. Mohamed Karim MOUNIR : Director - Mr. Hassan EL BASRI : Director - Mr. Mohamed MESKINE : Director - Mr. Laïdi EL WARDI : Director - Mr. Nourreddine BELMAHJOUBI : Director - BP Tanger-Tetouan : Director - BP Rabat-Kenitra : Director - BP Centre Sud : Director - BP Marrakech-Beni Mellal : Director - BP Fes-Taza : Director Status & contact details Legal form Limited-Liability Company with a Board of Directors Date of creation 1992 Address Angle boulevard Zerktouni, Bd de Bourgogne et rue de Dijon - Casablanca Telephone (+212) Fax (+212) Website

101 Activity newsflash In a competitive environment where the consumercredit sector is experiencing strong competition as well as deep, rapid changes, VIVALIS SALAF has registered remarkable achievements, with an appreciable increase in its activity indicators. Thus, and in spite of a tightening of qualifying conditions, gross production recorded growth of 13% to billion dirhams, and outstanding credits rose by 2.5% to billion dirhams. Net Banking Income stood at 276 million dirhams, and the operating co-efficient reached 34.9%. The risk load reduced to average outstanding loans stood at 1.91%, as against 3.3% one year previously, a significant fall of 1.39 points which is an indication of notable improvement in risk management. VIVALIS Salaf has sought to improve its Net Profit, which stood at 63 million dirhams a strong rise of 57%, and an ROE of 13.8%. Own funds stood at 455 million dirhams, posting a significant rise of 11% and strengthening the solvency ratio, which stood at 11%. VIVALIS SALAF has not taken on a new dimension, and is making its presence felt as a reference actor in the field of consumer credit. VIVALIS SALAF is moved by a desire for sustainable development and a concern for consolidating the basis for growth that is healthy, profitable, and sustainable. It is working to set up a centre of excellence, the aim of which is to create value and to make a significant contribution to the group s results. In 2012, VIVALIS SALAF continued with its development plan, guiding important projects that aim at revenue growth, industrialising value chains, optimising risk management, and attaining the level of advanced practices. In particular, that involves: increasing commercial effectiveness and improving the quality of services to clients setting up an industrial platform for recovery improving the grant chain as well as controlling credit and operational risks setting up an individual Client Services platform improving the system of internal control in line with professional benchmarks and regulatory requirements. Activity Report

102 GROUP ACTIVITY Mediafinance: Results going green Synopsis Purpose and mission -Intermediation in Treasury Securities, Market Bank. Shareholding Capital : MAD BCP : 60% - Upline groupe : 40% Total : 100,00% Governance : Board of Directors - Mr. Rachid AGOUMI : Chairman - Mr. Mohamed Karim MOUNIR : Director - Mr. Laïdi EL WARDI : Director - Mr. Othmane TAJEDDINE : Director - Mr. Mohamed MESKINE : Director - Ms Soumia ALAMI OUALI : Director General Management - Mr. Mohammed EL AZAAR : Chairman of the Management Board - Mr. Driss EL IDRISSI MOUMEN : Member of the Management Board Status & contact details Legal form Limited-Liability Company with Management Board and Supervisory Council Date of creation 1994 Address 27, Boulevard Moulay Youssef - Casablanca Telephone Fax Website

103 Activity newsflash The interest-rate market situation was unfavourable in The money market was characterised by the search for subliquidity in the banking system. The bond market was market by a general upward trend in rates that began in In that context, Mediafinance, a specialist in intermediation of Treasury securities, dealt in the primary market with a subscription volume of 1.02 billion dirhams, for a total in raised funds of MAD billion. On the secondary market, the bank dealt with a transaction volume of 10.3 billion dirhams. Net banking income rose to MAD 12.1 million, as against MAD 4.3 million at the end of the previous year. Net profit stood at MAD 1.2 million. At the end of 2012, MEDIFINANCE s main indicators were trending as follows : Net Banking Income MAD 4.3 million MAD 12 million ä % Net Profit MAD million MAD 1.2 million ä - Own funds MAD million MAD million ä + 0,6 % The transaction volume in the secondary market stood at MAD 10.3 billion, as against MAD 18.1 billion at the end of 2011, i.e. a fall of 43% Net Banking Income at the end of 2012 was MAD 12.1 million, as against MAD 4.3 million in 2011, a rise of 180%. That increase is due mainly to income from interest The operating co-efficient stood at 83%, a clear improvement over 2011, thanks to good performance from Net Banking Income (up by 180%) Net profit came to MAD , as against a loss of MAD in Activity Report

104 GROUP ACTIVITY Fondation Attawfiq Micro Finance: From microcredit to microfinance Synopsis Purpose and mission The business purpose mainly covers the following points : - distribute microcredit in order to enable people of modest means to set up or develop their own production or service activity, and to ensure their insertion into the economy; - for the benefit of its clients, carry out all transactions linked to grants of microcredit, in particular: training, consultancy, and technical assistance. The Attawfiq Micro-Finance programme has three main aims : - modernising microbusinesses production tools - facilitating their gradual transition from the informal sector to the organised sector of the economy - placing their financial transactions in a banking context. Main products - Professional loans : AL INTILAKA, AL MOUAKABA, ATTAEHIL, AL FARDI, ATTAKADOUM, ATTAJHIZ, al hirafi, Salaf attaaounia. - Rural loans : AL KARAOUI, AL KARAOUI IKHLASS - Housing loans : ISLAH ASSAKAN, ALMILKIA. Governance : Board of Directors Mr. Mohamed BENCHAABOUN Mr. Mohamed Karim MOUNIR Mr. Hassan EL BASRI Mr. Laïdi EL WARDI Mr. Mohamed BOULGHMAIR Mr. Abdelkhalek BENDRISS Mr. Ahmed ESSALHI General Management Mr. Mustapha BIDOUJ Mr. Mohamed ALLOUCH : Chairman : Director : Director : Director : Director : Director : Director : General Manager : Deputy General Manager Status & contact details Legal form Non-profit-making association governed by the Dahir of 15 November 1958 and Law 18 / 97 on microcredit. Date of creation 2000 Address 3, Rue Docteur Veyre Casablanca Telephone Fax Website

105 Activity newsflash During financial year 2012 and as part of strengthening its position at the level of the national market in microfinance and in preparation for institutionalisation, the foundation worked on a number of structuring projects in order to meet the specific demands and needs of its clients on the one hand, and to improve its governance on the other hand. Amongst projects that are aimed directly at beneficiaries are : LIB (Low-Income Banking) and Low Cost ATMs for providing banking services to clients microsavings and microinsurance, which contribute to beneficiaries social performance whilst making the risk safe for the Foundation transferring money from abroad to Morocco mobile banking, which allows clients to have access to financial services at low cost and in complete safety Showcasing individual loans (Silatech project) and non-financial services (training, help with marketing, etc.) Projects that are directly linked to improving the Foundation s organisation and management include : credit scoring classifying points of sale risk cartography provision for combating money-laundering and financing terrorism, in accordance with the requirements of Bank Al Maghrib. Moreover, as regards financial year 2012, the Foundation s activity showed patent signs of improvement with respect to the two previous years. The Foundation s main activity indicators at the end of 2012 were : Amount released MAD 1.9 billion ä + 5 % Number of dossiers released æ - 3 % Loans outstanding MAD 1.59 billion ä +8 % Active Clients ä + 3 % Surplus from the financial year MAD 71.5 million ä + 76 % Activity indicators At the end of 2012 and in spite of a 3% fall in the number of dossiers released, the amount served rose by 5% to stand at MAD 1.90 billion, as against MAD 1.82 billion during the previous financial year. Loans outstanding stands at MAD 1.59 billion, as against MAD 1.47 billion one year previously, an additional figure of MAD 114 million (up by 8%). At the end of 2012, the number of active clients stood at , an increase of clients (up by 3%) Surplus for the financial year The Foundation s surplus for the financial year shows an increase of 76% over the end of That improvement is essentially attributable to an increase in activity and to a fall in provision for depreciation due to loans outstanding. Th e Foundation maintained its Risk Portfolio at the lowest level in the market: 2.08% at the end of December Activity Report

106 GROUP ACTIVITY Chaabi Doc net: Optimised management of the Group s archives Synopsis Purpose and mission The aim of the company is : - to take on the archiving and conservation of all types of documents, computer supports, and others - digitising, indexing, and physical, analogue, or digital transfer of all documents or archive supports - consultancy in organising, studying, and managing documents and archiving areas - operating all computer systems that optimise the management of remote dossier searches by clients. Shareholding Capital : MAD BCP : 31,84% - BPR : 68,13% - Others : 0,03% Total : 100,00% Governance : Board of Directors - Mr. Mohamed Karim MOUNIR : Chairman - Mr. Mohamed MESKINE : Director - Mr. Mohamed BOULGHMAIR : Director - Mr. Lbachir BENHMADE : Director - Mr. Abdelkhalek BENDRISS : Director - Mr. Ahmed Rida TADILI : Director - Mr. Abdelaziz TRACHEN : Director - Mr. Ahmed ESSALHI : Director - Mr. Redouane ZAKAT : Director General Management - Mr. Chihab EL ADLOUNI : General Manager Status & contact details Legal form Limited-Liability Company with a Board of Directors Date of creation 1996 Address Route Ouled Abbou/ Route d'el Jadida-Zone industrielle, Commune Sidi El Mekki- Berrechid BP: 282 Berrechid. Telephone (+212) / (+212) Fax (+212) / (+212)

107 Activity newsflash For financial year 2012, the company s activity was marked by: stock retention, which stood at containers, i.e. up by 6.23% with respect to 2011 ( units). The net flow represented containers received in 2012, as against in 2011, i.e. up by 4.41% the occupancy rate fell from 71.6% in 2011 to 55.8% in 2012, a fall of 22 points. That fall is explained by the entry into operation of the new warehouse, with an overall capacity of containers research fell by 7.6% ( operations handled in 2012, as against in 2011). The change in that provision of service remains dependent on network demand Consolidation allowed containers to be destroyed out of a forecast total of That gap is explained by the extension requested by the owners of containers destroyed. Main indicators changed as follows : Variation Turnover MAD MAD ä + 1,97% Net Profit MAD MAD æ - 33,76% Balance-Sheet Total MAD MAD æ - 12,4% Own Funds MAD MAD ä + 2,46% Activity Report

108 GROUP ACTIVITY Atlantic Business international: A growth engine in Africa Synopsis Purpose and mission A Financial Holding company for control and development, with holdings in: - Banque Atlantique de Côte d Ivoire - BACI - Banque Atlantique du Sénégal - BASN - Banque Atlantique du Bénin -BABN - Banque Atlantique du Togo - BATG - Banque Atlantique du Burkina Faso -BABF - Banque Atlantique du Mali - BAML - Banque Atlantique du Niger -BANE - Atlantique Finance - AtlantiqueTechnologies Business - Defining and rolling out high-value strategic priorities - Validating the broad outlines of country-bank strategies - Optimising the allocation of own funds - Proximity steering of performance and risks - Facilitating commercial and regional development - Co-ordinating interfaces and synergies between country banks Shareholding Capital : XOF - BCP : 50,00% - Atlantic Financial Group (AFG) : 50,00% Total : 100% Governance : Board of Directors - Mr. Koné DOSSONGUI : Chairman - Mr. Mohamed BENCHAABOUN : Director - Mr. Mohamed Karim MOUNIR : Director - Mr. Rachid AGOUMI : Director - Mr. Laïdi El WARDI : Director - Mr. Hassan El BASRI : Director - Mr. Ahmed Mamadou CISSE : Director - Mr. Georges WILSON (CFI Financial) : Director - Mr. Soungala TRAORE (AFG) : Director - Mr. Oumar DIARRA (BOAD) : Director

109 General Management Mr. Souleymane DIARRASSOUBA Mr. Sotiguy COULIBALY Mr. Essaid ZIRARI : General Manager : Finance Director : Audit Director Status & contact details Legal form Limited-liability company with a board of directors Date of creation 2012 Address Avenue Nogues - Immeuble Atlantique, 8éme étage, Plateau, 01 BP Abidjan 01 Telephone Fax Website On Thursday 7 June 2012, the Banque Centrale Populaire (BCP) and the Atlantic Financial Group (AFG), a company incorporated under Ivorian law, signed a strategic-partnership agreement for developing banking activities in seven countries of the Union Économique et Monétaire Ouest-Africaine (UEMOA - West African Economic and Monetary Union). It enables BCP to strengthen its strategic development choices at international level: the partnership enables it to have a simultaneous presence in the seven countries of the UEMOA area, i.e. a target market of over 80 million. In that way, BCP accelerates its presence on the international scene, and now has banking subsidiaries in 10 African and 7 European countries. Strategic orientations & objectives The structure chosen for the partnership consists of setting up a common holding company called Atlantic Bank International, become Atlantic Business International (ABI), to which AFG contributes its holding in the following seven banks : Banque Atlantique de Côte d Ivoire - BACI-; Banque Atlantique du Sénégal - BASN -; Banque Atlantique du Bénin -BABN-; Banque Atlantique du Togo BATG-; Banque Atlantique du Burkina Faso BABF -; Banque Atlantique du Mali - BAML ; Banque Atlantique du Niger BANE as well as its holdings in the firms Atlantique Finance andatlantique Technologies. For its part, BCP brings ABI the cash equivalent of the value of those holdings, which enables it to hold, at par with AFG, control of the seven aforementioned banks, as well as of the business bank Atlantique Finance, and the IT engineering firm Atlantique Technologies. It should be noted that BCP provides day-to-day management of all those subsidiaries under the Banque Atlantique brand, as well as their strategic, operational, and financial management. The partnership thus established allows AFG to join forces with a partner of the first rank that is able to ensure the development of its subsidiaries' banking activities, as part of a vision and of objectives that are shared with Groupe Atlantique. It should be noted that the Banque Atlantique network was built up gradually from the end of the 1980s onwards. That growth accelerated in the mid-2000s with the setting up, in 2005, of the Atlantic Financial Group (AFG), a control holding company of the Banque Atlantique group, with a significant geographical presence across West Africa. Activity newsflash The final half year for financial year 2012 was marked by the effective entry of Groupe Atlantique into BCP s consolidation perimeter. ABI s activity led to Net Banking Income of MAD 322 million and net profit of MAD 72.9 million, respectively. The Groupe ABI thus begins financial year 2013 with a healthy balance sheet, a strengthened system of governance, and ambitious projects for transformation that are in the course of implementation, with support from BCP. Budgets for financial year 2013 approved at the latest meetings of the group entities Boards of Directors give a glimpse of a financial year 2013 that is promising, with a rise of almost 3-0% in Net Banking Income and good control of operating costs, which should be contained at slightly above 10%. In that regard, the performance for January 2013 in line with the budget in almost all the group s subsidiaries give a clear indication of that trend. Activity Report

110 Activité du Groupe

111 Financial Statements Activity Report 2012

112 Financial Statements GROUPE BANQUE centrale POPULAIRE CONSOLIDATED ACCOUNTS TO IFRS STANDARDS of 31 December GENERAL FRAMEWORK 1.1. BANQUE CENTRALE POPULAIRE Banque Centrale Populaire (BCP) is a credit institution established as a business corporation with Board of Directors. It has been listed on the Stock Exchange since 8 July BCP plays a central role within the Group. Its mission is twofold: Credit institutions empowered to perform all banking operations; Central banking entity of Banques Populaires Régionales (Regional Banks). BCP coordinates the Group s financial policy, provides refinancing of the Banques Populaires Régionales and management of their cash surpluses, as well as joint interest service on behalf of its entities BANQUES POPULAIRES REGIONALES The 10 Banques Populaires Régionales (BPR), are credit institutions empowered to perform all banking transactions in their respective territorial constituencies. They are organized as variable capital cooperative entities with Board of Directors and Supervisory Board CREDIT POPULAIRE DU MAROC Crédit Populaire du Maroc (CPM) is a banking group consisting of Banque Centrale Populaire and the Banques Populaires Régionales. It is placed under the tutelage of the Board of Directors of Crédit Populaire du Maroc 1.4. BOARD OF DIRECTORS Board of Directors is the supreme body exercising exclusive tutelage over various entities of CPM. Its principal assignments are as follows: Define the Group s strategic orientations Provide administrative, technical and financial management over the organization as well as management of CPM entities; Define and control the operating rules jointly applicable to the Group; Take all the measures required for proper operating of the CPM entities and maintaining of the financial equilibrium thereof GUARANTEE MECHANISM Crédit Populaire du Maroc disposes of a support fund for preserving the solvency of its different entities. The support fund is funded by BCP and BPRs via payment of a contribution determined by the Board of Directors HIGHLIGHTS OF FISCAL YEAR In compliance with its strategic plan, Banque Centrale Populaire proceeded to two capital increases in FY 2012: Capital increase amounting to MAD 1.65 billion on behalf of Groupe Banque Populaire Caisse d Epargne (BPCE); Capital increase amounting to MAD 1.74 billion for International Finance Company (IFC). Parallelly to these operations, the Moroccan State transferred to the Banques Populaires Régionales 10% of BCPs equity bringing its stake to 6%. Groupe Banque Centrale Populaire also strengthened its sphere abroad and implantation on the African continent via the external growth operation carried out in several countries of the WAEMU. This operation was performed via a subscription to the capital increase of the holding company of Ivoirian Group Atlantic Bank International (ABI) and its subsidiary Banque Atlantique de Côte d Ivoire (BACI). In the framework of the partnership set up with AFG, BCP plays a dominant role in dayto-day management and supervision of the operational and financial policies of the ABI holding and its subsidiaries. Global integration of ABI in the consolidated accounts of BCP Group led to placement on 31 December 2012 of provisional goodwill into the balance sheet assets of some MAD 616 million. Elsewhere, Groupe Banque Centrale Populaire significantly strengthened its global provisioning level so as to integrate the effects of the prevailing economic situation. This measure led to the increase in the rate of outstanding debt coverage at the Group level of 77% and by the setting aside of an additional general provision in the corporate accounts of MAD 300 million. 2. SUMMARY OF ACCOUNTING PRINCIPLES APPLIED BY GROUPE BANQUE CENTRALE POPULAIRE 2.1 CONTEXT The International Financial Reporting Standards IFRS) were applied to the consolidated accounts of Groupe Banque Centrale Populaire as of 1 January 2008 with the initial balance sheet on 1 January 2007 in compliance with the regulations stipulated by IFRS 1 First Application of International Reporting Standards and by the other IFRS standards taking account of the version and interpretations of the standards as adopted by the International Accounting Standards Board (IASB). The prime objective of the regulatory authorities is to provide credit institutions an accounting and financial information framework in compliance with the international standards in terms of financial transparency and quality of information. 2.2 ACCOUNTING STANDARDS APPLIED SCOPE OF CONSOLIDATION The consolidated accounts of Banque Centrale Populaire join together all the corporate entities under exclusive or joint control or under appreciable influence apart from those the consolidation of which are employed for the establishment of BCP consolidated statements. A subsidiary is consolidated as of the date at which CPM effectively procures control. The entities provisionally controlled are also integrated into the consolidated statements to the date of transfer. It is worth noting that the BPRs have been integrated since 2010 in BCP scope of consolidation. GROUPE BANQUE POPULAIRE SCOPE OF CONSOLIDATION STAKE % BCP INTEREST % CONTROLLED CORPORATE CAPITAL IN THOUSANDS CONSOLIDATION METHOD CPM (BCP + BPR) 100,00% GI* CHAABI BANK (IN KEURO) 100,00% 100,00% GI BPMC (IN KCFA) 62,50% 62,50% GI DAR ADDaMANE 5.17% 52,63% GI MAI 77,43% 77,43% GI MOUSSAHAMA FUND 99,86% 99,86% GI VIVALIS 64,01% 87,17% GI MEDIA FINANCE 89,95% 100,00% GI CHAABI LLD 98,85% 98,85% GI CIB (IN KUSD) 70,00% 100,00% GI BPMG (IN KGNF) 55,53% 55,53% GI BANK AL AMAL 24,01% 35,86% GI ATTAWFIQ MICRO- FINANCE 100,00% 100,00% GI UPLINE GROUP 74,87% 100,00% GI MAROC LEASING 53,11% 53,11% GI BP SHORE 51,00% 100,00% GI FPCT SAKANE 49,00% 100,00% GI ATLANTIC BANK INTERNATIONAL (IN KCFA) GI* GLOBAL INTEGRATION 50,00% 100,00% GI Enterprises controlled: Subsidiaries The enterprises controlled by CPM are consolidated via global integration. CPM controls a subsidiary when it is in a position to manage the financial and operational policies of an entity so as to benefit from its activities. Control is assumed to exist when CPM directly or indirectly holds more than one half of the voting rights therein. It exists when CPM has the power to manage the financial and operational policies of the entity in question by way of an agreement or to appoint, reject or gather together the majority of the members of the Board of Directors or equivalent management body. Determination of the percentage of control takes into account the potential

113 voting rights giving access to complementary voting rights as they are immediately exercisable or convertible Enterprises under joint control: Joint ventures Joint ventures are consolidated by proportional integration or on an equity basis. CPM enjoys joint control when, by way of a contractual agreement, the financial and operational decisions require unanimous agreement among the parties sharing control Enterprises under appreciable influence: Associates The enterprises under appreciable influence are controlled by the equity method. Appreciable control exists in conjunction with the ability to partake in the financial and operational policies of an entity but without exercising control. This is assumed if CPM directly or indirectly holds 20% or more of voting rights in a given entity. Stakes below this threshold are excluded from the scope of consolidation unless they represent a strategic investment and if CPM exercises effective appreciable influence. Variations in shareholders equity in enterprises by the equity method are included in the balance sheet assets under stakes held on the basis of the equity method and under balance sheet liabilities under the appropriate shareholders equity. The goodwill of a consolidated enterprise based on the equity method is listed under the balance sheet as Stakes in enterprises based on the equity method. If the quota of CPM in the losses of an enterprise based on the equity method is equal or greater than its interests in the said enterprise, CPM no longer takes into account its quota in future losses. The stakes are then presented at nil value. Any additional losses of the associate enterprise are provisioned only when CPM is legally or implicitly obliged to do so or when it has made payments on behalf of the enterprise Minority interests Minority interests are listed separately in the consolidated income, as well as in the consolidated balance sheet under shareholders equity OPTIONS RETAINED BY GROUPE BANQUE CENTRALE POPULAIRE Definition of scope To define the companies to be integrated into the scope of consolidation, the following criteria must be respected : CPM must directly or indirectly hold at least 20% of existing or potential voting rights. One of the below limits is reached: - The total assets of the subsidiary are over 0.5% of total consolidated assets. - The net situation of the subsidiary is greater than 0.5% of the net consolidated situation. - The turnover or banking income of the subsidiary is greater than 0.5% of the consolidated banking income. Ownership interest over which BCP has no control is not integrated in the scope even if the contribution thereof fulfills the aforementioned criteria. It is worth nothing that CPM has chosen consolidation according to the vision of the parent company Exception An entity with a non significant contribution must integrate the scope of consolidation if it holds shares in the subsidiaries answering to the aforementioned criteria Consolidation of ad hoc entities Consolidation of ad hoc entities and in particular funds under the exclusive control was described by SIC 12. By way of application of this text Banque Populaire Foundation for Microcredit has been integrated into the scope of consolidation. The chairmanship of the Foundation Board of Directors is provided by the Managing Director of Banque Centrale Populaire further to modification of its by-laws. Exclusions from the scope of consolidation : An entity under control or appreciable influence is excluded from the scope of consolidation when at acquisition the shares of the said entity are exclusively held in view of an eventual transfer in the near future. These shares are listed under the category of assets to be transferred and evaluated at fair value per statement. The stakes (apart from majority holdings) held by risk capital entities are also excluded from the scope of consolidation to the extent in which they are recorded as financial assets at fair value per statement upon options Consolidation methods The consolidation methods are established respectively by standards IAS 27, 28 and 31. They result from the type of control exercised by Groupe Banque Populaire over the entities to be consolidated regardless of their activity or whether they are corporate persons. Acquisition of minority interests are entered under parent equity extension method through which the difference between the price paid and the book value of the quota of the net shares acquired is entered under goodwill FIXED ASSETS The fixed assets entered in the Group balance sheet include the tangible and intangible fixed assets in or out of operation, as well as investment property. Operating fixed assets are used for production or administrative purposes. They include property other than real estate and leasing contracts. Investment property is real estate held for purposes of rental and appreciation of the capital invested INITIAL RECORDING Fixed assets are recorded at the acquisition price with addition of the expenses directly related thereto and the cost of borrowing when the commissioning is preceded by a long period for construction or adaptation. The software developed internally, when fulfilling fixed asset criteria, are listed at the direct cost of development including external expenditures and payroll expenses directly assigned to the project FUTURE ASSESSMENT AND RECORDING After initial entry the fixed assets are assessed at cost with deduction of depreciation and eventual losses in value. It is also possible to opt for reevaluation after the initial recording AMORTIZATION The depreciable amount of a fixed asset is determined after deduction of the residual value. Only property under lease is assumed to have a residual value as the duration of use of operating fixed assets is generally equal to the expected life span of the property. Fixed assets are amortized according to the linear method over the expected economic life useful to the enterprise. Allocations to amortization are entered under Allocation to amortization and provisions for depreciation of tangible and intangible fixed assets in the profits and losses account. When amortization consists of several items replaceable at regular intervals but having different uses or that enable economic advantages according to a different pace, each item is entered separately and each of the components is amortized according to a specific plan DEPRECIATION Depreciable fixed assets are subjected to a depreciation test when the closing date of any loss indices is identified. The non depreciable fixed assets as well and the goodwill are subjected to a depreciation at least once per year. If such a depreciation index exists the recoverable value of the asset is compared to the net book value of the fixed asset. In the event of loss of value, depreciation is recorded in the profits and losses account. The depreciation is resumed in the event of improvement of the recoverable value or disappearance of the depreciation indices. Depreciation is recorded under Allocations to depreciation and provisions for depreciation of tangible and intangible assets in the profits and losses account DISPOSAL GAINS OR LOSSES The disposal gains or losses of operating fixed assets are recorded in the profits and losses account under Net gains on other assets. The disposal gains or losses on investment property are recorded in the profits and losses account under revenues or expenses for other activities OPTIONS RETAINED BY THE GROUPE BANQUE CENTRALE POPULAIRE Approach per component In the corporate accounts buildings are linearly depreciated over 25 years even though they consist of several components that, in principle, have the same durations of utility. The definition of standard components of the different categories of building has been done further to a professional expertise and study conducted among certain BPRs. Distribution of the components is applicable in different ways depending of the type building. Four families of building have been defined. For each one an average distribution per component has been established. Each component has been amortized over duration of utility internally documented. Evaluation The Group has opted for the cost model. The reevaluation option set by IAS 16 has not been retained. After its entry as an asset, a tangible fixed asset must be recorded at its cost less the depreciation and total losses in value. However, according to IFRS 1 an entity can decide to assess a tangible fixed asset at the date of transition to IFRS at the fair value and used that Activity Report

114 Financial Statements value as an assumed cost at that date. This option has been retained for land reassessed by external experts LEASE CONTRACTS The companies in the Group can be the lessee or the lessor of rental contracts THE GROUP IS LESSOR Rentals granted by a company of the Group are analyzed as financial lease contracts (financial leases with purchase option and other form) or leasing contracts Financial lease contracts In a financial lease contract, the lessor transfers to the lessee almost all of the risks and benefits attached to the asset. It is analyzed as financing granted to the lessee for the purchase of property. The current value of payments owed according to contract, if necessary increased by the residual value, is recorded as a debt. The net income from the operation and for the lessor or lessee corresponds to the amount of interest on the loan and is recorded in the profits and losses account under Interest and similar products. The rents cashed in are spread out over the duration of the financing lease contract by attributing them to depreciation of capital and interest so that the net income is the implicit interest rate of the contract. The depreciation on the said loans and debts, whether individual or collective, adhere to the same rules as those described for loans and debts Lease contracts A lease contract is a contract through which almost all the risks and benefits of the asset leased are not transferred to the lessee. The property is entered into the assets of the lessor as fixed asset and linearly depreciated over the period of rental after deduction, if applicable, from the price of acquisition the estimate of the residual value. The rents are totally entered into the income in linear fashion over the period of the rental contract. The said rents and allocations to depreciation are entered in the profits and losses account at the income from other activities and expenses of other activities lines The Group is the lessee Lease contracts signed by a Group company are analyzed as financial leases (and other) or lease contracts Financial lease contracts A financial lease contract is considered to be property acquired by the lessee and financed by a loan. The rented asset is entered at its market value under the assets of the lessee balance sheet or it is lower, at the updated value at the implicit interest rate of the contract. As counterparty, the financial debt of an amount equal to the market value of the fixed asset or the updated value of the minimal payments is recorded in the lessee liabilities. Property is depreciated according to the same method as that applicable to fixed assets held in the own account after deduction, if applicable, from the acquisition price, of the residual value estimate. The duration of use retained is the duration of useful like of the asset. The financial debt is entered into the amortized cost Lease contracts The property is not entered into the assets of the lessee. The payments made for lease contracts are linearly recorded in the profits and losses accounts over the period of rental LOANS AND DEBTS, FINANCING AND GUARANTEE COMMITMENTS LOANS AND DEBTS The loans and debts category includes customer loans and interbank transactions by the Group, and Group stakes taken out in syndicated loans. The loans and debts are initially assessed at their fair value that generally is the net amount originally disbursed and include the origination costs directly chargeable to the operation, as well as certain commission paid (administrative charge, participation and commitment commissions) considered as an adjustment of the actual yield on the loan. The loans and debts are assessed at a later date at the depreciated cost and the interests and cost of transactions and commission are included in the initial value of the loans participate in the formation of the outcomes of these operation throughout the duration of the loan, calculated according to the effective interest rate method. The commissions paid on financing commitments prior to the granting of a loan are differed and then integrated at the value of the loan at the time of assignment. The commission paid on the financing commitments or whose uses are indefinite over time and in their amount, are linearly spread out over the duration of the commitment FINANCING COMMITMENTS Financing commitments are entered at fair value which is generally the amount of the commitment commission paid. They are recorded in compliance with aforementioned rules. If required a risk provision is entered if it is found that the said commitment will lead to a probable loss due to failure to pay by the debtor COMMITMENTS ON GUARANTEES ACCORDED The guarantee commitments are entered at their fair value which is generally the amount of the guarantee commission paid. The said commissions are then entered at the prorata temporis over the period of guarantee. A provision for risks is entered, if necessary, if it occurs that the said commitment will lead to a probable loss, in particular owing to failure to pay by the debtor DETERMINATION OF FAIR VALUE GENERAL PRINCIPLES All the financial instruments are assessed at their fair value either in the balance sheet (assets and liabilities at fair value per statement including derivatives and financial assets up for sale) or in the annotations to the financial statement for other financial assets and liabilities. Fair value is amount at which an asset can be exchanged, or a liability extinguished between two consenting parties well informed and acting in the framework of a competitive market. The fair price is the price quoted on the active market when it exists or otherwise the price determined internally via use of a valuation method incorporating the maximum amount of market information observable in coherence with the methods used by other players on the market PRICES QUOTED ON ACTIVE MARKET When the prices quoted on an active market are available they are retained for determining the fair market price. Also valuated are the securities listed and derivatives on organized markets such as futures and options PRICES NOT QUOTED ON ACTIVE MARKET When the price of a financial instrument is not quoted on an active market the valuation is done via use of models generally employed by market plays (updating of future cash flows, Black-Scholes model for options). The valuation model incorporates the maximum amount observable market data: quoted market price of instruments of similar underlying values, interest rate curve, currency prices, implicit volatility, goods prices. The valuation originating from the models is carried out on prudent bases. It is adjusted to take account of the liquidity and credit risk to reflect the quality credit of the relevant financial instruments MARGIN OBTAINED IN CONJUCTION WITH NEGOTIATION OF FINANCIAL INSTRUMENTS The margin obtained in conjunction with negotiation of these financial instruments (day one profit): Is immediately entered into the income if the prices are quoted on an active market or if the valuation model incorporates only observable market data; Is deferred and included in the income over the duration of the contract when all the data is not observable on the market, or when the parameters originally non observable become so; the share of the margin not yet recognized is entered into the income NON QUOTED SHARES The fair value of non quoted shares is determined by comparison with a recent transaction dealing with the equity of the relevant company carried out by an independent third party under normal market conditions. In the absence of this type of reference, the valuation is executed either based on techniques normally employed (updating of future cash flows) or on the basis of the quota of the net asset of the Group calculated according to the information most recently available. The shares whose book value is less than 1 million MAD are not subject to reassessment SECURITIES The securities held by the Group are classified into three categories: Financial assets at fair value per statement; Financial assets up for sale; Investments held up to MATURITY FINANCIAL ASSETS AT FAIR VALUE PER STATEMENT The category of financial assets at fair value per statement includes: Financial assets held for transactions; Financial assets the Group has chosen via the option of entering

115 and evaluating at fair price per statement right from the outset as this option makes it possible to obtain more pertinent information. The securities classified in this category are initially entered at their fair price and the transaction costs are directed recorded in the profits and losses account. At the date of the statement they are assessed at their fair price and the fair price changes, the coupon included for fixed income securities, are entered into the statement under net gains or losses on financial instruments at fair value per statement. Likewise, dividends from variable income securities and the positive or negative values on the operations performed are entered under this heading. The credit risk assessment on these securities is included at their fair price FINANCIAL ASSETS UP FOR SALE The category of financial assets up for sale includes fixed or variable income securities not falling into the two other categories. Securities in this category are initially entered at fair price, including transaction fees when of significant amount. At the date of the statement they are assessed at fair price and the fair price changes, apart from the coupon for fixed income securities, and are listed in shareholders equity under underlying or differed gains or losses. The rules of evaluation of fixed or variable income not quoted on a regulated market are internally formalized and adhered to from one statement to another. Upon transfer of securities the said unrealized losses recorded as shareholders equity are entered into the profits and losses account under net gains or losses on assets up for sale. The income recorded according to the effective interest rate method on fixed income securities in this category are listed under similar interest and income of the profits and losses account. The dividends paid on variable income securities are entered under net gains or losses on financial assets up for sale when the Group s right to receive them is duly established INVESTMENTS HELD TO MATURITY The category of investments held to maturity includes fixed or determined income securities with fixed maturity that the Group has the intention and the capacity to hold until the said maturity. The interest rate risk coverage eventually established in this category of securities is not eligible for the coverage as spelled out by the IAS 39 standard. The securities held to maturity are entered at cost amortized according to the effective interest rate method integrating the amortization of premiums and losses corresponding to the difference between the acquisition value (including the transaction costs if significant) and the value of reimbursement of the said securities. The revenues gained on these securities are listed under similar interest and income of the profits and losses account REPURCHASE AND LOAN OPERATIONS/SECURITIES BORROWING The securities provisionally transferred in the event of a repurchase agreement remain entered in the Group balance sheet in their original portfolio. The corresponding liabilities are entered under the appropriate debt title. Nevertheless, for repurchase agreement operations initiated by transaction activities the corresponding liability is entered under financial liabilities at fair value per statement. The securities acquired provisionally in the event of a repurchase agreement are not entered into the Group balance sheet. The corresponding debt is entered under loans and debts with the exception of repurchase agreements initiated by transaction activities for which the corresponding debt is recorded under financial assets at fair value per statement. Securities loan operations do not give rise to the de-recognition of securities loaned and loan operations do not give rise to entry into the balance sheet of securities borrowed with the exception of instance where the securities borrowed are then transferred by the Group. In this case, the obligation to deliver the securities at the maturity is materialized by a financial liability entered in the balance sheet under financial liabilities at fair value per statement DATE OF ENTRY AND DERECOGNITION The securities are entered in the balance sheet at the date of settlement and delivery. During these timeframes the consequences of the fair price changes are taken into account depending on the category under which they are classified. These operations are kept in the balance sheet until discontinuance of the Group s rights to receive the flows connected thereto or the Group has substantially transferred all the risks and benefits in this connection. Then they are derecognized and the transfers of plus or minus values are listed in the statement under the appropriate heading OPTIONS RETAINED BY GROUPE BANQUE CENTRALE POPULAIRE The options retained for classification of the various securities portfolios are as follows: Financial assets at fair value per statement Transaction securities Derivatives Financial assets up for sale Treasury bills classified as investment securities Non quoted Moroccan bonds Mutual Funds securities held (securitization) Mutual Funds and shares Reclassified treasury bills of investment securities Investments held to maturity Investment securities (apart from treasury bills reclassified AFS) Treasury bills for low-cost housing classified as investment securities 2.8. CURRENCY OPERATIONS MONETARY ASSETS AND LIABILITIES IN CURRENCY Monetary assets and liabilities correspond to the assets and liabilities to be received or paid for a determined or determinable cash amount. Monetary assets and liabilities in currency are converted into the functional currency of the relevant entity of the Group at the closing price. The exchange rate differences are entered into the income with the exception of exchange rate difference concerning financial instruments designated as instruments for coverage of future revenues or coverage for net investments in currency which, in this event, are recorded as shareholders equity. Future exchange rate operations are assessed at the price of the term remaining to be completed. The exchange rate operations are entered into the income except when the operation is qualified as coverage of cash flow. The translation differences are entered into the income except when the operation is qualified as coverage of cash flow. In this case the translation differences are entered under shareholders equity for the efficient part of the coverage and recorded as income in the same way and same periodicity as the income from the operation covered NON MONETARY ASSETS IN CURRENCY The exchange differences regarding non monetary assets in currency and assessed at fair price (variable income securities) are entered as follows: They are entered into the income when the asset is classified under financial assets at fair value per statement. They are entered under shareholders equity when the assets are placed under financial assets up for sale unless the said assets are not specified as an item covered for an exchange rate risk for coverage at fair value the exchange rate differences are entered into earnings. Non monetary assets not evaluated at the fair price remain at their historical exchange rate. 2.9 DEPRECIATION OF FINANCIAL ASSETS DEPRECIATION ON LOANS, DEBTS AND THE LIKE Scope: Loans and debts, financial assets held to maturity and financing and guarantee commitments. Depreciation is accorded to credits and on financial assets held to maturity as soon as there exists an objective indication of a loss in the measurable value in connection with an event occurring after the issuance of the loan or acquisition of the asset. The analysis of any existence of depreciation is first performed at the individual level and afterwards at the portfolio level Depreciation on individual basis Provisions concerning financing and guarantee commitments given by the Group follow similar principles. At the individual level depreciation is measured as the difference between the book value before deprecation and the updated value at the effective interest rate of components deemed to be recoverable, in particular guarantees and perspective for recovery of principal and interest. Depreciation is entered into the profits and losses account under cost of risk. Any subsequent re-appreciation owing to an objective cause occurring after entry of the depreciation is recorded in the profits and losses account under cost of risk. As of depreciation of the asset, the heading entitled interest and income of the like of the profits and losses account record the theoretical remuneration of the net book value of the asset calculated at the original interest rate used for updating the flows deemed recoverable. For FY 2012 Groupe Banque Centrale Populaire, anticipating the potential incidents due to the prevailing economic situation, strengthened provisioning on an individual basis according to IFRS, via a contribution by its support fund Depreciation on collective basis Assets not collectively depreciated are subject to risk analysis per homogeneous portfolio. This analysis makes it possible to identify the groups of counterparties Activity Report

116 Financial Statements that, given events occurring since the establishment of the loans, have collectively reached a probability of maturity default supplying an objective indication of loss of value for the portfolio as a whole, but without the said loss at this juncture being individually ascribed to the various counterparties making up the portfolio. The analysis also provides and estimate of the losses concerning the relevant portfolios taking account of the trend in the economic cycle over the period under analysis. Modifications in the value of portfolio depreciation are recorded in the operating account under cost of risk. By way of application of the provisions of the IFRS standard it is possible to use expert opinion to correct the flows of recovery issuing from the statistical data and adapt them to the conditions prevailing at the time of the statement DEPRECIATION OF FINANCIAL ASSETS UP FOR SALE The financial assets up for sale are depreciated individually per counterparty in the profits and losses account when there is an objective indication of sustainable depreciation resulting from one or more events coming into play since the time of acquisition. In particular, with regard to viable income securities listed on an active market, a prolonged or significant drop in the price below its acquisition cost constitutes an objective indication of depreciation. Depreciation concerning a fixed income security is entered under cost of risk and can be entered into the profits and looses account when the market value of the security has appreciated due to an objective cause occurring after the last depreciation. Depreciation on a variable income security is entered under net gains or losses on financial assets up for sale and can be ascribed to a profits and losses account, if required, only at the date of transfer of the security. In addition, any eventual fall in the market price constitutes depreciation recognized in the statement OPTIONS RETAINED BY GROUPE BANQUE CENTRALE POPULAIRE For individual provision of loans (individually significant debts All outstanding debts qualified as major cases are reviewed caseby-case to determine the recovery flow expected over a 5 year period and therefore to calculate the IFRS provision via the difference between the gross amount of the debt and the updated value of the flows at the original rate. For the individual provision of loans (individually non significant debts) Outstanding debts qualified as minor cases are subject to statistical model-building (model-building of historical recovery flows) per homogeneous risk class. For collective provision: The Group has defined identification criteria for sensitive debts and has developed statistical models to calculate the collective provisions on the basis of the historical records of transformation of sensitive debts into outstanding debts. The collective provisioning methodology takes inspiration from the Basel provisions DEBTS REPRESENTED PER SECURITY AND OWN SHARES DEBTS REPRESENTED BY A SECURITY The financial instruments issued by the Group are qualified as debt instruments if there is a contractual obligation for the Group company issuing the said instruments to deliver specie or a financial asset to the security holder. This also applies in the event where the Group can be obliged to exchange assets or financial assets or liabilities with another entity at potentially unfavorable conditions or to deliver a variable number of its own shares. The debts issued represented by a security are originally recorded at their issue value comprising the transaction costs and are assessed at their depreciated cost according to the effective interest rate method. The bonds reimbursable or convertible in own shares are considered as hybrid instruments comprising at the same time a debt and equity component determined at the time of initial entry of the operation OPTIONS RETAINED BY GROUPE BANQUE CENTRALE POPULAIRE Shares: Further to updating of the internal regulations of the BPRs, these banks henceforth retain the unconditional rights to respond favorably to requests for reimbursement of share holders. This new provision means that a quota of the equity of the BPRs cannot be classified under financial liabilities OWN SHARES Own shares held by the Group are deducted from the consolidated shareholders equity regardless of the objective of holding and the earnings related thereto are removed from the consolidated profits and losses account DERIVATIVES AND INCORPORATED DERIVATIVES All the derivative instruments are entered into the balance sheet at their fair price GENERAL PRINCIPLE The derivatives are entered in the balance sheet at their fair price under financial assets and liabilities at fair value per statement. They are recorded as financial assets when the value is positive and as liabilities when is negative. The gains and losses made and underlying are entered in the profits and losses account under net gains and losses on financial liabilities at fair price DERIVATIVES AND COVERAGE ACCOUNTING The derivatives entered into in the framework of coverage relations are designated according to the objective set. Coverage at fair value is used to cover the interest rate risk of fixed income assets and liabilities. Coverage of cash flow is used to cover the interest rate risk of variable income assets and liabilities and the exchange risk of future revenues likely to be paid in currency. In conjunction with the establishment of coverage relations, the Group puts in place formalized documentation: designation of the instrument and risk coverage strategy and type of risk covered, designation of the coverage instrument, and the modalities of assessment of the efficiency of the coverage relation. In compliance with this documentation, at the time of initiation and at least on a minimum six monthly basis, the Group assesses the retrospective and prospective efficiency of the coverage relations put in place. The purpose of the retrospective efficiency test is to make sure that relation between the effective variations in value or outcome of the coverage derivatives and those of the instruments covered is between 80 and 125%. The purpose of the prospective test is to make sure the variations in value or the outcome of derivatives throughout the residual life span of the coverage adequately compensate for the existence of historical records on similar type transactions. With regard to the highly probable transactions, the character thereof is appreciated via the existence of historical records on similar transactions. In the event of interruption of the coverage relation or when it no longer satisfies the efficiency tests, the coverage derivatives are transferred to the transaction portfolio and entered according to the principles applicable to the said category INCORPORATED DERIVATIVES The derivatives incorporated into composed financial instruments are separated from the value of the host instrument when the economic characteristics and risks relative to the derivative instrument are not closed linked to those of the host contract. The derivatives are entered separately as derivatives and the host contract according to the category in which it is classified. Nevertheless, when the composed instrument is integrally entered under financial assets and liabilities at fair value per statement, no separation is made COMMISSIONS ON SERVICE PROVISION The commissions on the provision of services are recorded as follows: Commission that are an integral part of the effective yield of a financial instrument: administrative commissions, commitment commissions, etc. Such commissions are dealt with as an adjustment of the effective interest rate (except when the instrument is evaluated at fair value per statement). Commissions remunerating continuous service: rental of safes, custody fees for securities on deposit, telematic subscriptions or bank cards, etc. They are entered into the statement for the duration of the services gradually as the service is provided. Commissions remunerating a specific service: stock market commissions paid, foreign exchange commissions; etc. These are entered into the income when the said service has been rendered.

117 2.13. PERSONNEL BENEFITS General principle: The entity must no only enter the legal obligation in connection with the formal terms of the specific service scheme but also any implicit obligation in connection with the use thereof. The said uses generate an implicit obligation when the entity has no other realistic solution than to pay for services rendered to staff members. For example, an implicit obligation exists if a change in the habits of the entity gives rise to an unacceptable degradation in relations with the personnel. Typology of benefits to personnel: The benefits granted to the Groupe Banque Populaire staff are classified into four categories: Short term benefits such as wages, annual vacation, insurance, participation, top-ups; Long term benefits including bonuses for seniority and departure for retirement; Indemnities for end of employment contract; Benefits after employment consisting of medical insurance and retirement SHORT TERM BENEFITS The Group enters an expense when the services rendered by staff members have been used in counterpart to the benefits granted LONG TERM BENEFITS Long term benefits refer to the benefits, other than those after employment and end of contract indemnities that are not integrally due within the twelve months after the end of position during which the staff member has provided corresponding service. This particularly concerns bonuses for seniority and departure on retirement. These benefits are provisioned in the account of the year to which they refer. The actuarial evaluation method is similar to the one applicable to the benefits after employment for specific services but the actuarial variations are entered immediately and no corridor is applicable. In addition, the effect linked to possible modification in the system considered as akin to past service is immediately recorded END OF EMPLOYMENT CONTRACT InDEMNITIES The end of work contract indemnities result from the benefit granted to staff members at the time of termination by the Group of the work contract before the legal age of retirement or the decision of the staff members to leave voluntarily against an indemnity. The indemnities for end of work contract payable at more than twelve months after the closing date are currently being updated BENEFITS AFTER EMPLOYMENT The Group distinguishes between the definite contribution system and definite service schemes. The definite contribution schemes are not representative of a commitment for the Group and have no provision attached thereto. The amount of the contributions paid during the fiscal year is recorded in the expenses. Only the schemes qualified as definite service schemes are representative of a commitment to be honored by the Group which gives rise to assessment and provisioning. Classification in one or other of these categories is based on the economic substance of the scheme in determining whether the Group is required or not via the clauses of an agreement or by implicit obligation, to ensure the services promised to staff members. The principal definite service scheme identified by the Group is that concerning medical coverage for retired members and their families. The benefits after employment with definite services are the subject of actuarial evaluations taking account of demographic and financial assumptions. The provisioned amount of the commitment is determined by using the actuarial assumptions retained by the Group and by applying the projected unit credit method. This evaluation method takes account of a certain number of parameters such as demographic assumptions, early departures, salary increases, and discount and inflation rates. The value of future contributions or a reimbursement expected of a part of the amount paid into the scheme. When the amount of coverage assets surpasses the value of the commitment, an asset is entered if it is representative of a future economic benefit to the Group taking on the form of economy of future contributions or of an expected reimbursement of a part of the amount paid into the scheme. Measurement of the obligation due to a particular scheme and the value of its coverage assets can change considerably from one fiscal year to the next depending on the changes in actuarial assumptions and as a result can cause actuarial gaps. The Group applies the so-called corridor methodology to enter the actuarial gaps on these commitments. This method authorizes refraining from recognition the following fiscal year and spread over the average residual duration of activity of staff members, that the fraction of the actuarial gaps surpass the highest of the two following values: 10% of the updated value of the gross obligation or 10% of the market value of the coverage assets at the end of the previous fiscal year. The consequences of the modification of schemes for past service are recognized in the statement on the complete duration of rights the said modifications. The annual expenses entered as payroll costs for definite service schemes is representative of the rights acquired over the period by each wage earner corresponding to the cost of services rendered, the financial cost linked to the updating of commitments, of the returns expected from investments, depreciation of the actuarial gaps and costs of past serves, resulting from any modifications in the schemes, as well as the consequences of the reduction or liquidation thereof. The calculations made by the Group are examined on a regular basis by an independent actuary OPTIONS RETAINED BY GROUPE BANQUE CENTRALE POPULAIRE In compliance with the option provided in IFRS 1 the cumulative amount of the actuarial differences at the date of transition was included in shareholders equity. At the time of transition to IFRS the significant commitment for medical coverage for the retired and early departures were provisioned for the first time. To proceed to these actuarial evaluations the basic assumptions of the calculated have been specifically determined for each scheme. The discount rates retained are obtained via reference to the rate of yield of bonds issued by the Moroccan State to which a risk premium is added, for estimation of the rate of yield of top category enterprise bonds with equivalent maturity for the duration of the scheme. The coverage assets for the medical coverage scheme exclusively comprise treasury bills issued by the Moroccan State. The rate of yield of investments is equivalent thereto PROVISIONS FOR LIABILITIES The provisions recorded in the liabilities of the Group balance sheet, other than those for financial instruments and social commitments, mainly concern provisions for litigation, fines, penalties and tax risks. A provision is made when it is likely that an exit of resources representing economic benefits will be necessary to extinguish and was born from a past event and when the amount of the bond can be reliably estimated. The amount of this bond is discounted to determine the amount of the provision when significant OPTIONS RETAINED BY GROUPE BANQUE CENTRALE POPULAIRE The provisions for risks and expenses of more than MAD 1 million have been analyzed to make sure of their eligibility according to the conditions stipulated by IFRS standards CURRENT AND DIFFERED TAXES DIFFERED TAX The income tax payable is determined on the basis of rules and the rates in force in each country of operation of Group companies over the period covered by the statement IMPOT DIFFERE Differed taxes are recorded when there are time differences between the book values of balance sheet assets and liabilities and the corresponding fiscal values. Differed tax liabilities are recognized for all the taxable time differences with the exception of: Taxable time differences generated by the initial entry of an acquisition difference; Taxable time differences concerning investments in companies under exclusive and joint control to the extent in which the Group is capable of controlling the date at which the time difference will be reversed and it is probable that the said time difference will not be reversed in the foreseeable future. Differed tax assets are recorded for all deductible time differences and tax losses carried over to the extent in which it is probable that the relevant entity will have taxable income in the future on which the said time difference and tax losses can be charged. The asset and liabilities differed taxes are evaluated according to the variable carry-forward method at the tax rate the application thereof is assumed over the period in which the asset will be earned or the liability Activity Report

118 Financial Statements settled on the basis of the tax rates and fiscal regulations either adopted or to be adopted before the closing date of the period. They are not discounted. The asset or liabilities differed taxes are compensated for when their origin in within a given tax group falls under the authority of a given tax office and when a legal right for compensation exists. The payable and differed taxes are entered as a tax product or expense in the profits and losses account with the exception of those relevant to underlying gains and losses on the assets up for sale and the variations in value of the derivative instruments for coverage of cash flow for which the corresponding differed taxes are recorded as shareholders equity. The tax credits on income for debts and securities portfolios, when effectively used for settlement of income tax payable for the fiscal year, are registered under the same heading as the incomes to which they are connected. The corresponding tax expense is kept under income tax in the profits and losses account RECYCLABLE AND NON RECYLABLE SHAREHOLDERS EQUITY The FTA adjustments have been entered into the bank consolidated accounts in counterpart to shareholders equity. The impacts of value corrections on equity can be final or temporary. If the FTA adjustment stems from an IFRS entry that should have impacted the outcome, the value difference is definitively frozen in equity through the use of non recyclable equity account. If the FTA adjustment is due to an IFRS entry impacting shareholders equity, recycling into income is possible at the time of transfer or when materialization of the coverage via use of recyclable equity account is used CASH FLOW TABLE The balance of cash and similar accounts consists of the net balances of cash accounts, central banks, postal checks and the net balances of loans and sight borrowings from credit institutions. Variations in the cash flow generated by the operational activity record the cash flows generated by Group activities including those with regard to investment property, the financial assets held to maturity and negotiable debt securities. Variations in cash flow linked to investment operations result from cash flows linked to acquisitions and transfers of subsidiaries, associate enterprises or consolidated joint ventures, as well as those in connection with acquisitions and fixed asset transfer apart from investment property and lease contracts. Variations in cash flow linked to financing operations include payments and disbursements originating from operations with shareholders and flows linked to subordinated and bond debts and debts represented by a security (apart from negotiable debt securities) NON CURRENT ASSETS TO BE TRANSFERRED AND ABANDONED ACTIVITIES When the Group decides to sell non current assets and when it is highly likely that the said sale will occur within twelve months, the said assets are inscribed separately in the balance sheet under non current assets up for sale. The liabilities that may be connected thereto are inscribed separately under debts linked to non current assets up for sale. When they are classified in this category, the non current assets and assets and liabilities groups are evaluated at their lowest book value and fair price less the cost of sale. The concerned assets cease to be depreciated. In the event of loss of value on an assets or group of assets and liabilities the depreciation is entered income. Abandoned activities include activities to be sold, activities stopped, as well as subsidiaries exclusively acquired with a view to re-sale. All profits and losses concerning these operations are inscribed separately in the profits and losses account under outcome net of tax for activities either stopped or in the process of being stopped SECTORAL INFORMATION Groupe Banque Populaire is organized around four principal activity hubs: Banque Maroc comprising Crédit Populaire du Maroc, Media Finance, Moussahama Fund I, Upline Group, Dar Addamane, Maroc Assistance Internationale, Bank Al Amal, Attawfiq Micro Finances, BP Shore and FPTC Sakane; Specialized financing companies comprising Chaabi Bank, Banque Populaire Morocco- Centrafricaine, Banque Populaire Maroco- Guinéenne, Chaabi International Bank Off Shore and Atlantic Bank International. Each of these business lines registers expenses and income, as well as assets and liabilities attached thereto after elimination of intra group transactions USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS The preparation of Group financial statements requires the management and executives to formulate assumptions and the production of estimates which are reflected in the determination of profits and expenses in the profits and losses account and in the evaluation of balance sheet assets and liabilities and editing of associated notes. This exercise assumes that the managers make use of their judgment and exploit the information available at the date of production of the financial statements to proceed to the required estimates. The final future outcomes of the operations for which the manager has resorted to estimates can obviously be different therefrom and have a significant effect of the financial statement. In particular, this is the case for: Depreciations made to cover credit risks; Use of internal models to valuate the financial instruments not quoted on active markets; Calculation of the fair value of non quoted financial instruments classified under assets up for sale or financial instruments at fair value per statement under assets or liabilities, and more generally calculation of the market values of financial instruments for which this information must be inscribed in the annotations to financial statements; Depreciation tests carried out on incorporated assets; Determination of the provisions to be provided for coverage of the expenses and losses risk FINANCIAL STATEMENT LAYOUT FINANCIAL STATEMENT FORMAT In the absence of any format required by IFRS the Group financial statements are drawn up in compliance with the models imposed by Bank Al-Maghrib ASSETS AND LIABILTIIES COMPENSATION RULES A financial asset or liability is compensated for and a net balance is recorded in the balance sheet if and only if the Group disposes of a legal right to compensate for the amounts stated and if it has the intention of either settling the net amount or selling the asset and settle the liability at the same time.

119 CONSOLIDATED IFRS BALANCE SHEET IFRS ASSETS 31/12/12 31/12/11 Values deposited, Central Banks, Public Treasury, Postal Check service Financial assets at fair value per statement Derivative coverage instruments - - Financial assets up for sale Loans and debts on Credit Institutions and the like Loans and debts on customers Revaluation difference on assets in portfolios covered by rates - - Investments held to maturity Payable tax assets Differed tax assets Accruals and other assets Non current assets up for sale - - Stakes in equity method companies Investment property - - Tangible fixed assets Intangible fixed assets Goodwill TOTAL IFRS ASSETS CONSOLIDATED IFRS OUTCOME 31/12/12 31/12/11 Interest and similar income Interest and similar expenses INTEREST MARGIN Commissions cashed in Commissions paid MARGIN ON COMMISSIONS Net gains or losses on financial instruments at fair value per statement Net gains or losses on financial assets up for sale MARKET ACTIVITIES OUTCOME Income from other activities Expense son other activities NET BANKING INCOME General operating expenses Allocations to amortization and depreciation of tangible and intangible fixed assets GROSS OPERATING INCOME Cost of risk OPERATING INCOME Quota of net income of equity method companies Net gains or losses on other assets Variations in values of goodwill PRETAX INCOME Income tax NET INCOME Income BPR share Income outside of Group NET INCOME BCP GROUP SHARE Income per share (in Dirhams) 10,84 11,69 Income diluted per share (in Dirhams) 10,84 11,69 STATEMENT OF NET INCOME AND GAINS AND LOSSES DIRECTLY ENTERED AS SHAREHOLDERS EQUITY 31/12/12 31/12/11 Net income Translation differences Revaluation of financial assets up for sale Revaluation of derivative coverage instruments - - Revaluation of fixed assets - - Actuarial differences on definite service schemes - - Quota of gains and losses directly entered as equity on companies by equity method - - Total gains and losses directly entered into shareholders equity Net income and gains and losses recognized directly in equity Group share BPR share Minority shares VARIATION IN SHAREHOLDERS EQUITY Equity Reserves linked to capital IFRS LIABILITIES 31/12/12 31/12/11 Central Banks, Public Treasury, postal checks Financial liabilities at fair value per statement - - Derivative coverage instruments - - Debts to credit institutions and similar Debts to customers Debts represented by securities Debt securities issued Liability reevaluation difference of portfolios covered by rates - - Current tax liabilities Differed tax liabilities Adjustment accounts and other liabilities Debts linked to non current assets up for sale - - Technical provisions for insurance contracts Provisions for risks and expenses Subsidies, public funds assigned and special guarantee funds Subordinated debts Related equity and reserves Own shares - - Consolidated reserves Group share BPR share Minority shares Unrealized gains or losses or deferred Group share PR share Minority shares Net income for the FY Group share PR share Minority shares TOTAL IFRS LIABILITIES CASH FLOW TABLE 31/12/12 31/12/11 Pretax income /- Net allocations to depreciation of tangible and intangible fixed assets /- Net allocations for depreciation of goodwill an other fixed assets /- Net allocations for depreciation of financial assets /- Net allocations to provisions /- Quota of income in connection with companies by equity method /- Net loss (net gain) of investment activities /- Net loss/gain financing activities - - +/- Other movements Total of non monetary items included in pretax net income and other adjustments /- Flows linked to operations with credit and similar institutions /- Flows linked to operations with customers /- Flows linked to other operations affecting financial assets or liabilities /- Flows linked to other operations affecting non financial assets or liabilities Taxes paid Net decrease (increase) of assets and liabilities stemming from operational activities Net cash flow generated by operational activity /- Flows linked to financial assets and stakes taken out /- Flows linked to investment property - - +/- Flows linked to tangible and intangible fixed assets Net cash flow linked to investment operations ash flow /- Cash flow from or to shareholders /- Other net cash flows linked to financing activities Net cash flow linked to financing operations Effect of variation in exchange rates on cash flow and cash flow equivalents Net increase (decrease) in cash flow and cash flow equivalents Cash flow and cash flow equivalents at opening Window, Central Banks, Postal checks (assets and liabilities) Accounts (assets and liabilities) and loans/sight borrowings from credit institutions Cash flow and equivalents at closing of fy Window, Central Banks, Postal checks (assets and liabilities) Accounts (assets and liabilities) and loans/sight borrowings from credit institutions Variation in net cash flow Own shares Consolidated income and reserves Underlying or differed gains or losses Equity group share Equity BPR share Equity year ending published Impact of method change Impact in method change year ending retired Operations on capital Payments founded on shares - - Operation on own shares Income assignment Dividends FY Income Tangible and intangible fixed assets reevaluations and transfers (D) - - Financial instruments: variations at fair value and transfer to income (E) Translation differences: variations and transfers to income (F) Underlying or differed gains or losses (D) + (E) + (F) Variation in scope Other variations Shareholders equity at year ending Operations on capital Payments founded on shares - - Operation on equity shares Income assignment Dividends FY outcome Tangible and intangible fixed assets: reevaluations and transfers (D) - - Financial instruments: variations at fair price and transfer to income (E) Translation differences: variations and transfers to income (F) Underlying or differed gains or losses (D) + (E) + (F) Variation in scope Other variations Shareholders equity year ending (*) restated further to wider scope of collective provisioning Minority interests Total Activity Report

120 Financial Statements 3.1 ASSETS, LIABILITIES AND DERIVATIVE FINANCIAL INSTRUMENTS IN MARKET VALUE PER STATEMENT 31/12/12 31/12/11 Transaction Portfolio in market value Transaction Portfolio in market value Total Total portfolio with option portfolio with option Transaction securities Treasury bills and similar securities Other debt securities Ownership title Derivative transaction financial instruments Derivative exchange rate instruments TOTAL FINANCIAL ASSETS IN MARKET VALUE PER STATEMENT FINANCIAL ASSETS UP FOR SALE 31/12/12 31/12/11 Negotiable debt securities Treasury bills and other items obtainable from the central bank ther negotiable debt securities Bonds Government bonds Other bonds Shares and other variable income securities Including quoted securities Including non quoted securities TOTAL ASSETS UP FOR SALE BEFORE DEPRECIATION Including underlying gains and losses Including fixed income securities - - Including securities on loan - - Provisions for depreciation of assets up for sale - - TOTAL ASSETS UP FOR SALE NET OF DEPRECIATION Including fixed income securities net of depreciation LOANS AND DEBTS ON CREDIT INSTITUTIONS Loans and debts on credit institutions 31/12/12 31/12/11 Sight accounts Loans Repurchase operations TOTAL OF LOANS GRANTED AND DEBTS ON CREDIT INSTITUTIONS BEFORE DEPRECIATION Depreciation of loans and debts issued on credit institutions TOTAL OF LOANS AND DEBTS ON CREDIT INSTITUTIONS NET OF DEPRECIATION Breakdown of loans and debts on credit institutions per geographical area 31/12/12 31/12/11 Morocco Off shore zone Africa Europe TOTAL OF LOANS AND DEBTS ON CREDIT INSTITUTIONS BEFORE DEPRECIATION Provisions for depreciation TOTAL OF LOANS AND DEBTS ON CREDIT INSTITUTIONS NET OF DEPRECIATION CUSTOMER LOANS AND DEBTS Customer loans and debts 31/12/12 31/12/11 Ordinary debtor accounts Loans granted to customers Repurchase operations Financial lease operations TOTAL OF CUSTOMER LOANS AND DEBTS BEORE DEPRECIATION Depreciation of customer loans and debts TOTAL OF CUSTOMER LOANS AND DEBTS BEFORE DEPRECIATION Breakdown of customer loans and debts per geographical area 31/12/12 31/12/11 Morocco Off shore zone Africa Europe TOTAL OF CUSTOMER LOANS AND DEBTS Details of customer debts 31/12/12 31/12/11 Sound outstanding debts Pending outstanding debts Total outstanding Individual provision Collective provision Total provisions TOTAL CUSTOMER LOANS AND DEBTS NET OF DEPRECIATION INVESTMENTS HELD TO MATURITY 31/12/12 31/12/11 Negotiable debt securities Treasury bills and other items obtainable from central banks Other negotiable debt securities Bonds Government bonds Other bonds TOTAL OF FINANCIAL INVESTMENTS HELD TO MATURITY TANGIBLE AND INTANGIBLE FIXED ASSETS Gross book value 31/12/12 31/12/11 Cumulative depreciation and loss in value Net book value Gross book value Cumulative depreciation and loss in value Net book value TANGIBLE FIXED ASSETS Land and buildings Equipment, furnishings, installations Moveable property rented Other fixed assets INTANGIBLE FIXED ASSETS Lease rights Patents and brand names Software purchased Software produced by company Other intangible fixed assets TOTAL FIXED ASSETS

121 3.7. GOODWILL 31/12/11 Scope of variation Translation different Other movements 31/12/12 Gross value Cumulative losses in value Net balance sheet value DEBTS TO CREDIT INSTITUTIONS 31/12/12 31/12/11 Sight accounts Borrowing Repurchase operations TOTAL DEBTS TO CREDIT INSTITUTIONS DEBTS TO CUSTOMERS Debts to customers 31/12/12 31/12/11 Ordinary creditor accounts Time accounts Savings accounts at administered rate Cash vouchers Repurchase operations Other debts to customer TOTAL DEBTS TO CUSTOMERS Breakdown of debts on customers per geographical zone 31/12/12 31/12/11 Morocco Off Shore ZONE Africa Europe Total in principal Attached debts - - Balance sheet value PROVISIONS FOR RISKS AND EXPENSES AMOUNT ON 31/12/2011 VARIATION IN SCOPE ALLOCATIONS WRITE BACKS OTHER VARIATIONS AMOUNT ON 31/12/2012 Provisions for risk of execution of commitments by signature Provisions for social commitments Other provisions for risks and expenses PROVISIONS FOR RISKS AND EXPENSES INTEREST MARGIN 31/12/12 31/12/11 Income Expenses Net Income Expenses Net OPERATIONS WITH CUSTOMERS Accounts and loans/borrowing Repurchase operations Financial lease operations INTERBANK OPERATIONS Accounts and loans/borrowings Repurchase operations Loans issued by Group Debts represented by security Assets up for sale Assets held to maturity Other interest and similar income TOTAL OF INTREST OR SIMILAR INCOME AND EXPENSES NET COMMISSIONS 31/12/12 31/12/11 Income Expenses Net Income Expenses Net Commissions on securities Net income on means of payment Other commissions INCOME NET OF COMMISSIONS Activity Report

122 Financial Statements 4.3. COST OF RISK 31/12/12 31/12/11 ALLOCATIONS TO PROVISIONS Provisions for depreciation of loans and debts Provisions for depreciation of securities held to maturity (apart from rate risk) - - Provisions for commitments by signature Other provisions for risks and expenses PROVISION WRTE BACKS Write backs from provisions for depreciation of loans and debts Write backs from provisions for depreciation of securities held to maturity (apart from rate risk) Write backs commitments by signature Write backs from other provisions for risks and expenses VARIATION IN PROVISIONS Losses for counterparty risk of financial assets up for sale (fixed income securities) - - Losses for counterparty risk of financial assets held to maturity - - Losses on unrecoverable provisions loans and debts Losses on unrecoverable provisioned loans and debts Decrease on restructured products - - Recovery on depreciated loans and debts Losses on commitments by signature - - Other losses - - Cost of risk SECTORAL INFORMATION 5.1. BALANCE SHEET Morocco Bank SPECIALIZED FINANCE COMPANIES RETAIL BANK ABROAD AND OFF SHORE BANK TOTAL ASSETS Including ASSET COMPONENTS Financial assets up for sale Loans and debts on credit and similar institutions Loans and debts on customers Investments held to maturity LIABILITIES COMPONENTS Debts to credit and similar institutions Debts to customers SHAREHOLDERS EQUITY interco Total 5.2. PROFITS LOSSES ACCOUNT Morocco Bank SPECIALIZED FINANCE COMPANIES RETAIL BANK ABROAD AND OFF SHORE BANK interco Total Interest margin Margin on commissions Net banking income Gross operating income Operating income Net income NET INCOME GROUP SHARE GROUPE BANQUE CENTRALE POPULAIRE (GBCP) AUDIT REPORT ON CONSOLIDATED FINANCIAL STATEMENTS FISCAL YEAR 1 ST JANUARY TO 31 ST TO DECEMBER 2012 EXERCICE Deloitte Audit 288, Boulevard Zerktouni Casablanca, Morocco Mazars Audit et Conseil 101, Boulevard Abdelmoumen Casablanca, Morocco To the Shareholders of BANQUE CENTRALE POPULAIRE Casablanca AUDIT REPORT ON CONSOLIDATED FINANCIAL STATEMENTS FISCAL YEAR 1 ST JANUARY TO 31 ST TO DECEMBER 2012 EXERCICE We have conducted the audit on the enclosed financial statement of BANQUE CENTRALE POPULAIRE and its subsidiaries, including the balance sheet at 31st December 2012, as well as the profits and losses account, the global income statement, the shareholders equity variation statement and the cash flow table for the fiscal year ending at that date, in addition to the notes containing a summary of the principle accounting methods and other explanatory material. These financial statements show the amount of consolidated shareholders equity of KMAD 30,979,752, including a net consolidated profit of KMAD 3,208,791. Top Management Responsibility The top management is responsible for the drawing up and true and sincere preparation of these financial statements in compliance with International Financial Reporting Standards (IFRS). This responsibility includes the format, organisation and follow-up of internal control pursuant to the drawing up and presentation of the financial statements and the assurance that they contain no significant discrepancy resulting from fraud or error, as well as the determination of the reasonable accounting estimates taking account of the prevailing circumstances. Auditors Responsibility It is our responsibility to put forth an opinion on the financial statements based on our audit. We have conducted our audit according to the professional standards practised in Morocco. These standards require that we comply with the rules of ethics, planning and conducting the audit to obtain reasonable assurance that the summary financial statements comprise no significant discrepancy. An audit implies the establishment of procedures designed to make possible the gathering of significant items concerning the amounts and information contained in the summary statements. The choice of the procedures used is the decision of the auditor, as is the evaluation of whether the summary statements contain any significant discrepancies due to fraud or error. In carrying out the said risk evaluations, the auditor takes into account the internal control in force in the entity with regard to the establishment and presentation of the summary statements so as to define the appropriate auditing procedure corresponding to the prevailing circumstances and not in order to express an opinion on its effectiveness. An audit also comprises an estimate of the pertinent nature of the accounting methods used and the reasonable character of the accounting estimates made by the management, as well as an evaluation of the overall format of the summary statements. Our judgement is that the significant items gathered are sufficient and pertinent enough for us to base our opinion. Opinion on Summary Statements Herewith we certify that the summary statements mentioned in the first paragraph hereabove give a fair and sincere image of the financial situation of the entities included in the consolidation as of 31st December 2012, as well as of the financial performance and cash flows for the fiscal year ending at that date in compliance with International Financial Reporting Standards (IFRS). Without challenging the opinion put forth hereabove, we call attention to note 2.9 of the Appendix which presents the strengthening on 31/12/2012 of the provisioning scope on an individual basis according to IFRS. Casablanca, 25th March 2013 Deloitte Audit Statutory Auditors Mazars Audit et Conseil A. Benabdelkhalek K. Mokdad Associate Managing Associate

123 BANQUE centrale POPULAIRE CORPORATE ACCOUNTS 31 December 2012 BALANCE SHEET Assets 31/12/12 31/12/11 Cash, central banks, public treasury, postal check services Debts on credit and similar institutions Short-term account Long-term account Customer debts Cash and consumption loans Equipment loans Real Estate loans Other loans Debts acquired by factoring Transaction and investment securities Treasury bills and securities of the like Other debt securities Ownership deeds Other assets Investment securities Treasury bills and similar securities Other debt securities Equity shares and similar Subordinated debts Fixed assets handed over as financial loans and rental - - Intangible fixed assets Tangible fixed assets TOTAL ASSETS PROFITS AND LOSSES ACCOUNT 31/12/12 31/12/11 BANK OPERATING INCOME Interest and income on operations with credit institutions Interest and income on customer operations Interest and income of debt securities Income on ownership deeds Income on financial lease and rental fixed assets - - Commissions on service provision Other banking income BANK OPERATING EXPENSES Interest and expenses on operations with credit institutions Interest and expenses on customer operations Interest and expenses on debt securities issues Expenses on financial leases and rental - - Other bank expenses NET BANKING Nonbank revenues Nonbank operating expenses GENERAL OpeRATION EXPENSES Payroll Taxes and duty External expenses Other general operating expenses Allocations to depreciation and provisions for tangible and intangible fixed assets ALLOCATION TO PROVISIONS AND UNRECOVERABLE DEBT LOSSES Allocations to provisions for debts and outstanding commitments by signature Loss on provisions on unrecoverable debts Other allocation to provisions WRITE BACKS OF PROVISIONS AND RECOVERIES ON DEPRECIATED DEBTS Write down from provisions for debts and outstanding commitments by signature Recovery of depreciated debts Other write backs from provisions CURRENT INCOME Non current income Non current expenses PRETAX INCOME Income tax NET INCOME OF FY LIABILITIES 31/12/12 31/12/11 Central banks, Public treasury, postal check service Debts to credit and similar institutions Short-term Long-term Customer deposits Savings accounts Term accounts Term deposits Other creditor accounts Debt securities issued Negotiable debt securities Bond borrowings - - Other debt securities issues - - Other liabilities Provisions for risks and expenses Regulated provisions - - Subsidies, public funds assigned and special guarantee funds Subordinated debts Revaluation differences - - Reserves and premiums linked to equity Equity Shareholders, unpaid capital (-) - - Carried forward (+/-) Net income pending assignment (+/-) - - FY net income (+/-) TOTAL LIABILITIES OFF BALANCE SHEET 31/12/12 31/12/11 Commitments made Financing commitments given to credit and similar institutions Financing commitments given to customers Guarantee commitments to credit and similar institutions Guarantee commitment to customers Securities purchased by repo - - Other securities deliverable Commitments received Financing commitments received from credit and similar institutions Guarantee commitments received from credit and similar institutions Guarantee commitment received from State and various guarantee bodies Securities sold by repo - - Other securities receivable MANAGEMENT BALANCE STATEMENT INCOME FORMATION TABLE 31/12/12 31/12/11 (+) Interest and similar income (-) Interest and similar expenses INTEREST MARGIN (+) Income from financial leases and rental fixed assets - - (-) Expenses on financial leases and rental fixed assets - - Income on financial leases and rental operations - - (+) Commissions received (-) Commissions served MARGIN ON COMMISSIONS (+) Income from transaction securities operations (+) Income from investment securities operations (+) Income from foreign exchange operations (+) Income from derivative income operations INCOME from MARKET OPERATIONS (+) Various other bank income (-) Various other bank expenses NET BANKing INCOME (+) Income from financial fixed asset operations (+) Other non banking operating income (-) Other non banking operating expenses 8 - (-) General operating expenses GROSS OPERATING INCOME (+) Net allocations from write backs from provisions for debts and outstanding commitments by signature (+) Other net allocations from provision write backs CURRENT INCOME NON CURRENT INCOME (-) Income tax NET FY INCOME (+) Allocation to depreciation and provisions of intangible and tangible fixed assets (+) Allocations to provisions for depreciation of financial fixed assets (+) Allocations to provisions for general risks (+) Allowances for regulated provisions - - (+) Non current allocations (-) Write backs from provisions (-) Value added from sale of tangible and intangible fixed assets (+) Capital loss from sale of tangible and intangible fixed assets 8 - (-) Value added from sale of financial fixed assets - - (+) Capital loss from investment subsidies (-) Write backs from investment subsidies received - - (+) SELF FINANCING CAPACITY (-) Profits distributed (+) SELF FINANCING BANQUE CENTRALE POPULAIRE (BCP) GENERAL REPORT OF STATUTORY AUDITORS FISCAL YEAR 1 ST JANUARY TO 31 ST DECEMBER 2012 Deloitte Audit 288, Boulevard Zerktouni Casablanca, Morocco Mazars Audit et Conseil 101, Boulevard Abdelmoumen Casablanca, Morocco To the Shareholders of BANQUE CENTRALE POPULAIRE Casablanca GENERAL REPORT OF STATUTORY AUDITORS FISCAL YEAR 1 ST JANUARY TO 31 ST DECEMBER 2012 In compliance with the mission entrusted to us by your General Meeting, we have conducted the audit of the enclosed summary statements of BANQUE CENTRALE POPULAIRE, comprising the balance sheet, the income statement, the management balance statement, the cash flow table and the complementary information table (ETIC) pursuant to the fiscal year ending on 31st December The said summary statements show shareholders equity and similar at KMAD 22,095,860, including a net profit of KMAD 1,706,362. Top Management Responsibility The top management is responsible for the drawing up and true and sincere preparation of these financial statements in compliance with International Financial Reporting Standards (IFRS). This responsibility includes the format, organisation and follow-up of internal control pursuant to the drawing up and presentation of the financial statements and the assurance that they contain no significant discrepancy resulting from fraud or error, as well as the determination of the reasonable accounting estimates taking account of the prevailing circumstances. Auditors Responsibility It is our responsibility to put forth an opinion on the financial statements based on our audit. We have conducted our audit according to the professional standards practised in Morocco. These standards require that we comply with the rules of ethics, planning and conducting the audit to obtain reasonable assurance that the summary statements comprise no significant discrepancy. An audit implies the establishment of procedures designed to make possible the gathering of significant items concerning the amounts and information contained in the summary statements. The choice of the procedures used is the decision of the auditor, as is the evaluation of whether the summary statements contain any significant discrepancies due to fraud or error. In carrying out the said risk evaluations, the auditor takes into account the internal control in force in the entity with regard to the establishment and presentation of the summary statements so as to define the appropriate auditing procedure corresponding to the prevailing circumstances and not in order to express an opinion on its effectiveness. An audit also comprises an estimate of the pertinent nature of the accounting methods used and the reasonable character of the accounting estimates made by the management, as well as an evaluation of the overall format of the summary statements. Our judgement is that the significant items gathered are sufficient and pertinent enough for us to base our opinion. Opinion on Summary Statements Herewith we certify that the summary statements mentioned in the first paragraph hereabove give a fair and sincere image of the outcomes and operations of the past fiscal year, as well as of the financial situation and assets of BANQUE CENTRALE POPULAIRE as of 31st December 2012 in compliance with the terms of reference of financial reporting in Morocco. Verifications and Specific Information We have also conducted the specific checks required by law, and we are convinced of the concordance of the information given in the Board of Directors Management Report addressed to the shareholders along with the Bank summary statements. In compliance with the provisions of Article 172 of Law as amended by Law 20-05, herewith we inform you of the main interests and control taken out by BANQUE CENTRALe POPULAIRE during fiscal year 2012: BP OUTSOURCING PROCESS: Stake acquisition representing 52% of corporate capital. ATLANTIC BUSINESS INTERNATIONAL (ABI): Stake acquisition representing 50% of corporate capital. Casablanca, 25th March 2013 Statutory Auditors Deloitte Audit Mazars Audit et Conseil A. Benabdelkhalek K. Mokdad Associate Manager Associate Activity Report

124 Financial Statements CASH FLOW TABLE 31/12/12 31/12/11 1) Bank operating income received ) Recovery of depreciated debts ) Non banking operating income received ) Non banking operation expenses paid ( ) ( ) 5) Non banking operating expenses paid (51 204) (35 207) 6) General operation expenses paid ( ) ( ) 7) Income tax paid ( ) ( ) I- NET CASH FLOW FROM PROFITS AND LOSSES ACCOUNT Variation in: 8) Debts on credit and similar institutions ( ) ( ) 9) Customer debts ( ) ( ) 10) Transaction and investment securities ( ) ( ) 11) Other assets ( ) ) Fixed assets for financial leases and rentals ) Debts to credit and similar institutions ) Customer deposits ( ) ) Debt securities issued ) Other liabilities ( ) II- BALANCE OF VARIATIONS ON OPERATING ASSETS AND LIABILITIES ( ) ( ) III- NET CASH FLOW FROM OPERATING ACTIVITIES (I+II) ( ) ( ) 17) Income from sale of financial fixed assets ) Income from sale of tangible and intangible fixed assets ) Acquisition of financial assets ( ) ( ) 20) Acquisition of tangible and intangible fixed assets ( ) ( ) 21) Interest paid ) Dividends paid IV- NET CASH FLOW FROM INVESTMENT ACTIVITIES ( ) ) Subsidies, public funds and special guarantee funds received ) Issuance of subordinated debts ) Share issues ) Reimbursement of shareholders and similar equity ) Interest paid (75 000) (75 000) 28) Dividends paid ( ) ( ) V- NET CASH FLOWS FROM FINANCING ACTIVITIES VI- NET CASH FLOW VARIATION (III+IV+V) ( ) ( ) VII CASH POSITION AT OPENING OF FISCAL YEAR VIII CASH POSITION AT CLOSURE OF FISCAL YEAR PRINCIPLE METHODS OF EVALUATION APPLIED INDICATION OF EVALUATION METHODS APPLIED BY THE INSTITUTION *Application of evaluation methods stipulated by the accounting plan of credit institutions (P.C.E.C.) entered into force on 01/01/2000, updated in October 2007 and applicable as of 01/01/2008. * The summary statements are issued in compliance with the provisions of P.C.E.C. DEBTS ON CREDIT AND SIMILAR INSTITUTIONS DEBTS Bank Al-Maghrib, Public Treasury and Postal Check Service Banks in Morocco Other credit and similar institutions in Morocco Credit institutions abroad Total 31/12/12 Total 31/12/11 ORDINARY DEBTOR ACCOUNTS SECURITIES RECEIVED IN REPURCHASE Day to day Forward CASH FLOW LOANS Daily Daily Time Time FINANCIAL LOANS OTHER DEBTS INTEREST RECEIVABLE OUTSTANDING DEBTS TOTAL CUSTOMER DEBTS DEBTS PUBLIC SECTOR Financial institutions PRIVATE SECTOR Non financial institutions Other customers Total 31/12/2012 Total 31/12/2011 CASH FLOW LOANS Debtor sight accounts Commercial loans in Morocco Export loans Other cash loans CONSUMER LOANS EQUIPMENT LOANS REAL ESTATE LOANS OTHER LOANS DEBTS ACQUIRED BY FACTORING INTEREST RECEIVABLE OUTSTANDING DEBTS Pre-doubtful debts Doubtful debts Compromised debts TOTAL BREAKDOWN OF TRANSACTION AND INVESTMENT SECURITIES SECURITIES Gross book value Current value Reimbursement value Underlying value added Underlying capital losses Provisions TRANSACTION SECURITIES Treasury bills and similar securities Bonds Other debt securities Ownership titles INVESTMENT TRANSACTIONS Treasury bills and similar securities Bonds Other debt securities Ownership titles INVESTMENT SECURITIES Treasury bills and similar securities Bonds Other debt securities GRAND TOTAL BREAKDOWN OF TRANSACTION AND INVESTMENT SECURI- TIES PER ISSUER CATEGORY SECURITIES Credit and similar institutions Public issuers PRIVATE ISSUERS Financial Non financial Total 31/12/12 Total 31/12/11 STATEMENT OF CHANGES IN METHOD TYPE OF CHANGE I- Change affecting evaluation methods II- Change affecting format rules STATEMENT OF WAIVERS INDICATION OF WAIVERS I- Waivers to fundamental accounting principles II- Waivers to evaluation methods III- Waivers to the rules governing the devising and format of summary statements JUSTIFICATION OF CHANGES NIL JUSTIFICATION OF WAIVERS NIL INFLUENCE ON ASSETS, FINANCIAL SITUATION AND INCOME NIL INFLUNCE ON ASSETS, FINANCIAL SITUATION AND INCOME NIL QUOTED SECURITIES Treasury bills and similar securities Bonds Other debt securities Ownership titles NON QUOTED SECURITIES Treasury bills and similar securities Bonds Other debt securities Ownership titles TOTAL DETAILS OF OTHER ASSETS 31/12/ /12/2011 OPTIONAL INSTRUMENTS VARIOUS SECURITIES OPERATIONS (DEBTOR) - - Sums paid and recoverable from issuers - - Other settlement accounts for securities operations - - VARIOUS DEBTORS Sums payable by the States Sums payable by providence bodies Various sums owed by staff Customer account for non banking services Various other debtors Various amounts and uses Various amounts and uses Adjustment accounts off balance sheet (debtor) Currency divergence accounts and securities (debtor) - - Potential losses on unsettled coverage operations - - Losses spread out over settled coverage expenses - - Losses to be spread over several fiscal years Linkage accounts between headquarters and branch office in Morocco (debtor) Income receivable and expenses entered in advance Income receivable Expenses entered in advance Transitory or pending accounts debtors Outstanding debts on various operations - - Provisions for outstanding debts on various operations - - TOTAL

125 EQUITY SECURITIES AND SIMILAR USES Name and activity of issuer company SUBORDINATED DEBTS Sector of activity INTANGIBLE AND TANGIBLE FIXED ASSETS Corporate capital in thousands Rate of equity Gross book value Translation difference Cumulative provisions Net book value Extract of last summary statements of issuer company Date of closing fiscal year Net situation Net income Currency A/ EQUITY IN LINKED ENTERPRISES CHAABI INTER.BANK OFF SHORE (CIB) Offshore bank USD 70,00% Dec USD CHAABI BANK Bank EUR 100,00% June EUR BPMC Bank FCFA 62,50% Dec FCFA BPMG Banque GNF 55,53% June GNF ATLANTIC BUSINESS INTERNATIONAL (ABI) Holding company FCFA 50,00% MEDIAFINANCE Capital market ,00% June MAD VIVALIS SALAF Construction loan ,01% June MAD FONDS MOUSSAHAMA 1 Investment fund ,86% Dec MAD BP SHORE (ESSOUKNA) Real Estate ,00% Dec MAD CHAABI LLD Long duration rental ,62% June MAD MAROC ASSISTANCE INTERNATIONALE Assistance ,43% June MAD DAR ADDAMANE Credit guarantee ,71% Dec MAD STE H. PARTNERS GESTION Management company ,00% Dec MAD UPLINE GROUPE Investment bank ,87% Dec MAD GENEX PARTICIPATION Portfolio management ,00% Dec MAD SCI OASIS YVES Real Estate 15 99,67% Dec MAD SCI AL MASSIRA Real Estate 10 95,00% Dec MAD SCI OASIS PAPILLON Real Estate 8 99,33% Dec MAD SCI OASIS JEAN Real Estate 15 99,67% Dec MAD CHAABI CAPITAL INVESTISSEMENT Investment fund ,00% June MAD CHAABI DOC NET Services ,84% Dec MAD BANK AL AMAL Bank ,01% Dec MAD SIBA Real Estate ,10% Dec MAD FONDS MOUSSAHAMA 2 Investment fund ,00% Dec MAD MAROC LEASING Financial leasing ,11% June MAD SCI DAIT ROUMI II Real Estate 10 90,00% Dec MAD BP OUTSOURCING PROCESS Holding company ,00% June MAD BPR Banks B) OTHER EQUITY SECURITIES IDMAJ SAKANE Real Estate ,00% Dec MAD SOGEPOS Service ,20% Dec MAD BENAF Real Estate ,00% Dec MAD REGIONAL GESTION Management company ,00% Dec MAD SOCIETE MONETIQUE INTERBANCAIRE Services ,24% Dec MAD MITC Services ,50% Dec MAD EUROCHEQUE Services ,48% Dec MAD MITC CAPITAL Management company ,00% Dec MAD MOROCCAN FINANCIAL BOARD Financial ,29% Dec MAD FIROGEST Management firm ,50% Dec MAD CASABLANCA TRANSPORTs Services ,71% Dec MAD CASABLANCA AMENAGEMENT Services ,50% Dec MAD C) PORTFOLIO ACTIVITY SECURITIES AWB MOROCCO MAURITANIE Financial EUR 33,03% UNIVERSITE INTERNATIONALE DE RABAT Education ,05% June MAD D) SIMILAR ACTIVITIES OCP Industry ,88% June MAD UBAF Bank EUR 4,99% Dec EUR BACB Bank LS 8,26% Dec LS UBAE Bank EUR 4,66% févr EUR OTHER Grand Total Global Amount Credit and similar institution Finance companies RELATED Non finance companies Other similar types INCOME LISTED IN CPC 31/12/12 31/12/11 Subordinated debts Subordinated securities of credit and similar institutions Subordinated customer loans Subordinated loans credit and similar institutions Subordinated customer loans Subordinated outstanding debts Charges reserved to subordinated debts (-) Provisions for outstanding subordinated debts FIXED ASSETS Gross amount at beginning of FY Amount of acquisition during FY Amount of sale or withdrawals during FY Gross amount at end of FY Amount of depreciation and/ or provisions at beginning of FY DEPRECIATION AND/OR PROVISIONS Allocations during FY Amount of depreciation on fixed assets exited Net amount at end of FY INTANGIBLE FIXED ASSETS Lease rights Fixed assets for research and development Other operating intangible fixed assets Intangible operating fixed assets TANGIBLE FIXED ASSETS OPERATING BUILDING Operating land Office buildings Service residential buildings OPERATING FURNITURE AND MATERIAL Office furniture Office furniture Computer equipment Operational rolling stock Other operating equipment OTHER OPERATIONAL TANGIBLE FIXED ASSETS FIXED TANGIBLE ASSETS NO IN OPERATION Non operational land Non operating Buildings Non operating furniture and equipment Other non operating tangible fixed assets TOTAL Cumulative amount Activity Report

126 Financial Statements TANGIBLE AND INTANGIBLE FIXED ASSETS SALE DEBTS TO CREDIT AND SIMILAR INSTITUTIONS CUSTOMER DEPOSITS Gross book value Cumulative depreciation and/or provisions for depreciation Net book value Income from sale Sale value added Sale capital loss INTANGIBLE FIXED ASSETS Lease rights Research and development fixed assets Other operating intangible fixed assets Non operating intangible fixed assets TANGIBLE FIXED ASSETS OPERATIONAL BUILDING Operational land Office buildings Service residential buildings OPERATIONAL FURNITURE AND EQUIPMENT Office furniture Office equipment Computer equipment Operating rolling stock Other operating equipment OTHER OPERATING TANGIBLE FIXED ASSETS NON OPERATING TANGIBLE FIXED ASSETS Non operating land Non operating buildings Non operating furniture and equipment Other non operating tangible fixed assets TOTAL DEBTS Credit and similar institutions in Morocco Bank Al- Maghrib Public Treasury Post Office check services Banks in Morocco Other credit and similar institutions Foreign credit institutions Total 31/12/12 Total 31/12/11 ORDINARY CREDITOR ACCOUNTS SECURITIES UNDER MANAGEMENT Daily Forward CASH FLOW BORROWINGS Daily Forward FINANCIAL BORROWINGS OTHER DEBTS INTEREST PAYABLE TOTAL DEPOSITS Public sector Finance companies PRIVATE SECTOR Non finance companies Other customers Total 31/12/12 Total 31/12/11 CREDITOR SIGHT ACCOUNTS SAVING ACCOUNTS FORWARD DEPOSITS OTHER CREDITOR ACCOUNTS INTEREST PAYABLE TOTAL PROVISIONS SUBSIDIES, PUBLIC FUNDS ASSIGNED AND SPECIAL GUARANTEE FUNDS 31/12/ /12/2011 SUBSIDIES AND PUBLIC FuNDS ASSIGNED Investment subsidies received - Investment subsidies received - Investment subsidies received and registered in CPC Public funds assigned - Public funds assigned Special guarantee funds Mutual guarantee funds - Mutual guarantee funds - Other special guarantee funds - Crédit Populaire du Maroc support fund SUBORDINATED DEBTS GLOBAL AMOUNT NON APPARENTE DETAILS ON OTHER LIABILITIES 31/12/12 31/12/11 OPTIONAL INSTRUMENTS SOLD Securities operation settlement accounts - - Debts on securities - - Payment to be made on unpaid securities Provisions for financial service to issuers - - Sums paid by customer and repayable to issuers - - Miscellaneous creditors Sums payable to the State Sums owed to provident entities Various sums payable to shareholders and associated Sums payable to staff Suppliers of goods and services Various other creditors Adjustment accounts off balance sheet Divergence accounts on currency and securities Potential gains on unsettled coverage operations - - Gains spread out over settled coverage operations - - Linkage accounts between headquarters and branch offices in Morocco (creditor) - - Expenses payable and income identified in advance Expenses payable Income identified in advance Creditor transitory or pending accounts TOTAL DEBT SECURITIES ISSUED 31/12/2012 NATURE DES TITRES Outstanding 31/12/2011 Date of availability Maturity CHARACTERISTICS Nominal value rates Method of reimbursement 31/12/12 Certificates of deposit 27/04/12 26/04/ ,83% In Fine Certificates of deposit 25/05/12 24/05/ ,90% In Fine Certificates of deposit 12/11/12 11/02/ ,75% In Fine Certificates of deposit 12/11/12 13/05/ ,85% In Fine Certificates of deposit 31/12/12 02/04/ ,70% In Fine Interest payable TOTAL FIXED ASSETS GIVEN AS FINANCIAL LEASE AND RENTAL ON 31/12/2012 FIXED ASSETS GIVEN AS FINANCIAL LEASE AND RENTAL CREDIT AND SIMILAR INSTITUTIONS FINANCE AND SIMILAR INSTITUTIONS Allocations Write backs Other variations RELATED FINANCE COMPANIES NON FINANCE COMPANIES FISCAL YEAR 31/12/12 FISCAL YEAR 31/12/11 SUBORDINATED DEBTS FIXED DURATION SUBORDINATED DEBTS Fixed duration subordinated securities Fixed duration subordinated borrowing with credit institutions Fixed duration borrowings from customers OPEN DURATION SUBORDINATED DEBTS Open duration subordinated debts Open duration subordinated borrowings with credit institutions Subordinated open borrowings with customers INTEREST PAYABLE NIL Outstanding 31/12/2012 PROVISIONS DEDUCTED FROM ASSETS Debts credit institutions and similar Customer debts Investment securities Ownership and similar resources Financial lease and rental fixed assets - Other assets PROVISIONS ENTERED IN LIABILITIES Provisions for risk of commitments by signature Provisions for foreign exchange risks Provisions for general risks Provisions for retirement pensions and similar obligations Provisions for other risks and expenses Regulated provisions - GRAND TOTAL

127 SHAREHOLDERS EQUITY Outstanding 31/12/11 Assignment of income Other variations Outstanding 31/12/12 Reserves and premiums linked to equity Legal reserve Other reserves Issue, merger and contribution premiums Capital Called up capital Non called up capital - Investment certificates - Allocation funds - Shareholders, unpaid capital - Carried forward (+/-) Net income pending assignment (+/-) - Net income in FY (+/-) Total FINANCING AND GUARANTEE COMMITMENTS 31/12/12 31/12/11 FINANCING AND GUARANTEE COMMITMENTS GIVEN Financing commitments to credit and similar institutions Import documentary credit - - Payment acceptances or commitments - - Confirmed credit openings Substitution commitments upon securities issue - - Irrevocable financing lease commitments - - Other financing commitments given - - Financing commitments customers Import documentary credits Acceptances and commitments to pay Confirmed opening of credit Substitution commitments on securities issue - - Irrevocable financing lease commitments - - Other financing commitments given - - Guarantee commitments for credit institutions and similar orders Confirmed export documentary credits Acceptances or commitments to pay - - Credit guarantees given - - Other guarantees, approvals and authorizations given Pending commitments - - Guarantee commitments orders customers Credit guarantees given Guarantees given for public administration Other guarantees given Pending commitments Other securities to be issued FINANCING AND GUARANTEE COMMITMENTS RECEIVED Financing commitments received from credit and similar institution Credit guarantee Other guarantees received - - Substitution commitments upon securities issue - - Guarantee commitments received from credit institutions and similar Credit guarantees - - Other guarantees received Guarantee commitments received from State and sundry guarantee bodies Credit guarantees Other guarantees received - - Other securities receivable COMMITMENTS ON SECURITIES 31/12/12 31/12/11 COMMITMENTS GIVEN Securities purchased repos - Securities to be delivered Primary market - - Grey market - - Regulated markets Over the counter market - - Other - COMMITMENTS RECEIVED Securities sold repos - Securities receivable Primary market - - Grey market - - Regulated markets Over the counter market - - Other - NIL FORWARD FOREIGN EXCHANGE OPERATIONS AND COMMITMENTS ON DERIVATIVE PRODUCTS Coverage operations 31/12/12 31/12/11 FORWARD FOREIGN EXCHANGE OPERATIONS Currency receivable Dirhams to be delivered Currency to be delivered Dirhams receivable Including currency financial swaps - - COMMITMENTS ON DERIVATIVE PRODUCTS Commitments on regulated interest rate markets - - Commitments on interest ate over the counter markets - - Commitments on regulated foreign exchange markets - - Commitments on regulated foreign exchange markets Commitments on over the counter markets of other instruments - - Commitments on over the counter markets of other instruments SECURITIES RECEIVED AND GIVEN AS GUARANTEES Assets or off balance Amounts of debts sheet recorded debts and commitments Securities received as guarantee Net book value or commitments by by signature given signature given and covered Treasury bills and similar securities Other securities Mortgages Other securities TOTAL Securities received as guarantee Net book value Assets or off balance sheet recorded debts or commitments by signature given Amounts of debts and commitments by signature given and covered Treasury bills and similar securities Other securities Mortgages - Other securities TOTAL BREAKDOWN OF FINANCIAL RESOURCES ACCORDING TO RESIDUAL DURATION D<1 month BREAKDOWN OF ASSETS, LIABILITIES AND OFF BALANCE SHEET IN FOREIGN CURRENCIES 31/12/12 31/12/11 ASSETS: Cash on hand, central banks, public treasury, post office checks Debts on credit institutions and similar Customer debts Transaction and investment securities Other assets Investment securities Interest taken out and similar resources Subordinated debts TOTAL ASSETS LIABILITIES: Debts to credit institutions and similar Customer deposits Other liabilities TOTAL LIABILITIES OFF BALANCE SHEET: COMMITMENTS GIVEN COMMITMENTS RECEIVED INTEREST MARGIN 1 month<d <3 months 3 months <1 year 31/12/12 31/12/11 INTEREST PAID * Interest and similar income on operations with credit institutions * Interest and similar income on customer operations * Interest and similar income on debt securities INTEREST SERVED * Interest and similar expenses on operations with credit institutions * Interest and similar expenses on customer operations * Interest and similar expenses on debt securities issued INTEREST MARGIN income on ownership titles 1year <D<5 years D>5 years TOTAL ASSETS Debts to credit institutions and similar Customer debts Debt securities Subordinated debts Financial leases and similar TOTAL LIABILITIES Debts to credit institutions and similar Customer debts Debt securities issued Subordinated borrowings TOTAL /12/12 31/12/11 Income on investment securities (ownership interests) OCIT dividends Dividends on other ownership interests Other income on ownership interests Income on ownership interests and similar resources Dividends on ownership interests Dividends on linked ownership interests Other income on ownership interests Activity Report

128 Financial Statements GENERAL OPERATING EXPENSES 31/12/12 31/12/11 GENERAL OPERATING EXPENSES Payroll expenses Salaries and wages Bonuses and gratuities Other staff remuneration Social insurance charges Retirement charges Training charges OTHER PAYROLL EXPENSES Taxes and duty Urban taxes Operating license City taxes - - Registration fees 1 - Stamp duty and forms 5 66 Automotive tax OTHER TAXES, DUTY, AND SIMILAR FEES External Expenses Financial lease rents Operating lease rents Maintenance and upkeep costs Temporary staff remuneration Middlemen payments and fees Insurance premiums Deeds and legal costs ELECTRICITY, WATER, HEATING AND FUEL External expenses Transport and travel expenses Missions and receptions Advertising, publications and public relations Postal and telecommunications costs Research and documentation costs Consultancy and meeting costs Donations and contributions Office supplies and printed materials OTHER EXTERNAL EXPENSES Other operating expenses Preliminary costs - Fixed asset purchase costs - Other expenses spread out over several fiscal years Penalties and fines - Back taxes other than income tax - Gratuities donations and contributions - Investment and operating subsidies granted - General operating costs of previous years Sundry other general operating costs - Allocations to depreciation and tangible and intangible fixed asset provisions TRANSITION FROM NET BOOK INCOME TO NET FIS- CAL INCOME Reintegration Deductions I NET BOOK INCOME. Net profit Net loss II FISCAL REINTEGRATION Current Expenses on relevant fiscal years VAT/real estate loans to staff members Depreciation surpluses 2 - Non deductible donations 73 - Write-offs Clearing out of small non deductible debts 89 - Allocation for end of career premium - Corporate tax Non current Fines and penalties of all kinds and non deductible increases Miscellaneous III FISCAL DEDUCTIONS Current Deduction on equity income Write down of provision for investment 2 Non current Support fund subsidy Other deductions TOTAL IV GROSS FISCAL INCOME. Gross profit if Gross fiscal deficit if V DEFICITARY CARRY OVERS (C) (1). Fiscal year n-4. Fiscal year n-3. Fiscal year n-2. Fiscal year n-1 VI NET FISCAL INCOME Net fiscal profit OR. Net fiscal deficit (B) VII CUMULATIVE FISCALLY DIFERRED DEPRECIATION VIII CUMULATIVE FISCAL DEFICITS TO BE CARRIED FORWARD. Fiscal year n-4. Fiscal year n-3. Fiscal year n-2. Fiscal year n-1 (1) In the limit of the amount of the gross fiscal profit (A) COMMISSIONS RECEIVED AND PAID COMMISSIONS 2012 COMMISSIONS 2011 E. CREDIT CLIENTELE E. CREDIT CLIENTELE COMMISSIONS RECEIVED Commissions on account operations Commissions of means of payment Commissions on securities transactions Commissions of management/ deposit transactions Commissions on credit-based services rendered Income on consultancy and assistance activities Other income on services rendered Commissions for investments on primary market Guarantee commissions on primary market Commissions on derivative income Commissions on foreign exchange transfer operations Commissions on bank note exchange operations COMMISSIONS PAID Charges on means of payment Commissions on purchase and sale of securities Commissions on security custody fees Commissions and brokerage fees on market transactions Commissions on securities commitments Commissions on derivative income Commissions on transfer foreign exchange operations Commissions on bank note foreign exchange operations Other expenses for services rendered MARKET OPERATIONS INCOME 31/12/12 31/12/11 Gains on transaction securities Losses on transaction securities INCOME ON TRANSATION SECURITIES Value added on sale of investment securities Write down from provisions on depreciation of investment securities Capital loss on sale of investment securities Allocation to provisions on depreciation of investment securities INCOME ON INVESTMENT SECURITIES Income on securities commitments - - Expenses on securities commitments - - INCOME ON SECURITIES COMMITMENTS - - Income on derivative product commitments Expenses on derivative product commitments INCOME ON DERIVATIVE PRODUCT COMMITMENTS Income on foreign exchange operations Expenses on foreign exchange operations INCOME ON FOREIGN EXCHANGE OPERATIONS OTHER INCOME AND EXPENSES 31/12/12 31/12/11 Other banking income Value added from sale of investment securities Commissions on derivative income Gains on derivative foreign exchange rate income Income on foreign exchange operations Sundry other banking income Quota of mutual banking transactions - - Income from previous fiscal years Sundry other banking income Write-downs from provisions for depreciation on investment securities Other banking expenses Negative values on sale of investment securities Charges on means of payment Sundry charges on ownership interests - - Loan issue costs - - Other security operation charges Losses on foreign exchange rate derivative income OTHER EXPENSES ON SERVICE PROVISION Charge on foreign exchange operations Sundry other banking charges Quota on banking operating transactions - Depositor guarantee fund contribution Reverted income - - Charges in previous FYs Other sundry banking charges - - Allocations to provisions for depreciation of investment securities NON BANKING OPERATING INCOME Income from securities and similar resources - - Value added on sale of financial fixed assets - - Value added on sale of tangible and intangible fixed assets Fixed assets produced by enterprise on its own behalf - - Accessory income Subsidies received - - Other non banking operating income NON BANKING OPERATING EXPENSES Charges on securities and similar resources - NEGATIVE VALUES FOR SALE OF FINANCIAL FIXED ASSETS Negative values for sale of tangible and intangible fixed assets 8 Crédit Populaire du Maroc support fund -

129 DETERMINATION OF CURRENT INCOME AFTER TAX I. DETERMINATION OF INCOME Amounts Current income after profits and losses account (+ or -) Fiscal reintegration on current operations Tax deductions on current operations Current income theoretically taxable Theoretical tax on current income Current income after tax II. INDICATION OF FISCAL SCHEME AND BENEFITS GRANTED BY THE INVESTMENT CODE OR BY SPECIFIC LEGAL PROVISIONS VAT TAX DETAILS NETWORK (in number) NETWORK 31/12/12 31/12/11 Permanent windows Temporary windows Automatic distributors and automatic teller machines Branch offices abroad 2 2 Representation office abroad 7 7 CUSTOMER ACCOUNTS TYPE BALANCE AT BEGINNING OF FY 1 FY BOOK OPERATIONS 2 VAT TAX DECLARATIONS 3 BALANCE AT END OF YEAR (1+2-3=4) CUSTOMER ACCOUNTS 31/12/12 31/12/11 Current accounts Checking accounts of Moroccans residing abroad A. VAT COLLECTED B. VAT to be recovered. On expenses. On fixed assets C. VAT payable or VAT = (A-B) GIVEN FISCAL UNICITY THE TABLE IS AVAILABLE AT CPM Other checking accounts Factoring accounts Saving accounts Forward accounts Cash vouchers Other deposit accounts DISTRIBUTION OF BCP CORPORATE CAPITAL Name of principal shareholders or associates Address Number of shares held Previous FY Current FY Share of capital held % BANQUES POPULAIRES REGIONALES ,10% GENERAL TREASURY RABAT ,02% OCP ,06% MISCELLANEOUS ,82% Total % APPROPRIATION OF EARNINGS TAKING PLACE DURING FISCAL YEAR A. ORIGIN OF INCOME APPROPRIATED Decision of A.G.O. 24/05/2011 AMOUNTS B. APPROPRIATION OF EARNINGS AMOUNTS Carried forward Legal reserve Net income pending appropriation Other reserves Net income in FY Dividends Deductions from profits Other assignments Other deductions Carried forward TOTAL (A) TOTAL (B) INCOME AND OTHER COMPONENTS OF THE PAST THREE FISCAL YEARS FISCAL YEAR 2012 FISCAL YEAR 2011 FISCAL YEAR 2010 SHAREHOLDERS EQUITY AND SIMILAR (CAPITAL) FISCAL YEAR OPERATIONS AND INCOME 1. Ne banking income DATES AND FOLLOWING EVENTS I- DATES Date of fiscal year end 31//12/2012 Date of drawing up summary statements February 2013 II- EVENTS AFTER 31/12/2012: STAFF MEMBERS NIL (in number) 31/12/ /12/2011 Paid staff members Staff members used Equivalent full time staff members Administrative and technical staff members (full time equivalent) Staff member assigned to banking tasks (full time equivalent) Managerial staff (full time equivalent) Employees (full time equivalent) Including employees working abroad 4 7 SECURITIES AND OTHER ASSETS MANAGED OR DE- POSITED NUMBER OF ACOUNT AMOUNTS 31/12/12 31/12/11 31/12/12 31/12/11 Securities deposited in bank Securities managed under management mandate Mutual funds deposited in bank Mutual Funds managed under management mandate NIL NIL NIL NIL Other assets deposited in bank NIL NIL NIL NIL Other assets managed under management mandate NIL NIL NIL NIL 2. Pre-tax income Income tax STATUS OF TURNOVER ON 31/12/12 4. Profits distributed Income not distributed (placed in reserve or pending assignment) 31/12/ /06/ /12/2011 TURNOVER INCOME PER SECURITY (in MAD) Net income per share (*) Profit distributed per share year N-1 (*) STAFF Amount of gross remunerations in fiscal year Average number of wage earners during fiscal year (*)The average number of BCP shares was multiplied by 2 further to the capital increase via incorporation of reserves as of 01/11/2011 STATUS OF OUTSTANDING DEBTS AND CORRES- PONDING PROVISIONS AMOUNT ON 31/12/12 By disbursement By signature DEBTS PROVISIONS Activity Report

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131 Activity Report 2012

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