Morocco - Sixth Banque Nationale Pour Le Developpement Economique (BNDE) Project

DOCUMENT OF INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION Not For Publ Use ISE Copy Report No. 90 a-MOR APPRAISAL OF BANQUE NATIONALE POUR LE DEVELOPPEMENT ECONOMIQUE MOROCCO April 11, 1973 Development Finance Companies Division Europe, Middle East and North Africa Region This report was prepared for official use only by the Bank Group. It may not be published, quoted or cited without Bank Group authorization. The Bank Group does not accept responsibility for the accuracy or completeness of the report.  CURRENCY UNIT MOROCCAN DIRHAM (DH) US $1 DH Li.19 US $1 million =I 4H.19 million DHi 1 =US $0.238 IF 1 million US $238,000 FISCAL YEAR January 1 to December 31 This report is based on a visit to BNDE from January to F'ebruary 1972, followed by an updating mission early in September 1972 and was prepared by Messrs. Claude Blanchi and Jost Luis Mombru.  MOROCCO APPRAISAL OF BANQUE NATIONALE POUR LE DEVELOPPEMENT ECONCM4IQUE Table of Contents Page No. BASIC DATA SUMMARY i - ii I. INTRODUCTION 1 II. BNDE'S ENVIRONMENT 1 Economic Performance of Morocco 1 Investment Policies and Incentives 2 Financial Environment 3 Relations with the Government 4 IIT. THE COMPANY - POLICIES, ORGANIZATION AND PROCEDURES 4 Policies 4 Shareholders and Board S Management, Organization and Staff 5 Appraisals 6 Project Supervision 6 IV. RESOURCES, OPERATIONS, PORTFOLIO AND FINANCIAL POSITION 7 Resources 7 Resource Position 9 Characteristics of Operations 9 Impact of BNDE's Operations 12 Evaluation of Loan and Equity Portfolio 14 Financial Performance and Position 15 V. BNDE'S FUTURE OPERATIONS 18 Prospects for Industrial Investment in Morocco 18 BNDETs Forecast of Operations 19 Financial Projections 21 VI. CONCLUSIONS AND RECOMMENDATIONS 22 Conclusions 22 Recommendations 24   LIST OF ANNEXES 1. Private Investment in Manufacturing - Approvals by the Investment Commission 2. Statement of Policy 3. Shareholders and Ownership Structure (as of December 31, 1972) 4. Board of Directors as of December 31, 1972 5. Organization Chart as of December 31, 1972 6. Outstanding Resource Position as of December 31, 1972 7. Analysis of Investments Approved (as of December 31, 1972) 8. Projected Financing of Investments in all Sectors 9. Comparison of Projects Authorized Under Loans 660 and 736-MOR (as of December 31, 1972) 10. Equity Portfolio as of December 31, 1972 11. Profit and Loss Statements, 1968 - 1972 12. Summary Balance Sheets, 1968 -1972 13. Past Operations, 1968- 1972 and Forecast of Operations, 1973-1977 14. Projected Statements of Income, 1973 - 1977 15. Financial Ratios Derived from 1972 Accounts and Projected Accounts for 1973- 1977 16. Projected Sources and Applications of Funds, 1973 - 1977 17. Projected Balance Sheets, 1973 - 1977 18. Estimated Disbursements Schedule for the Proposed Bank Loan MEKNA/DFC March 1973   BANQUE NATICNALE POUR LE DEVELOPPD(ENT ECONOMIQUE BASIC DATA Year of Establishment: 1959 Ownership (December 31, 1972) No. of Shares % of Total (Par value DH50) Government, direct and indirect 247,389 38.17 Moroccan private institutions 3,734 o.58 Moroccan individuals 111.787 17.25 Total Moroccan 362,910 56.00 Institutions resident in Morocco but foreign-controlled 64,138 9.90 Foreign financial institutions 110,311 17.03 I.F.C. 110.641 17.07 Total Foreign 285P090 44.00 Total Capital 6h8,000 100.00 Bank Group Financing a. IFC Investment in BNDE's Share Capital Investment Date Number Cost per Total Investment No. approved of Shares Share at Cost (US$) 56-MOR 12/20/62 150,000 10 1,4;95,774 Share.Sales 9/24/68 51,213 10 501,645 Stock Dividend 12/72 11,854 0 0 Held by IFC 12/31/72 110,641 8.99 994,129 b. IBRD Loans (As of February 28, 1973, in US$ '000) Loan No. Date Rate of Amount Allocated Amount Disbursed signe interest to Projects less Repaid 329-MOR 12/21/62 Variable 114973 4,084 447-MOR 5/13/66 Variable 16,172 4,552 571-MOR 11/114/68 Variable 11,398 9,l148 660-MOR 3/ 6/70 7% 13,299 10,271 736-MOR 10/20/71 7.25% 34,857 22,478 Operations (tH millions) Direct loans 1968 1262 1970 1971 1972 Net approvals 61.1 65.5 164.7 110.2 87.8 Commitments 38.4 68.5 65.0 148.9 89.4 Disbursements 32.3 142.7 61.1 96.3 97.9  BASIC DATA - 2- Operations (DHI mil;lions) - continued jiyr Investments 68 1969 1970 1971 1972 Approvals - 0.1 3.0 17.9 8.9 Disbursements 2.2 0.7 1.1 12.3 141.9 Rediscount Approved 39.2 5.4 96.7 134.0 65.o Financial Perfonmance a. Total assets 214.7 226.7 261.1 346.3 419,9 of which Loan Portfolio (172.6) (188.2) (218.9) (279.5) (334.7) of which Equity Portfolio (17.9) (18.4) (18.5) (3.1 ) (4339) Total Equity/