Fitch Ratings has placed Societe Generale Marocaine de Banques' (SGMB) National Long-Term Rating of 'AAA(mar)' and National Short-Term Rating of 'F1+(mar)' on Rating Watch Negative (RWN).

The RWN follows the announcement by France's Societe Generale S.A. (A-/Positive) of the sale of its 57.7% stake in SGMB and its subsidiaries to Moroccan-based Saham Group (unrated) for EUR745 million. Saham Group will take over all the activities operated by these companies as well as all client portfolio and employees.

The sale is subject to regulatory approvals, including from Morocco's Central Bank (Bank-Al Maghrib), the Competition Authority and the Moroccan Authority for Capital Markets. The sale is expected to be concluded by end-2024.

The RWN on SGMB's National Ratings reflects Fitch's expectation that upon completion of the sale, the agency will cease to factor in SG's support in SGMB's ratings,. We will resolve the RWN once the transaction is concluded. At that time, we are likely to factor in sovereign support in the bank's National Ratings. If downgraded, SGMB's National Ratings are unlikely to fall below the 'A(mar)' category.

Key Rating Drivers

SGMB's National Ratings currently reflect Fitch's opinion of the support that the company could expect to receive, if required, from its 57.65% shareholder. SGMB is 57.65%-owned by SG, whose ability to support SGMB is strong (as reflected by its 'A-' Long-Term IDR).

The Key Rating drivers are as outlined in the rating action commentary published on 29 January 2024 on www.fitchratings.com.

Rating Sensitivities

Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade

If the transaction closes, Fitch expects to downgrade SGMB's ratings to the higher of the levels of the bank's standalone credit profile or potential support expected from the Moroccan authorities.

If the transaction fails to close, we could affirm SGMB's ratings or downgrade them if we take the view that support propensity from SG has diminished.

The resolution of the RWN could extend beyond the typical six months if the transaction is not completed by the end of it.

Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade

SGMB's National Ratings are at the highest level on the Moroccan National Scale and cannot be upgraded.

REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING

The principal sources of information used in the analysis are described in the Applicable Criteria.

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