Bank of Africa : Consolidated Financial Statements and Explanatory Notes 2022

ir-bankofafrica.ma

DECEMBER 31, 2022 COMMUNICATION

BANK OF AFRICA

CONSOLIDATED FINANCIAL STATEMENTS

AND EXPLANATORY NOTES

31 December 2022

BANK OF AFRICA

140, Avenue Hassan II

PO. BOX 20 039 Casa Principale

Phone: [phone] / 96

Fax: [phone]

Capital: 2 087 698 270 MAD

Swift: bmce ma mc

Telex: 21.931 - 24.004

Trade Register: casa 27.129

CCP: Rabat 1030

CNSS: 10.2808.5

Tax Identification Number: 01085112

Trading tax: 35502790

GOVERNANCE AND CSR GROUP-FINANCIAL COMMUNICATION

Phone: [phone]

Fax: [phone]

E-mail: [e-mail]

BANK OF AFRICA WEBSITES : www.bankofafrica.ma

www.ir-bankofafrica.ma

INTERNATIONAL TRADE WEBSITE : www.bmcetrade.com

BMCE CAPITAL WEBSITE : www.bmcecapital.com

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Summary

I. CONSOLIDATED BALANCE SHEET, CONSOLIDATED INCOME STATEMENT, STATEMENT OF NET INCOME, STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY, CASH FLOW STATEMENTS AND SUMMARY OF

ACCOUNTING POLICIES	5
1.1. Consolidated Balance Sheet	5
1.2. Consolidated income statement	6
1.3. Statement of Net Income and Gains and Losses Recognised Directly in Shareholders' Equity	7
1.4. Statement of Changes in Shareholders' Equity	7
1.5. Cash Flow Statements at 31 december 2022	8
1.6. Summary of Accounting Policies Applied by the Group	9

II. NOTES TO THE INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2022	19
2.1. Net Interest Income	19
2.2. Net Fee Income	19
2.3. Net Gains on Financial Instruments at Fair Value Through Profit or Loss	20
2.4. Net Gains on Available-For-Sale Financial Assets	20
2.5. Net Income From Other Activities	20
2.6. General Operating Expenses	20
2.7. Cost of Risk	21
2.8. Net Gains on Other Assets	21
2.9. Income Tax	22

III. SEGMENT INFORMATION	23
3.1. Earnings by business line	23
3.2. Assets and Liabilities by Business Activity	24
IV. NOTES TO THE BALANCE SHEET FOR THE YEAR ENDED 31 DECEMBER 2022	25
4.1. Cash, Amounts due From Central Banks, banks and the Post Office	25
4.2. Assets and Liabilities at Fair Value through Profit or Loss	25
4.3. Available-For-Sale Financial Assets	26
4.4. Interbank Transactions, Receivables and Amounts due From Credit Institutions	26
4.5. Loans, Receivables and Amounts due From Customers	26
4.6. Debt Securities, Subordinated Debt and Special Guarantee Funds	27
4.7. Held-To-Maturity Financial Assets	29
4.8. Current and Deferred Tax	29
4.9. Accrued Income and Expenses, Other Assets and Liabilities	29
4.10. Investments in Companies Accounted for Under the Equity Method	30
4.11. Property, Plant and Equipment and Intangible Assets Used in Operations and Investment Property	30
4.12. Goodwill	31
4.13. Provisions for Risks and Charges	31
4.14. Fair Value	32
V. FINANCING AND GUARANTEE COMMITMENTS	34
5.1. Financing Commitments	34
5.2. Guarantee Commitments	34
VI. SALARY AND EMPLOYEE BENEFITS	34
6.1. Description of Calculation Method	34
6.2. Summary of Provisions and Description of Existing Schemes	34
VII. ADDITIONAL INFORMATION	35
7.1. Changes in Share Capital and Earnings Per Share	35
7.2. Scope of Consolidation	35
7.3. Executive Compensation	36
7.4. Related Parties	36
VIII. NOTE CONCERNING RISKS	40
8.1. Risk Management Policy	40
8.2. Credit Risk	41
8.3. Rating Model	42
8.4. Credit Risk Control and Monitoring Procedure	43
8.5. Description of the Policy for Managing Liquidity and Interest Rate Risks	45
8.6. Market Risk	46
8.7. Operational Risk	48
8.8. ICAAP System	50
8.9. Internal Crisis Recovery Plan (PRCI)	50
8.10. Corporate and Social Responsibility	50
8.11. Measurement of Capital Adequacyy	51

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Established in 1959 and privatised in 1995, BANK OF AFRICA is a universal bank which offers a diversified range of products and services through a domestic network of 700 branches. BANK OF AFRICA, Morocco's third largest bank in terms of market share for deposits and loans, currently has operations in about thirty countries in sub-Saharan Africa, Europe and Asia.

BANK OF AFRICA's activities primarily include commercial banking, specialised financial services, asset management, investment banking and international activities.

The Group's activities in Morocco

BANK OF AFRICA's activities in Morocco include:

• Retail Banking, sub-divided by market specialisation - retail customers, professional banking customers, private clients and Moroccans living abroad;
• Corporate Banking, including SMEs and large enterprises.

It is worth noting that BANK OF AFRICA has embarked on a regional strategy aimed at moving the decision-making process closer to the customer and improving the Bank's impact from a commercial perspective. The Bank's distribution network, now organised on a regional basis and enjoying greater independence, encompasses both Retail Banking as well as Corporate Banking activities.

• BMCE Capital, the Bank's investment banking subsidiary, is organised by business line on an integrated basis which include asset management, wealth management, brokerage and capital markets activities as well as M&A and other corporate advisory services.
• Specialised financial services, whose products are primarily marketed via the branch network, the aim being to develop intra-Group commercial and operational synergies - consumer credit, leasing, bank-insurance, factoring and vehicle leasing. RM Experts, subsidiary specialising in recovery, was established in 2010.

BANK OF AFRICA's international activities

BANK OF AFRICA's international vocation can be traced back to its origins as a bank specialising in foreign trade. The Bank rapidly turned to international markets by building a strong presence in Europe. In 1972, it became the first Moroccan bank to open a branch in Paris. The Group's European activities are conducted through BANK OF AFRICA UK and BANK OF AFRICA Europe, which constitute the Group's European platform for investing in Africa.

The Bank also has twenty or so representative offices providing banking services to Moroccans living abroad. The Bank recently established BMCE Euroservices as a result of the recent re-organisation of its European business. This entity, which is responsible for banking for expatriates, will work closely with the domestic branch network.

BANK OF AFRICA has also developed, since the 1980s, sizeable operations in the African market following the restructuring of Banque de Développement du Mali, the country's leading bank, in which it has a 32.4% stake.

Similarly, in 2003, in Congo Brazzaville, BANK OF AFRICA acquired a 25% stake in LCB Bank 37% as of 31 december, 2015 which it restructured, resulting in it becoming the undisputed market leader in its industry. BANK OF AFRICA's stake in LCB Bank increased to 39.42%.

BANK OF AFRICA's development accelerated in 2008 following the acquisition of a 35% stake in BOA Group which has operations in some fifteen countries.BANK OF AFRICA has since increased its stake in the pan-African bank to 72,4%.

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7, Boulevard Driss Slaoui	23, rue Brahim Lemtouni - Quartier Oasis
Casablanca	20410 - Casablanca - Maroc

GROUP BANK OF AFRICA BMCE GROUP

STATUTORY AUDITORS' LIMITED AUDIT CERTIFICATE RELATING TO THE PROVISIONAL CONSOLIDATED FINANCIAL STATEMENTS 31 DECEMBER 2022

We have performed a limited audit of the provisional financial position of BANK OF AFRICA BMCE GROUP and its subsidiaries, comprising the consolidated statement of financial position, consolidated income statement, consolidated cash flow statement, consolidated statement of changes in shareholders' equity and a selection of explanatory notes for the period from 1 January to 31 December 2022. This provisional financial position shows consolidated shareholders' equity of MAD 31.841.759 thousands, including consolidated net income of MAD 3.540.174 thousands.

We performed our limited audit in accordance with Moroccan accounting standards. These standards require that the limited audit is planned and performed with a view to obtaining reasonable assurance that the provisional consolidated statement of financial position mentioned in the paragraph above is free from material misstatement. A limited audit primarily involves interviews with the company's staff and the carrying out of analytical checks on financial data. It therefore provides less assurance than a full audit and, as a result, we are unable to express an opinion.

BANK OF AFRICA BMCE Group possesses a stock of non-operating real estate assets, acquired as dation-in-payment, These assets represented a total of 5 billion dirhams as of end of 2022. In accordance with the applicable regulatory requirements, assets of MAD 1 billion were identified as presenting uncertainties about their resale.

On the basis of our limited audit, we have not identified any items that lead us to believe that the attached consolidated financial statements do not give a true and fair view of income from operations over the period and of the financial position and assets of BANK OF AFRICA BMCE Group at 31 December 2022, in accordance with international accounting standards (IAS/IFRS).

Casablanca, 24 March 2023

The Statutory Auditors

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I. CONSOLIDATED BALANCE SHEET, CONSOLIDATED INCOME STATEMENT, STATEMENT OF NET INCOME, STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY, STATEMENT OF CASH FLOWS AND SUMMARY OF ACCOUNTING POLICIES

1.1. CONSOLIDATED BALANCE SHEET

The consolidated financial statements at 31 December 2022 were approved by the board of directors on 24 March 2023.

ASSETS UNDER IFRS		Note	dec.-22	dec.-21
Cash and balances at central banks, the Public treasury and postal cheque centre	4.1	18.425.856	19.737.051
Financial assets at fair value through profit	or loss		-	-
- Financial assets held for trading purposes		4.2	42.305.151	35.604.594
- Financial assets at fair value through profit	or loss	4.2	1.555.980	807.037
Derivative hedging instruments			-	-
Financial assets at fair value through other comprehensive income		-	-
- Debt instruments at fair value through other comprehensive income (recyclable)	4.3	553.274	1.708.897
- Equity instruments at fair value through other comprehensive income (non-recyclable)	4.3	5.575.246	4.969.163
Securities at amortised cost		4.4	51.299.202	38.926.888
Loans and advances to credit and similar institutions at amortised cost	4.5	26.324.021	21.001.481
Loans and advances to customers at amortised cost	4.5	209.469.232	197.020.207
Revaluation adjustment for portfolios hedged against interest rate risk		-	-
Financial investments from insurance operations		-	-
Current tax assets		4.8	1.290.422	981.203
Deferred tax assets		4.8	2.443.684	2.466.604
Prepayments, accrued income and other assets	4.9	8.377.263	6.497.978
Non-current assets held for sale			-	-
Investments in companies accounted for using the equity method	4.10	1.215.549	1.003.557
Investment property		4.11	3.434.112	3.560.318
Property, plant and equipment		4.11	8.560.774	8.517.859
Intangible assets		4.11	1.292.679	1.222.904

Goodwill

TOTAL ASSETS UNDER IFRS

LIABILITIES UNDER IFRS

Amounts due to central banks, the Public treasury and postal cheque centre Financial liabilities measured using the fair value option through profit or loss

4.12	1.032.114	1.032.114
	383.154.559	345.057.854
		(In thousand MAD)
Note	dec.-22	dec.-21

• Financial liabilities held for trading purposes
• Financial liabilities at fair value through profit or loss

Derivative hedging instruments Debt securities issued

Amounts due to credit and similar institutions Amounts due to customers

Revaluation adjustment on portfolios hedged against interest rate risk Current tax liabilities

Deferred tax liabilities

Accruals, deferred income and other liabilities Liabilities related to non-current assets held for sale Liabilities under insurance contracts

Provisions

Subsidies - public funds and special guarantee funds Subordinated debt

TOTAL LIABILITIES Shareholders' equity

Share capital and related reserves Consolidated reserves

• Attributable to shareholders of the parent company
• Non-controllinginterests

Gains and losses recognised directly in equity

• Attributable to shareholders of the parent company
• Non-controllinginterests

Net income for the period

• Attributable to shareholders of the parent company
• Non-controllinginterests

TOTAL CONSOLIDATED SHAREHOLDERS' EQUITY

TOTAL LIABILITIES UNDER IFRS

	-	-
	-	-
4.7	9.167.945	11.828.034
4.5	65.731.476	60.283.987
4.6	246.179.646	218.973.241
	-	-
4.8	1.551.727	1.357.479
4.8	1.179.479	1.187.570
4.9	13.942.922	9.717.696
	-	-
	-	-
4.13	1.458.938	1.613.520
	-	-
4.6	12.100.668	10.597.210
	351.312.800	315.558.737
	19.975.690	19.292.416
	-	-
	2.253.001	1.920.836
	4.878.592	4.357.111
	-	-
	671.763	587.204
	522.540	492.175
	-	-
	2.304.613	2.007.213
	1.235.561	842.162
	31.841.759	29.499.117
	383.154.559	345.057.854

(In thousand MAD)

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