CFG Bank confirms strong momentum in 2025
CFG Bank's performance for the FY 2025 exceeded our initial forecasts. This is reassuring regarding the bank's ability to maintain its announced growth trajectory.
Under these conditions, we maintain our BUY recommendation on CFG Bank stock with a target price of MAD 287, offering an upside of +39%.
The key takeaways from CFG Bank's 2025 achievements are as follows:
- The Net Banking Income (NBI) grew by +32.5% to MAD 1,247 Mn, above our forecast of MAD 1,192 Mn (+26.7%). The Interest Income accounts for more than half of the NBI increase (52%), rising by +42.6%. This growth was driven by the loan growth momentum, which jumped by +25.2% to MAD 21.8 Bn, fueled by the development of the corporate segment and an improved net interest margin thanks to lower funding costs. It is reassuring to note that the Fees Income accounted for more than 40% of the NBI increase, rising by +32.0% to MAD 529 Mn, compared to an estimate of MAD 441 Mn (+10.0%). The bank thus confirms its ability to better value its services. The Income from MA & Other amounted to MAD 186 Mn, up +11.2% against a forecast of MAD 231 Mn;
- The Cost-to-Income ratio (C/I ratio) accelerated its decline by -9.5 pts to 49.2% against a forecast of 52.6%. The bank thus outperformed its 2028 target in terms of operational efficiency, with a C/I ratio below 50%;
- The Cost of risk amounts to MAD 46 Mn compared to an estimate of MAD 51 Mn. The CoR rate thus stands at 21 BPS after 23 BPS in 2024 thanks to the decrease of the NPL ratio;
- The Net Income Group Share reached MAD 370 Mn, surging by +41.5%. This is higher than our forecast of MAD 335 Mn. Note that following the utilization of tax loss carryforwards, the effective tax rate settled at 32.0% in 2025 against 18.5% in 2024. The DPS came out better than expected at MAD 4.0, up +21.2%, i.e a dividend yield (D/Y) of around 2.0%.
