CIH Bank: Record profits confirm strong growth momentum
As anticipated in our last report, CIH Bank’s earnings crossed the MAD 1.0 Bn mark for the first time in 2025. At the same time, the bank's results are in line with our initial forecasts.
This validates our growth scenario for the 2025-2027E period. Under these circumstances, we maintain our BUY recommendation on the CIH Bank’s stock with a target price of MAD 492, offering an upside of +38%.
The key takeaways from CIH Bank's 2025 results are as follows:
- The Net Banking Income (NBI) increased by +14.4% to MAD 5,423 Mn, slightly above our forecast of MAD 5,275 Mn (up +11.3%). The Interest income accounts for more than half of the NBI increase, rising by +12.9%. This growth was driven by a strong lending dynamic as loans increased by +16.7% to MAD 118.1 Bn (up MAD +16.9 Bn), fueled by equipment loans in Morocco. These loans posted a significant increase of +49.7% to MAD 16.1 Bn. The Fees income grew by +9.4% to MAD 464 Mn, compared to a forecast of MAD 450 Mn. The Income from Market Activities & Other increased by +19.5% to MAD 1,576 Mn, in line with our initial forecast of MAD 1,522 Mn;
- The Cost-to-Income ratio (C/I ratio) improved by -1.0 pt to 42.9%, compared to a forecast of 42.5%. This ratio is below the banking sector average of 43.0% in 2025R;
- The Cost of Risk (CoR) amounted to MAD 1,209 Mn, up +12.9%, compared to an estimate of MAD 1,137 Mn (+6.1%). Consequently, the CoR rate improved slightly by -3 BPS to 97 BPS, in line with our initial expectation of 96 BPS;
- Net Income Group Share (NIGS) reached MAD 1,089 Mn, up +24.4%, almost identical to our forecast of MAD 1,090 Mn (up +24.5%). As expected, CIH Bank's earnings exceeded MAD 1 Bn for the 1st time. The Dividend per share (DPS) remained stable at MAD 14.0, below our expectation of MAD 16.0. The payout ratio stands at 54% based on the parent company’s net income against a pre-Covid average of 86% for the period 2015-2019.
