EXECUTIVE SUMMARY
At the end of FY 2024, CFG Bank recorded operational achievements higher than our initial forecasts, particularly in terms of NBI and Cost to Income. The NIGS, for its part, is in line with our expectations, at around MAD 260 Mn (Banking Sector Report - January 2025). Reassuring performances which led us to slightly revise our growth forecasts over the period 2024E-2026E.
Following our analysis of CFG Bank's annual results as well as the conference held by the Top-Management, we come away with the following messages:
- Thanks to a sustained commercial effort, particularly in the Corporate segment, the bank continues to increase its market share. This is supported by the strong growth in credit activity of +22.1%(1) in 2024 to MAD 17.4 Bn. In parallel with this commercial dynamic, we note the strong increase in the fees income of +52.8% to MAD 401 Mn. A development which attests to the remarkable performance of asset management;
- Despite the resumption of the investment program at the level of the branch network, marketing and the IT system, CFG Bank was able to reduce its Cost to Income ratio by -7.2 pts in 2024 to 58.8%. The bank manages to control the evolution in its management fees (+27.6%) below the growth level its commercial activity (+43.2%);
- CFG Bank's positioning on relatively less risky segments, namely investment credits dedicated to Medium & Large Corporates as well as real estate loans, allows it to display a CoR rate vastly different from the sector average, i.e. 23 BPS(2) Vs. 120 BPS respectively;
- At the end of our update, we come out with a target price of MAD 253, showing an upside potential of +7.0% compared to the stock’s price of MAD 236 on 03/04/2025. To this end, we recommend HOLDING CFG Bank stock.
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