CIH Bank stock: price target reached in january 2025

Since our recommendation on January 9th, 2025 (Rapport Secteur Bancaire-Janvier 2025), the CIH Bank stock reached its price target within the same month, specifically on January 27th, 2025.

Strong growth driven by credit and investment

CIH Bank has experienced remarkable growth over the past decade, with an average annual growth rate (AAGR) of loans at +12.2%, surpassing the symbolic milestone of MAD 100 billion in 2024. In the medium term, the bank is expected to benefit from . Based on our 2024–2027E growth scenario, we recommend "HOLDING" the stock.

2024 results: indicators aligned with forecasts

The analysis of CIH Bank's FY 2024 results reveals the achievement of our growth forecasts :

  • NBI increased by +6.1% to MAD 4,740 Mn, in line with our forecast of MAD 4,750 Mn. The interest income accounts for 70% of this increase. It rose by +6.8% thanks to steady loans growth of +11.5% driven by the diversification of the "Corporate" segment. The Fees income explains a quarter of the NBI increase thanks to the rise of digital technology, which has boosted electronic payment activity. Income from Market Activities(2) remains above MAD 1.3 Bn in a favorable interest rate environment;
  • The Cost-to-Income ratio (C/I ratio) improved by -0.7 pt to 43.9%, in line with our forecast of 43.8%. The productivity improvement effort is reflected in a cumulative decrease of this profitability indicator by -20.8 pts since the peak of 64.7% reached in 2017;
  • The Cost of Risk (CoR) declined by -16.3% to MAD 1,072 Mn, below our forecast of MAD 1,217 Bn. This was primarily due to the loan recovery of the Factoring Activity, whose outstanding amounts fell by half, from MAD 3.3 Bn to MAD 1.6 Bn. The CoR Rate improved by -34 BPS to 100 BPS. According to Management, this represents a new benchmark level ;
  • The NIGS stood at MAD 876 Mn, slightly above our forecast of MAD 837 Mn. (DPS) remained stable at MAD 14.0, i.e a payout (parent company basis) of 59%. This level came out below our scenario, which anticipated the transition to a new dividend threshold.
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