CIH Bank stock performance
Since our BUY recommendation on January 9th, 2025, CIH Bank stock price is getting closer to our target price of MAD 441. Taking into account the quality of the FY 2024 and Q1-25 results, we have considered that it is appropriate to revalue CIH Bank, based on the new growth forecasts for the period 2025-2027.
Analysis of CIH Bank's financial results
The key takeaways from CIH Bank's FY 2024 and Q1-25 achievements are as follows:
- NBI grew by +6.1% to MAD 4,740 Mn in 2024 in line with our forecast of MAD 4,750 Mn. This growth was driven by the net interest income, which appreciated by +6.8% thanks to a volume effect of loans(1) whose outstanding increased by +11.5% to MAD 101 Bn. The market activities income(2) stabilized around MAD 1.3 Bn contributing to 28% of the NBI. In Q1-25, NBI accelerated by +15.8%, driven by the positive dynamic of all business lines. This is a reassuring 2025E achievement rate of 26%;
- The Cost-to-Income ratio (C/I ratio) improved by -0.7 points to 43.9% in 2024, in line with the AGR forecast of 43.8%. This evolution was driven by cost optimization through digital banking combined to a growing NBI. In Q1-25, this trend was confirmed by a further decrease of this ratio by -1.9 points to 42.2%, compared to an AGR forecast of 43.6% in 2025E;
- After a +117% increase in 2023 due to anomalies related to the factoring activity, the Cost of Risk (CoR) adjusted by -16.3% to MAD 1,072 Mn in 2024 after the recovery of loan receivables related to this activity. This level stands below the AGR forecast of MAD 1,217 Mn. The CoR rate(3) settles at 106 BPS after 141 BPS in 2023, still above the average of 66 BPS over the 2021-2022 period. In Q1-25, this ratio fell by -5 BPS to 117 BPS;
- The Net Income Group Share (NIGS) reached MAD 876 Mn, up +23.3% in 2024, slightly above our forecast of MAD 837 Mn. In Q1-25, the NIGS amounted to MAD 298 Mn, reflecting a high achievement rate(4) of 34%.
