Positioning of Banque Centrale Populaire’s stock

Since our BUY recommendation on January 9th, 2025 (Rapport Secteur Bancaire-Janvier 2025), Banque Centrale Populaire stock price have increased by +4% getting close to our target price of MAD 325. After the release of the FY 2024 and Q1-25 results, we maintain our 2025E forecasts unchanged. Additionally, we remain confident in the Group's ability to maintain an upward trajectory in its operational and financial results in the coming years.

Banque Centrale Populaire: Results Analysis

The key takeaways from Banque Centrale Populaire's FY 2024 and Q1-25 achievements are as follows:

  • NBI surged by +12.4% to settle at MAD 25,611 Mn in 2024, in line with our forecast of MAD 25,882 Mn. A growth driven by the Market Activities Income(1) which appreciated by +42.8% to MAD 6,821 Mn in a favorable interest rate context in Morocco. The Interest Income rose by +4.3%, supported by a visible improvement of loan yields. In Q1-25, NBI momentum remains strong (+14.9%), driven by the appreciation of market activities (+55.2%), which continue to benefit from a favorable interest rate environment;
  • The Cost to Income (C/I) ratio improved by -4.1 pts to 45.1% in 2024 against an of -4.6 pts to 44.6 pts. This decrease is driven by the optimization of the branch distribution network combined with the sustained NBI increase. In Q1-25, this trend is confirmed through a further decrease of -4.6 pts to 41.1%, i.e. the lowest historical level;
  • The Cost of Risk (CoR) grows by +15.6% to MAD 6,196 Mn in 2024. A level slightly higher than our forecast of MAD 6,027 Mn. This is due to a relatively prudent provisioning policy compared to . Thus, the CoR ratio stands at 216 BPS against 137 BPS on average for the listed banks in 2024. In Q1-25, this ratio remains stable at 216 BPS, i.e. the highest level within the listed banking sector in Morocco;
  • Net Income Group Share (NIGS) reached MAD 4,155 Mn, up +19.6% in 2024, slightly below our forecast of MAD 4,586 Mn. In Q1-25, NIGS settles at MAD 1,293 Mn, which reflects a high achievement rate of 27%. This observation supports our 2025E growth scenario.
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