BCP’s Strong Growth and Risk Discipline Justify Buy Rating, Say Analysts

As the stock market returns to optimism, the results of the Banque Centrale Populaire (BCP) for the 2024 financial year and the first quarter of 2025 reinforce the scenarios of a sustainable recovery in the banking sector. In a recent note, Attijari Global Research (AGR) maintains its buy recommendation on the stock, with a target price of 325 dirhams.

At the heart of this conviction are significantly improving financial indicators, strengthened operational discipline and a rigorous risk management policy.

A dynamic driven by BCP market activities

The overall performance of the BCP group is largely based on the sustained growth of its net banking income (NBI), which reached 25.6 billion dirhams (MMDH) in 2024, an increase of 12.4% over one year.

This development is perfectly aligned with the 25.9 billion forecast issued by AGR, reflecting the bank’s clear business model. However, it was primarily the “market activities and other” component that boosted revenues, with a spectacular jump of 42.8% to 6.8 billion dirhams, in a particularly favorable interest rate environment in Morocco.

This trend continues in Q1-2025, where the NBI increases by a further 14.9% to nearly 6.95 billion dirhams, driven by a 55.2% increase in market revenues.

At the same time, the interest margin, the traditional core of the banking business, is up 4.3% to MAD 14.6 billion in 2024, confirming an improvement in loan yields. AGR also notes a controlled increase in the commission margin, in line with expectations.

Efficiency levers well activated by BCP

While revenues are on an upward trajectory, streamlining efforts are not lagging behind. The operating ratio, a key indicator of cost control, stands at 45.1% in 2024, down 4.1 points compared to 2023.

AGR emphasizes that this improvement stems from both a significant increase in GNP and an optimization of the distribution network. The first quarter of 2025 confirms this dynamic, with a further contraction in the coefficient to 41.1%, its lowest level in history.

For AGR, this operational discipline strengthens the group’s ability to generate profitable and resilient growth, even in a demanding macroeconomic environment.

As a result, gross operating income (GOI) recorded a notable increase of 21.4%, to 14.05 billion for the whole of 2024. This figure was consolidated in Q1-2025 with a quarterly GOI of 4.1 billion, up 24.6% year-on-year.

Prudent provisioning, a guarantee of resilience

Rigorous risk management is another pillar of the BCP model. The cost of risk (CDR) stands at MAD 6.2 billion in 2024, an increase of 15.6%. Although this level slightly exceeds AGR’s expectations, it reflects, according to analysts, a prudent provisioning policy in the face of economic uncertainty.

This strategic choice translates into a consolidated CDR rate of 216 basis points (bps), compared to a sector average of 137 bps for listed banks. AGR sees this as a deliberately conservative positioning, which allows BCP to strengthen its safety cushion while absorbing potential shocks.

In Q1-2025, the CDR remains at the same level of 216 bps, confirming the consistency of this risk hedging policy. This prudent approach does not weigh on net profitability, since the net income group share (NIPG) climbs by 19.6% in 2024, to MAD 4.15 billion. In the first quarter of 2025 alone, the NIPG reached MAD 1.29 billion, up 19%, representing an annual achievement rate of 27%, according to AGR estimates.

A buy recommendation maintained for BCP

On the back of this solid performance and reassuring visibility on future results, Attijari Global Research maintains its “Buy” recommendation on the BCP share, with an unchanged target price of 325 dirhams, representing an upside potential of +8% compared to the price of 300 DH observed on June 10, 2025.

While the stock’s market performance remains modest (+2.7% over 12 months), especially compared to the surge in the MASI index (+41.7%), AGR sees a gap between market valuation and fundamentals. This gap could be corrected as quarterly results validate growth assumptions.

The bank also boasts a market capitalization of 61 billion dirhams and a slightly higher dividend per share of 10.5 dirhams, with a social payout of 73%. These levels are considered balanced by analysts, who anticipate a dividend of 11 dirhams in 2025.

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(Featured image by Nicholas Cappello via Unsplash)

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