CDM Reports 2025 Results Aligning with Expectations; AGR Reiterates Buy Recommendation
Strong Growth Driven by Interest Margin
CDM's net banking income (NBI) rose by 8% to 3,568 million MAD, closely matching AGR's estimate of 3,585 million MAD. This growth is primarily fueled by a 10.4% increase in the interest margin, which accounts for 95% of the NBI rise.
The bank experienced a significant surge in lending, with total loans increasing by 11% to 62.9 billion MAD, marking the highest growth rate in the past decade. Notably, corporate loans showed remarkable performance, particularly in equipment financing, which grew by 16.6%, and leasing, which soared by 42.2%.
Operational Improvement and Risk Management
CDM's cost-to-income ratio improved by 2.3 percentage points to 46.3%, surpassing broker expectations and indicating effective cost optimization. The risk cost decreased by 3.8% to 383 million MAD, aligning closely with forecasts.
The non-performing loan ratio improved to 6.6%, reflecting prudent risk management practices. Consequently, the Group's net profit attributable to shareholders (RNPG) reached 864 million MAD, a 16.5% increase, slightly exceeding AGR's forecast of 848 million MAD.
Attractive Growth/Yield Profile
As of February 17, 2026, CDM's shares are trading at 14.3 times its estimated 2025 earnings, with a price-to-book ratio of 1.47 and an estimated dividend yield of 4.5%. The bank is expected to achieve a return on equity (ROE) of 10.5% in 2025, gradually improving to 10.8% in 2026 and 11.3% in 2027, indicating a steady enhancement in profitability.
For 2026, AGR projects an NBI of 3.84 billion MAD, reflecting a 7.1% increase, and an RNPG of 915 million MAD, up 7.9%, translating to earnings per share (EPS) of 84.1 MAD and a dividend per share (DPS) of 55 MAD, which would yield nearly 4.9%.
The cost-to-income ratio is expected to continue improving to 46.3%, while the risk cost is projected to remain contained at 58 basis points. By 2027, the RNPG is anticipated to reach 995 million MAD, with an EPS of 91.5 MAD, suggesting a price-to-earnings (P/E) multiple of 12.2 times, indicating potential multiple compression as profit growth materializes.
In this context, AGR believes that CDM presents one of the best profiles in the banking sector for consistent growth and yield, with a projected compound annual growth rate (CAGR) of 10.3% from 2024 to 2027 and a stable payout ratio around 65-66%.
