CFG Bank: Wealth Management Clients Boost Deposits, Saham Bank Raises Price Target

CFG Bank's half-year results have captured the attention of analysts at Saham Bank, who raised their price target in a note dated September 11. The private bank achieved 105% of the initial forecasts for demand deposits (DAV) for 2025. This outperformance is attributed to the unexpected resilience of average client deposits and strong fundraising within the private banking sector, amid particularly dynamic capital markets. "We now anticipate an average weight of DAV at 47% over the next five years, up from the initial 43%, with a management target of 50%. Consequently, we are raising our forecasts for net income (RNPG) by +21.6% for 2025 and approximately +12% annually until 2029," the analysts noted. For reference, CFG Bank's RNPG increased by +66% by the end of June 2025, driven by market activities, a significant portion of which remains non-recurring. Based on this, Saham Bank now expects an RNPG of 367 million dirhams in 2025, up from the previously forecasted 301 million dirhams, and 424 million dirhams in 2026, compared to an initial estimate of 355 million dirhams. The bank's net banking income (PNB) is also projected to exceed 1.4 billion dirhams as early as 2026, a milestone reached sooner than anticipated. "The increase in forecasts is primarily due to an improvement in the net interest margin (MNI), thanks to a higher-than-expected weight of DAV, and a more pronounced reduction in the cost of equity (CoEx) at 42% in 2029 compared to the initial 45%," the analysts from Saham Bank explained. In conclusion, they stated, "Given the potential for stock price progression, the bank's ability to consistently exceed expectations, and several positive catalysts in the coming years – namely (1) a likely strengthening of the capital markets cycle in 2026-2027, (2) the dynamics of demand deposits, and (3) the outlook for equipment loans – we maintain our BUY recommendation on the stock."