Bank CenterCredit reported its Q1 2025 results. Quarterly interest income and net profit reached new records despite weak loan portfolio growth. In our valuation model, we updated the key financial indicators and lowered the cost of equity. As a result, the target price for one BCC share was set at 3,260 KZT, implying a 5% upside from the current level. Recommendation — Hold.
(+) Record-high interest income. In Q1, interest income reached a record 215 billion KZT, up 33% YoY and 3.8% QoQ. The main driver was loan interest income, which rose by 2.4% QoQ and 37% YoY. Other items also showed positive dynamics, especially income from financial assets measured at fair value, which grew by 34% YoY. Over the quarter, the net loan portfolio increased by 1.5% QoQ and 29% YoY.
(+) Net profit also reached a record high. Quarterly net fee and commission income rose by 2.9% QoQ, though it edged down by 0.4% YoY, remaining close to the quarterly average over the past two years. Gross commission income grew by 23% QoQ but declined by 2.7% YoY. Net non-interest income reached a record 46.5 billion KZT (+24% QoQ and +127% YoY), primarily due to loan loss reserve recoveries of 10.9 billion KZT — 21.2 billion KZT more than in Q4. There was also a strong increase in FX operations income (+151% YoY) amid active dealing. Operating expenses rose by 28% YoY but fell by 21% QoQ, mainly due to lower tax and administrative costs. As a result, BCC posted a record quarterly net profit of 82 billion KZT (+82% YoY and +40% QoQ), or 437 KZT per share. The cash collection rate for interest income rose from 92% to 97%, while the ratio of liquid assets to liabilities declined slightly from 45% to 43% over the quarter
Our opinion and valuation model changes. BCC’s financial report can be considered moderately positive, given record interest income and net profit. However, loan portfolio growth was modest, and part of the net profit was driven by a one-off income item. In the valuation model, we updated the key financial indicators and lowered the cost of equity. As a result, the new target price per BCC share is 3,260 KZT, implying a 5% upside. Recommendation – Hold.