Bank CenterCredit reported results for Q4 2024. Quarterly interest income hit a record high; however, net profit growth was largely driven by a one-off non-interest income. In our valuation model, we updated the key financial indicators and raised the cost of equity. As a result, our estimated fair value per BCC share stands at KZT 2,700, indicating a 9% overvaluation relative to the current price. Recommendation – Hold.
(+) Record-high interest income. Interest income in Q4 reached a record KZT 207 billion, up 34% y/y and 5.8% q/q. The increase was mainly driven by a 6.5% q/q and 37% y/y rise in loan interest income. Other interest income lines also grew over 15% y/y, with interest income from placements in banks particularly strong, up 35% y/y. The bank’s net loan portfolio expanded 7.1% q/q and 30.8% y/y over the year.
(=) One-off non-interest income boosted profit. Quarterly fee-based profit rose 18% q/q and 148% y/y, though it remains below the average quarterly levels of 2023. Additionally, fee income declined 20% q/q and 27% y/y. Net non-interest income amounted to KZT 37.5 billion (+44% q/q and +136% y/y), driven by a one-time gain from placing bonds at below-market rates. Income from foreign exchange operations continued to grow strongly (+388% y/y) thanks to strong dealing activity. Quarterly operating expenses rose 56% y/y and 32% q/q. As a result, BCC posted net profit of KZT 58 billion (+84% y/y and -0.1% q/q). Earnings per share for 2024 reached KZT 1,085 (+15% y/y). Over the year, the cash collection ratio of interest income declined slightly from 93.7% to 93.1%. The ratio of liquid assets to liabilities increased from 43.1% last year to 44.6%
Our opinion and valuation model changes. BCC’s financial report can be seen as moderately positive, supported by strong loan book growth and record interest income. In our valuation model, we revised the key financial indicators and raised the cost of equity. As a result, our updated target price per BCC share is KZT 2,700, suggesting the current price is 9% overvalued. Recommendation – Hold.