Bank CenterCredit reported its results for the fourth quarter of 2025. We assess the report as moderately negative: net profit declined by 28% q/q and 12% y/y due to a sharp increase in loan loss provisions, seasonal growth in operating expenses, and a decline in non-interest income in several items. At the same time, net interest income before provisions reached a record KZT 113 billion for the quarter, indicating that the bank’s operational strength remains intact. For the full year 2025, net profit increased by 33% y/y, while EPS rose by 38% y/y to KZT 1,501 per share. In our valuation model, we updated the key financial indicators, slightly lowered our expectations for net profit, and reduced the cost of equity. As a result, the target price for BCC shares is KZT 4,600, implying 2% upside from the current level. Recommendation: Hold.
Interest income: a new quarterly record. Quarterly interest income reached a new record of KZT 249 billion (+2.5% q/q and +20% y/y). The main contribution came from income on loans to customers, which grew 6.6% q/q and 23% y/y to KZT 202 billion. Meanwhile, interest expenses declined by 5% q/q to KZT 136 billion, mainly due to the positive effect of the full repayment of subordinated bonds (from KZT 43 billion to zero by year-end), although on a yearly basis interest expenses increased by 20%. As a result, net interest income before provisions reached a record KZT 113 billion (+14% q/q and +21% y/y), marking the best quarterly result in the bank’s history.
Net profit: quarterly result declined y/y for the first time in 2.5 years. Loan loss provisions amounted to KZT 23.5 billion, increasing by 30% q/q and almost sixfold y/y (KZT 4.2 billion in Q4 2024), reflecting accelerated growth of the retail loan portfolio (+20% y/y). Net fee and commission income declined to KZT 7.6 billion (-49% q/q), while income from foreign exchange operations fell to KZT 23 billion (-31% q/q and -37% y/y). Operating expenses amounted to KZT 60 billion (+33% q/q and +2% y/y), with the quarterly increase explained by seasonal factors. As a result, quarterly net profit declined to KZT 51 billion (-28% q/q and -12% y/y), with EPS of KZT 293. For the full year 2025, EPS reached KZT 1,501 per share (+38% y/y). The net loan portfolio grew 2% q/q to KZT 4.5 trillion, while the annual growth reached 17%. Cash collection of interest income increased from 93% to 94% over the year, while the ratio of liquid assets to liabilities increased during the quarter from 41.5% to 45.4%.
Our view and changes in the valuation model. The key risk is the faster growth of interest expenses and loan loss provisions, which increased sixfold compared with last year. The key valuation catalyst is the record quarterly net interest income before provisions, driven by continued loan portfolio growth and improved operational efficiency, with the cost-to-income ratio (C/I) declining from 42% to 37%. A potential start of the NBK base rate easing cycle could reduce pressure on funding costs. However, tighter banking sector regulation (higher minimum reserve requirements and corporate income tax rates) is likely to negatively affect performance in 2026. For example, during the first two months of 2026 the bank’s net profit declined by 32% y/y. In our valuation model, we updated the key financial indicators and reduced the cost of equity. We also lowered our expectations for net profit growth, which negatively affected the valuation. As a result, the new target price for BCC shares is KZT 4,600, implying 2% upside from current levels. Recommendation: Hold.