CIH Bank targets 2030 expansion with $1.5 billion capital increase

08:30

CIH Bank is preparing a major capital increase of 1.5 billion dirhams as the Moroccan lender seeks to strengthen its financial capacity and support an expansion strategy extending to 2030. The operation comes as the bank continues to broaden its customer base, accelerate digital adoption and diversify beyond its traditional real estate financing business.

The planned fundraising is designed to provide additional room for credit expansion while reinforcing the bank's capital position. It also reflects CIH Bank's intention to maintain strong financial performance as regulatory requirements become increasingly demanding.

A capital operation designed to support expansion

Under the proposed transaction, new shares will be offered at 358 dirhams per share, representing a discount of roughly 12% compared with the average market price recorded over the preceding 12 months.

The subscription mechanism gives existing shareholders priority according to their current holdings. Investors will be able to subscribe to three new shares for every 23 preferential subscription rights held, while additional applications may be submitted if part of the available rights remain unused.

The operation is structured around a defined timetable, with subscription rights scheduled to detach on July 1 and the subscription period running through July 23, while the broader operation is set to take place between August 1 and August 5.

For CIH Bank, the transaction serves several strategic objectives. The additional capital is expected to help accommodate continued demand for financing, improve the bank's regulatory capital buffers and preserve its ability to generate returns for shareholders.

From housing specialist to diversified banking group

CIH Bank's transformation over the past decade and a half has significantly changed its position in Morocco's financial industry.

The bank's customer base has more than doubled during the period, reaching approximately 2.7 million customers. Its nationwide network now includes 427 branches and 1,072 ATMs, while its digital channels have become an increasingly important part of the institution's relationship with clients.

Mobile banking has emerged as a major growth engine, with more than 100 million transactions conducted through mobile channels each year. The bank's application is used by around two million customers, underlining the rapid shift toward digital financial services.

Although real estate finance remains central to CIH Bank's identity and expertise, the institution has progressively developed a broader range of banking activities. This diversification has enabled it to serve different customer profiles while preserving its historical strength in property-related financing.

Younger customers and new growth segments

The bank's expansion has also been accompanied by a notable increase in its appeal among younger customers. Since 2018, CIH Bank has averaged around 400,000 new account openings annually, providing a significant source of customer acquisition and future business opportunities.

The next phase of the strategy is expected to place greater emphasis on small and medium-sized enterprises, microbusinesses, Moroccans living abroad and other strategically important customer groups.

This shift reflects broader changes within Morocco's economy, where access to financing for smaller businesses, digital financial services and banking solutions tailored to increasingly diverse customer needs are becoming more important competitive factors.

Solid financial base ahead of the 2030 roadmap

CIH Bank entered this new strategic phase with significant financial resources already in place. At the end of 2024, the institution recorded 4.74 billion dirhams in net banking income, while consolidated net profit approached 876 million dirhams.

Its Common Equity Tier 1 ratio stood at 8.3% on a consolidated basis and 8.67% on a standalone basis, both above the applicable regulatory requirements.

The planned capital increase is therefore not simply a response to immediate financial pressure. Instead, it is intended to provide the institution with greater flexibility as it pursues a more ambitious growth trajectory.

Betting on a hybrid banking model

CIH Bank's longer-term strategy is also closely tied to the changing expectations of Moroccan banking customers. Digital tools are becoming increasingly central to everyday transactions, but the bank sees continued value in personalized advice and human interaction.

Its target is therefore a hybrid banking model, combining digital self-service with direct customer support. The approach seeks to make routine banking faster and more accessible while preserving personalized assistance for more complex financial decisions.

As the Moroccan banking market continues to evolve under the influence of digitalization, economic transformation and tighter regulatory standards, CIH Bank is positioning its capital increase as a foundation for the next stage of its development.

The 1.5 billion-dirham operation ultimately represents more than an injection of capital: it is a financial lever intended to support the bank's transformation into a broader, digitally driven institution capable of capturing new growth opportunities through 2030.