RHB Bank on course to meet KPI targets

Despite the difficult operating environment, RHB Bank Bhd is on pace to achieve the majority of its key performance indicator (KPI) targets for the financial year ending December 31, 2022 (FY22).

A return on equity (RoE) of 8.5%, loan growth of 4% to 5%, a gross impaired loan (GIL) ratio of 1.7% or less, a current account savings account (CASA) or low-cost deposit ratio of 30%, and a cost-to-income (CTI) ratio of 45% or less are among the goals.

RHB Bank group managing director and CEO Mohd Rashid Mohamad recently informed analysts during a conference call that the bank had so far surpassed four of its five KPI targets, with the CASA ratio being the only one that fell just short of the mark.

The bank’s RoE was 9.3% for the nine months ending in September 2022, while loan growth was 7.5%, the GIL ratio was 1.57%, the CTI ratio was 44.8%, and the CASA ratio was 29.9%.

With a target price (TP) of RM7, Kenanga Research kept its “outperform” recommendation on RHB Bank.

“The group looks to surpass its initial 4% to 5% loan growth objective, led by strong progress in its retail mortgage and auto financing books. The group is on track to reach most of its headline targets.

Despite starting from a considerably weaker basis than Malaysia (less than 15% of total loans), the group also voiced higher ambitions to expand its regional operations in Singapore and Cambodia, according to the statement.

RHB Bank was given an “add” rating by the brokerage, with a TP of RM7.62 per share remaining constant.

According to CGS-CIMB Research, “We predict a modest 2.4% year-over-year growth in RHB Bank’s fourth-quarter net profit, supported by ongoing expansion in net interest margin from OPR hikes.”

James Roberto

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