The bank has exceeded four of the five KPI targets year-to-date, with the CASA ratio being the only one slightly below target.
PETALING JAYA: RHB Bank Bhd is on track to meet most of its key performance indicator (KPI) targets for the financial year ending Dec 31, 2022 (FY22) despite the challenging operating environment.
The targets include a return-on-equity (RoE) of 8.5%, loan growth of 4% to 5%, gross impaired loan (GIL) ratio of 1.7% or lower, current account savings account (CASA), or low-cost deposit ratio of 30%, and cost-to-income (CTI) ratio of 45% or lower.
At a recent conference call, RHB Bank group managing director and CEO Mohd Rashid Mohamad told analysts that the bank had exceeded four of the five KPI targets year-to-date, with the CASA ratio being the only one slightly below target.
For the nine months to September 2022, the bank’s RoE stood at 9.3%, loan growth at 7.5%, GIL ratio at 1.57% and CTI ratio at 44.8%, while CASA ratio was at 29.9%.
Kenanga Research maintained its “outperform” call on RHB Bank with an unchanged target price (TP) of RM7.
“The group is set to meet most of its headline targets and looks to exceed its initial 4% to 5% loan growth target, driven by solid headway in its retail mortgage and auto financing books.
“The group also expressed stronger aspirations to grow its regional operations in Singapore and Cambodia, albeit at a much lower base as compared to Malaysia (less than 15% of total loans),” it said.
Meanwhile, CGS-CIMB Research reiterated that RHB Bank was its top sector pick as the bank was seen as one of the biggest beneficiaries of the overnight policy rate (OPR) hikes.
The brokerage recommended “add” on RHB Bank, with an unchanged TP of RM7.62 a share.
“We project a small 2.4% year-on-year increase in RHB Bank’s fourth-quarter net profit, underpinned by continuous expansion in net interest margin from OPR hikes,” CGS-CIMB Research said.
