PETALING JAYA: RHB Bank
Bhd may continue to see an outperformance to the broader banking sector as it progresses into the second half.
A potential positive indicator is its forecast that loan growth will see solid growth in the second half of the year despite this metric being at an annualised 4.9% in the first half. RHB’s full-year target for loan growth is at 6.5% to 7%.
UOB Kay Hian (UOBKH) Research said RHB may seize the opportunity to gain greater loan market share in the second half without needing to compete aggressively on pricing.
It noted that with the easing of large corporate loan repayments and judging from its current approval pipeline, the bank still expects solid loan growth momentum in the second half of the year.
UOBKH Research also noted a potential improvement in RHB’s net interest margin with disciplined loan and deposit pricing, along with steady growth in retail current account, savings account.
It upgraded the stock to a “buy” call with a higher target price of RM6.80 from RM6.39 per share, noting it is trading at a highly attractive 0.80 times price-to-book ratio. This is below the 1.24 times sector average, despite delivering a similar return on equity.
