PETALING JAYA: RHB Bank
Bhd is expected to deliver a firmer net interest margin (NIM) in the first quarter of financial year 2026 (1Q26), supported by easing funding cost pressures and resilient loan growth momentum.
According to BIMB Research, RHB Bank’s deposit repricing and stable asset yields across its key markets should lead to the improvement of the bank’s NIM quarter-on-quarter (q-o-q).
“Management sees there is scope to reduce funding costs by replacing high-cost money market term deposits (MMTD) with a more balanced mix of fixed deposits and MMTDs,” the brokerage said.
The group’s current account savings account (Casa) ratio is also expected to continue trending higher from 30.4% recorded in 4Q25, supported by ongoing deposit-focused initiatives.
At the same time, deposit repricing activities in Malaysia and Singapore are expected to ease pressure on funding costs.
BIMB Research noted that asset yields remained stable during 1Q26, while pressure on Singapore margins could be more muted due to a shallower projected decline in Singapore overnight rate average.
The research firm maintained that RHB Bank’s 2026 loan growth target of 5% to 6% remains achievable, underpinned by steady expansion in commercial lending and sustained consumer loan demand, particularly for automotive financing, Amanah Saham Bumiputra financing and mortgages.
“Growth in small and medium enterprise (SME) loans was subdued attributed to repayments while corporate lending is likely to pick up pace in the second half of 2026,” it said.
However, loan growth in Thailand and Cambodia remained restrained amid weaker macroeconomic conditions linked to fuel price pressures arising from the Middle East conflict.
On costs, BIMB Research expects expense growth to remain below 5% in 2026 as the bank continues to pursue operational efficiency initiatives, tighter staff cost management and procurement savings from information technology and hardware vendor re-negotiations.
The research house also expects stronger non-interest income contributions in financial year 2026, particularly from bancassurance activities.
On asset quality, BIMB Research said there had been “no notable decline in asset quality for international loans” as of 1Q26, while the SME portfolio had not shown any sharp deterioration.
BIMB Research maintained its fair value of RM8.50 for RHB Bank, based on a calendar year 2027 price-to-book ratio of one time and an expected return on equity of 10.6%.
RHB Bank is scheduled to announce its 1Q26 results on May 29, 2026.
