PETALING JAYA: CIMB Securities has maintained its “buy” call on RHB Bank
Bhd and target price of RM9.20, supported by a sustainable financial year ending Dec 31, 2026 (FY26) return on equity of 10.6% and cost of equity of 9.75%.
RHB Bank’s forecast FY26 and FY27 price-to-book value (P/BV) multiples have re-rated to 1.09 times and 1.06 times from approximately one times, it said, narrowing the valuation gap with larger banking peers, which are trading at FY26 to FY27 P/BV multiples of 1.2 to 1.7 times.
“We see further re-rating potential as RHB Bank strengthens its current account savings account (Casa) franchise, improves funding efficiency and delivers more capital-efficient growth,” it told clients in a note.
The research firm also noted “attractive” dividend yields of 6.6% to 6.9% provide income support, while a common equity tier one ratio of 14.7% and loan loss reserves of 114.3% offer downside protection.
At last look, RHB Bank was at RM8.84 apiece. An analyst told StarBiz that RHB Bank had yet to fully reap the potential from its growth strategies.
“There’s room for more upside for this stock,” he said, cautioning that intense competition and external factors continue to be a downside risk.
Meanwhile, CIMB Securities noted that RHB Bank launched RHB Pay, Malaysia’s first “bank-owned” unified online payment gateway on Wednesday, adding that by integrating RHB Pay into the payment gateway, the platform connects multiple payment channels directly to merchants’ RHB Bank accounts.
“We are positive on RHB Pay, as we expect it to strengthen RHB Bank’s Casa ecosystem, enhance its franchise as a transactional bank, and improve customer experience.”
CIMB Securities said strategically, RHB Pay could help the group further expand its Casa deposit ecosystem by capturing merchants’ recurring collection and operating balances. “These transaction-linked deposits should be relatively sticky, given that they are embedded within customers’ daily business activities rather than attracted solely through higher deposit pricing.
“The platform could also strengthen RHB Bank’s ability to acquire higher-quality SME and mid-corporate customers with meaningful transaction volumes and more sophisticated cash management requirements.”
It said RHB Bank indicated that the enhanced transaction banking capability could potentially lift group net interest margin by approximately five basis points over time, supported by stronger Casa mobilisation and lower funding costs.
Beyond the initial margin benefit, greater visibility into customers’ transaction and cash flow data could improve credit selection, facilitate more targeted working capital financing, and create additional opportunities for fee income and cross-selling, it said.
CIMB Securities said it therefore viewed RHB Pay as an important foundation for RHB Bank’s broader “beyond payments” strategy, potentially transforming transaction flows into deeper primary banking relationships while helping merchants to address critical pain points (ie, fragmented integration, multiple portals/report formats, T+1 to T+3 settlements, manual reconciliation and delayed cash flows).
It said competition in digital payments and merchant acquiring is likely to intensify as domestic banks accelerate the rollout of similar integrated payment and cash management solutions.
