RHB Bank has outperformed most of its self-imposed targets for the first nine months of 2022, with only one metric falling short of expectations. The bank’s performance was detailed by group managing director and CEO Mohd Rashid Mohamad during a conference call with analysts.
The bank achieved a return on equity of 9.3%, exceeding its 8.5% target. Loan growth reached 7.5%, significantly outpacing the 4% to 5% objective. The gross impaired loan ratio stood at 1.57%, below the 1.7% ceiling.
The cost-to-income ratio came in at 44.8%, under the 45% limit. The sole area where the bank missed its goal was the current account savings account (CASA) ratio, which fell just short of the 30% mark.
Kenanga Research maintained its “outperform” rating on the stock with a target price of RM7. The research house noted that the bank appears poised to exceed its initial loan growth target. The primary drivers of this expansion are retail mortgages and auto financing, as customers continue borrowing for home and vehicle purchases.
RHB Bank is also pursuing growth beyond Malaysia. The group has expressed higher ambitions for its regional operations in Singapore and Cambodia.
Currently, less than 15% of total loans originate from outside Malaysia, providing a small base for expansion. The bank has committed to increasing this share. The CEO informed analysts that the group expects to surpass its original loan growth objective of 4% to 5%, which may prove conservative.
Retail mortgages and auto financing remain the key contributors to this outperformance. Mohd Rashid described the operating environment as challenging, yet the bank’s numbers indicate effective management.
The cost-to-income ratio remains under control, loan quality is stable, and growth is concentrated in sustainable areas. Kenanga’s analysis stated plainly that the group is on track to achieve most of its headline targets. The CASA ratio represents the one shortfall. This metric matters because cheap deposits underpin lending margins.
While falling short is not a crisis, it is a miss that the bank will need to address. For now, the focus is on what is working.
Loan growth is strong, asset quality is solid, costs are contained, and regional expansion is underway. The 2022 targets were established under different economic conditions, and the bank is outperforming them. The CASA ratio is the single blemish on an otherwise clean report card.
