RHB Bank on Track to Achieve Most FY2022 KPI Goals
RHB Bank Bhd says it is positioned to meet the majority of its key performance indicator targets for the financial year that ends on 31 December 2022, even though the operating climate remains challenging. The bank’s targets call for a return on equity of 8.5 %, loan growth between 4 % and 5 %, a gross impaired loan ratio of no more than 1.7 %, a current account savings account ratio of 30 % and a cost‑to‑income ratio of 45 % or lower.
After the first nine months of the year, which ended in September 2022, the bank had already exceeded four of the five benchmarks. The only metric that fell just short was the CASA ratio. Group managing director and chief executive officer Mohd Rashid Mohamad shared these results during an analyst conference call, noting that the return on equity stood at 9.3 %, loan growth reached 7.5 %, the gross impaired loan ratio was 1.57 % and the cost‑to‑income ratio measured 44.8 %.
He attributed the stronger loan expansion to solid performance in the retail mortgage and auto‑financing portfolios. Mohd Rashid Mohamad added that the group expects to surpass its original 4 %‑5 % loan‑growth aim.
Kenanga Research maintained its “outperform” rating on RHB Bank, setting a target price of RM7. The research house highlighted that the bank is on course to exceed its initial loan‑growth objective, driven by progress in retail mortgage and auto financing, and that it is likely to achieve most of its headline targets. The bank’s regional footprint in Singapore and Cambodia is also slated for growth.
Management voiced higher ambitions to increase its presence in those markets, even though the operations there currently represent less than 15 % of total loans, a weaker starting point compared with the domestic Malaysian book. The strategy is to leverage the existing Singapore and Cambodia platforms to spur growth and lift market share.
CGS‑CIMB Research forecast a modest 2.4 % year‑on‑year increase in the bank’s fourth‑quarter net profit, citing the continuing rise in net interest margin that follows OPR hikes. The firm kept an “add” recommendation and a target price of RM7.62 per share. Analysts anticipate that RHB Bank will keep delivering strong results, powered by robust loan growth and an improving asset‑quality profile.
The gross impaired loan ratio has been trending downward while the cost‑to‑income ratio has been improving. Mohd Rashid Mohamad reiterated that the bank remains on track to satisfy its KPI targets and that performance is expected to keep advancing in the coming quarters.
Kenanga Research pointed out that the retail banking segment has been the main engine behind the strong performance, noting significant growth in that business over recent quarters. The broader Malaysian banking sector is projected to expand as economic conditions improve and demand for banking services rises. RHB Bank’s solid retail base and its expanding regional operations place it in a favorable position to capture this growth.
CGS‑CIMB Research also expects the Malaysian banking industry to experience modest growth in the near term, again linking the outlook to the ongoing expansion of net interest margin stemming from OPR hikes.
