Latest news with #RHB
The Star
3 days ago
- Business
- The Star
Analysts offer mixed outlook on RHB
PETALING JAYA: RHB Bank Bhd's prospects for the rest of the financial year appear balanced between resilience and caution, as analysts weigh solid fundamentals against macroeconomic uncertainties following the group's first-quarter results. Despite a 2.7% year-on-year rise in net profit to RM750.03mil for the three months ended March 31, 2025 (1Q25), brokerages are mixed in their outlook, citing slower gross domestic product (GDP) growth projections, credit cost risks and muted non-interest income (NOII) as key variables. Hong Leong Investment Bank (HLIB) Research noted that RHB has revised its loan growth guidance to 5%-6% from 6%-7%), in response to revised GDP growth expectations now 4.5% against 5%. Nevertheless, net interest margin (NIM) guidance remains intact, expected to be flat to +4 basis points (bps), excluding any overnight policy rate (OPR) cut, underpinned by concrete efforts to ease funding cost pressures through portfolio rebalancing, Singapore deposit rate repricing and leveraging statutory reserve ratio (SRR) liquidity, it said. HLIB maintained a 'buy' rating with an unchanged target price of RM7.70, calling the stock attractive at 0.88 times price-to-book (P/B) due to a dividend yield of 6.7%. TA Research was similarly upbeat, reiterating a 'buy' and raising its target price to RM7.52 from RM7.00. It highlighted that 'management remains cautiously optimistic about the outlook for 2025', with credit cost guided at 15–20bps and return on equity (ROE) forecast at 10.4%–10.8%. The bank's focus on mitigating risks through early restructuring efforts was also noted, especially for small and medium enterprises (SME) exposures, with RHB proactively engaging with potentially affected borrowers and has reinforced its early restructuring and rescheduling (R&R) initiatives. TA also underscored stable NIM expectations of 1.86% to 1.90%, aided by the recent SRR cut and an improving current-account-savings-account (CASA) ratio. However, Maybank Investment Bank (MaybankIB) Research struck a more cautious tone, revising its call to 'hold' from 'buy' and cutting its target price to RM7.10 from RM7.70. It stated that 'RHB's 1Q25 core net profit was below expectations, largely on account of lower-than-expected NOII'. Reflecting a weaker macroeconomic backdrop, MaybankIB has cut its 2025-2027 earnings for RHB by 8%-9%, largely to factor in slower economic growth, a potential rate cut and lower NOII, and added that it has raised credit costs by 20% from 3bps. CIMB Research, meanwhile, maintained a 'buy' call with an unchanged target price of RM7.50, asserting that dividend yield will likely remain close to 5.5%, even under a more stressed scenario. It believes key catalysts for RHB include 'higher-than-expected NIM, better asset quality, higher-than-expected loan growth, and sustained dividend payout'. However, it warned of downside risks from 'higher-than-expected cost of funds' and 'uptick in impaired loans'. The bank's key performance index targets for 2025 include ROE of 10.4%–10.8%, loan growth of 5%–6%, NIM of 1.86–1.90%, and a dividend payout ratio of 30%–50%. Credit cost is expected to be kept within 15–20bps, while the cost-to-income ratio is guided at 45.5–46%. For 1Q25, RHB reported revenue of RM4.39bil, marginally lower than RM4.40bil in the previous year. Net profit of RM750.03mil was up from RM730.17mil previously.
The Star
3 days ago
- Business
- The Star
Bank counters weigh on FBM KLCI after recent earnings reports
KUALA LUMPUR: The local stock index drifted lower in the early session as investors sold down financial heavyweights following their recent earnings announcements. The FBM KLCI was down 1.29 points to 1,525.60 at the midday break, as the domestic market shrugged off a global rally sparked by a US trade court's decision to block US President Donald Trump's tariffs on trading partners. On the broader market, the number of declining issues piped advancers 430 to 400 after 2.16 billion shares changed hands for RM1.06bil. Hong Leong Bank weighed on the market as traders sold down its shares by 28 sen to RM19.62 on the back of its earnings report yesterday. Sector peer RHB, which also released its earnings yesterday, fell 14 sen to RM6.53. Other laggards included Telekom down 30 sen to RM6.55, Guan Chong sliding 18 sen to RM3.25 and Sunway Construction dropping 12 sen to RM5.83. Key Asian markets maintained a rally on news of a potential reprieve in US tariffs imposed on the rest of the world. Japan's Nikkei rose 1.53% to 38,297 while China's blue-chip CSI 300 gained 0.68% to 3,862 and Shanghai's composite index rallied 0.72% to 3,363. Hong Kong's Hang Seng climbed 0.65% to 23,408.
The Star
3 days ago
- Business
- The Star
RHB sustains growth
PETALING JAYA: RHB Bank Bhd (RHB) is keeping a cautious stance amid evolving macroeconomic conditions, shaped by interest rate movements and global trade dynamics, although it expects the recent reduction in the statutory reserve requirement by Bank Negara to provide funding flexibility in the quarters ahead. In addition, the lender is projecting for the banking sector to maintain its strong capital and liquidity positions. RHB's group managing director and group chief executive Datuk Mohd Rashid Mohamad said the bank's new three-year strategic roadmap, named PROGRESS27, has set a clear course for the lender toward becoming the best in service, enhancing profitability and reinforcing its purpose-driven commitment. 'With focused execution priorities, from simplifying customer journeys to advancing our sustainability ambitions, we are well-positioned to deliver near-term value while unlocking long-term value for all stakeholders,' added Mohd Rashid. Releasing its results for the first quarter ended March 31 (1Q25) yesterday, RHB saw net profit inch up by 2.7% year-on-year (y-o-y) to RM750mil, despite a marginal dip in revenue to RM4.39bil. The 1Q25 performance translates to an earnings per share of 17.2 sen. The group attributed the growth in net profit primarily to higher net funding income and improved credit cost management, which was offset by lower non-fund based income, higher tax expense, higher operating expenses and higher share of loss in associates. At the same time, it reported that total income stood at RM2bil, a marginal dip of 1.9% y-o-y mainly from contraction in non-fund based income due to lower net gain on foreign exchange (forex) and derivatives, as well as net trading and investment income. RHB said it has maintained operational stability, supported by prudent cost management, continued strength in capital and liquidity positions, reflected by the containment of cost growth at 1.2%, while cost-to-income ratio stood at 47.4% from 45.9% a year ago, reflecting the marginal contraction in income. Commenting on the results, Mohd Rashid remarked that the sustaining of the bank's earnings growth momentum in 1Q25 was underpinned by solid fundamentals and early traction from its PROGRESS27 strategy. 'Our cost optimisation efforts are beginning to deliver results, enabling us to contain expenses while driving growth in key segments. 'At the same time, our continued focus on asset quality has led to a reduction in credit cost. We remained disciplined in execution, strengthening our core capabilities, driving operational excellence, and unlocking new growth opportunities.' Net fund based income increased by 7.3% to RM1.49bil y-o-y on the back of gross loans and financing growth of 6.3%, while non-fund based income declined by 20.2% to RM561mil from a year ago, driven by lower net trading and investment income, lower net gain on forex and derivatives as well as lower income from its insurance business, partly offset by higher fee income. Net allowance for credit losses was lower at RM105.8mil, primarily due to lower credit losses on loans and financing. Meanwhile, total assets of the group increased by 0.7% from December 2024 to RM352.5bil as at March 31, 2025, with net assets per share at RM7.39, and shareholders' equity at RM32.2bil. Concurrently, the group's gross loans and financing grew by 6.3% y-o-y to RM239.2bil, mainly supported by growth in mortgage, corporate, commercial and automotive finance. RHB's gross impaired loans (GIL) increased marginally to RM3.6bil, with a GIL ratio of 1.50%, from 1.47%, or RM3.5bil in December 2024. The group reported a domestic GIL ratio of 1.22%, which is lower than the banking industry's GIL ratio of 1.42%. Loan loss coverage ratio for the group, including regulatory reserves, improved to 115.7%, while it stands at 76.9% if regulatory reserves are excluded. Customer deposits increased by 2.3% to RM248.5bil, primarily due to growth in money market time deposits by 31.3%, offset by a decrease in current accounts and saving accounts (Casa) by 1.1% and fixed deposits by 0.9%. Casa composition stood at 28.0% as at March 31, 2025, and liquidity coverage ratio remained sound at 134.6%. Compared to the previous quarter ended December 2024, RHB saw net profit decrease by 10.1% from RM834.5mil, which it attributed mainly to lower non-fund based income and higher allowances for credit losses. These were partly offset by lower operating expenses, higher net funding income, lower impairment on other non-financial assets and lower share of loss in associates during 1Q25. RHB did not declare any dividends for the quarter.
The Star
5 days ago
- Business
- The Star
BANK EMPOWERS OVER 700 MICRO-ENTREPRENEURS
Mohd Rashid (third left), RHB managing director of group community banking Jeffrey Ng Eow Oo (second right) and group chief brand and customer experience officer Norazzah Sulaiman (second left) capturing a victorious moment with #JomBiz Cohort five winners (from left, holding mock cheques) Nur Shawani, Nurul Farhana and Mohd Shafiq. KUALA LUMPUR: RHB Banking Group (RHB) celebrates the continued success of its #JomBiz programme, a socio-economic empowerment initiative aimed at empowering B40 micro entrepreneurs. Since launching in 2022, the programme has invested over RM1.1mil, benefitting more than 700 micro-entrepreneurs and delivering an impressive 35% average sales growth within just three months. The 2025 RHB #JomBiz Award Ceremony held on Feb 10 celebrated these remarkable achievements of selected micro entrepreneurs from RHB #JomBiz, showcasing the programme's critical role in providing funding, capacity building, and mentorship to micro, small and medium enterprises (MSMEs) from the B40 group and underserved communities. The ceremony recognised the recipients of business incentive funding from Cohort 5 of the #JomBiz programme. Participants undergo capacity-building classes on topics such as social media marketing, sustainable business practices and financial management. Following these sessions, they present their business plans to a panel of judges, with the top 10 proposals receiving initial funding ranging from RM5,000 to RM15,000 to support their business growth. RHB group managing director/group chief executive officer Datuk Mohd Rashid Mohamad emphasised RHB's commitment to supporting micro-entrepreneurs, 'We recognise the immense potential of MSMEs in transforming lives and uplifting communities, but we also acknowledge the challenges they face such as limited access to funding, lack of business knowledge and the difficulty of building networks within competitive markets. Mohd Rashid (front, fourth left) showing thumbs up with his team, Ng (front, fourth right), Norazzah (front, third left), together with guests, winners and participants of the RHB #JomBiz programme, during the RHB #JomBiz award ceremony 2025 held at RHB Centre, Kuala Lumpur. 'This initiative reflects our unwavering commitment to driving growth, fostering resilience and empowering participants to overcome obstacles and thrive in today's dynamic economy.' At the graduation ceremony of Cohort 5, Mohd Rashid also shared inspiring success stories from the programme, including participants who secured franchise opportunities and supply contracts with renowned companies after attending the Franchise Expo Malaysia 2024 organised by the Malaysia Retail Chain Association. Notably, four #JomBiz participants were recognised at The Star Outstanding Business Awards (SOBA) 2023. The top 3 winners of Cohort 5's business incentive funding are: > First: Nurul Farhana Amirul Hizan, Hanawarrah Creation Enterprise (healthy dried snack food products) - awarded with RM15,000 > Second: Mohd Shafiq Ezwanie Jafri, Senju Co (pastry and bakery business) - awarded with RM12,000 > Third: Nur Shawani Che Mansur, Wisymadani Resources (agro-tourism and agro-based industry business) - awarded with RM10,000 Mohd Rashid concluded, 'These stories inspire us at RHB to continue providing more platforms for our RHB #JomBiz participants. We hope their success inspires and motivates other micro-entrepreneurs to pursue their dreams.' RHB aims to expand the #JomBiz programme in 2025 to reach more participants and broaden its impact on Malaysia's micro-entrepreneur community. The programme will continue to prioritise asnafs, single parents, and persons with disabilities, ensuring inclusive opportunities for all. Learn more about how RHB #JomBiz can help micro-entrepreneurs achieve their goals by visiting .
Business Times
5 days ago
- Business
- Business Times
Centurion seen as small-cap ‘jewel' amid demand for dormitory spaces, potential Reit listing
[SINGAPORE] With demand for foreign workers continuing to outpace the supply of dormitory spaces, Centurion Corporation is ramping up capacity and exploring asset monetisation, making it a small-cap property play to watch. This is according to RHB Bank Singapore, which highlighted Centurion as one of its top stock picks for 2025 among companies with small market capitalisation. Centurion was featured in RHB's Singapore Small Cap Jewels 2025, published on May 16. The bullish sentiment is echoed by analysts from Maybank Securities and Phillip Securities Research, who cited favourable demand-supply dynamics and a robust pipeline of expansion projects across key markets. Headquartered in Singapore, Centurion operates purpose-built worker accommodation (PBWA) in Singapore and Malaysia, and student housing in Australia, the UK, and the US. Phillip Securities analyst Yik Ban Chong noted that the group's first-quarter FY2025 revenue rose 13 per cent year-on-year to S$69 million, driven by higher rental rates for its Singapore dormitories. Contributing to this growth, said Yik, was the ramp-up of new capacity, including a 1,650-bed facility at Westlite Ubi, which became operational in late 2024 and has already reached near-full occupancy. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Meanwhile, RHB Singapore's head of small-mid cap research Alfie Yeo said in a separate May 23 note that he anticipates Centurion's earnings to rise by 4 per cent annually for FY2025 and FY2026, and 5 per cent for FY2027, on the back of stronger-than-expected bed rates and occupancy levels across its PBWA and student housing segments. While concerns linger over US-led reciprocal tariffs, Maybank analysts Eric Ong and Jarick Seet pointed out that Centurion expects minimal disruption to its business operations. They highlighted a clear capacity expansion roadmap for 2025–2026 spanning Singapore, Malaysia and Australia, aimed at striking a 'strategic balance between occupancy levels and rental rate growth'. Undemanding valuation Looking ahead, RHB's Yeo pointed to Centurion's ongoing capacity expansion and asset monetisation plans as key reasons for its positive outlook. For instance, he said in the Singapore Small Cap Jewels report that the total number of revenue-contributing beds for FY2025, he said, is expected to grow by 5.3 per cent year-on-year to 73,000, and it will be supported by Singapore's new Westlite Ubi Ave 3 and Malaysia's Westlite Johor Tech Park Centurion has also expanded into Hong Kong and China. In FY2024, the group entered these markets through two majority-owned partnerships. In China, it will manage and operate build-to-rent properties comprising around 1,500 residential apartments, targeted at fresh graduates and working professionals. In Hong Kong, it entered the worker housing market with Westlite Sheung Shui, a 539-bed facility catering to foreign workers in sectors such as food and beverage and services. More value could be unlocked over the mid to longer term, Yeo said. Centurion has previously monetised assets through sale-and-leaseback deals in Malaysia, and is now exploring a potential Reit (real estate investment trust) listing involving some of its student and worker accommodations. While still at an exploratory stage, Yeo said that the move is aimed at supporting growth, shifting to an asset-light model, and generating fee-based income. RHB also flagged the possibility of special dividends, depending on how any proceeds are used. Centurion's net gearing stood at 0.4 times in FY2024, and the business has generated over S$75 million in operating cash flow annually for the past five years, according to RHB. While it uses debt to fund property developments, the group has remained cash-generative, said Yeo. He also noted that Centurion typically pays a sustainable dividend, with a payout of S$0.025 per share in FY2023, representing around 30 per cent of earnings. This payout ratio is expected to be maintained, with occasional special dividends possible if more assets are unlocked and excess cash is not reinvested, said Yeo. Still, Yeo cautioned that RHB's earnings forecasts are premised on stronger occupancy and improved bed rates at Centurion's student accommodation assets. Any shortfall in these areas could pose downside risks to its estimates, he added. That said, Yeo said that Centurion remains a leading dormitory operator in Singapore, where a shortage of beds continues to support both occupancy and rental growth. With opportunities for further capacity expansion, he added that the stock is trading at an 'undemanding valuation' of nine times FY2025 forecast earnings, and offers a dividend yield of around 3 per cent. RHB has set a target price of S$1.50 for shares of Centurion – implying a potential upside of 11.9 per cent from its closing price of S$1.34 on Friday (May 23). In the year to date, the counter has generated a total return – with dividends reinvested – of 41.8 per cent. In comparison, the benchmark Straits Times Index has a total return of 5 per cent over the same period.
