Latest news with #RM750.03mil
The Star
6 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
7 days ago
- Business
- The Star
RHB Bank maintains growth with 1Q net profit of RM750.03mil
RHB Banking Group's group managing director/ group chief executive officer Mohd Rashid Mohamad —YAP CHEE HONG/The Star KUALA LUMPUR: RHB Bank Bhd sustained earnings growth in the first quarter of 2025 (1QFY25) with cost optimisation efforts and a focus on asset quality yielding results. 'Our new 3-year strategic roadmap, PROGRESS27, sets a clear course toward becoming the best in service, enhancing profitability, and reinforcing our 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,' said group managing director and CEO Datuk Mohd Rashid Mohamad in a statement. During the quarter under review, RHB recorded a net profit of RM750.03mil, up from RM730.17mil in the year-ago quarter. The group reported revenue of RM4.39bil, which was slightly lower than RM4.4bil in the comparative quarter, while earnings per share rose to 17.2 sen from 17.03 sen previously. According to the bank, net fund-based income increased 7.3% year-on-year (y-o-y)to RM1.5bil, on the back of higher gross loans. Net interest margin improved from 1.83% to 1.84% over the one-year period. "The group continued to proactively manage its funding costs through active liability management initiatives. Taking this into account, the effective NIM for the quarter was 1.91%," it said. Non-fund based income, however, fell 20.2% y-o-y to RM600mil, mainly owing to lower net gain on forex and derivatives, and net trading and investment income. On an annualised basis, the group's gross loans grew 2.4% to RM239bil, supported by growth in the group community banking and commercial segments, respectively. Customer deposits was RM249bil, with current account savings account (Casa) composition improving to 28% from 27.6% In December 2024.
