RHB Bank Bhd is expected to report stronger results in the upcoming quarter, driven by widening margins and robust loan growth, according to Hong Leong Investment Bank. The bank’s net interest margin is projected to hold up well, even amid recent currency fluctuations, with loan growth remaining solid at 6.5%-7.0% for 2024.
Following a recent meeting with RHB, Hong Leong expressed optimism, raising its net profit forecasts by 4%-5% for FY2024-FY2026 and increasing the target price (TP) to RM7.30 from RM6.75. This revision reflects expectations of sustained loan growth and strong non-interest income.
RHB shares have risen 15% this year, and the bank continues to attract positive sentiment from analysts, with nine 'buy' ratings and a consensus 12-month TP of RM6.65. The research house also highlighted RHB’s focus on issuing cheaper sukuk, reducing fixed deposit rates, and maintaining its market share in key segments like mortgages and auto finance.
Looking ahead, Hong Leong expects non-interest income to improve, driven by a healthy investment banking pipeline, better foreign exchange revenue, and stronger brokerage volumes. The bank is also anticipated to face lower provisions and maintain solid asset quality, benefiting from a positive local economic outlook.
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