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Research houses maintain 'buy' call for RHB Bank on TWP24 plan

05/08/2022 02:01 PM

KUALA LUMPUR, Aug 5 (Bernama) -- Research houses are maintaining their 'buy' call on RHB Bank Bhd’s shares following the recent launch of its new promising three-year strategic plan, ‘Together We Progress 24’ (TWP24).

Hong Leong Investment Bank (HLIB) said TWP24 aims to position RHB Bank as the people’s primary bank; prioritise customer experience; and drive quality growth. 

“TWP24 supersedes the bank’s previous five-year FIT22 blueprint that helped to lay the current business foundation from 2018-22," it said in a note today.

The investment bank has also maintained its financial year 2022-2024 (FY22-24) earnings estimation for RHB Bank as it is fairly close to TWP24 financial targets. 

“We still like RHB for its high Common Equity Tier 1 ratio, which indicates headroom for an attractive dividend payout in the future, along with undemanding valuations," said HLIB. 

Echoing HLIB, MIDF Research said RHB's latest plan prioritises organic growth, specialisation and the refinement of processes in equal measure.

“While long-term effects are a bit hard to discern at this point, we are mildly positive on TWP24. 

“Despite a slight amount of execution risk on foreign projects, we are ultimately optimistic about RHB expanding its overseas ventures, prioritising secured small and medium enterprise loans, making notable advances in its environmental, social and corporate governance journey, and making the effort to hike up its lagging Islamic banking stats," it said. 

Nevertheless, MIDF has reduced its FY23 earnings forecast for RHB by three per cent, saying that it may have underestimated the quantum of fair value through other comprehensive income (FVOCI)-related losses for the year following Bank Negara Malaysia’s hawkish stance on the overnight policy rate hikes.

Meanwhile, Kenanga Research has maintained its 'outperform' rating for RHB Bank, noting that the group plans to allocate up to RM500 million over the next three years to modernise its operations, with several key automation prospects being identified to improve customer experience and productivity. 

“A more seamless onboarding experience and greater implementation of data analytics would enable a more reactive approach by the bank in identifying and scaling into new segments," it said. 

Kenanga added that RHB’s recent digital banking licence win could serve as a sentiment booster to the group as it nears the launch of its new entity and digital offerings.

At 12.35 pm, RHB shares were unchanged at RM5.88 with 733,100 shares traded.


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