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Mackie Research initiated coverage on RHB Bank (RHBBANK:MK) with a Buy rating and a price target of MYR7.85 on Tuesday.
The research firm cited the Malaysian bank’s "attractive bear case 8.2% forward yield" as a key factor in its positive outlook despite some concerns about the bank’s return on equity targets.
RHB Bank recently reduced its fiscal year 2025 loan growth guidance from 6%-7% to 5%-6%, which Mackie Research noted "increases the risk of missing its FY25 10.4% ROE target with a higher reliance on NOII to deliver."
The firm expressed concern that RHB’s credit cost targets are "too low in the current uncertain environment" and predicted the bank would fall short of management’s medium-term ROE targets.
Despite these challenges, Mackie Research expects RHB Bank to achieve "a respectable ~11.5% ROE (post dividends)" which supports its Outperform recommendation.
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