HIGHER TARGETS

RHB Bank Bhd aims to achieve a return on equity of 11.5 per cent by 2022, in line with its five-year FIT22 strategy. The bank has set a loan growth goal of six per cent this year.

RHB Bank Bhd is targeting to increase its return on equity (ROE) to 11.5 per cent by 2022, in line with its five-year FIT22 strategy.

Managing director Datuk Khairussaleh Ramli said its current ROE is slightly below industry average.

“Our ROE of 8.7 per cent is slightly below industry average, but we are targeting to bring it up to nine to 10 per cent this year,” he said at the bank’s annual general meeting, here, yesterday.

“Our five-year target is to bring the ROE up to 11.5 per cent by 2022.”

One of the ways to increase its ROE is to decrease cost-to-income ratio (CTR), which stands at 49.9 per cent.

“We have lowered our CTR from 58.8 per cent in 2015 to 49.9 per cent as of the end of last year. Though it is on the slightly high side, we have brought it down progressively.

“We don’t see any major reduction to the CTR this year as we have allocated capital expenditure for FIT22. That said, we expect capital market activities to pick up, and we remain moderate on loan growth. We will also look at increasing our fee income from various areas, namely investment banking activities and fund management.”

The bank has set an overall loan growth target of six per cent this year. It achieved 3.7 per cent loan growth last year.

“The six per cent loan growth target is still a moderate target. We still expect our mortgage and small and medium enterprise (SME) segments to contribute. We also expect our Singapore business to recover from the negative impact of low oil prices.

“We believe that it will be more challenging to grow our corporate segment, but we have plans in place.”

Khairussaleh also expects the banking sector this year to be as good as last year.

“The banking segment did well last year and we expect it to be the same this year, on the back the Overnight Policy Rate hike and the positive impact of IFRS 9,” he added.

The banking segment did well last year and we expect it to be the same this year... DATUK KHAIRUSSALEH RAMLI RHB Bank Bhd managing director

PIC BY OWEE AH CHUN RHB Bank group managing director Datuk Khairussaleh Ramli (left) and group financial officer Tuan Syed Ahmad Taufik Albar at the 52nd annual general meeting in Kuala Lumpur yesterday.