RHB Bank repayment assistance loans at 10 per cent of total domestic loans

KUALA LUMPUR: RHB Bank loans under repayment assistance currently accounts for 10 per cent of its total domestic loans with 9.0 per cent of total corporate loans have been approved for restructuring.

Maybank IB Research, in a note yesterday, said the management assesses 23 per cent that may require some form of restructuring or rescheduling of its corporate loans.

“The B40 group accounts for about 14 per cent of its retail portfolio,” it said.

The research house said total loans grew 5.6 per cent year- on-year (yoy) at endSeptember 2020, with the growth of retail loans at 5.2 per cent, business banking at 8.5 per cent, and overseas loan growth of 11.3 per cent.

“These more than offset 3.1 per cent yoy decline in wholesale loan growth, while within retail loans, mortgages rose 5.8 per cent and auto financing increased 4.2 per cent yoy.

“SME loans rose 9.4 per cent and overseas loan growth of 11.3 per cent yoy, led by Singapore loans growth of 16.4 per cent yoy, backed by property such as logistics warehouse and property space for rental,” it said.

On the flip side, the research house said margins continued to contract due to the delayed repricing of deposits while provisions more than doubled.

In light of the CMCO, it said the management raised its credit cost guidance to 45-50 basis points ( bps) from 40bps previously and expected credit cost to rise in 4Q20.

“Our credit cost is correspondingly raised to 47/35 bps from 40/30 bps previously, but this is balanced off with higher net interest margin (NIM) assumptions and higher investment income,” it said.

Maybank IB has maintained profit forecasts and imputed a dividend payout ratio of 40 per cent for FY20E versus 50 per cent in FY19.