RHB Bank sees loan growth in 3Q20

RHB Bank Bhd has established contacts with slightly more than half of its 201,000 vulnerable consumer loan borrowers at the end of the six-month blanket loan moratorium which ended on Sept 30.

Through contacting its 104,000 retail customers, this worked to a cumulative to RM9.7 bil which represented 54% of the total vulnerable retail loans of RM17.9 bil, according to AmBank Research.

“We understand that 97,000 customers (46% of the total vulnerable retail loan borrowers) failed to be contacted,” wrote analyst Kelvin Ong.

“Of the 104,000 retail customers contacted, 82.7% or 86,000 borrowers did not require repayment assistance.”

Meanwhile, 17.3% or 18,000 borrowers indicated their need for further repayment assistance.

Year-to-date, the RHB group has approved the restructuring and rescheduling (R&R) of loans totalling RM7 bil to 56,000 retail borrowers.

“This comprised largely R&R for mortgage loans (RM5.2 bil),” noted Ong.

Thus far, RHB Bank has approved the R&R for 580 business banking customers (BB) (29% of the total vulnerable BB borrowers) which amounted to a cumulative RM2 bil in loan value.

“On a comforting note, the average collateral coverage for BB loans is between 70% and 80%,” said Ong.

Ong had earlier maintained a “buy” call on RHB Bank with an unchanged fair value of RM5.70.

“Except for lowering our dividend pay-out expectation for FY20/21 to 40% from 50%, there are no changes to our earnings estimate,” he added.

As at 4.44pm today, RHB Bank share price was at  RM4.33 with a market capitalisation of 17.36 billion. – Oct 15, 2020

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