KUALA LUMPUR: RHB Bank Bhd’s renewed bancassurance agreements are expected to boost its return on equity (ROE), with estimated improvements of 0.3 percentage points in 2026 and 0.25 percentage points in 2027.
CIMB Securities said that, based on its simulation of the RM1.61 billion access fee being amortised over 20 years at an effective interest rate of 5 per cent, the deal could contribute about RM145 million in non-interest income (NOII) or RM109 million after tax in 2026 and RM140 million (RM106 million after tax) in 2027.
“These fees will provide stable and recurring revenue fee-based income to the RHB group over the next 20 years,” it said in a note.
The research house noted that with deeper collaboration, RHB, Tokio Marine Life Insurance Malaysia Bhd, and Syarikat Takaful Malaysia Keluarga Bhd are expected to continue benefiting from synergies through greater operational efficiency and an improved customer experience.
“Meanwhile, renewing the agreements also avoids transitional disruptions due to the high degree of operational integration (system connectivity, customer insights, sales force training) that has been in place as a result of the long-standing relationships between RHB and Tokio Marine as well as Syarikat Takaful.
“On a more positive note, all parties can now deepen technological collaboration, such as seamless product integration into RHB’s digital banking apps, which would otherwise require a longer time to replicate with new partners,” it said.
CIMB Securities has reiterated its ‘Buy’ recommendation on RHB Bank but has reduced its target price to RM7.35 from RM7.50.
The new valuation is based on a price-to-book value multiple of 0.91 times applied to the 2026 book value per share of RM8.06, compared to the previous assumption of 0.9 times on the 2025 BVPS.
This revision reflects a lower projected return on equity (ROE) of 9.4 per cent for 2026 and a cost of equity of 10 per cent.
The research house also cut its earnings forecasts for RHB by 6.9 per cent for 2025, 7.6 per cent for 2026, and 5.2 per cent for 2027.
© New Straits Times Press (M) Bhd
