RHB Bank Bhd and Alliance Bank Malaysia Bhd have been downgraded to ‘sell’ with lower 52-week target prices (TP) at Affin Hwang Investment Bank Bhd (AHIB).

In a note released yesterday (Aug 29), AHIB said RHB’s second quarter ended June 30, 2023 (2Q23) came in below expectations, and it expressed concern about a more subdued earnings outlook in 2H23, coming from  net interest margin (NIM) challenges and a more normalised level of net credit cost, of which will be detrimental to bottomline.

The research house has downgraded its call on RHB to ‘Sell’ from ‘Hold’ with a TP of RM5.25, down from RM6.05. The counter closed yesterday at RM5.70.

On Alliance, AHIB has also downgraded the stock to ‘sell’ from ‘hold’, with a TP of RM3.20 from an earlier RM3.35. The counter yesterday closed at RM3.53. It said it downgraded the counter as it saw more downside risk to share price after lowering its TP.

It noted that Alliance Bank saw weaker growth in the first quarter ended June 30, 2023 (1Q23), with the results below its and consensus estimates, largely due to the research house’s more robust net operating income assumptions. –TMR