{
  "id": 12056202,
  "title": "MGS sell-off set to hit RHB's Q3 earnings: HLIB",
  "url": "https://urgent.news/2026/10/05/mgs-sell-off-set-to-hit-rhbs-q3-earnings-hlib",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-10-05T02:47:24.000Z",
  "source": {
    "name": "New Straits Times",
    "slug": "new-straits-times",
    "url": "https://www.nst.com.my/business/corporate/2026/10/1547837/mgs-sell-set-hit-rhbs-q3-earnings-hlib"
  },
  "original_language": "en",
  "account": "RHB Bank's near-term earnings may be impacted by increasing Malaysian Government Securities (MGS) yields, according to Hong Leong Investment Bank (HLIB) Research. Analyst Raymond Ng predicts a negative effect on trading income for Q3 FY26 due to the recent rise in MGS yields, with limited time left in the quarter for a recovery. The impact is expected to be a missed opportunity rather than substantial losses, considering RHB's limited trading book. The bank's treasury division has been strategically unwinding securities positions to cut exposure. Despite this near-term pressure, RHB's management remains optimistic about the fourth quarter, with potential portfolio repositioning if bond yields stabilize. RHB's return on equity target of 10.8 to 11 percent, based on a 6% loan growth and minimal cost growth, remains achievable, although the bank is likely to end up at the lower end of the range. Credit costs are currently at 13 basis points, which is at the lower end of management's guidance. RHB's asset quality is strong, with no major red flags and a manageable deterioration in the SME segment. Management remains selective in mortgage and SME lending, avoiding aggressive pricing when risk-adjusted returns are unattractive. Capital management is a medium-term catalyst, with management aiming for better clarity in capital and dividend policy by Q1 2027. HLIB maintains a \"Hold\" rating on RHB with an unaltered target price of RM8, driven by a projected dividend yield of more than 6.5 percent in FY27.",
  "summary": "KUALA LUMPUR: RHB Bank Bhd’s near-term earnings are likely to come under pressure from higher Malaysian Government Securities (MGS) yields, said Hong Leong Investment Bank (HLIB) Research.",
  "key_points": [
    "Malaysian Government Securities yields rising, impacting RHB's Q3 earnings",
    "Hong Leong Investment Bank predicts negative effect on trading income",
    "Treasury division unwinding positions to reduce exposure"
  ],
  "editors_take": "RHB Bank's Q3 earnings are likely to take a hit due to rising MGS yields, but the impact will be limited and may set the stage for a more optimistic fourth quarter.",
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}