CIMB Investment Bank Bhd (CIMB Securities) maintained its BUY call on RHB Bank Bhd with an unchanged target price of RM9.55, saying the lender’s planned insurance consolidation with Tokio Marine Asia could unlock value, enhance earnings visibility and support stronger dividend prospects over the medium term.
The research house said Bank Negara Malaysia has approved RHB Bank to commence negotiations with Tokio Marine Asia Pte Ltd for a potential disposal of up to 100% of RHB Insurance and the creation of an enlarged general insurance entity, in which RHB would retain up to a 35% stake.
According to CIMB Securities, the approval marks the first step in discussions that must be concluded within six months, with final agreements also requiring clearance from the Minister of Finance under Malaysia’s Financial Services Act 2013.
The analysts noted that the proposed integration would combine RHB Insurance with Tokio Marine Insurans (Malaysia) to form a more competitive general insurance franchise with an estimated combined market share of close to 10%, potentially ranking among the top four players in the domestic market.
They added that the deal structure reflects a broader regional trend where banks shift towards capital-light bancassurance models, focusing on distribution-led income while retaining strategic minority stakes to preserve earnings upside.
CIMB Securities said the transaction could help RHB unlock value from its insurance arm while improving return on equity through an earnings-accretive partnership, without the need for additional shareholder capital as funding is expected to come from internal resources.
The research house also highlighted RHB’s strong capital position, with healthy buffers and improving credit outlook supporting its dividend yield of between 6.5% and 6.9% for financial years 2026 and 2027.
As of 3.28 pm, the stock price was unchanged at RM8.35.
