Hong Leong Bank Likely to See Stronger Operating Income in 4Q — Market Talk

Early signs suggest operating income momentum at Hong Leong Bank could improve in fiscal 4Q, supported by stronger wealth-management activity and further net interest margin expansion from deposit repricing efforts, RHB IB analyst David Chong says in a note. While the bank has started to see signs of stress among some small-and-medium enterprise customers since mid-May, management expects to maintain its asset quality guidance for the rest of 2026, he notes. Hong Leong's 175 million ringgit pre-emptive provisions remain unutilized and could help cushion any emerging credit risks, he adds. RHB cuts Hong Leong Bank's target price to 24.70 ringgit from 25.70 ringgit, while maintaining a buy rating on the stock. Shares are 1.0% lower at 21.68 ringgit. (yingxian.wong@wsj.com)