KUALA LUMPUR (May 11): RHB Bank Bhd (KL:RHBBANK) had gone through a challenging year in 2023, as the banking industry was busy defending narrowing net interest margins amid high funding costs as lenders competed fiercely for deposits.

In an interview with The Edge, group managing director and group chief executive officer Mohd Rashid Mohamad shared his account of RHB’s approach to dealing with industry headwinds and outlined some of the opportunities management could leverage on to navigate the way forward.

Notably, Rashid shared that last year, RHB undertook an active liability management through foreign exchange swaps to help fund ringgit-based loans. The results were reflected as foreign exchange gains under non-interest income in its books. RHB will continue to do so in the financial year ending Dec 31, 2024 (FY2024), albeit less aggressively and when there is opportunity, Rashid said.

“If you ask me, 2023 was a good learning period for us,” said Rashid, who took on the top job in April 2022. “Despite all the challenges, we came out better than the year before.”

Easing competition for deposits is another relief, as “you hardly see fixed deposit rates of 4% and above in the market now. They have all come down”, he said.

The country’s fourth largest lender by asset size is seeing its mid-term plan —Together We Progress 24 (TWP24) — coming to a conclusion this year.

However, RHB may not meet some of the financial targets like having an 11.5% return on equity and a cost-to-income ratio of less than 44.5% by FY2024.

With TWP24 coming to an end, Rashid said management had already started developing the next mid-term plan for RHB, and is targeting to unveil it as early as the first quarter of 2025.

To find out more about RHB from Rashid’s perspective, grab a copy of The Edge Malaysia weekly today.

Save by subscribing to us for your print and/or digital copy.

P/S: The Edge is also available on Apple's App Store and Android's Google Play.