KUALA LUMPUR (Feb 27): RHB Bank Bhd (KL:RHBBANK) aims to boost its return on equity (ROE) to 12% by 2027 from 10% currently, under its three-year corporate strategy (2025-2027), also known as “PROGRESS27”.

At a media briefing, group managing director cum chief executive officer Datuk Mohd Rashid Mohamad stated that “PROGRESS27” is built on three main pillars: becoming the best service bank, driving high profitability, and upholding its commitment as a responsible, purposeful financial institution.

“This roadmap ensures we remain agile in a rapidly evolving financial landscape while continuing to deliver innovative, customer-centric solutions and meaningful impact to society,” Rashid said.

He also noted that the bank’s previous three-year roadmap had fostered significant expansion in retail and SME (small and medium enterprise) banking, accelerated digital adoption, and improved operational efficiency. And now, it serves as a solid foundation for the new three-year plan.

Some of the key targets that have been set under “PROGRESS27” include cost-to-income ratio of below 44.8% — from 46.7% as at end-2024, as well as containing gross impaired loan (GIL) ratio at below 1.3%. The bank’s GIL stood at 1.47% in 2024.

To achieve these ambitions, RHB will roll out eight multi-year transformation programmes focusing on promoting domestic deposits growth, retail wealth management, cost optimisation, and expanding digital and technology initiatives.

Regarding technological spending that would aid in boosting productivity, Rashid shared that the bank has allocated a capital expenditure (capex) of between RM700 million and RM900 million, which has been considered when setting the key targets under “PROGRESS27”.

He added that IT modernisation and automation initiatives are now 70% complete due to previous investments in digital, IT and analytics over the past three years.

In terms of cost control, Rashid said the bank will optimise wastages by identifying and automating unnecessary processes within the end-to-end customer journey. RHB has no plans to cut its workforce; instead, it will focus on reskilling employees.

The bank has also set a sustainability target of mobilising RM90 billion in sustainable financing by 2027. As of the end of 2024, its loan books associated with sustainability were at RM42.6 billion.

Commenting on its bancassurance partnership, Rashid noted that the bank is currently negotiating with Tokio Marine and expects to conclude better partnership terms by the first half of this year.

Shares of RHB Bank rose 12 sen or 1.8% to close at RM6.76 on Thursday, giving the bank a market capitalisation of RM29.47 billion. The stock has been on an uptrend, rising 22.9% from the RM5.50 level in May last year.

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