KUALA LUMPUR (April 16): Bank Kerjasama Rakyat Malaysia Bhd (Bank Rakyat) flagged that 2025 will be a challenging year for the group due to the turbulent global economic outlook and intensifying geopolitical tensions, particularly from the ongoing trade war among major economies.

Its newly appointed chief executive officer Ahmad Shahril Mohd Shariff said that the development financial institution is looking to sustain its growth trajectory by tapping into new market segments and expanding lending activities to support household spending.

“We forecast 2025 will be challenging, but we remain positive in terms of sustaining the growth momentum. [The new] strategies we’re adopting include venturing into new markets and customer segments. Hopefully, this will cushion any potential shortfalls stemming from global uncertainties,” he told reporters at a press conference on Wednesday.

Personal financing remains a key contributor to the group’s earnings, he said.

However, Bank Rakyat is actively diversifying its portfolio, including expanding into water utility financing, logistics, and tax-related financing. These non-personal financing segments collectively grew by 10.6% in FY2024 — outpacing overall market growth.

“We are not abandoning personal financing — it remains our bread and butter — but we are creating a bigger pie by also focusing on new engines of growth,” said Shahril. “We are going bigger into the mass affluent and non-Bumiputera markets, which we believe offer significant untapped potential.”

Earlier, Bank Rakyat announced a flat dividend payout of 17% for the financial year ended Dec 31, 2024 (FY2024) — the same payout ratio as the previous year — amounting to a total distribution of RM486.32 million, compared with RM426.8 million previously.

"We believe the ability to declare a 17% dividend reflects the group’s sustained profitability and strong financial resilience, as recognised by our regulators and stakeholders,” Shahril added.

For FY2024, Bank Rakyat recorded a 3.15% year-on-year increase in profit before tax and zakat to RM1.82 billion, from RM1.76 billion in FY2023. This was attributed to a continued focus on core business activities, improving asset quality, and a more favourable domestic economic environment.

Chairman Datuk Mohd Irwan Mohd Mubarak said the group’s performance remained resilient, underpinned by prudent risk management, enhanced cost discipline, and targeted growth in consumer financing.

“Alhamdulillah, the bank’s strategic initiatives — including adapting to digitalisation, enhancing asset quality, and focusing on higher-income customer segments — have contributed to a solid set of results for 2024,” he said in his speech.

Gross income rose marginally by 0.36%, in line with the group’s five-year BR25 strategic plan.

Deposits grew 5.5% to RM10.75 billion, supported by efforts to grow savings and investment accounts with low-cost deposits.

The bank also improved its asset quality, with the non-performing financing ratio declining to 1.93% from 2.02% previously. Its cost-to-income ratio stood at 46.89%, below the industry average, reflecting operational efficiency and disciplined cost management.