KUALA LUMPUR (March 18): Lembaga Tabung Haji is putting money back into its reserves for the first time in three years, a sign it is on firmer footing after its multi-year restructuring.

The Malaysian pilgrimage fund's balance sheet "has completely been straightened out, cleaned up", according to Tan Sri Abdul Rashid Hussain, who two years ago said that his immediate priority when assuming the chairman role was to “sort out the legacy issues” in Tabung Haji.

Tabung Haji has moved beyond its recovery phase and is now rebuilding its financial buffers, Abdul Rashid, who took over as chairman in 2023, told The Edge after a media briefing on the fund's dividend declaration on Wednesday.

The fund is increasing its exposure to equities as it seeks to boost returns after years of conservative positioning, he added.

“We have not only increased our dividend for two years running — this is our best result in eight years — but we have also started the practice of building our reserves again. This is the first time in three years that we have put money back into reserves,” he said. “The proof is in the pudding." 

Earlier, Tabung Haji declared a 3.5% profit distribution after zakat for the financial year ended Dec 31, 2025 (FY2025), with RM3.22 billion to be distributed to 9.7 million depositors, up from RM2.92 billion a year earlier.

The fund’s total assets now stood at RM98.58 billion, exceeding liabilities of RM95.63 billion. 

Back in 2018, Tabung Haji underwent a government-led exercise which saw the transfer of underperforming assets worth RM9.7 billion to Minister of Finance Inc-owned Urusharta Jemaah Sdn Bhd (UJSB), in exchange for RM19.6 billion in sukuk, and RM300 million in cash to offset its net liabilities position and allow it to pay distributions to its depositors.

As the May 2026 deadline looms for UJSB to redeem part of the sukuk, Abdul Rashid said discussions are ongoing and that a resolution could be near.

While Tabung Haji's financial position improved, the fund still continues to face challenges, particularly in managing deposit flows, says Abdul Rashid.

Tabung Haji has recorded modest net withdrawals in recent years at between RM1 billion and RM1.2 billion, he said, as households tap into savings amid rising cost of living — a trend seen across Malaysia’s financial system.

The net withdrawal trend is "not threatening, but not healthy", he said. 

Unlike the Employees Provident Fund, Tabung Haji depositors can take out their savings anytime. A depositor needs an account balance of just RM1,300 to register or 'queue' for Hajj quota under Tabung Haji.

The fund has no plans to impose stricter withdrawal conditions, as accessibility remains a core feature of Tabung Haji’s deposit structure, he added. “We are not in a panic mode."

Instead, Tabung Haji is now intensifying efforts to rebuild its deposit base, including campaigns to encourage systematic savings, particularly among younger Malaysians.

“We are trying to inculcate a systematic saving habit… to make Tabung Haji the first choice as an Islamic savings institution,” Abdul Rashid said.

While Tabung Haji already serves about 9.7 million depositors — roughly 53% of Malaysia’s Muslim population — the key challenge lies in increasing the depth of savings rather than merely expanding the depositor base, he added. 

Read also:
Tabung Haji signals 'happy solution' with Urusharta Jamaah's RM12.5 bil sukuk redemption due in two months 
Tabung Haji eyes higher equity exposure amid lower yield environment
Tabung Haji declares 3.50% profit distribution for FY2025