KUALA LUMPUR: RHB Bank
Bhd expects Malaysia to remain appealing as an investment destination, predicting 2026 to be a good year.
Group managing director and group chief executive officer Datuk Mohd Rashid Mohamad foresees the country’s gross domestic product to grow by 4.7% this year as external conditions improve.
“This will be primarily driven by strong domestic demand, steady investment activities and supportive policy measures.
“We foresee an improvement in external demand and manufacturing momentum led by Malaysia’s continued strengthening of the electrical and electronics exports (E&E),” he said at the media briefing last Friday announcing the bank’s financial performance for the fourth quarter ended Dec 31, 2025 and full-year (FY25).
According to Mohd Rashid, the bank predicts that the benchmark lending rate, the overnight policy rate, would remain accommodative in supporting the economy at 2.75%. But, he reckoned inflation could inch up to 1.8%. The government estimates inflation to range from 1.5% to 2% this year.
“This also reflects healthy domestic demand, supported by stable investment, resilient consumption and expansionary fiscal policy.
“For banks, the outlook points to steady demand across retail lending, small and medium enterprise (SME) financing and corporate banking, with activity remaining firm in the E&E sector and also consumer-related services,” he noted.
Mohd Rashid said the bank aims to achieve cost savings of between RM500mil and RM800mil under its Progress27 plan.
“The first year which was RM158mil was a reflection of us initiating some of these activities. So that will be cascaded down to the second year and third year.
“For this year, we’re targeting more than RM200mil,” he said.
Mohd Rashid said for the first time in five years, the bank declared dividends totaling 50 sen per share for FY25, following the second interim dividend of 35 sen per share, bringing the payout ratio to 65%.
“In terms of guidance, we had a 30% to 50% ratio payout, but now we’ve moved our guidance to between 50% and 60%.
“Our total results for FY25 has allowed us to pay a slighter higher dividend this time around,” he explained.
Moving forward, Mohd Rashid said this year, the bank would continue driving quality growth and operational efficiency.
Part of these plans include prioritising loan growth in high-yielding segments, including SME and commercial segments, while sustaining the core retail segment’s momentum.
“Regionally, Singapore will continue to be the primary growth engine. Last year, both Singapore and Cambodia were our focus.
“But it won’t be just one segment, we are looking at improving our wealth management business as well.
“There were a lot of cross-border activities that assisted us in achieving some of our wealth management targets for 2025.”
