Turning strategy into results

Mohd Rashid: The lender’s objective is to build a more agile and future-ready banking group.

THE banking industry is increasingly judged on whether its reported achievements are credible, comparable over time and clearly linked to shareholder value.

RHB Banking Group group managing director and group chief executive officer Datuk Mohd Rashid Mohamad says the challenge is not simply communicating strategy but demonstrating consistent execution through a focused set of measurable outcomes.

He notes that, for the banking sector, the central challenge is sustaining attractive returns while continuing to invest in growth, transformation and resilience.

“Investors are looking beyond near-term earnings performance for evidence that banks can execute consistently, generate tangible outcomes from investment and create shareholder value through changing market conditions,” he tells StarBiz 7.

Mohd Rashid says banks must show where growth will come from, how it will generate returns above the cost of capital, and why their capabilities and market position will sustain long-term shareholder value creation.

The second challenge is balancing capital priorities.

Other challenges include demonstrating the economic impact of digital and artificial intelligence (AI) investments, strengthening resilience to physical climate risks, and supporting customers and economies through the transition.

“As climate-related disruptions become more frequent and severe, banks need to demonstrate how these risks are incorporated into risk management, business planning and capital allocation, while providing sustainable and transition finance solutions that support adaptation, growth and long-term value creation,” he adds.

Mohd Rashid also explains that banks must allocate capital across profitable growth, technology and transformation investments while maintaining strong capital buffers and delivering sustainable shareholder returns.

“Investors increasingly expect a clear and disciplined framework that explains these trade-offs and demonstrates how capital decisions support resilience, returns above the cost of capital and long-term value creation.”

For the six months ended June 30, RHB Bank recorded a net profit of RM1.66bil on revenue of RM8.62bil, compared with a net profit of RM1.55bil on revenue of RM8.89bil in the corresponding period a year earlier.

For the second quarter ended June 30, an interim dividend of 15 sen per share was declared.

Mohd Rashid says MY Value Up presents RHB with an opportunity to offer investors a clearer proposition on how its strategy, disciplined execution, capital allocation and transformation initiatives strengthen its competitiveness and translate into sustainable growth, attractive returns and long-term shareholder value.A national capital market initiative jointly led by the Securities Commission and Bursa Malaysia, MY Value Up is intended to “catalyse strategic value creation among public-listed companies and enhance the attractiveness of Corporate Malaysia”, according to Bursa Malaysia’s website.

“We view it as an important step towards strengthening market transparency, deepening investor confidence and enhancing the attractiveness of Malaysia’s capital market,” Mohd Rashid says.

Sustainable shareholder value

The head honcho also says the strategic foundation for this narrative is already embedded in Progress27, its three-year corporate strategy.

“As part of MY Value Up, we provide greater clarity on the key drivers of sustainable shareholder value,” he says.

“We are developing RHB’s first MY Value Up presentation to bring these elements together in a clear and accessible investment proposition,” he adds.

“Building on information already shared through our integrated reports, investor presentations and engagements, it shows more clearly how our strategy and execution create long-term shareholder value,” Mohd Rashid says.

As the lender enters the final year of Progress27, its priority is disciplined execution and converting strategic investments into measurable outcomes, he says.

“We remain focused on delivering our three strategic ambitions of high profitability, best in service, and responsible and purposeful, which strengthen RHB’s competitiveness and create sustainable value for our customers and stakeholders.”

He says these ambitions are mutually reinforcing.

“Sustainable profitability enables us to continue investing in our capabilities, superior customer experiences strengthen relationships and loyalty, while being responsible and purposeful ensures that growth is achieved in a sustainable manner that benefits our customers, communities and shareholders alike,” he says.

Over the past two years, RHB has strengthened its market position, customer relationships and digital capabilities, he adds.

“Looking ahead, we see further opportunities arising from greater regional connectivity, AI adoption and growing demand for sustainable financing and advisory solutions.”

He notes that disciplined capital management remains a priority and that the bank aims to provide investors with greater transparency and predictability in how it balances growth investment, capital strength and shareholder returns.

“The group is developing a formal dividend policy, subject to the necessary approvals, as part of our broader commitment to strengthening our capital management framework,” he adds.

Beyond Progress27, Mohd Rashid says the lender’s objective is to build a more agile and future-ready banking group.

In its latest annual report, RHB Banking Group chairman Tan Sri Ahmad Badri Mohd Zahir notes that this year is likely to be defined by steady but uneven global conditions.

He tells shareholders that “confidence must be grounded in fundamentals.”

“Progress27 is deliberately designed to strengthen the quality and durability of our performance across cycles. It sharpens our focus on sustainable growth, income diversification and disciplined cost management, ensuring we are not reliant on favourable conditions to deliver results,” the chairman says.

At last look, RHB shares were trading at RM7.83 apiece, valuing the group at around RM34.2bil. The stock traded as high as RM8.94 over the past 52 weeks.