PETALING JAYA: RHB Bank Bhd has set a loan growth target for 2022 at 4-5%, slightly below the industry average of 5.2% in anticipation of uncertainties affecting the country’s economy.
Managing Director and CEO Mohd Rashid Mohamad said a growth rate of 4-5% is more realistic at this stage.
“Inflation and the rise in the OPR (Overnight Policy Rate) will have an impact, but the continued growth of the economy will neutralize the impact, so people will come back to borrow,” Mohd Rashid told media at the press conference. the announcement of the results for the first quarter of 2022. the launch of RHB’s 2022-2024 strategy today.
The group’s gross lending and funding grew 1.4% year-to-date to RM201.3 billion, mainly driven by growth in mortgages, small and medium enterprises and Singapore. Domestic loans and financing have increased by 1.0% since the beginning of the year.
The group also unveiled a three-year strategy called Together We Progress 24 (TWP24) – with a new goal statement “Making progress happen for all”. It is built around three objectives: to be everyone’s main bank, to prioritize the customer experience and to generate quality growth.
Several key targets have been set, including a return on equity of 11.5% and a cost/income ratio of ≤ 44.5% by 2024, as well as non-financial targets related to digital, IT information and analysis. Sustainability targets include mobilizing RM20 billion in sustainable financial services and a financial inclusion target of empowering two million people by 2026 and having the group carbon neutral by 2030.
Mohd Rashid revealed that TWP24 is set at a shorter period compared to its previous plan as the group needs to move quickly to adapt to the fast-paced and constantly changing market environment and operating environment, in addition to the changing customer needs.
“So to respond to that, we felt it was better to do three-year long-term planning rather than our traditional five-year plan that we had done before,” he said.
Mohd Rashid noted that RHB’s exposure to foreign investment is currently still modest due to the weakening of the ringgit against the US dollar,
“I think the impact will be very minimal or almost nil for the group’s TWP24. We always focus on ringgit. Also, volatility can sometimes help. We also advise clients how and when is the right time to hedge their foreign currency exposure,” said Mohd Rashid.
RHB’s net profit for the first quarter ended 31 March 2022 decreased by 7.69% to RM600.27 million from RM650.29 million in the same quarter a year ago due to higher taxes and lower net profit. Revenue was lower at RM2.86 billion compared to RM2.90 billion a year ago.
Mohd Rashid previously served as Treasurer of RHB Group from 2014 before being elected Managing Director of RHB Group Wholesale Banking in July 2021. As he was internally elected as Managing Director and CEO of the group effective April 1, 2022, Mohd Rashid said his leadership style will remain.
“My leadership is more inclusive and I make decisions collectively with the team. I’m open to feedback because that’s how I think I will progress,” said Mohd Rashid.