RHB Bank’s Singapore unit to drive Malaysia lender’s regional growth under new 3-year road map

SINGAPORE – The Singapore unit of Malaysian lender RHB will lead the bank’s drive to expand in Asean in the next three years.

Speaking on July 18 at the unveiling of the bank’s new three-year road map for regional growth, its managing director of group international business Danny Quah said that Singapore is a key growth engine for its international business arm.

“We will use Singapore as a growth engine, because we have been doing well here, and we have built enough fundamentals to be strong on its own to continue growing. It is also strong to be a strategic hub to the four countries that we have,” he said at a media briefing.

RHB is the fourth-largest banking group in Malaysia by assets. Singapore is part of RHB’s group international business (GIB) arm, which also covers Cambodia, Thailand, Laos and Brunei.

GIB accounted for 12 per cent of the group’s total income in 2024, with RHB Singapore contributing about 80 per cent of GIB’s total income, said Mr Quah.

“RHB Singapore has been designated the group’s regional hub due to its strong and consistent contribution to GIB, mature capabilities and strategic proximity to both customer networks and capital flows,” he added.

Profit before tax for Singapore in 2024 nearly doubled, reaching $98.7 million, a 95.6 per cent jump from a year earlier. Meanwhile, slower growth was observed from its other Asean businesses.

The Singapore unit also expanded its sustainable financing portfolio by 40 per cent to $972 million.

Mr Goh Ken-Yi, chief executive of RHB Singapore, said that the bank is targeting the larger commercial banking clients here, of which some are listed companies, by supporting them in investment banking.

The bank has also been supporting Singapore-based clients’ expansions into Malaysia with financing and advisory services.

“We’ve also helped Singapore-based clients or international private equity firms with financing and M&A (mergers and acquisitions) advisory solutions to invest into Malaysia. In fact, we are actually marketing Malaysia and Singapore as a single hub to support our private equity and larger corporate clients,” he said.

RHB is also optimistic about expanding its cross-selling within Singapore, and will make efforts to market to corporate investment banking clients, especially the C-suite clients, its retail banking experience, said Mr Goh.

The lender is planning on expanding its secured lending approach and continuing efforts to move away from non-performing loans.

“When I joined RHB about 10 years ago, there was an active effort to pivot the business away from some of the industries and sectors that were hurting us and causing us a fair bit of non-performing loans, to one where we did a lot more secured financing, specifically in the real estate space,” Mr Goh said.

Currently, about two-thirds of the bank’s Singapore loan book is made up of real estate-related loans and it hopes to deepen its support for other sectors such as healthcare and construction, he added.

Under the three-year road map, RHB aims to achieve a return on equity of 12 per cent by 2027, up from 10 per cent in 2024.

It also targets reducing cost-to-income ratio, which measures operational efficiency, to below 44.8 per cent, down from 46.7 per cent in 2024.

It further aims to maintain a gross impaired loan ratio not exceeding 1.3 per cent by 2027, down from 1.47 per cent in 2024.