RHB Bank Bhd has unveiled a bold three-year roadmap, dubbed PROGRESS27, designed to lift return on equity (ROE) to 12% by 2027 from the current level of 10%. Announced during a media briefing, the plan is anchored on three core pillars—becoming the best service bank, driving high profitability, and upholding a steadfast commitment as a responsible, purposeful financial institution. The new strategy builds on the momentum of the bank’s prior three-year roadmap, which significantly expanded its retail and SME banking footprint, accelerated digital adoption, and enhanced operating efficiency. PROGRESS27 is positioned as a comprehensive framework intended to keep RHB adaptable in a fast-evolving financial landscape while delivering innovative, customer-centric solutions that also create meaningful societal impact. The roadmap emphasizes a disciplined approach to execution, with clear benchmarks, measurable outcomes, and a strong emphasis on sustainable growth. This introduction provides a detailed view of how PROGRESS27 aims to translate ambition into tangible performance gains, while ensuring that the bank’s culture and governance align with long-term value creation for customers, employees, and shareholders alike.
PROGRESS27: A Strategic Framework for Growth and Resilience
Pillars and Strategic Intent
At the heart of PROGRESS27 lies a triad of strategic aims that define RHB Bank’s future course. The first pillar is about becoming the best service bank—an ambition that extends beyond product lines to the entire customer experience. This involves elevating service quality, driving smoother omnichannel interactions, and leveraging data-driven insights to anticipate customer needs. The second pillar centers on profitability, with a focus on sustainable earnings growth and efficiency gains that translate into a stronger, more resilient balance sheet. The third pillar anchors the bank as a responsible, purposeful financial institution—an emphasis on governance, sustainability, and social impact that aligns with broader stakeholder expectations and regulatory trends. Taken together, these pillars outline a holistic approach to value creation that integrates customer value, financial discipline, and societal contribution.
From the outset, management has underscored that PROGRESS27 is crafted to ensure agility in a rapidly changing financial services landscape. The group managing director cum chief executive officer, Datuk Mohd Rashid Mohamad, stressed that the plan is designed not only to deliver top-line growth but also to improve efficiency and customer outcomes in meaningful ways. This orientation toward agile execution reflects the bank’s recognition that technological advancements, shifting consumer preferences, and evolving competitive dynamics require a roadmap that can adapt while staying grounded in core principles of service quality and responsible lending. The emphasis on customer-centric innovations—tailored solutions, faster turnaround times, and seamless digital experiences—also aligns with a broader industry trend toward digitization and personalization in banking.
To appreciate PROGRESS27’s scope, it is helpful to view it against the backdrop of RHB’s prior three-year blueprint. That earlier plan acted as a catalyst for expansion in the retail and SME segments, accelerated digital adoption, and improvements in operational efficiency. The current roadmap does not discard those gains; instead, it positions them as a foundation on which to build more sophisticated capabilities. By anchoring the new strategy in proven momentum, RHB Bank signals its intent to accelerate momentum in customer acquisition, product diversification, and technology-enabled productivity. The three pillars together create a balanced framework that seeks to optimize both the customer experience and the cost efficiency required for sustained profitability in a competitive market. The overarching ethos of PROGRESS27 is to remain proactive rather than reactive, enabling the bank to respond to disruption with a forward-looking, disciplined investment plan.
Measurable Targets and Operational Metrics
PROGRESS27 carries a set of concrete financial and operational targets designed to translate strategic intent into quantified performance. One of the marquee goals is to lift ROE to 12% by 2027, a significant increase from the current level of 10%. This target reflects an expected combination of earnings growth, better capital efficiency, and ongoing cost discipline. In addition to ROE, the roadmap includes a cost-to-income ratio target of below 44.8%—a meaningful improvement from 46.7% at the end of the prior year—indicating a sharp focus on efficiency gains across the bank’s operations. The bank also targets keeping its gross impaired loan (GIL) ratio under 1.3%, an objective that seeks to manage credit quality while expanding lending activities. The GIL ratio stood at 1.47% in the previous year, underscoring the improvement scope embedded in PROGRESS27.
To realize these financial targets, RHB will implement eight multi-year transformation programmes. These programmes are designed to promote domestic deposits growth, expand retail wealth management, optimize costs, and broaden digital and technology capabilities. The emphasis on domestic deposits is aimed at strengthening the bank’s funding base and reducing funding costs, while retail wealth management initiatives are expected to diversify revenue streams and deepen customer relationships. Cost optimization programmes will target end-to-end process efficiencies, enabling faster service delivery and lower operating expenses. On the technology front, the focus is on accelerating digital initiatives, modernizing core systems, and expanding data analytics capabilities to support better decision making and personalized customer experiences.
Management disclosed a capital expenditure (capex) range of RM700 million to RM900 million, allocated to drive the PROGRESS27 initiatives. The capex envelope is positioned as a critical enabler for IT modernization, automation, and the broader digital transformation necessary to achieve the stated targets. With technology spending playing a central role in boosting productivity, these investments are expected to yield a reduction in manual processes, faster loan approvals, improved risk monitoring, and more efficient customer onboarding—key elements in improving the cost-to-income ratio and enhancing overall profitability. The plan also notes that IT modernization and automation initiatives are already 70% complete, supported by prior investments in digital infrastructure, IT systems, and analytics over the previous three years. This progress underscores the bank’s ability to sustain momentum and deliver measurable gains in efficiency and customer experience.
Operational Excellence and Workforce Strategy
An important dimension of PROGRESS27 is its approach to cost control and workforce management. Rashid emphasized a focus on optimizing waste by identifying and automating unnecessary processes across the end-to-end customer journey. Rather than pursuing headcount reductions, RHB intends to prioritize reskilling and upskilling of its existing workforce. This stance aligns with a broader industry shift toward capability-building and talent retention as a driver of sustained performance, particularly in the context of accelerating digital transformation and the need for sophisticated data analytics, cybersecurity, and user experience competencies. By investing in people, the bank aims to bolster its ability to execute complex transformation programmes and to deliver higher value-added services to clients.
In addition to efficiency measures, PROGRESS27 includes a sustainability target to mobilize RM90 billion in sustainable financing by 2027. This target reflects a commitment to financing activities with environmental, social, and governance (ESG) objectives, while also supporting long-term growth opportunities in sectors such as energy transition, green infrastructure, and social impact projects. The sustainable financing pillar is complemented by the bank’s existing loan book, which stood at RM42.6 billion in sustainability-related lending by the end of the previous year. This context highlights the potential for growing a robust, ESG-focused portfolio that aligns with both risk management standards and stakeholder expectations for responsible banking.
Bancassurance and Strategic Partnerships
RHB Bank’s strategy for risk diversification and revenue expansion includes pursuing a bancassurance partnership with Tokio Marine. The bank indicated it is currently negotiating terms and expects to finalize a more favorable arrangement by the first half of the current year. The outcome of these negotiations could provide a diversified insurance revenue stream, help cross-sell products to existing customers, and enhance the overall customer value proposition. While the exact terms are not disclosed, the anticipated partnership is framed as a strategic lever to broaden the bank’s non-interest income base and to deepen financial protection solutions accessible to customers. This potential alliance signals RHB’s broader strategy to leverage partnerships to accelerate growth, improve risk management, and deliver comprehensive financial services across its customer touchpoints.
Market Feedback and Shareholder Value
Market reaction to RHB Bank’s PROGRESS27 announcement has been positive, reflecting investor confidence in the bank’s strategic clarity and growth outlook. The bank’s shares rose by 12 sen, or 1.8%, in a session that closed the day with a market capitalization near RM29.5 billion. The stock has demonstrated an uptrend, advancing roughly 22.9% since mid-2024, a signal that the market views PROGRESS27 as an actionable blueprint with the potential to deliver sustainable earnings growth and improved capital efficiency over the medium term. Market participants will be closely watching how the eight transformation programmes are executed, how the capex is deployed, and how quickly the efficiency improvements translate into a lower cost-to-income ratio and stronger ROE. The bank’s emphasis on digital transformation, plus the sustainable financing objective, aligns with broader investor interest in banks that can balance growth with prudent risk management and ESG considerations.
Transformation Programmes: Execution Roadmap and Focus Areas
Domestic Deposits Growth and Funding Stability
A central axis of PROGRESS27 is to promote domestic deposits growth as a sustainable funding pillar. By deepening relationships with local customers and expanding deposit-taking capabilities, RHB aims to secure more stable funding at a time when market funding dynamics can be volatile. Strategies likely include expanding product offerings tailored to household and SME clients, enhancing loyalty programs, optimizing pricing strategies to attract and retain deposits, and leveraging digital channels to simplify the savings and investment process. Strengthening the deposit base is expected to lower funding costs and improve net interest income, supporting the bank’s profitability objective while reducing funding concentration risk.
Retail Wealth Management Expansion
The plan’s emphasis on retail wealth management signals a push to build a broader lineup of advisory and product solutions for individual clients. By integrating investment products, insurance solutions, and advisory services, RHB aims to deepen client relationships and increase cross-sell opportunities. Digital platforms and robo-advisory capabilities may play a role in delivering scalable wealth management services, enabling the bank to reach a wider customer base while maintaining high service standards. The expansion is expected to contribute to fee-based income, enhance overall client lifetime value, and diversify revenue away from traditional lending, contributing to the profitability pillar of PROGRESS27.
Cost Optimisation Across End-to-End Processes
Cost optimization is a continuous priority, with projects designed to shave inefficiencies from the customer journey and back-office operations. The focus is on identifying bottlenecks, eliminating redundant steps, and reengineering processes to speed up service delivery without compromising risk controls. Automation and digitization are key enablers in this area, reducing manual workload and enabling more accurate and timely decision-making. This pillar ties directly to the target of a lower cost-to-income ratio and improved margins, supporting the bank’s ability to sustain higher profitability even amid competitive pricing pressures.
Digital and Technology Expansion
Expanding digital and technology initiatives is a cornerstone of PROGRESS27. Investments in core banking modernization, data analytics, cybersecurity, and customer-facing digital experiences are designed to drive better customer outcomes and more efficient operations. The bank’s current progress shows IT modernization and automation efforts are already 70% complete, underscoring the relevance and pace of these transformations. As digital capabilities mature, RHB anticipates faster product development cycles, improved risk management through data-driven insights, and more personalized customer journeys. These capabilities should help the bank compete more effectively with fintechs and other digital-first players while preserving the trust and reliability customers expect from a traditional bank.
Retail Banking, SME Growth, and Cross-Sell Initiatives
A fourth focus area involves strengthening retail banking and SME growth, continuing the momentum seen in the prior roadmap. This includes expanding product offerings, enhancing relationship management, and deploying targeted marketing and distribution strategies. Cross-selling across customer segments is expected to be a driver of revenue growth, leveraging the bank’s existing customer base to introduce multi-product solutions. The objective is to improve overall client engagement, increase average revenue per client, and diversify earnings streams beyond traditional interest income. The result should be a more resilient retail and SME franchise capable of weathering economic cycles.
Operational Efficiency and Digital-Driven Customer Journeys
Eight multi-year programmes collectively aim to automate and optimize the end-to-end customer journey. By focusing on seamless onboarding, faster transaction processing, and more intuitive digital interfaces, the bank seeks to enhance customer satisfaction and retention. Operational efficiency is expected to translate into faster decision-making, better risk management, and lower processing costs. The synergy between digital platforms and human expertise remains important, ensuring high-touch service where needed and automated excellence where scalable. These programmes will be monitored through a suite of performance metrics, including cycle times, error rates, customer satisfaction scores, and productivity measures across departments.
Sustainability Financing and ESG Integration
The sustainability financing target of RM90 billion by 2027 sits at the intersection of business growth and ESG commitments. The bank’s approach to sustainable lending will likely involve prioritizing green projects, social impact initiatives, and governance improvements across its lending portfolio. By expanding sustainable financing, RHB aims to align with global best practices and regulatory expectations while pursuing a balanced risk-return profile. The process will involve rigorous due diligence, standardized ESG frameworks, and transparent reporting to stakeholders. The portfolio’s performance will contribute to the bank’s reputation as a responsible lender and support long-term client relationships with organizations pursuing sustainable development goals.
Bancassurance Strategy and Insurance Partnerships
The Tokio Marine bancassurance negotiations form a strategic extension of RHB’s product suite. A successful partnership could enable deeper protection and investment product distribution to customers, while creating new revenue streams through insurance financing, commissions, and product bundling. The collaboration would require careful integration of systems, compliance with regulatory requirements, and alignment of service standards to preserve customer trust. If terms are finalized satisfactorily, this partnership could reinforce cross-sell capabilities and widen the bank’s value proposition, strengthening client loyalty and contributing to fee-based income growth.
Financial Metrics, Capex, and Technology Enablement
Capex Allocation and Return on Investment
RHB’s capex plan of RM700 million to RM900 million underscores the importance of technology and modernization in achieving PROGRESS27’s financial goals. The investments are intended to accelerate core system upgrades, enhance data analytics capabilities, expand digital channels, and bolster cybersecurity. The expected payoffs include improved process efficiencies, quicker product delivery, more accurate risk assessment, and enhanced customer experience. The bank will need to monitor capital allocation carefully to ensure that expenditure aligns with expected returns and that projects deliver measurable improvements in key performance indicators such as cost-to-income ratio and ROE.
IT Modernization Progress and Future Milestones
With IT modernization and automation already 70% complete, RHB is positioning itself to complete remaining initiatives within the transformation horizon. Ongoing upgrades are anticipated to yield benefits such as streamlined onboarding, real-time data analytics, and robust risk management capabilities. The technology stack’s maturity supports more agile product development and faster time-to-market for new services. As the digital backbone strengthens, the bank will be better equipped to respond to customer needs, deliver personalized solutions, and manage competitive pressure from new entrants in the financial services space.
Efficiency Gains and Workforce Development
RHB’s commitment to workforce reskilling rather than headcount reductions reflects a long-term capability-building strategy. By equipping employees with modern skills in data science, automation, and digital customer engagement, the bank aims to maintain a high-performance culture and reduce friction in process improvements. The reskilling approach aligns with the bank’s risk and governance priorities, ensuring staff proficiency supports enhanced control environments and better customer outcomes. This strategy also reinforces employee morale and engagement, which can bolster retention and performance as the organization undertakes substantial transformation.
Sustainability Financing and ESG Metrics
The RM90 billion sustainable financing target provides a framework for the growth of ESG-linked lending and investments. The bank will likely track metrics such as portfolio mix, carbon intensity, energy transition alignment, and social impact outcomes to demonstrate progress toward its ESG goals. Transparent reporting and stakeholder communication will be essential to maintaining confidence in the bank’s sustainability agenda. The integration of ESG criteria into lending decisions can influence risk-adjusted returns and help manage long-term credit risk in a changing regulatory and market environment.
Market Performance and Shareholder Value Reinforcement
Market reception to PROGRESS27 indicates that investors are paying attention to the bank’s long-term strategy, capital discipline, and potential for earnings expansion. The positive share price movement signals confidence in the bank’s ability to execute on its plan and to deliver sustainable ROE improvement. Over the coming years, the bank’s ability to translate strategic milestones into demonstrable financial results will be the key determinant of continued investor interest. Effective communication of milestones, performance data, and risk management outcomes will be important to maintaining market trust and supporting the stock’s value trajectory.
Sustainability, Risk Management, and Governance
ESG Convergence with Banking Operations
PROGRESS27’s sustainability targets reflect a broader industry push to integrate environmental, social, and governance considerations into the core banking model. By prioritizing sustainable financing and responsible lending practices, RHB aims to align with evolving regulatory expectations, investor preferences, and customer demand for ethical financial solutions. The bank’s governance framework must support disciplined risk management, rigorous governance oversight, and transparent reporting of ESG outcomes. Achieving these objectives will require ongoing training, robust internal controls, and a culture that values long-term resilience as much as short-term gains.
Credit Quality, Risk Management, and Portfolio Resilience
The GIL ratio target below 1.3% is a key indicator of credit risk management discipline. Maintaining credit quality while pursuing growth requires careful balance among underwriting standards, portfolio diversification, and proactive risk monitoring. The bank will need to continue refining its credit scoring models, monitor macroeconomic developments, and adjust risk appetite as needed to protect asset quality. The interplay between growth initiatives and risk controls will be critical to achieving ROE targets without compromising financial stability.
Governance, Compliance, and Stakeholder Engagement
A robust governance framework will be essential as PROGRESS27 proceeds. Clear accountability, independent risk oversight, and transparent reporting are foundational to maintaining investor confidence and meeting regulatory expectations. Stakeholder engagement—covering customers, employees, regulators, and communities—will help ensure that the bank’s transformation remains aligned with expectations and delivers broad-based value. The bank’s ability to implement new policies, uphold high compliance standards, and respond effectively to emerging risks will shape its long-term success.
Thought Leadership and Market Positioning
By articulating a clear, credible pathway to higher profitability and stronger capital efficiency, RHB aims to position itself as a leading player among its peers. Thoughtful communication of strategy milestones, performance outcomes, and ESG progress can differentiate the bank in a competitive landscape. The combination of a customer-centric service model, disciplined cost management, and sustainable growth initiatives can reinforce brand strength and investor confidence, supporting a resilient market position over the multi-year horizon.
Market Response, Risks, and Strategic Implications
Investor Sentiment and Shareholder Value Creation
The initial market response to PROGRESS27 suggests that investors are confident in RHB’s ability to translate strategic intent into durable earnings growth. The stock’s momentum reflects expectations of improved return metrics, enhanced efficiency, and a stronger ESG profile. Sustained valuation will depend on forthcoming disclosure of milestone progress, quarterly results that confirm trend lines, and transparent risk management practices that reassure stakeholders about the plan’s achievability. As PROGRESS27 unfolds, investor relations communications will play an important role in maintaining confidence and ensuring that the bank’s strategic narrative remains coherent and compelling.
Macro and Competitive Environment
RHB operates in a banking sector characterized by robust competition, evolving regulatory requirements, and macroeconomic fluctuations. The bank’s ability to deliver on PROGRESS27 depends on its capacity to navigate interest rate movements, credit demand cycles, and any potential shifts in consumer borrowing behavior. A favourable macro backdrop, combined with the bank’s strategic execution, could unlock meaningful upside in profitability and ROE. Conversely, adverse conditions would heighten the importance of prudent risk management, cost discipline, and timely technology-enabled responses to changing customer needs.
Risk Mitigation and Contingency Planning
Given the scale and complexity of transformation programmes, risk management becomes central to PROGRESS27’s success. The bank will need to monitor execution risk, technology integration challenges, and potential regulatory changes that could impact strategy implementation. Contingency plans for encountering unexpected delays or cost overruns will be essential to sustaining momentum. An effective risk culture, along with strong governance and ongoing assurance activities, will help ensure that PROGRESS27 remains on a stable path toward its defined objectives.
Customer-Centric Outcomes and Societal Impact
Ultimately, PROGRESS27 aspires to translate strategic ambition into tangible benefits for customers and society. By delivering superior service, innovative financial solutions, and sustainable financing, the bank seeks to enhance the financial well-being of its clientele while contributing to broader economic development. The customer-centric focus, reinforced by technology-enabled capabilities and ESG commitments, should help RHB cultivate lasting client relationships, drive retention, and attract new customers who value both quality service and responsible banking practices.
Conclusion
RHB Bank’s PROGRESS27 roadmap represents a comprehensive, forward-looking plan designed to elevate profitability, service quality, and societal value over a three-year horizon. By targeting a 12% ROE by 2027 and a cost-to-income ratio below 44.8%, the bank signals a disciplined approach to growth that prioritizes efficiency and sustainable earnings. The eight multi-year transformation programmes—covering domestic deposits growth, retail wealth management, digital and technology expansion, cost optimization, and broader ESG objectives—form the backbone of this strategy, supported by a capex framework of RM700 million to RM900 million and a substantial progress milestone of IT modernization at 70% completion. Sustainability remains central, with a RM90 billion financing target by 2027 and a growing portfolio of green and ESG-aligned lending. The potential Tokio Marine bancassurance partnership adds another avenue for diversified revenue and enhanced customer value, subject to finalization of terms. As the bank moves ahead, market participants will closely watch delivery on milestones, margin improvements, and the realization of efficiency gains, all of which will shape RHB’s trajectory and its standing in a dynamic banking landscape.
