RHB Bank Delivers 9% Profit Growth, Lifts Dividend to 35 Sen — Steady Operator or Re-Rating Candidate?

RHB Bank Bhd reported a solid 4QFY2025, with net profit rising 8.5% year-on-year to RM905.7 million.

The bank declared a 35 sen dividend for the quarter, bringing total FY2025 dividends to 50 sen per share, up from 43 sen previously.

Full-year net profit rose 7.8% to RM3.36 billion.

Quarterly Highlights

4QFY2025:

• Net profit: RM905.7 million (+8.5%)

• Driven by lower provisions and stronger non-interest income

• Dividend: 35 sen

FY2025:

• Net profit: RM3.36 billion (+7.8%)

• Net interest income: RM6.0 billion (+3.9%)

• Net interest margin: 1.88%

• Gross impaired loans ratio: improved to 1.41%

• CET1 ratio: 15.2% (post-dividend)

Money Master Take

This is not a breakout quarter. It is a balance-sheet-quality quarter.

1. Provisions Did the Heavy Lifting

Profit growth was supported largely by:

• Lower bad debt provisions

• Better asset quality trends

Gross impaired loans improved to 1.41%, suggesting credit costs are contained.

When earnings expansion comes from lower provisions rather than loan acceleration, sustainability depends on credit stability continuing.

2. Margin Environment Remains Tight

Net interest margin stands at 1.88%.

Loan growth and funding optimisation helped, but:

• NIM expansion is limited in a moderating rate cycle

• Future upside depends more on volume than pricing

That makes execution on deposit gathering and loan growth critical under its PROGRESS27 plan.

3. Capital Strength Supports Dividend Story

CET1 at 15.2% provides:

• Strong regulatory buffer

• Dividend visibility

• Capacity for growth without equity dilution

With total FY dividend at 50 sen, RHB reinforces its positioning as a yield-support name in the Malaysian banking sector.

4. PROGRESS27: Execution Phase Matters

Management targets by 2027:

• 12% return on equity

• Cost-to-income ratio below 44.8%

Achieving that requires:

• Domestic deposit expansion

• Retail wealth growth

• Cost discipline

This is a steady optimisation strategy, not a high-growth pivot.

Investor Positioning View

Short term:

• Earnings stable

• Dividend supportive

• Asset quality improving

Medium term:

• Re-rating depends on ROE improvement toward 12%

• NIM trajectory remains key

RHB currently trades as a stable dividend bank, not a growth multiple story.

Bottom Line

• 9% quarterly profit growth backed by lower provisions.

• Asset quality improved.

• Dividend increased to 50 sen for FY2025.

• Capital position remains strong.

The stock fits income-focused portfolios, but meaningful upside requires delivery on ROE expansion under PROGRESS27.