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In 2025, Malaysia’s economy grew 4.7% despite global uncertainties such as trade tensions, tariff shifts, regional conflicts, and changing consumer sentiment. Growth was supported by strong domestic demand and investments in high-growth sectors.

Malaysia’s banking sector navigated a dynamic landscape with rising corporate credit demand driven by investments, while retail financing experienced a slowdown, a reversal from previous years. Cost of deposits surged amid competition from digital banks and local fintechs, prompting banks to reassess funding strategies.

Digital adoption accelerated in 2025, and demand for ethical, Shariah-compliant solutions remained robust. Regulatory expectations intensified in cybersecurity and sustainability, while consumers sought greater convenience, transparency, and personalisation. These trends shaped alrajhi bank Malaysia’s (ARBM) strategic priorities for the reporting period.

A strong performance against a solid growth strategy

ARBM delivered a strong performance in 2025, supported by focused execution across its four key strategic pillars:

Revenue diversification was primarily driven by Treasury operations. ARBM realigned its sukuk portfolio to capitalise on rate movements and optimise foreign currency investments. By exiting unrated sukuk and reinvesting in high-yield structured products, ARBM strengthened returns and overall profitability. New offerings such as motorcycle financing, digital gold-i investments, and insurance solutions reflected ARBM’s shift towards a diversified, values-driven product ecosystem.

Disciplined execution of strategic priorities lifted Profit Before Tax (PBT) by 17.0% YoY supported by higher net yields, steady non-yield income growth, and lower impairments. Total Assets grew by 4.5% YoY to MYR 19.8 Bn., driven mainly by Treasury Investments of MYR 6.1 Bn., a 26% YoY increase. Growth was supported by strong momentum in the Retail segment, which expanded by 44% this year. Treasury’s USD/MYR swap book increased from USD 382 Mn. to USD 575 Mn., signalling market confidence.

Operational efficiencies under Pillar 02 improved through process reengineering, restructuring, and system cost optimisation, reducing CIR further to 56.6% from 58.5% in FY24, and 70.9% in FY23. ARBM anticipates an income growth of 7.6% against a 4.1% increase in expenses.

ARBM’s overall performance resulted in the improvement of Return on Equity (ROE) from 9.5% in FY24 to 10.16% at the close of the year, supported by increased profitability and efficient capital deployment.

Future-ready digital transformation

To achieve Pillar 03 objectives, ARBM launched a 3-phase IT System Consolidation Roadmap to strengthen infrastructure, enhance security, and build a future-ready foundation for digital transformation. Phase 1 was completed in 2025 with the launch of the MY alrajhi app, a unified platform consolidating RIZE and alrajhi@24seven into a mobile-first ecosystem.

The app delivers a seamless experience across savings, financing, and lifestyle services, improving transaction stability and customer engagement. Features include biometric login, bill payments, and term deposit placements, while savings tools were extended to all retail customers. A customer referral campaign supported adoption, with 400–700 new users monthly since the app’s launch in June 2025. At the close of the year, the app served over 70,000 customers (71% of retail base) and contributed 37% of deposit growth, with individual deposits surpassing MYR 1.5 Bn.

With Phases 2 and 3 scheduled for 2026–2027, ARBM focused on improving the operational resilience of the bank’s IT infrastructure in 2025. The overseas branch introduced a virtualisation platform for hybrid IT (cloud/on-premise), next-gen backup and recovery, and upgraded core network and firewalls to strengthen cybersecurity. Scalability was ensured through application consolidation, cloud-native architecture, and enterprise API gateway integration. A unified data platform enabled advanced analytics and personalised experiences.

A Generative AI platform was introduced internally to boost overall productivity. ARBM leveraged its synergies across the alrajhi group, particularly through its collaboration with Ejada, the Group’s IT consulting arm. Ejada played a critical role in supporting the development of ARBM’s digital banking infrastructure, contributing best-in-class consulting and technical capabilities that accelerated the Bank’s digital transformation and reinforced infrastructure resilience.

2025 also marked the Phase 1 completion of Project Phoenix, ARBM’s Real-Time Retail Payments Platform migration. This enabled real-time payments via Malaysia’s national payments channels DuitNow QR and DuitNow Transfer (both interbank and intrabank). Building on doubled transaction volumes in 2024, Phase 2 introduced DuitNow Online Banking/Wallets (OBW), Consent, and Auto Debit services in 2025. Future phases will further expand real-time payment capabilities and transaction growth.

The YoY comparison for Real-Time Retail Payments volume:

Growing the customer base

Pillar 04’s strategic objective of customer growth was driven by product expansion, service enhancements, and targeted branding initiatives. New and restructured offerings addressed evolving needs, while loyalty programmes strengthened engagement. ARBM overcame its limited physical footprint by pivoting to digital channels, strategic partnerships, and alternative touchpoints, ensuring convenience for Malaysia’s digitally connected demographic.

Brand visibility remained a priority as ARBM deepened market presence in a saturated environment. ARBM’s leadership maintained an active role in industry dialogues with peers and Bank Negara Malaysia, reinforcing credibility as a collaborator shaping Malaysia’s banking future.

ARBM launched impactful marketing campaigns, including social media collaborations with lifestyle brands, referral programmes, and personalised outreach. Roadshows at universities, malls, and public events complemented digital efforts. Social media engagement surged, with shared content achieving nearly two million views across all social media channels, while website sessions doubled, reflecting stronger resonance with a digitally active audience.

Promoting sustainable banking practices

ARBM advanced its commitment to sustainable banking as an active member of Malaysia’s Value-Based Intermediation (VBI) Community of Practitioners of Malaysia, promoting positive and sustainable impact on the economy, community and the environment, aligned with shariah objectives.

Under the VBI principle of Community Environment, ARBM targeted SME growth through new CASA acquisitions, each averaging MYR 50,000 in deposits. The branch nearly doubled its customers to 236 at the close of the year, contributing to an increase in deposit balance of MYR 62 Mn. This growth builds on a strong foundation, representing a 15% increase from the previous year’s MYR 400 Mn. base, and underscores the segment’s potential for long-term value creation.

To strengthen ESG risk management, ARBM applied BNM’s Climate Change and Principle-based Taxonomy (CCPT) across its corporate book, supported by an ESG Assessment Checklist and the bank’s ESG Risk Management Policy (Corporate Credit Policy and Sustainability Policy). Moody’s scorecard tool was introduced alongside CCPT scoring to enhance climate risk evaluation and credit assessment.

ARBM continued supporting BNM’s ‘My First Home’ scheme via the SJKP programme in 2025, improving access for B40 (bottom 40% of households) and M40 (middle 40% of households) first-time buyers, including those with irregular incomes. Partnerships with property developers and real estate agents opened a new market for shariah-compliant home financing, creating a foundation for growth in the first-time buyer segment. ARBM aims to scale this segment, targeting MYR 100 Mn via SJKP in 2026.

To promote financial inclusion, ARBM enhanced mobile banking and simplified account opening for underserved segments. Targeted campaigns incentivised savings habits among lower-income customers through cashback rewards, reinforcing ARBM’s commitment to inclusive and sustainable banking.

Reinforcing data security measures

Between 2022 and 2025, Malaysia recorded over 173,000 mule accounts amid rising online fraud. In response, ARBM strengthened its fraud prevention framework with advanced detection tools and real-time transaction monitoring, implemented ahead of BNM deadlines. ARBM also reviewed fees and contract terms to ensure fair treatment, introduced safeguards for high financing amounts, and enhanced data protection in line with updated PDPA requirements. Anti-bribery measures were reinforced through risk assessments, supported by the appointment of an Integrity Officer responsible for driving ethical standards across the organisation.

ARBM further enhanced AML and sanctions screening, adopted risk-based monitoring, and aligned governance with evolving regulations. In preparation for BNM’s Responsibility Mapping policy effective January 2026, ARBM updated its Corporate Governance Policy and introduced a statement of responsibility for senior managers, reinforcing accountability and ethical standards.

Investing in human capital

ARBM strengthened its employee value proposition in 2025 through initiatives that doubled training volume via a new in-house centre and completed its inaugural Leadership Development Programme. The 18-month Management Trainee Programme attracted 4,828 applicants, with 15 graduates onboarded for structured rotations and certifications, building a future leadership pipeline. Strategic appointments, including a Chief Shariah Officer, reinforced governance, accelerated digital transformation, and enhanced retail banking capabilities.

To foster a high-performance culture, ARBM conducted KPI alignment workshops and improved healthcare coverage with new medical plans, health screenings, and mental health programmes. ARBM also earned the Change Maker Award in the Data Leaders Category at the Darwinbox Unboxed Awards Singapore for leveraging data and analytics through enhancements to its Darwinbox-based Human Capital Management platform.