KUALA LUMPUR: Bank Kerjasama Rakyat Malaysia Bhd (Bank Rakyat) is targeting higher non-interest income growth over the next five years amid pressure on sector margins and deposits.
CEO Ahmad Shahril Mohd Shariff said the bank plans to expand non-interest income streams through its credit card business and other transaction-based offerings as it seeks to diversify revenue sources.
“The aim is these coming five years, we want to expand all our fee-based income. One of it is through our credit cards,” he told reporters at the launch of the Bank Rakyat World Mastercard Credit Card-i introduced in partnership with Mastercard.
Ahmad Shahril said the syariah-compliant premium travel card forms part of the bank’s strategy to tap growing travel and lifestyle spending among higher-income consumers.
“We notice more and more Malaysians are eager to go overseas. Before even the ringgit strengthened, Malaysians had started to go overseas. It’s a lifestyle,” he said.
He said travel demand among Malaysians is expected to remain resilient despite the war in the Middle East, supported by continued demand for regional and international travel.
“We believe that Malaysians travel to many places. Even with the current condition there are a lot more locations for Malaysians to travel to. Domestic travel activity also continues to provide opportunities for the bank,” he said.
Ahmad Shahril said the bank also sees untapped opportunities within its customer base of more than four million.
“There are huge opportunities there, huge potential and we have not maximised or unleashed our true potential just yet in this segment,” he said.
Ahmad Shahril said the bank remains cautious on asset quality given geopolitical uncertainties and tensions in the Middle East.
“Not just Bank Rakyat, all banks are under cautious mode. A lot of scenarios are being put into place for our projections moving ahead,” he said.
He commented the current economic conditions remain supportive of household spending and travel demand after Bank Negara Malaysia maintained the overnight policy rate at 2.75%.
“As far as Bank Rakyat is concerned, we believe that the current economy is still conducive to sustain demand for travelling,” he said.
He added that domestic demand and household spending are expected to continue supporting business opportunities for the bank.
“If you look at the latest annual report produced by Bank Negara, the economy will continue to be supported by domestic demand, domestic spending and household spending,” he said.
