Strategic Management (Khairulssaleh Strategies)

Reframing RHB, Khairulsalleh who is appointed as the RHB group managing director(MD) and
RHB Capital Bhd(RHB Cap) chief executive officer (CEO) and MD. He said that it is time to
focus more on value creation to shareholders. When talk about the value of creation, it is about
how do they to anchor on Return on Asset (ROE). For the record, RHB gained from RM115
billion in 2009 to RM223 Billion on this year. The strategy called IGNITE 2017 where to guide to
group through the next five years with the first target f hitting ROE of 13% by 2017. ROE
targets, RHB wants to boost revenue from the key growth areas, manage cost and enhance
productivity and optimize its capital and balance sheet. One of the initiatives is career transition
scheme (CTS) to trim its workforce. RHB has launched the program and is giving employees
the opportunity to respond within three weeks. RHBs strategy on value creation anchored on 3
key themes. Firstly, boost revenue from key growth areas then manage cost and enhance
productivity, optimize capital and balance sheet, deliver superior customer experience, build
ecosystem for digital and payments enablement and lastly engage and develop talent into high
performing teams.

Reframing the strategy. Due to focusing more on value creation so it has dropped the size goal
but focusing more on performance. Second pillar, the group had identified as much as 40% of
its revenue came from overseas, premised on the strategy that it would be able to obtain a
commercial bank in Indonesia. When we talk about value creation, we want to anchor our
journey into three core themes says Khairulsalleh. Three core themes are key growth areas,
manage cost and enhance productivity and lastly optimize its capital and balance sheet. So,
Khairulsalleh points out that the small and medium enterprise segment is one of the fastest
growing areas which offer much potential growth. It has proven by past two years, which the
group has grown from 6% to 8%. In the medium and the long-term strategy there are two parts
for the banking group. One is the corporate restructuring which entails a few things. Right issue
of RM2.5 billion where this money will be injected into RHB Bank for the bank to use that capital
to grow. Then there is the internal restructuring where the insurance business will be injection
into the bank. The bank will then assume the groups listing status to become the new holding
company for RHB group. Khairulsalleh says the shares in the bank would then be distributed to
its current capitol shareholders through capital repayment and distribution.