Same RM10,000, different dividends
Put RM10,000 into each bank: last year's dividends run from RM419 to RM719.
So is the bank that pays the most the best bank? Not so simple. I gave all ten listed banks the same five checks. The one with the fewest bad loans, Public Bank, comes last overall. And the one that comes first doesn't top a single check.
So this isn't about which bank to buy. It's about what makes a good bank.
Who each bank lends to
My first question for any bank: who did it lend the money to?
Keep the last one in mind. It comes back at the end.
Loan mix from each bank's own loan tables, 30 Jun 2026.
Five checks, ten banks
Four checks of health, one of price.
| Bank | Bad loans | Provisions | Capital | ROE | P/B | Score |
|---|---|---|---|---|---|---|
| RHB Bank | 1.47% | 74% | 14.8% | 10.2% | 0.95× | 81 |
| Alliance Bank | 1.83% | 102% | 13.0% | 9.8% | 0.89× | 77 |
| AmBank | 1.62% | 70% | 14.8% | 9.7% | 0.97× | 75 |
| Hong Leong Financial | 0.57% | 80% | 11.8% | 9.9% | 0.57× | 74 |
| Hong Leong Bank | 0.57% | 80% | 12.9% | 10.8% | 1.04× | 73 |
| CIMB | 1.64% | 100% | 14.0% | 11.1% | 1.06× | 70 |
| Maybank | 1.35% | 103% | 14.9% | 11.3% | 1.30× | 69 |
| Affin Bank | 1.82% | 71% | 12.6% | 4.3% | 0.41× | 69 |
| Bank Islam | 0.98% | – | 13.1% | 6.9% | 0.57× | 68 |
| Public Bank | 0.54% | 139% | 13.9% | 11.9% | 1.50× | 67 |
1. Bad loans (impaired loans): the part of the loans where borrowers have started to fall behind. Best is Public Bank: of every RM100 lent, about 54 sen. Worst is Alliance Bank, 1.83%. On home loans alone, Public Bank had 0.39% bad, the industry 1.15% and Alliance 2.15%: same kind of loan, about five times the bad loans.
2. Provisions (loan loss coverage): money a bank takes out of today's profit for loans it may not get back, as a cushion. Public Bank holds RM1.39 for every RM1 of bad loans; AmBank only 70 sen. Bank Islam is blank: no full report is published, so there is no number.
3. Capital (CET1): shareholders' money plus profits kept over the years. It is owed to no one, so in a crisis it is what absorbs the losses. Bank Negara's floor is about 7%; the lowest of the ten is 11.8%. My green line is 14%, and 4 banks clear it: Maybank, AmBank, RHB Bank, CIMB.
4. Earnings (ROE): for every RM100 shareholders have in the bank, how much it earns them in a year. Best is Public Bank at 11.9%. My green line is 15%, and none of the ten reaches it. That doesn't mean all ten are bad; more likely my ruler doesn't fit banks. Under 8%: Bank Islam and Affin Bank.
After four checks, Public Bank has the fewest bad loans and is first on 3 of the four. Surely it's No.1? It scores 67, rank 10 of 10. The clue is in the dividends.
Why a weaker earner can pay more
The answer is in the word "yield".
Bank Islam paid RM719 on RM10,000, yet its ROE is 6.9%, in the red. It earns less, so why does it pay more?
Dividend yield is the dividend per share divided by the share price. If the price halves, the yield doubles, and the company hasn't paid a single sen more. A high yield doesn't always mean a better earner. Sometimes the market just prices it lower.
Check 5: are you paying too much?
Public Bank costs 1.50× its net assets; Affin Bank 0.41×.
For banks the usual price check is P/B: for every RM1 of net assets on the books, how much the market asks you to pay. Public Bank at 1.50: RM1.50 for RM1, the dearest of the ten. Affin Bank at 0.41: 41 sen for the same RM1.
Is Affin Bank the better deal? You can't say that. 41 sen for RM1 may really be cheap, or the market may think that RM1 won't earn much later. Public Bank is the opposite: healthy everywhere, so the market pays the most, and price became its weakest pillar (33).
Take price out and score again
The table reshuffles. Only RHB Bank stays first.
The score has five pillars, out of 100; 80 and up is green. Financial Safety and Price Fairness weigh the most. So a bank that is safe but expensive gets pulled down hard. What if I ignore today's share price? On My Rules, set P/E, P/B and PEG to 0 and score again:
| Bank | Score | Rank | Without price | Rank |
|---|---|---|---|---|
| RHB Bank | 81 | 1 | 80 | 1 |
| Alliance Bank | 77 | 2 | 75 | 4 |
| AmBank | 75 | 3 | 72 | 7 |
| Hong Leong Financial | 74 | 4 | 66 | 9 |
| Hong Leong Bank | 73 | 5 | 75 | 4 |
| CIMB | 70 | 6 | 76 | 3 |
| Maybank | 69 | 7 | 75 | 4 |
| Affin Bank | 69 | 7 | 60 | 10 |
| Bank Islam | 68 | 9 | 68 | 8 |
| Public Bank | 67 | 10 | 78 | 2 |
Public Bank goes from 67 to 78, rank 10 → 2. The cheapest, Affin Bank, goes from 69 to 60, rank 7 → 10. Not one number in the banks' accounts changed. What changed is the ruler.
Why RHB Bank comes first
It tops none of the five checks, and none of its pillars drags it down.
Remember the bank that was hard to label: some Singapore, some home loans, some SME, some big companies. That spread shows up in the score. Its lowest pillar is 67, while Public Bank's price pillar is 33. It also gets full marks on cash and dividends.
It has weak spots too: provisions rank 7 of 9. A top score doesn't mean strong everywhere, and it doesn't mean you should buy it. If all you take away is "RHB Bank is first", this article missed.
Whose ruler are you using?
Same accounts, four investors, four different No.1s.
So don't take my score as the answer. Put in your own weights and score the banks your way, or open any bank's page for every number behind it, for example RHB Bank or Public Bank. To put two side by side, use Compare.
Stocks in this article
Score out of 100:80+ Strong40-79 Okay0-39 Weak
The 10 listed banks, best score first
FAQ
RHB Bank, at 81 out of 100, the only one of the ten at 80 or above. It isn't best on any single check; its lowest pillar is 67. A high score is not a reason to buy; it shows where a bank has no weak spot.
Price. Public Bank's P/B is 1.50, the highest of the ten, so its Price Fairness pillar is 33. Price and Financial Safety weigh the most in the score. With price switched off, it scores 78 instead of 67.
Not always. Yield is dividend per share ÷ share price, so a lower share price lifts the yield without the bank paying more. Bank Islam has the highest yield of the ten (RM719 a year on RM10,000), while its ROE is 6.9%.
Public Bank: 0.54% of its loans are impaired, against 1.83% at Alliance Bank. On home loans alone, Public Bank was 0.39% against an industry average of 1.15% (30 Jun 2026).
Sources (3)
- Each bank's interim financial report and investor materials, 30 Jun 2026 (loan mix, home-loan impaired ratios)
- Industry home-loan impaired ratio 1.15%, 30 Jun 2026: quoted in Hong Leong Bank's annual report and a Bank Islam release
- Bank Negara Malaysia, Capital Adequacy Framework (Capital Components): CET1 minimum 4.5% plus 2.5% conservation buffer
Scores, ratios and dividend yields: this site's data, 30 Oct 2026. Bank ratios (impaired loans, loan loss coverage, CET1) come from each bank's latest published results.
Educational content, not investment advice. Do your own research, or speak to a licensed financial adviser, before investing. See About for how this site works.