TH Should Focus On Income Stability, Avoid Pressure Of Chasing High Returns
By Nurul Jannah Kamaruddin and Mohd Noor Azeery Idris
KUALA LUMPUR, Aug 14 (Bernama) -- Income stability, liquidity, and capital safety must continue to form the basis of Lembaga Tabung Haji’s (TH) investment policy, given that the institution manages withdrawable savings.
MARA University of Technology (UiTM) Faculty of Accountancy Adjunct Professor Dr Mohamad Faisal Abdul Malik said this foundation must remain a consideration without pressure to pursue high returns.
This means that Syariah-compliant fixed-income instruments, especially high-quality sukuk, are expected to continue driving TH’s investment income and supporting stronger performance over the next five to ten years.
“In other words, TH fund managers need to strike a balance in the context of maximising and optimising returns without taking on excessive risks.
“So, a more disciplined portfolio management approach is called for in this context, not just chasing assets that offer high returns,” he told Bernama.
Mohamad Faisal, who is also a corporate and business analyst, said the real test is whether TH can sustain its return performance for the next few years without taking on excessive risks.
In 2025, TH recorded investment income of RM4.64 billion, the highest since 2018, with assets of RM98.58 billion, exceeding RM95.63 billion in liabilities.
Mohamad Faisal said this performance indicates the portfolio cleaning process is beginning to bear fruit, but good performance over one or two years does not prove consistent returns.
He said this is because three responsibilities with different requirements, i.e., managing depositors’ withdrawable savings, funding and operating Hajj activities, and fulfilling the mandate to generate investment returns, can put pressure on TH.
Therefore, he opined that a better model is the separation of functions so that each mandate can be carried out more focused without taking on high risks.
“TH must focus on its core, original establishment, and functions. In other words, other functions, such as investments, should be mandated to more authoritative agencies, such as the Securities Commission Malaysia or Bank Negara Malaysia,” he said.
Mohamad Faisal said TH also needs to improve the productivity of existing assets by evaluating which assets need to be rehabilitated, reorganised, or gradually disposed of.
According to him, every investment should also undergo independent evaluation, rigorous risk analysis, and stress testing, in addition to obtaining a second opinion from experts before major investment decisions are made, such as property purchases or company acquisitions.
Mohamad Faisal said separating problematic assets, recognising losses and impairment, and restructuring the portfolio are now seen as strengthening TH’s investment discipline.
Hence, he said, TH is now in a better position compared to 2017.
Meanwhile, he said the effective implementation of the recommendations by the Royal Commission of Inquiry (RCI), including streamlining the board structure, committee responsibilities, risk assessment processes, and investment decisions, is also considered capable of helping to restore TH’s finances and depositor confidence.
“I see the RCI as a good turning point. The RCI gave many recommendations for a recovery plan, and if the recovery plan is well received in terms of implementation, it will certainly yield better results,” he added.
The RCI TH report was made public on July 29, 2026, documenting various TH management and operational weaknesses from 2014 to 2020 and presenting 25 improvement recommendations, of which TH had implemented 75 per cent as of July 30 this year.
The government held a briefing during a special Dewan Rakyat sitting on Aug 11 regarding the RCI’s TH report by Minister in the Prime Minister’s Department (Religious Affairs) Dr Zulkifli Hasan.
During the winding-up session, Deputy Finance Minister Datuk Seri Amir Hamzah Azizan revealed that TH recorded losses of nearly RM13 billion from 14 problematic investments, seven of which posted 100 per cent losses.
The nearly RM13 billion in losses included RM10.2 billion borne by the government through a bailout via Urusharta Jamaah Sdn Bhd in 2018 and a RM2.6 billion impairment borne by TH from 2018 to 2025 for investments still under management.
-- BERNAMA