Public Bank Bets RM500 Million Against Maybank’s Rebuild

Public Bank Bhd will spend about RM500 million a year on digital work while leaving its 314 Malaysian branches and more than 21,000 staff in place. Managing director and chief executive Tan Sri Dato’ Sri (Dr) Tay Ah Lek set that budget at the bank’s 60th annual general meeting in Kuala Lumpur on 5 May 2026. Malaysia’s third-largest bank by assets is not building a new stack from scratch. It is polishing the one it already runs.

Malayan Banking Bhd, known as Maybank, has pledged RM10 billion for technology, data and artificial intelligence through 2030, or about RM2 billion a year. That is four times Public Bank’s annual digital budget. Tay is betting the cheaper bank does not need the rebuild.

Public Bank Guards a RM500 Million Digital Budget

Public Bank, founded in 1966, used the anniversary meeting at the Shangri-La Hotel to say digital work remains a growth driver and that the bill will stay tight. Tay’s phrasing was blunt for a bank that rarely talks up its technology spend.

Digitalisation remains a key driver of growth for us. We do not overspend… we are guarding this expenditure very closely.

Tan Sri Dato’ Sri (Dr) Tay Ah Lek, Managing Director and Chief Executive Officer, Public Bank 60th AGM

The money is meant to refine MyPB Web and the MyPB App, tidy internal processes and lift output. A first task, Tay said, is using new tools to keep customer data safe. The bank has already put artificial intelligence into fraud systems that watch customer activity, fire alerts and look for malware. It is also looking at fintech tie-ups rather than buying a full digital-bank licence of its own.

He told shareholders the group has no plan to thin the 314 domestic branches, which he called an optimal level, and no plan to swap people for machines. The headcount of more than 21,000 covers Malaysia plus Hong Kong, China, Cambodia, Vietnam, Laos and Sri Lanka. Process work is supposed to cut cost. The branches stay.

Four Times the Spend for a Higher Cost Base

Maybank launched its ROAR30 plan on 20 January 2026 and said it would invest RM10 billion over the next five years in technology, data and AI. President and group chief executive Dato’ Sri Khairussaleh Ramli said the outlay would put the group on cloud and AI architecture, refresh core banking and fund a next-generation app to succeed MAE, with Indonesia likely first. The same plan aims for return on equity of 13% to 14% by 2030 and a cost-to-income ratio of 47% or lower.

Public Bank already prints a better cost line than that target, and a better return than Maybank is chasing. Over five years, RM500 million a year is RM2.5 billion. Maybank’s envelope is four times that sum. The extra cash is going into a rebuild Public Bank says it does not need.

THE 2025 COST GAP

Maybank served 10.68 million active MAE and M2U digital users in the first nine months of 2025 and kept those channels up 99.9% of the time. That is a bigger digital base than Public Bank publishes. It is also the reason Maybank is paying for a new app. Public Bank is still running MyPB.

The Cost Line Already Runs at 34.9%

In his 2025 review, Tay said the group posted a cost to income ratio of 34.9%, well below the banking industry’s 45.2%. Net return on equity was 12.8%, the highest among Malaysian banks. Pre-tax profit rose 6.8% to RM9.54 billion, the first time it had cleared RM9 billion. Net profit rose 1.1% to RM7.22 billion. Gross loans grew 5.1% to RM445.8 billion, with domestic books up 5.9% against industry growth of 4.8%. The group reported customer deposits of RM447.1 billion, up 3.2%, and domestic deposits of RM419.0 billion, up 3.8%.

A shareholder flagged that return on equity had come down from 13.2%. Tay blamed net interest margin pressure after Bank Negara Malaysia cut the overnight policy rate in July 2025, plus hard fights for loans and deposits. Marketing costs rose 18.3% and administration and general costs rose 27.2%, which he tied to heavier business activity, not to a technology binge. The RM500 million IT line sat beside those other bills rather than replacing them.

The first half of 2026 did not break the pattern. On 26 August 2026 the group said pre-tax profit was RM4.71 billion, up 1.3%, and net profit was RM3.58 billion, up 2.0%. The cost-to-income ratio for that later stretch was 35.1%. Net return on equity was 12.2%. Gross impaired loans were 0.54%, against an industry average of 1.43%. Loans had reached RM458.9 billion and deposits RM457.6 billion, both on an annualised growth rate near 5%. The fortress leaked a little. It did not fall over.

Why 314 Branches Still Count as Optimal

Tay’s answer on branches is that 314 is the right number for the customers Public Bank actually banks: home buyers, car buyers, small firms and depositors who still walk in. The group also runs more than 2,000 self-service terminals in Malaysia. Closing rooms would save rent. It would also cut the cross-sell machine that feeds hire purchase, mortgages and Public Mutual funds.

DOMESTIC BOOK END-2025

• Home loans: 20.1% of the Malaysian residential-property book.
• Shop and office loans: 32.4% of commercial-property financing.
• Hire purchase: 32.8% of the car and other HP market.
• SME loans: 18.7% of domestic small-business financing, after 10.6% growth in 2025.

Those shares are the product of a branch net that still takes applications, plus a digital layer that now opens savings accounts online. Tay said staff will be trained in digital work, sustainability and compliance rather than let go. The bet treats people as distribution, not as a cost to automate away. If transaction traffic keeps moving to the phone, that stance gets more expensive every year. If older depositors and SME owners still want a counter, it is the cheapest way to keep RM447.1 billion from walking.

Less Than 1% of This Deposit Book Has Moved

Five licensed digital banks were live by the end of 2025: GX Bank, Boost Bank, AEON Bank, KAF Digital Bank and Ryt Bank. Bank Negara Malaysia’s 2025 annual report said they had served 2.4 million customers and RM4.2 billion in deposits. About 65% of those customers came from unserved and underserved groups, including low-income households, gig workers and youth. The five had approved RM1 billion of financing, with 34% of that going to the same groups. RM4.2 billion is 0.94% of Public Bank’s RM447.1 billion deposit book, or about one ringgit in every 106.

Tay told the meeting that start-up costs and the high deposit rates digital banks use to win customers make those lenders hard to run at a profit, though those rates have been easing. He called the hit on incumbent banks temporary while the new names gather funds, and said Public Bank’s own digital services match what they offer. The 2.4 million digital-bank customers are a real cohort. They are still a rounding error on a deposit franchise built over 60 years. The risk is not today’s RM4.2 billion. It is whether 3% savings pots train younger Malaysians never to walk into a Public Bank branch at all.

Fraud Blocks, Mule Accounts and a China QR

Most of the RM500 million does not show up as a splashy new super-app. It shows up as blocks, alerts and a few extra buttons on MyPB. In 2025 the group’s PB Scam Rangers, a mobile team of cybersecurity staff, toured the country. Internal controls blacklisted more than 390,000 mule accounts. The bank said those steps stopped more than 4.5 million attempted transfers amounting to about RM1.98 billion and kept more than 1.5 million customers from being used as targets.

WHERE 2025 FRAUD SPEND LANDED

• Mule accounts: More than 390,000 accounts were blacklisted by year end.
• Customers shielded: Over 1.5 million customers were kept off mule-account targeting lists.
• Stopped transfers: More than 4.5 million attempted payments were blocked, worth about RM1.98 billion.
• Public drills: PB Scam Rangers plus webinars and roadshows with universities and agencies.

That is a defensive use of AI, not a chatbot that sells funds. The same budget paid for a revamp of MyPB Web and the MyPB App, including online savings-account opening. On 27 August 2026, Public Bank said it had become the first Malaysian bank to plug MyPB straight into China’s payment network through Alipay+, covering more than 80 million merchant points. Tay said China is a key travel, business and education destination and that customers could now pay from the app without a second wallet. Alipay+ already listed MyPB among its partner apps across Asia. The China corridor made that link visible at home.

THE 2026 DIGITAL CALENDAR

1. 20 January 2026: Maybank unveils ROAR30 and a RM10 billion technology budget through 2030.
2. 5 May 2026: Public Bank’s 60th AGM sets about RM500 million a year for digital work and keeps 314 branches.
3. 26 August 2026: First-half results show a 35.1% cost-to-income ratio and 12.2% return on equity.
4. 27 August 2026: MyPB adds direct Alipay+ QR payments across China.

The sequence is the wager in motion. Maybank writes a five-year cheque for a new core and a new app. Public Bank writes a yearly cheque for fraud filters, an app refresh and one high-traffic travel rail, then reports another half at a 35.1% cost line.

Mobile Volume Rose Faster Than Headcount

Active users on MyPB Web rose 7.6% in 2025. Active users on the MyPB App rose 4.1%. Mobile banking transactions rose 52.3%. Corporate online banking users rose 13.6% and corporate transaction volumes rose 13.3%. People who already bank with Public Bank are doing more on the phone. The app is not pulling in new names at a digital-bank clip. That split is the soft spot in Tay’s claim that MyPB is as capable as a digital bank. Capability among existing users is not the same as winning the next million accounts.

Total assets were RM561.7 billion at the end of 2025. Gross impaired loans of 0.51% sat far under the industry’s 1.37%, and loan-loss coverage of 149.9% sat far over the industry’s 84.8%. Those figures are why Tay can spend a quarter of Maybank’s annual technology budget and still post the fattest return on equity in the sector. They are also why a slow app-user line matters. A cheap bank that only deepens usage among people it already has will watch digital banks and Maybank’s next app bid for everyone else.

The 314 branches are still open. The RM500 million is still guarded. Through the first half of 2026 the cost line held at 35.1%, and in late August the same app that processes those 52.3% more mobile payments started scanning QR codes in China. That is the bet as it stands, measured in ringgit spent, rooms kept and transfers blocked, not in a new brand name on the home screen.

Disclaimer: This article is news reporting and analysis of Public Bank’s stated technology budget, branch policy and published financial figures, and of Maybank’s ROAR30 technology plan. It is for information only and is not investment advice, a recommendation to buy or sell any share, or a forecast of future profits, dividends or deposit rates. Readers who may act on bank stocks, deposits or digital-bank accounts should consult a licensed financial adviser or licensed investment adviser in their jurisdiction before making a decision. Figures and product features are those published by the banks and by Bank Negara Malaysia for the periods named and can change with later results, rate moves and app updates.