SABAH Development Bank Berhad (SDB) has significantly reduced its losses for the financial year ending 2024, marking a sharp turnaround in its financial position following a troubled period linked to non-performing loans and depreciated assets.
The state-owned lender reported a pre-tax loss of RM86 million, compared with a staggering RM878 million loss the previous year. Net losses fell to RM82 million from RM684 million in 2023.
The improvement comes amid a broader transformation exercise that began in the second half of 2023 under a newly appointed board and management team. SDB said it expects to return to profitability in 2025.
The bank’s total capital ratio, which had dropped to 7.9% at the end of 2023, has since climbed to 20.71% as of end-2024, helped by strong backing from the Sabah state government.
In June, RAM Rating Services reaffirmed SDB’s debt instrument ratings at AA1 with a stable outlook and its commercial papers at P1, which is the highest short-term rating.
SDB is currently focusing on financing infrastructure, water and power projects in line with its development mandate. The state has also positioned the bank as a lead lender for projects with high local content.
Between January 2024 and June 2025, the bank approved RM1.76 billion in loans aligned with its mandate, while rejecting RM9.65 billion in applications that either fell outside its scope or did not meet revised credit criteria.
SDB also reported progress in recovering non-performing loans, with RM965 million in settlement proposals approved by its board. An additional RM2 billion worth of pledged securities is currently under receivership.
The bank’s transformation efforts are being guided by an independent recovery team appointed in September 2023. - July 2, 2025
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