Tabung Haji’s financial strength should be judged by asset quality, sustainable earnings and transparency, not just hibah, says an economist
KUALA LUMPUR: Tabung Haji’s (TH) asset quality and its profit source should be among the key metrics in assessing the institution’s financial strength, aside from the hibah (profit) distribution, according to an economist.
Associate Prof Dr Abdul Rahim Ridzuan, a lecturer at Universiti Teknologi MARA’s (UiTM) Faculty of Business and Management, said focus should also be on the sources of TH’s earnings — specifically, whether they are backed by strong asset performance or driven by temporary factors.
“Don’t just ask, ‘how much is the hibah?’ but also ask, ‘Where does the profit come from, how sustainable is it, and how strong are the underlying assets?’” he told Bernama.
He said a healthy profit distribution rate is undoubtedly important because it directly benefits depositors, but strong earnings alone are insufficient to indicate that an institution has fully recovered.
Instead, Abdul Rahim said any assessment of TH’s financial strength should also take into account the quality and performance of its assets, the stability of its income, the sustainability of its long-term earnings, and the transparency of its financial reporting and investment disclosures.
These would allow depositors to evaluate the fundamentals underpinning TH’s financial performance, rather than focusing solely on the hibah distributed in a particular year.
In 2025, TH recorded its best performance in eight years, with investment income rising to RM4.64 billion from RM4.56 billion in 2024, while investment assets increased to RM96.37 billion from RM95.06 billion previously.
The haj pilgrims’ fund board also announced a 3.50 per cent profit distribution — a payout amounting to RM3.22 billion — to more than 9.7 million depositors for 2025, up from 3.25 per cent in the previous year.
Abdul Rahim said that while highlighting these accomplishments, TH should adopt a ‘transparency with accountability’ approach by not only disclosing its financial performance but also demonstrating the improvements made to address previous shortcomings.
He said achievements such as better financial performance and an improvement in asset quality can be highlighted, but these ought to be communicated together with changes that have been implemented.
“Acknowledging its weakness would not undermine the institution. On the contrary, learning from shortcomings and openly demonstrating improvements can strengthen public confidence,” he said.
Abdul Rahim said transparency and accountability in making investment decisions are also important indicators in determining whether TH’s financial strength can be sustained in the long run.
“The profits recorded today cannot ensure the security of depositors’ funds over the next 10 or 20 years without a clear and accountable decision-making process.
“If the investment process is transparent, risks are assessed independently, conflicts of interest are managed, performance is monitored, and decision-makers are held accountable, there will be a stronger basis for public confidence,” he added.
