Investigating the Effects of Perceived Value and Trust on Customer Loyalty towards Foreign Banks in Sabah, Malaysia

The liberalisation of the Malaysian banking industry has attracted a number of foreign banks to open branches in the country, putting the local banking industry under competition. Foreign banks such as Standard Chartered, HSBC, OCBC, and Bangkok Bank have been here for decades, surviving and remaining successful despite numerous restrictions. Newer banks such as Al-Rajhi Bank and Kuwait Finance House have also joined in this increasingly competitive landscape. This study focused on factors influencing customer loyalty in foreign banks at Kota Kinabalu, Sabah. Customer loyalty has been shown in previous research to play an important role in deciding a bank's competitive advantage. This study examined the level of customer loyalty towards foreign banks in Malaysia and investigated whether factors such as perceived value and trust influenced loyalty. The information was gathered from 239 foreign bank customers in Kota Kinabalu, Sabah, who completed a self-administered survey questionnaire. Customer loyalty is above average, with a mean of 4.86 (on a seven-point Likert scale), and both perceived value and confidence have positive and important effects on customer loyalty, according to the findings. Implications of the study are discussed and suggestions for future research are provided.