We compute the width of the decay $h^0$ (125 GeV) $to b bar{b}$ at next-to-leading order in the general MSSM with quark-flavour violation (QFV). We study the effect of mixing between the second and the third generation of squarks, taking into account the constraints on QFV from B-meson data. We discuss the renormalisation of the process as well as the resummation of the bottom Yukawa coupling at large $tan beta$. We show numerical results on the decay width $Gamma(h^0 to b bar{b})$ as a function of the involved QFV parameters and compare them with the corresponding width in the Standard Model.