Alliance Bank Malaysia Berhad has announced a revenue growth of 7.6 percent year-on-year (“YOY”) to RM896.1 million for the first half of the financial year 2021 (“1HFY21”). Net profit after tax for this period was RM208.3 million.
The Bank’s revenue growth was due to the improvement in non-interest income, which rose 28.4 percent YOY to RM229.5 million mainly due to higher treasury income, and improvements in wealth management and brokerage income.
The Bank also reported a pre-provision operating profit growth of 17.8 percent YOY to RM518.7 million stemming from the better revenue growth and prudent cost control.
For 1HFY21, its net interest income (including the Islamic Banking segment) improved by 2 percent YOY to RM666.5 million due to lower funding cost arising from better a deposit mix. Net interest margin was at 2.2 percent due to the OPR cut impact.
The Bank’s net credit cost stood at 56.3 bps for 1HFY21, of which 48 bps (amounting to RM209 million) is a management overlay to buffer against the uncertainty of the pandemic’s impact.
The Bank’s liquidity and capital positions remain strong. Common Equity Tier-1 (“CET 1”) ratio was at 15.4 percent, Tier-1 Capital ratio at 16.3 percent, and total capital ratio at 20.7 percent. Liquidity coverage ratio was at 156.9 percent (industry: 152%). Its holding of high-quality liquid assets (“HQLA”), which helps to mitigate possible shocks, remained stable at RM14.7 billion. Loan to fund ratio was 82 percent.
In October, the Bank successfully issued RM1.2 billion Basel III-compliant Tier 2 Subordinated Medium Term Notes (“Sub-MTN”) under its existing RM2 billion programme. The Sub-MTNs were issued in three tranches with maturities between 10 and 15 years.
During the book-building exercise, RM900 million Sub-MTNs were offered initially to investors to replace the Sub-MTNs that were callable in October 2020. Due to overwhelming demand from investors with more than 2 times book cover, the Bank upsized the offerings bringing the total issue size to RM1.2 billion in a single tap. The auction closed with the Sub-MTNs priced competitively between 3.60 percent p.a. and 4.05 percent p.a.
“We continue to focus on our two key priorities of helping our customers stay resilient during the pandemic and accelerating our digitisation initiatives to scale up and reach more customers, improve client engagement, and drive better cost efficiency,” said Joel Kornreich, group chief executive officer of Alliance Bank.
In the 1HFY2021, the Bank provided RM5 billion in targeted assistance to individuals and business clients. Of this, over RM2.1 billion was for the 3-month extended loan/financing moratorium, and RM2.9 billion was for Payment Relief Assistance packages. The approval rate was 98 percent.
The Bank has just announced its expanded Payment Relief Assistance packages for the B40, M40, and micro-SME segments in line with the Budget 2021 initiatives tabled recently. It will continue to provide payment relief to those who have lost their jobs, have had their income reduced, or work in highly-affected sectors such as hotels, tour operators, restaurants, or aviation.
Meanwhile, the Bank’s BizSmart® Solution portal is helping businesses stay resilient during this challenging time. The portal provides SMEs a 1-stop platform to obtain relevant business solutions such as digital marketing, logistics, and software services at discounted rates. It also features useful online training and webinars to help businesses navigate current market conditions.
The Bank continues to support businesses in their funding needs. During 1HFY21, SME loans grew 7.4 percent YOY to RM9.8 billion.