Alliance Bank Malaysia Bhd is disposing of its stockbroking business to stockbroking firm Phillip Futures Sdn Bhd, as part of the banking group’s strategic plan to re-prioritise its businesses to accelerate growth in its consumer, small- and medium-sized enterprise (SME) and Islamic banking businesses.
its subsidiary Alliance Investment Bank Bhd has entered into a conditional business sale & purchase agreement with Phillip Futures Sdn Bhd (Phillip Futures) for the sale of its stockbroking business.
A local media reported that the disposal consideration will be based on a formula that equals to an aggregate of an amount equal to the net asset value (NAV) of the stockbroking business as at the completion date of the proposed exercise, as well as an amount equal to 60% of the aggregate brokerage fee in respect of all brokerage transactions concluded by Phillip Futures in respect of the 12-month period from the specified transfer point until the date, that is, the 12-month anniversary of the completion date. The NAV of the stockbroking business stood at RM205.2 million as at Sept 30, 2021.
The Bank will also enter a strategic stockbroking partnership arrangement with PhillipCapital Group[1]. This will enable the Bank’s customers to gain access to regional trading platforms and a broad range of global investment products.
The excess capital from the sale of the stockbroking business will be re-deployed to accelerate growth in its consumer, SME and Islamic banking businesses.
Meanwhile, Alliance Investment Bank’s capital markets business will be transferred to the Bank’s other subsidiary, Alliance Islamic Bank Berhad. As a result, Alliance Islamic Bank will be one of the few local Islamic banks with in-house capabilities to serve business clients with comprehensive corporate and capital markets solutions.
The Bank expects to conclude the corporate exercise in the first half of 2022.
As part of the Bank’s broader Vision to be the Preferred Bank of Business Owners, it will invest in significantly scaling up its SME business. “Our SME banking business has consistently outpaced the industry’s growth over the past 5 years. We aim to be among the top 4 banks in SME market share in Malaysia,” said Mr Joel Kornreich, Group Chief Executive Officer of Alliance Bank.
“Our actions will be guided by the Alliance Way, which is our unique approach to address the needs of our customers. Our relationship managers take the time to truly understand our customers’ financial situation so that they can provide the most relevant solutions in a fast and simple manner. Our goal is to serve the business and personal needs of business owners and the needs of their stakeholders,” Mr Kornreich added.
