Alliance Bank Malaysia Berhad (Alliance Bank) saw its net profit increase by 16.98% to RM185.33 million for the second quarter ended Sept 30, 2023 (2QFY2024), from RM158.42 million a year before due to higher revenue and lower expected credit losses.
However, when comparing the first half of the financial year ending 31 March 2024 (1HFY2024) to the same period last year, its net profit is slightly lower at RM335.9 million from RM370.6 million for HFY2023, down by 9.3%.
Its net interest income increased 2.2% year-on-year (YoY), attributable to higher loans growth, with net interest margin improved 10 basis points (bps) quarter-on-quarter (QOQ) to 2.53%.
“The bank recorded a 20% rise in non-interest income (excluding brokerage) to RM163.1 million due to higher wealth management income and foreign exchange fees. Total revenue grew 4.2% YOY to RM994.4 million while cost-to-income ratio was at 48%.”
Overall, it said that loans accelerated 10% YoY to RM51.5 billion with SME, Commercial and Consumer Banking loans growing 15%, 12.2% and 8.8% YoY respectively.
“The bank’s customer-based funding saw a 4.4% YoY increase while CASA ratio also improved to 44.2% and remains one of the highest in the industry,” it added.
Alliance Bank declared a first interim dividend of 10.85 sen per share, representing a total dividend payout ratio of 50%.
Its group chief executive officer Kelle Kam said in financial period under review, it has made significant progress towards its Acceler8 strategy targets and continues to strive towards becoming a bank for the community.
“As set out in our Acceler8 strategy, we aim to create value for stakeholders through robust financial performance, exceptional customer service and ESG advancements.
“We recently unveiled a new tagline, ‘The Bank for Life’, which exemplifies the bank’s dedication to deliver solutions tailored to the evolving needs of our customers throughout their lives or at different stages of their business,” he said.
In 1HFY2024, Alliance Bank acquired 61,000 new-to-bank customers, representing more than 40% YoY increase.
Kam said the bank’s continued focus on digitalisation and targeted approach towards high-net-worth individuals and young professionals has led to a record first half expansion of 42% YoY in new-to-bank acquisition in the consumer banking segment.
“In tandem with this, consumer banking loans grew about 1.6 times faster than industry average. Meanwhile, in the business banking segment, Alliance Bank acquired 6,200 new-to-bank business customers representing a 30% YoY growth.
“SME loans continued its strong growth, outpacing industry growth by 1.8 times. Additionally, the bank intensified its cross-sell approach which bolstered the business banking client fee income.
“Our efforts to broaden our growth focus across key segments are starting to yield positive results as our total loan market share has started expanding,” added Kam.
In the Islamic financing business, the bank continues its momentum with a 7% YoY growth, driven by the bank’s flagship ‘Halal in One ‘ programme which offers business owners venturing into the halal space end-to-end solutions.
The bank also recorded RM12 billion in new sustainable banking business towards the RM15 billion FY2027 goal.
Meanwhile, 1HFY2024 net credit cost was 14.8 bps, with a healthy loan loss coverage ratio of 120%. The bank remains committed to engaging with customers, providing assistance to meet their financial needs.
The capital position (without transitional arrangement) of the bank remained robust with Common Equity Tier-1 ratio (CET 1) at 12.9% and Tier-1 Capital ratio at 13.7% respectively as at 30 September 2023.
Total capital ratio was at 17.5%. The bank’s liquidity position is also strong with coverage ratio of 154.3% (industry average: 151.5%) and loan to fund ratio of 88.6%.
