Alliance Bank posts 1Q24 net profit of RM150.5mil

KUALA LUMPUR: Alliance Bank Malaysia Bhd continues to focus on the eight Acceler8 growth pillars to build momentum and deliver value to stakeholders through strong finances, great customer service, and solid ESG progress, according to group chief executive officer Kellee Kam.

“We will leverage our strengths of speed, service and personalisation to position the bank as the preferred banking partner,” Kam said in a statement.

Alliance Bank’s Acceler8 strategy is yielding positive results, evidenced by the acquisition of more than 3,000 new-to-bank business customers (representing a 40% YOY growth). In addition, SME loans grew by 11% year-on-year (YoY).

The bank also intensified its cross-sell approach and established a business-to-business supply chain financing programme as part of the commitment to provide innovative products and services to serve businesses throughout their life cycle.

Alliance Bank’s digital channels continue to contribute favourably towards its consumer banking growth.

Over 25,000 consumer customers were acquired during the period which is a 40% increase YoY.

In the first quarter ended June 30 (1Q24), Alliance Bank posted a net profit of RM150.5mil, or earnings per share of 9.72 sen against RM212.1mil, or 13.70 sen in the same quarter last year.

Revenue for the quarter stood at RM466.3mil from RM474.1mil.

Its net interest income rose 2.4% YoY attributable to higher loans volume while net interest margin moderated to 2.43%.

Alliance Bank recorded a client-based fee income (excluding brokerage) at RM78.6mil while cost-to-income ratio was at 49.3%.

Overall loans growth continued its momentum, expanding 7.9% YoY to RM49.7bil as SME, commercial and consumer banking loans grew 13.4%, 11.7% and 7.1% YoY respectively.

Its customer-based funding increased 6.5%, bolstered by a rise in fixed deposits. CASA (current account savings account) ratio remained healthy and is among the highest in the industry at 43.9%.

In 1Q24 net credit cost was 7.1 bps, with a loan loss coverage ratio of 120%. The bank continues to proactively engage with customers to assist them in managing their financial commitments.

The bank maintained a strong capital position with common equity tier-1 ratio (CET 1) at 13.7% and tier-1 capital ratio at 14.6% respectively as at June 30. The total capital ratio was at 18.5%.

Its liquidity position is also robust with a coverage ratio of 163.2% (industry average: 155.3%) and loan to fund ratio of 85.8%.

In line with the bank’s focus of being an ESG-focused organisation, a total of RM177mil in financing was approved under the Alliance Bank Sustainability Assistance Programme, representing about 60% of the bank’s FY2024 green financing target.

Alliance Bank is also expanding in fast-growing economic corridors, strengthening its footprint in Sarawak and Penang and enhancing its branch network to better serve the local communities.

The bank is expanding its branch footprint to 83 locations by year-end, up from the current 79. This is complemented by its digital solutions such as Digital SME and e-KYC in the bank’s omni-channel approach to customer service.

Alliance Bank’s Islamic financing business grew 7% YoY driven by innovative propositions such as its Halal in One programme.

“We are committed to supporting our customers through the different stages of their life via innovative, customer-centric solutions. This includes providing sustainability solutions to help our customers adopt lower-carbon practices in their lifestyle and business operations,” Kam said.