Alliance Bank to maintain strong loan momentum in FY2026

The Sun

4 days ago

KUALA LUMPUR: Alliance Bank Malaysia Bhd aims to maintain strong loan momentum in FY2026 amid Malaysia's stable lending conditions.
Group CEO Kellee Kam said the bank is guiding for loan growth of between 8% and 10% for FY2026, doubling the industry's expected growth of around 5%.
'We've been growing between 12% and 14% over the last two years, at double the industry rate. Despite the fluid situation with US tariffs and other global uncertainties, we believe Malaysia remains accommodative for growth,' he told reporters after the bank's EGM on Friday.
To fund the growth, Alliance Bank Malaysia Bhd is raising RM606.5 million through a renounceable rights issue. The bank will issue 182.13 million new ordinary shares on a 2-for-17 basis at RM3.33 per share, representing a 20.1% discount to the theoretical ex-rights price (TERP) of RM4.1672.
Kam said the capital injection is meant to fuel the bank's ongoing growth under its Accelerate 2027 plan.
'So again, if you look at our first quarter GDP numbers, it was at 4.4% after a very strong last year. Last year was about 5.6%.
'So we believe that the banking sector will continue to be accommodative for growth, sufficient liquidity and sufficient fiscal and monetary levers,' he said.
He said the bank wants to position itself with enough capital to continue that growth.
'We want to not slow down because we believe that there's an opportunity for Alliance Bank to continue that pace of growth.'
Kam said the bank expects growth to remain broad-based across business segments, as seen in FY2025 when total loan growth of 12% was well distributed.
'Consumer, which grew about close to 13%, ....about 12.6%. Our SME grew at about 10.5%. Commercial grew about 15%, and corporate grew about close to 9%. So it was fairly well distributed within the segments.'
Kam said Accelerate 2027 was about broadening its engines of growth, which is how it has been able to grow much faster than it traditionally did.
'If you look at the compounded annual loan growth pre-Covid – specifically the three years before the pandemic – we used to grow about 3.3% compounded annually. Now, our three-year compounded growth is closer to 10.5%–10.6%, which is nearly three times what it used to be.'
The rights issue is expected to lift the bank's core equity Tier-1 (CET1) ratio from 12.2% to 13.3%, and total capital ratio to nearly 18%, in line with larger peers.
The rights issue is partially underwritten by RHB Investment Bank, which will underwrite 129.2 million shares – about 71% of the total.
Rights trading runs from June 17 to 24, with the subscription deadline on July 2. The new shares will be listed on July 15.
Alliance Bank FY2025 revenue up 12.3% y-o-y to RM2.3 billion and net profit rising 8.7% to a record RM750.7 million.
Net interest income climbed 13.2% to RM1.95 billion, while net interest margin held steady at 2.45%. Non-interest income rose 7.7% to RM323.4 million.
Total gross loans expanded by 12% to RM62.4 billion – more than double the industry's 5.2% growth.