logo
Alliance Bank steady on robust loans, healthy NIM

Alliance Bank steady on robust loans, healthy NIM

The Stara day ago

PETALING JAYA: CIMB Research is maintaining its 'buy' call on Alliance Bank Malaysia Bhd with an unchanged target price of RM4.80.
It stated that the lender's key catalysts include robust loan growth and a healthy net interest margin or NIM.
In a report to clients, the research house said its target price of RM4.80 (ex-rights basis) was based on a return on equity (ROE) of 9.7% and a fair price-to-book value of one times to the lender's financial year ending March 31, 2026 (FY26).
The bank's other key catalysts include benign credit costs and a potential merger, CIMB Research said.
The research house said the bank's downside risks include higher-than-expected credit costs and higher cost of funds.
In the report, it also noted that Alliance Bank had announced its rights issue price fixed at RM3.33.
The entitlement basis is two rights shares for every 17 existing shares.
'These are in line with our expectations.
'The total funding raised from the rights issue of RM606.5mil is consistent with the earlier indicative amount of RM600mil.
'Overall, there were no major surprises in the latest rights issue announcement,' the research house said.
CIMB Research said the bank announced in March a renounceable rights issue to raise gross proceeds of RM600mil with a rights issue price of RM4.20 per rights share (reflecting a discount of approximately 20% to the then-market price of RM5.09), with an entitlement basis of three rights shares for every 32 shares.
The research house reiterated that the change was in line with its expectations and that the latest announcement did not come as a surprise, and was in line with its earlier estimate that the rights price may have to be adjusted down, owing to the drop in Alliance Bank's share price.
CIMB Research estimated that the rights price might have to be revised down to RM3.20 (from the earlier indicative RM4.20) if set at a 20% discount to the current share price, with the number of rights increased to 186 million from the earlier indicative 145.1 million.
This is based on an estimated revised entitlement of four rights shares for every 32 shares.
The research house pointed out that Alliance Bank's key targets for FY26 included an ROE of more than 10% post rights issue, loan growth of between 8% and 10%, net interest margin of between 2.40% and 2.45%, net credit cost of between 30 and 35 basis points, cost-to- income ratio of 48%, and a dividend payout ratio of 40% to 50%.

Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

Stonepeak Partners' Reported Acquisition Of Yinson Could Value The Deal At RM9 Billion
Stonepeak Partners' Reported Acquisition Of Yinson Could Value The Deal At RM9 Billion

BusinessToday

time15 hours ago

  • BusinessToday

Stonepeak Partners' Reported Acquisition Of Yinson Could Value The Deal At RM9 Billion

Yinson Holdings Bhd - FSO (FPSO) Helang New York-based infrastructure investment firm Stonepeak Partners is reportedly in exclusive negotiations to acquire Malaysian energy infrastructure company Yinson Holdings Berhad, in a deal that could value the company at up to RM9 billion (US$2.1 billion). The development was first reported by Bloomberg. According to analysis by CIMB Research, this valuation translates to approximately RM3.23 per share, based on Yinson's 2.784 billion existing shares. CIMB Research indicated that if the report proves accurate, these exclusive talks could pave the way for a privatisation offer for the remaining shares of Yinson. Yinson's current market capitalisation stands at around RM6.5 billion. CIMB Research noted that the exclusivity arrangement suggests the deal has entered advanced stages of negotiation. The Lim family, who founded Yinson, currently holds a significant 26.6% stake in the company. The research house also commented that Stonepeak's investment focus appears to align well with Yinson's strategic direction, particularly given Yinson's growing presence in floating production, storage, and offloading (FPSO) and renewable energy sectors. From a valuation perspective, CIMB Research highlighted that the indicative RM9.0 billion take-private valuation, equivalent to RM3.23 per share, implies a substantial 38.0% premium to Yinson's last closing price. Relative to CIMB Research's own target price of RM2.93, the proposed acquisition price would represent a slight premium of 10.2%, suggesting potential additional upside should a formal offer materialize. Related

LBS achieves pivotal milestone in green financing
LBS achieves pivotal milestone in green financing

The Star

timea day ago

  • The Star

LBS achieves pivotal milestone in green financing

LBS group managing director and chief executive officer Datuk Wira Joey Lim Hock Guan (left) and Alliance Bank's group chief executive officer, Kellee Kam (right) at the official document presentation ceremony. LBS Bina Group Bhd has announced that its special purpose vehicle, Suria Hijauan Sdn Bhd has secured a RM88.4mil green financing facility from Alliance Bank Malaysia Bhd to fund the Engineering, Procurement, Construction and Commissioning (EPCC) costs for its maiden 43 MWp solar farm project. The project, which is under the Corporate Green Power Programme (CGPP), is located in Senawang, Negeri Sembilan and is scheduled for completion by the end of 2025. The solar farm is expected to deliver stable, recurring revenue, thus enhancing long-term earnings resilience, underscoring LBS' commitment to sustainable growth. The solar farm project is expected to generate approximately 53,000 MWh of clean energy annually, effectively offsetting about 35,000 tonnes of carbon emissions. Atlantic Blue Sdn Bhd – a subsidiary of Solarvest Holdings Bhd – was appointed as the EPCC contractor under a RM104.0mil contract, leveraging its expertise in delivering large-scale solar projects. LBS group executive chairman Tan Sri Ir Dr Lim Hock San commented that this green financing marks an important milestone for LBS as they diversify into renewable energy. 'Securing this credit facility from a reputable bank like Alliance Bank highlights the strong potential of our renewable energy venture and our capacity to expand our initiatives within this sector. 'This support reflects confidence in our strategic direction and financial strength, while also facilitating the successful execution of this project. 'This initiative not only resonates with our goal of creating a positive environmental impact, it also strategically complements our core property development business by integrating future product offerings with renewable energy solutions. 'In turn, this contributes to Malaysia's national carbon reduction goals, supporting the country's transition towards a low-carbon economy.' Expressing his optimism about the project, Alliance Bank's group chief executive officer, Kellee Kam said, 'At Alliance Bank, we believe financial institutions have a critical role to play in advancing sustainable development. 'We are honoured to partner with LBS, a company whose values and vision closely align with our own. He added, 'Today's announcement is not just the launch of a project – it marks the beginning of a journey and a cause we are proud to be part of.'

LBS Bina secures RM88.4mil financing for maiden solar farm project
LBS Bina secures RM88.4mil financing for maiden solar farm project

New Straits Times

timea day ago

  • New Straits Times

LBS Bina secures RM88.4mil financing for maiden solar farm project

KUALA LUMPUR: LBS Bina Group Bhd's special purpose vehicle, Suria Hijauan Sdn Bhd, has secured an RM88.4 million green financing facility from Alliance Bank Malaysia Bhd to cover the engineering, procurement, construction and commissioning (EPCC) costs for its maiden 43 MWp solar farm project in Negeri Sembilan. The project, part of the Corporate Green Power Programme (CGPP) and located in Senawang, is slated for completion by the end of 2025. It is expected to generate about 53,000 MWh of clean energy annually, offsetting around 35,000 tonnes of carbon emissions each year. Atlantic Blue Sdn Bhd, a subsidiary of Solarvest Holdings Berhad, was appointed as the EPCC contractor under a RM104 million contract, leveraging its expertise in delivering large-scale solar projects. Tan Sri Dr. Lim Hock San, group executive chairman of LBS, said that this green financing marks an important milestone for LBS as the group diversifies into renewable energy, reinforcing its commitment to sustainability. "Securing this credit facility from a reputable bank like Alliance Bank highlights the strong potential of our renewable energy venture and our capacity to expand our initiatives within this sector. This support reflects confidence in our strategic direction and financial strength, while also facilitating the successful execution of this project," he said. Lim said that this initiative not only resonates with the group's goal of creating a positive environmental impact, but it also strategically complements LBS' core property development business by integrating future product offerings with renewable energy solutions. "In turn, this contributes to Malaysia's national carbon reduction goals, supporting the country's transition towards a low-carbon economy," he said. The solar farm is expected to provide stable, recurring revenue, enhancing LBS' long-term earnings resilience and reinforcing its dedication to sustainable growth. Alliance Bank's group chief executive officer, Kellee Kam, said, "At Alliance Bank, we believe financial institutions have a critical role to play in advancing sustainable development. We are honoured to partner with LBS, a company whose values and vision closely align with our own."

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into the world of global news and events? Download our app today from your preferred app store and start exploring.
app-storeplay-store