28-05-2025
Alliance Bank targets further growth for FY26
PETALING JAYA: Alliance Bank Malaysia Bhd , which reported record earnings for its financial year ended March 31, 2025 (FY25), is positioning itself for continued growth in FY26, with plans to grow lending, diversify deposit sources and improve risk management despite the risk of heightened global trade tensions.
In a filling with Bursa Malaysia yesterday, the bank said it will remain vigilant of the evolving global developments, particularly the potential escalation of US-China trade tensions, which could weigh on global trade activity and economic growth.
'Notwithstanding this, we will continue to upgrade our products, services, and technology to drive future growth, prudently expand lending, diversify deposit sources, and strengthen risk management in FY26,' it noted.
The bank's forward strategy is framed within its 'Acceler8 2027 roadmap', which has reached its halfway mark.
Alliance Bank said it would stay focused on executing the eight growth pillars laid out in the plan to support long-term expansion and fortify its market position.
Among its key FY26 priorities is sustaining the momentum in small and medium enterprises (SME) banking.
For FY25, the bank's market share in SME banking rose to 5.39% from 5.19% in FY24, with fee income increasing 9% year-on-year (y-o-y).
Alliance Bank also plans to support business customers 'throughout their lifecycle' by offering end-to-end financial solutions and capturing recurring transactional and fee-based income.
On the consumer front, the bank aims to scale its offerings for young professionals and high-net-worth individuals. This includes expanding innovative digital propositions such as its virtual credit card.
Other key pillars include deepening ecosystem partnerships in areas such as sustainability, becoming a regional leader in key economic corridors such as Penang, Johor and Sabah and Sarawak.
The bank also aims to enhance client coverage under corporate and capital markets, grow its Islamic banking and leveraging strategic partnerships to broaden product and distribution reach.
Alliance Bank reported record earnings for FY25, with revenue rising 12.3% to RM2.27bil from RM2.02bil in FY24, supported by growth in both net interest income (NII) and non-interest income (NOII), while net profit increased 8.7% to RM750.73mil from RM690.48mil.
NII rose RM226.4mil or 13.2% y-o-y to RM1.95bil, driven by higher loan volumes, with total loans growing 12% y-o-y to RM62.4bil with growth across all business lines. The net interest margin stood at 2.45%, down from 2.48% a year earlier.
NOII increased RM23mil or 7.7% to RM323.4mil, mainly from higher treasury and investment income and trade fees, after accounting for lower wealth management income and higher credit card fee expenses.
Operating expenses rose RM114.8mil or 11.8% y-o-y, with the cost-to-income ratio stable at 48% as 'the bank continued investing in technology and people.'
The current account savings account ratio stood at 41%, supported by a 14.7% y-o-y increase in customer deposits, with total deposits rising to RM65.83bil from RM57.4bil a year ago.
The bank maintained capital strength, with a common equity tier-1 ratio of 12.2%, tier-1 capital ratio of 13.4%, and total capital ratio of 16.7%, while liquidity coverage ratio stood at 171.6% and loan-to-fund ratio at 85.6%.
Credit impaired loans, advances and financing stood at RM1.15bil at end-FY25, down from RM1.18bil at end-FY24, with the net impaired loans ratio improving to 1.02% from 1.16%.
Alliance Bank has proposed a second interim dividend of 9.9 sen per share for the final financial year quarter (4Q25), bringing the total dividend for FY25 to 19.4 sen per share. This translates into a 40% payout ratio amounting to RM300.3mil.
For 4Q25, the bank's net profit 11.1% to RM197.5mil from RM177.7mil in 4Q24, with revenue increasing 9.1% to RM563.2mil from RM516.2mil.
