25 July 2019

Alliance Bank Focus on Consumer & SME Yields Solid Financial Performance

Press Release
25 July 2019

Alliance Bank Focus on Consumer & SME Yields Solid Financial Performance

Press Release

Kuala Lumpur, 25 July 2019 - Alliance Bank Malaysia Berhad’s (“Alliance Bank” or the “Bank”) steady focus on consumers and business owners’ needs helped drive profit growth of 9% to RM537.6 million.

The Bank continued to support business owners through funding, training and mentorship with its BizSmart Challenge programme, and Halal business advisory service via its Islamic Banking’s One-Stop Halal Business Solution. This is in addition to other loan options such as SME Express Loan and CGC Portfolio Guarantee Scheme.

Efforts to help the SMEs have resulted in a steady growth in SME Banking’s loan balances of 11% year-on-year (YOY) to RM8.7 billion for the financial year ended 31 March 2019 (FY2019).

Alliance@Work, the Bank’s payroll services for companies and banking services for their local employees and foreign workers, saw 1,392 company payroll accounts and 25,320 employee CASA account openings in FY2019. The Bank’s target for the financial year ending 31 March 2020 (FY2020) is to secure 1,800 new company payroll accounts under Alliance@Work.

To help consumers better manage their loans, the Bank’s loan consolidation service, Alliance ONE Account (AOA), tripled its loan balance to more than RM3.2 billion, from RM1.0 billion in the financial year ended 31 March 2018 (FY2018).

For FY2020, the Bank aims to grow its AOA portfolio further by 70% to RM5 billion by improving its sales channels, i.e. the Mortgage Specialist team and digital marketing, and expanding its Alliance Mortgage Partner-in-Sales programme.

Tan Sri Dato’ Ahmad bin Mohd Don, Chairman of Alliance Bank said, “The Bank has time and time again proven that by focusing on consumers and the business community at large, it has been able to attain sustainable growth. Efforts to build and strengthen its consumer and SME portfolios have yielded results, as seen in the FY2019 financial performance.”

“The banking industy’s lackluster outlook prompts us to be even more vigilant in managing our credit portfolios and conservative in our provisioning practice. While we continue to enhance value with new products and services, we anticipate these headwinds,” said Mr. Joel Kornreich, Group Chief Executive Officer of Alliance Bank.

Solid Financial Performance

In line with the Alliance Bank’s transformation journey, which began in 2016, the Bank’s continuous efforts to enhance sales capacities, scale up digital efforts, and restructure for greater efficiencies have led to the Bank’s solid financial performance in FY2019.

The Bank achieved the highest earnings in five years, with net profit after tax up 9% to RM537.6 million, from RM493.2 million a year ago, on the back of a topline growth of 3.2% to RM1.62 billion, from RM1.57 billion in FY2018. Net interest margin improved 10 basis points to 2.50%, thanks to the steady growth of better risk adjusted return loans.

In FY2019, the Bank’s loan portfolio of 43% comprised of better risk adjusted return loans as compared to 36% a year ago. Normalised credit cost at 33 basis points, was within its guidance. Return on equity improved to 9.9%.

The Bank has continued to maintain a high CASA ratio of 35.5%, and aims to grow CASA through Alliance SavePlus and Alliance@Work. Its liquidity ratio at 154%, was higher than the industry and well above the regulatory requirement.

Alliance Bank’s capital levels remain among the strongest in the industry, with common equity tier-1 ratio at 13.8% and total capital ratio at 18.5%. In FY2019, the Bank issued a RM100 million Additional Tier-1 Capital Securities, further strengthening its Tier-1 capital ratio to 14.1%.

The Bank continues to enhance shareholder return, with net assets per share growing at a 4-year compounded annual growth rate of 6.3% to RM3.70.

The Bank maintains a dividend pay-out of 48% for the third consecutive year. Total dividend for FY2019 was 16.7 sen, an increase of 9.2% from 15.3 sen in FY2018.

Business Sustainability

Enhancing digital value propositions for customers remain key in providing faster, simpler and more responsive service to clients.

In FY2019, the Bank stepped up on its digitisation efforts to provide faster, simpler, and more responsive service to its clients. It launched the Alliance Origination System, a workflow process that streamlines and automates credit process, reducing 60% of the normal processing time. This quick turnaround time contributed to the 39% growth in SME loan disbursements.

The Bank also rolled-out the digitisation of individual CASA openings, enabling customers to complete their account opening in as little as 15 minutes, from 45 minutes previously. It will progressively roll out its digitised same-day business CASA opening this year.

To further enhance its clients’ banking experience, the Bank launched its mobile banking app, allianceonline Mobile. Within a year, it had over 52,000 sign-ups.

The Bank also continues to nurture the next generation of entrepreneurs. This is seen via the Alliance Eco-Biz Dream Project, Malaysia’s first environmental-themed business plan competition. The Bank has set aside RM200,000 in seed funding to help the winner implement its winning business plan.

The Bank recently launched SocioBiz, its digital social crowdfunding platform that helps disadvantaged individuals start or expand a business, or learn a skill to earn a sustainable livelihood.

About Alliance Bank Malaysia Berhad

Alliance Bank Malaysia Berhad and its subsidiaries, Alliance Investment Bank Berhad and Alliance Islamic Bank Berhad, is a dynamic, integrated financial services group offering banking and financial solutions through its consumer banking, SME banking, corporate and commercial banking, Islamic banking, investment banking and stockbroking businesses. The Bank provides easy access to its broad base of customers throughout the country via multi-pronged delivery channels which include retail branches, Privilege Banking Centres, Islamic Banking Centres, Business Centres, and Investment Bank branches, as well as mobile and Internet banking.

For more information on this press release, please contact

Agnes Ong

Tel: 03-2604 3378
Email: agnesong@alliancefg.com.