PETALING JAYA: Alliance Bank Malaysia Bhd today reported an 18.3% year-on-year (y-o-y) increase in net profit to RM677.8 million for the financial year ended March 31, 2023 (FY23).
Revenue grew 2.8% y-o-y to RM1.92 billion as net interest income rose 11.6% to RM1.65 billion on the back of higher loan volume and overnight policy rate hikes. Net interest margin improved 11 basis points (bps) to 2.64%. Client-based fee income (excluding brokerage) grew to RM284.1 million, attributable to higher wealth management, foreign exchange sales and trade fees. Cost-to-income ratio was 45.9%.
SME and consumer banking loans grew 13.1% and 5.2% y-o-y respectively, contributing to higher overall loan growth momentum at 6.2% on-year. Customer-based funding grew 6.8% y-o-y with fixed deposits increasing 18.6%. The bank’s funding is healthy and its Casa ratio stood at 41.9%, one of the highest in the industry.
Net credit cost for FY223 improved 16.2 bps to 31.9 bps due to the net release of management overlays. Covid pandemic-related loans under relief decreased further to RM1.25 billion, representing 2.5% of the bank’s total loan book.
Alliance Bank said it remains committed to helping customers who require further financial assistance.
The bank is well capitalised with Common Equity Tier-1 (CET 1) ratio remaining robust at 14.5% and Tier-1 Capital ratio at 15.3% respectively as at March 31, 2023. Total capital ratio was at 19.4%. The strong capital levels support the bank’s expansion plans. Its liquidity position is also strong with coverage ratio of 161.9% (industry average: 154.7%) and loan to fund ratio of 87.4%.
Alliance Bank has proposed a second interim dividend of 10 sen per share, bringing the total dividend to 22 sen per share for a 50% total dividend payout ratio, while maintaining robust liquidity and capital positions.
For the FY223 strategic priorities, new-to-bank customer acquisition grew 58% y-o-y to about 89,000 customers, exceeding the 80,000 target by 11%. Acquisition of dual-relationship business owners increased 72% y-o-y to 8,700. Digital transactions grew 19% as a higher proportion of customers adopted the bank’s mobile and online solutions.
The Acceler8 strategy that was launched earlier this year broadens Alliance Bank’s vision towards becoming a bank for the community, delivering value to stakeholders via strong financial performance, best in class customer service and solid ESG progress. The bank is targeting new market segments and business verticals, driving expansion in key economic corridors, as well as driving synergies and value creation through strategic partnerships to support its customers.
The bank recorded RM6.7 billion in new sustainable banking business in FY23, exceeding its target of RM2.6 billion. This was derived from various sustainable financing initiatives, including #financing4ESG programme in collaboration with Bursa Malaysia, Bank Negara Malaysia’s Low Carbon Transition Facility, solar panel financing campaign and sustainable mortgage financing packages for green certified development projects.
“Our refreshed strategy has started to yield results. We continue to invest resources to capitalise on the eight growth opportunities, building on our competitive advantages of speed, service and personalisation. We have launched over 30 projects under the eight pillars, focusing on high impact, lower complexity projects, as well as our sustainability initiatives,” said Alliance Bank Group CEO Kellee Kam.
He added that Alliance Bank will continue to invest in people and IT for growth and efficiency.
