KUALA LUMPUR (Feb 16): Alliance Financial Group Bhd recorded a 7% decrease in net profit to RM126.37 million for the third quarter ended December 31, 2014 (3QFY15), compared to RM136.51 million a year earlier, due to higher allowance for bad loans.
In a filing with Bursa Malaysia today, Alliance (fundamental: 2; valuation: 2.2) said revenue however, grew to RM349.83 million, from RM328.63 million.
Alliance's income statement showed bad loan allowance rose to RM26.95 million, from RM3.42 million.
Year-to-date, nine-month (9MFY15) net profit rose to RM437.51 million, from RM405.54 million in the previous corresponding period. Revenue increased to RM1.07 billion, from RM1.01 billion.
In a press release, Alliance said improved financial performance in 9MFY15 was mainly due to growth in interest income and recurring non-interest income.
Alliance said net interest income grew 9.8% to RM634.5 million, driven mainly by 16.7% net loan expansion. Non-interest income rose to RM273.7 million.
Interest margins however, continued to remain under pressure, due to increased competition for loans and deposits.
Moving forward, Alliance expects to deliver “satisfactory performance” in FY15. The group said it expected to generate sustainable revenue from consumer and corporate loans.
The bank expects loan growth in consumer banking, driven mainly by mortgage schemes and personal loans. Alliance said corporate loans were expected to grow in tandem with continuing demand for credit by businesses, due implementation of projects under the Economic Transformation Programme.
At 2:38pm, Alliance shares fell eight sen or 1.6% to RM4.78, for a market capitalisation of RM7.41 billion.
The stock had risen 1.9% this year, versus the FBM KLCI's 2.5 gain.
(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)