KUALA LUMPUR (Aug 30): Alliance Bank Malaysia Bhd's net profit for the first quarter ended June 30, 2022 (1QFY23) climbed 45% to RM212.16 million from RM146.01 million a year earlier, driven by higher net interest income and lower allowance for expected credit losses.
Earnings per share rose to 13.7 sen from 9.43 sen, its Bursa Malaysia filing on Tuesday (Aug 30) showed. No dividend was declared for the quarter under review.
The bank said its net interest income improved by 7.6% year-on-year (y-o-y) to RM392.1 million due to higher loans volume and overnight policy rate (OPR) hike, while client-based fee income — excluding brokerage income — grew 7.5% y-o-y due to higher wealth management income, foreign exchange sales and trade fees.
“The group’s allowance for expected credit losses on loans, advances, financing and other financial assets recorded a write-back of RM17.3 million primarily due to a recovery from a large account during the quarter,” it added.
Revenue for the quarter came in 1.84% lower at RM474.07 million from RM482.96 million a year ago. Coupled with pre-provision operating profit at RM263.5 million, its cost-to-income ratio stood at 44.4% — within the management of the bank’s guidance.
The bank also said proactive credit management has resulted in net credit cost decreasing 25.5 basis points (bps) y-o-y to -3.7bps.
“CASA (current account saving account) deposits in the bank grew 5.3% y-o-y or RM1.2 billion, resulting in an improved CASA ratio of 50%, the highest in the industry.
“Overall loans grew 6.7% y-o-y, fuelled by growth in business banking (small and medium enterprise (SME), corporate and commercial) loans, which increased 13.7% y-o-y,” it said.
Going forward, Alliance Bank said it will focus on acquiring more customers by scaling up its core segments of SME and consumer banking, capitalising on its consumer and business banking franchises, as well as enhancing productivity and efficiencies by streamlining processes.
“In addition to the above, the group will continue to focus on addressing asset quality concerns by continuing to prioritise customer engagement and continue managing its loan portfolio with refined credit underwriting to support the above business growth.
“With these focus areas, and continuing effort to apply prudent management practices, the group expects to deliver sustainable returns to our shareholders while strengthening our market presence,” it added.
At noon break, Alliance Bank was unchanged at RM3.52, giving the bank a market capitalisation of RM5.45 billion.