KUALA LUMPUR (Jan 7): Alliance Bank Malaysia Bhd (KL:ABMB) expects a positive financial year ending March 31, 2025 (FY2025) riding on strong momentum of loan growth, easing competition for funding, and stabilising asset quality.
The bank’s group chief executive officer Kellee Kam told The Edge that it was still seeing strong momentum in loan growth in the third quarter ended Dec 31, 2024 (3QFY2025), and is optimistic of achieving loan growth of 10% and a return on equity (ROE) of more than 10% in FY2025.
“Banks are a proxy to the economy. We are now seeing growth across every sector, and consumption and tourist arrivals. FY2025 is going to be quite promising,” he said.
In terms of net interest margin (NIM), Kam said the banking industry as whole is now past the “challenging” period for funding competition, and as such, NIMs are expected to be stable.
At the official launch event of integration between Alliance Bank Visa Credit Cards with Samsung Pay and Google Pay, the bank revealed that aggregate credit card spending by its customers had breached above RM400 million per month — a new record high for the bank.
The bank also saw its card balances increase by over 35% year-on-year (y-o-y), while its credit card users surged more than 70% to 210,000 cardholders from 120,000 in March 2024.
When asked about prospects of the bank’s asset quality, Kam said “we are comfortable with where we are right now”, implying that the bank is confident that its asset quality will hold steady.
For 2QFY2025, Alliance Bank's allowances for expected credit losses on loans, advances, financing and other financial assets swelled to RM93.98 million, a 135% hike against RM39.69 million a year ago.
Net credit cost was at 16.4 basis points (bps) in 2QFY2025, compared with 7.7 bps in 2QFY2024.
The bank’s net profit increased 2.47% y-o-y to RM189.91 million from RM185.33 million, mainly driven by revenue growth, which was offset by higher allowances for expected credit losses and operating expenses.
Quarterly revenue grew 14.7% to a record high of RM605.65 million, from RM528.1 million in the same quarter last year, thanks to higher interest income from loans and other operating income.
For the first half ended Sept 30, 2024 (1HFY2025), the group's net profit expanded 9.14% to RM366.56 million, from RM335.87 million in 1HFY2024, as revenue increased 15.2% to RM1.15 billion from RM994.36 million.
As for the merger and acquisition speculation with Singapore’s DBS Bank Ltd, Kam said he had no knowledge of the matter.
Launched in April 2023, Alliance Bank is reportedly the first bank in Malaysia to offer dynamic virtual card numbers, which enable users to create different 16-digit credit card numbers for various subscriptions and online platforms as well as one-time use numbers for e-Commerce transactions. On Tuesday, the bank announced that it is the first to integrate its virtual credit cards with Samsung Wallet.
Shares of Alliance Bank closed seven sen or 1.4% higher at RM5.09 on Tuesday, giving the bank a market capitalisation of RM7.88 billion. Since Jan 2, 2024, the bank’s share price has gained 51%.