KUALA LUMPUR (Aug 26): Alliance Bank Malaysia Bhd (KL:ABMB) posted a record quarter as broad-based loan growth and lower net credit costs boosted earnings.

Net profit for the three months ended June 30, 2026 (1QFY2027) was RM248.3 million, a 25% increase from the same period a year earlier, the bank said in an exchange filing on Wednesday. Year-on-year, net interest income grew 2.5% and non-interest income rose 2.5% as well.

“Notwithstanding the positive momentum, we remain cautious as we navigate the environment, while continuing to achieve market share gains in SME and consumer banking and sustained momentum across our regional franchises,” said Alliance Bank chief executive Kellee Kam.

Alliance Bank is on track with most of its guidance for FY2027 and is in the final stretch of Acceler8, its five-year strategy that aims for a top-quartile return on equity among peers and achieve above-industry loans growth.

The annualised return on equity was 11.3%, ahead of its target of 10.0%-10.5%.

The net interest margin — a measure of a bank’s profitability by comparing income from loans with expenses on deposits — eased 20 basis points to 2.26%. The target is now to achieve 2.23%-2.28% for FY2027 amid intense deposit competition and shift towards lower-yield-lower-risk assets.

Net credit cost, which reflects provisions after recoveries, came in at 0.3 basis point, compared with 14.4 basis points a year earlier and could come in as low as 20 basis points.  

Total gross loans and unrated bonds grew 9.5% year-on-year to RM69.33 billion, with commercial loans rising 19.1%, corporate loans and unrated bonds up 12.7%, consumer loans growing 7.8% and SME loans increasing 6.4%.

Total assets expanded 13.2% year-on-year to RM95.8 billion, while customer deposits increased 8.4%.

Alliance Bank shares rose two sen, or 0.4%, to RM4.76 ahead of the announcement, valuing the country’s smallest banking group at RM8.25 billion.