Its revenue for the quarter grew 9.5% to RM393.87mil against RM359.71mil in the same period last year mainly from net interest income and other operating income. Its operating expenses grew 14% year-on-year to RM190.15mil from RM167.34mil previously.
KUALA LUMPUR: Alliance Bank Malaysia Bhd
posted a net profit of RM122.79mil in the second quarter ended Sept 30, 2017, down 7% from RM132.57mil as operating expenses rose during the quarter.
Its revenue for the quarter grew 9.5% to RM393.87mil against RM359.71mil in the same period last year mainly from net interest income and other operating income. Its operating expenses grew 14% year-on-year to RM190.15mil from RM167.34mil previously.
The bank’s net interest margin recorded at 238 basis points, an improvement of 15 basis points and other operating income increased by RM8.3mil or 10.8% mainly from higher treasury income by RM8mil, while and fee based income increase by RM2.2mil.
For the first half to Sept 30 (1HFY18), Alliance Bank posted a net profit of RM257.8mil, or 16.80 sen earnings per share on revenue of RM780.48mil.
The bank said its pre-provision operating profit for 1HFY18 improved 6.9% year-on-year to RM413.9mil. Net profit after tax for 1HFY18 business as usual activities in the same period increased 3.5% year-on-year to RM274.3mil.
It said the reported net profit after tax for 1HFY18 declined 2.7% year-on-year to RM257.8mil was mainly due to expenses from its Transformation agenda.
Return on equity (ROE) for the first half of the year was at 10.0% while client-based fee income for 1HFY18 improved 3.6% year-on-year to RM164.8mil.
Year-to-date, Alliance Bank’s net interest margin improved nine basis points to 2.35%. Its loans growth in the SME sector remained strong at 9.1% year-on-year, with excellent gross impaired loans ratio at 1.6%.
Alliance said its overall gross impaired loans ratio at 1.2%, better than industry average of 1.7% and the year-to-date credit cost at 32.5 basis points (annualised) was within management guidance.
Commenting on its results, Alliance Bank CEO Joel Kornreich said, “Our financial performance indicates a steady and stable growth, with a strong ROE of 10.0%, which is above industry average.”
“We posted a net profit after tax of RM274.3mil or 3.5% increase year-on-year for business as usual activities. Pre-Provision Operating Profit grew two times faster than historical compounded annual growth rate (CAGR), improving by 6.9% to RM413.9mil, even after transformation expenses,” he said.
Kornreich said the bank’s focus on better risk adjusted returns (RAR) and improved loan mix contributed to an 11.8% year-on-year loan growth in better RAR portfolio.
“In 1HFY18, we recorded a growth of 9.1% in SME & commercial, 10.0% in consumer unsecured and 13.0% in share margin under better RAR portfolio.” he said, adding that the group posted a 4.6% increase year-on-year in CASA (current account savings account).
Going forward, Alliance Bank will continue to improve balance sheet efficiency by focusing on better risk adjusted return loans, liquidity management, and mitigating credit risk.
“In the second half of the financial year, we will continue to focus on helping the businesses and lives of our customers via our new and existing offerings,” Kornreich said.
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