KUALA LUMPUR: PublicInvest research has affirmed its outperform call on Alliance Bank Malaysia Bhd
with a target price of RM4.80 following the announcement of collaborations with Zurich Malaysia.
"We keep our earnings estimates unchanged at this juncture nonetheless, with this enhancement a part of our non-interest income growth assumptions.
"We continue to like the Group for its earnings prospects, underpinned by above-average net interest margins and relatively healthy asset quality and affirm our Outperform," it said in a note.
The bank said yesterday that it had penned exclusive 15-year bancassurance and banctakaful agreements with Zurich General Insurance Malaysia Bhd and Zurich General Takaful Malaysia Bhd in a bid to strengthen its position in providing financial solutions to both individuals and SME communities.
The collaboration will see from May 1 onwards, Zurich Malaysia's general insurance and general takaful products offered at Alliance Bank's 81-branch network nationwide.
The new products will expand on Alliance's current offering from its present tie-up wtih Manulife Insurance.
"This tie-up with Manulife is reportedly netting the Group RM70m over the 10-year period," said PublicInvest.
"While the Group’s total non-interest income contribution still only makes up about 15% of total income, fee-based income from the “insurance, bancassurance, structured investments and unit trust fees” segment is growing in significance.
"As a % of non-interest income fee-based composition, the mix has grown from about 14% in FY15 to 22% in FY18," it said.
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