Alliance Bank CEO Kam says being a small bank has its advantages and this means that it can target to grow more meaningfully from a small and stable base.
KUALA LUMPUR: Alliance Bank Malaysia Bhd
prefers to pursue organic growth as opposed to mergers and acquisitions (M&As) for now.
The bank believes growth opportunities are still present in the local banking landscape for it to capture.
The bank hopes to deliver this anticipated growth to its shareholders in the near to medium term, even as it is in the midst of boosting its manpower operations for this purpose.
Alliance Bank Malaysia chief executive officer Kellee Kam said being a small bank has its advantages and this means that it can target to grow more meaningfully from a small and stable base.
Kam, who was appointed to spearhead the bank some six months ago in September last year, also said growing in size is not “the be-all and end-all”.
“We have a senior management team that is ambitious with our opportunities and we also have the capital to be able to meet with these growth opportunities.
“M&A is not on my mind at all – and I would rather work with partners to increase our reach as well as our product capabilities,” Kam told StarBiz.
He said at present, its size allowed it to be more responsive, as it manages with a relatively more flat hierarchical structure in running the bank.
“People can come to my office to discuss things and in five minutes or so we’re done.
“This is how we want to build the bank – not worrying so much about paperwork, but more focused on making life easier within the bank and serving our customers faster,” Kam added.
The bank recently launched its strategic growth initiative called Acceler8 2027 with a vision to become a preferred banking partner and a mission of aiming to build alliances.
“Size is not necessarily the definition of success and we don’t go on the mindset that we need to grow larger. We are a challenger bank, which means others may have the market share we want and for us to grow we would have to take this share,” Kam pointed out.
“But we don’t think of it this way, but more to improve the value proposition to our customers.
“If we can provide value and opportunity that other banks don’t provide as well, then people will bank with me.
“If we keep on doing this regularly, these people will bank with us more (often),” he added.
The bank is also bullish on its loan growth in the coming financial year 2024 (ending March 31, 2024), and is targeting to outpace its peers on this front. Moving forward, the bank said it aims to grow its consumer loans above industry growth rates.
Kam said the loans for the bank is poised to grow by 8%-10% for the FY24.
This is more than double its historical loans growth rate of about 2%-3% per year in the recent past.
“The industry loans growth rate is about 4%5-4.5% and the loans growth meant that we were effectively losing market share every year. We are now looking at areas of opportunity that we have not been fully been targeting and working on,” explained Kam.
He said apart from continuing to keep up with the pace of growth in the small and medium enterprises (SMEs) segment that is growing at a strong 10% or so, the bank would like now like to boost growth in its consumer and corporate business operations and fire on all cylinders.
“I see that the momentum is already picking up in these areas. If you look at the retail segment, on an annualised basis we are already doing about 4.5% (in year-on-year loans growth) and this is close to double compared to the previous year,” he said.
“There is always a lag time between marketing, getting the business, application for loans, approvals then securing this business. Part of this is to build up the loans stock to be disbursed and we are seeing a very good build up of this loans stock in the consumer business at the moment,” he added.
Kam said growth on this front is coming from the mortgage area of consumer loans which it was not too active in, in the past.
“This could grow by up to 30% as we are seeing a fairly healthy traction now,” he said.
Another front is the corporate banking segment, which it now wants to grow from a base that had contracted prior to this, Kam noted.
“We want to be the bank to suit our customers’ lifecycle and needs.
“This we think will yield a fair amount of opportunities here.
“We don’t want to bank them just as a single individual, but follow them on their lifecycle. So, when they grow from SMEs to becoming larger commercial companies - and this is where we need to provide them with an opportunity to access corporate banking type of products,” Kam added.
