Alliance Bank’s rights issue to support loan growth

Kenanga Research believes the raised funds could help maintain loan growth at double-digit levels with minimal impact on dividend payouts.

PETALING JAYA: Alliance Bank Malaysia Bhd’s (ABMB) proposed right issue to raise RM600mil in fresh capital aims to support its 10% to 12% loan growth target over the next two years, while strengthening its common equity tier 1 (CET1) ratio to 13.5%.

In an analyst briefing, the bank stated that the exercise will help shift it from a capital-dilutive to a capital-neutral position within the timeframe of its “Acceler8” strategy, targeting an optimum CET1 ratio of 12.5% to 12.8%.