Alliance Bank Malaysia Bhd group chief executive officer Kellee Kam
PETALING JAYA: Alliance Bank Malaysia Bhd
(ABMB) has secured 99.9% votes in favour of its RM600mil renounceable rights issue it proposed in March at its extraordinary general meeting (EGM).
In a filing with Bursa Malaysia, the bank stated the issue price of the rights issue is set at RM3.33 per right share on the basis of two rights shares for every 17 existing ABMB shares.
The ex-date of the rights issue is June 13 and the entitlement date is June 16, 2025.
ABMB group chief executive officer Kellee Kam said shareholders had been supportive of the exercise, given the group has shown growth over the last two and a half years.
In terms of the discount rate, Kam noted shareholders want the company to remain competitive with market peers.
“If you take a look at market peers over the past four, five years, you see it ranging from between 20% to 25%. Hence, shareholders are conscious of that fact and expect us to be within that range.
“Secondly, they also acknowledge, as we have also mentioned, that as long as they take up their full allocation, there is no dilution from a shareholder perspective since everyone is entitled to the same value,” he told the media following the EGM today.
In March, ABMB, the smallest of Malaysia’s banking groups by asset size, said the rights issue aims to bolster the bank’s capital base, enhance financial flexibility and support its growth strategy.
The funds raised will primarily be allocated for working capital to fund its general banking, financing and investing activities.
The exercise is also expected to shore up the group’s Common Equity Tier 1 (CET1) ratio, by 1.1% percentage points to 13.5%, bringing it closer to the 14.3% for the banking industry. ABMB’s CET1 ratio is currently at 12.2%.
The bank’s major shareholder, Vertical Theme Sdn Bhd (VTSB), has provided an irrevocable undertaking to subscribe in full for its entitlement under the rights issue.
VTSB is 49%-owned by Singapore’s Temasek Holdings Pte Ltd, while the remaining 51% stake in VTSB is held by Langkah Bahagia Sdn Bhd. Langkah Bahagia is controlled by Singapore hotelier Ong Beng Seng, RRJ Capital’s Ong Tiong Sing and corporate adviser Seow Lun Hoo.
Kam said the core equity Tier 1 level will be raised to 13.3% and at the total capital level, it will reach close to 18% following the exercise.
“From a total capital level, we are actually quite in line with where the industry is. We run a slightly lower core equity Tier 1 because different banks have different exposures. The larger banks with regional exposures tend to carry more capital. We are a 100% Malaysian bank, so we tend to run a little bit less capital,” he said.
Kam added the rationale behind the group’s rights issue was not in anticipation of tougher times, but rather to support the group’s continued growth.
“We have been growing at twice the industry’s loan growth rate of 5% to 6% over the past two years, achieving between 12% and 14% during the period.
“Notwithstanding the fluid situation with the US tariffs, we believe Malaysia will remain accommodative to growth. As such, we expect the banking sector will continue to be supportive of growth, with sufficient liquidity and adequate fiscal and monetary levers. We want to position ourselves with enough capital to sustain our growth, and ensure that we do not slow down,” he said.
ABMB recorded a 12% loan growth for its financial year ended March 31, 2025 (FY25), above its guidance of 8% to 10%. The group maintained a similar loan growth target of 8% to 10% for FY26.
“Our 12% loan growth in FY25 is fairly well distributed across all business lines, with consumer loans growing close to 13%, small and medium enterprises segment at about 10.5%, commercial expanding by 15%, and corporate loans increased by close to 9%,” Kam said.
