KUALA LUMPUR: Pre-emptive measures by both Alliance Bank Malaysia Bhd
and the government have helped mitigate the external uncertainties stemming from geopolitical and trade tensions.
Alliance Bank group chief executive officer Kellee Kam said as a result, most sectors have shown strong, broad-based growth.
He explained that energy consumption, oil and gas, tourism, services and manufacturing were some examples that had benefited from a supportive environment.
Subsequently, foreign direct inflows had also increased, further creating a better environment for business.
“Bankers by nature are always very risk-forward and prudent. The current indicators do not indicate further stresses.
“Malaysia has been fortunate that we’ve come from a strong position, evident by the last three to four years,” he told reporters after the bank’s AGM here yesterday.
According to Kam, liquidity in the market has been a key factor for the bank. “It’s also the fact that we are an energy-exporting nation – this has given us some additional levers to manage conditions,” he noted.
Kam said that since there have been two quarters of strong growth so far, the year is likely to end on a stronger note.
“The government forecast gross domestic product (GDP) growth of between 4% and 5%, and I think it will be more towards the 5% level. In saying that, of course it all depends on the severity and duration of what we’re seeing in the Middle East. If it ends tomorrow, we would be even more optimistic,” Kam said.
He also estimated that interest rates would remain at 2.75%, and would not put the bank in a static position should interest rates fall faster than expected.
“Our book consists of largely variable loans, so if the interest rates come down, it will present a potential interest margin squeeze. But it is never a static position, if rates come down, our treasury book will increase,” he explained.
Between financial year 2025 (FY25) and FY26, fixed income for the bank grew by more than 25%.
For loan growth, Kam said the bank is seeing an increase from the electrical and electronics sector, as well as a pick-up from manufacturing, construction and commercial property.
He added that there is still room to gain market share for small and medium enterprises (SMEs), as the bank understands that segment very well. Growth was led by the SME segment, where loans grew 7.4% year-on-year (y-o-y).
As for consumer loans, Alliance Bank posted a 9% increase y-o-y, driven mainly by younger professionals.
When asked how Alliance Bank differentiated itself from its peers, Kam said the bank has continued to invest in its online platform, including improving the early disbursement service, self and service and others.
“By the end of this year, we will be refreshing our entire Alliance online app to make it more up to date. Our approach is to find things that other banks don’t offer, including digital banks.
“For instance, the Virtual Credit Card has been a significant growth driver – it’s not a physical card and generates its own 16-digit number,” he said.
Instant issuance accelerated adoption of the card, expanding the credit card customer base by 25% y-o-y, with over 70% of new sign-ups aged below 40.
Furthermore, its Islamic banking has continued to scale with the Halal in One programme. Regionally, the bank’s franchises in Penang, Johor, Sabah and Sarawak recorded approximately 7% y-o-y growth in both loans and deposits, reinforcing the strength of its regional presence.
Meanwhile, Alliance Bank posted a 10% increase in net profit to RM826.5mil for FY26 on the back of RM2.74bil in revenue. Return on equity stood at 10.2%, while the cost-to-income ratio was 47.9%.
Asset quality remained strong, with the gross impaired loan ratio improving to 1.73% from 1.83% a year earlier, while net credit cost was 33.5 basis points.
Kam added customer deposits grew 8.8% y-o-y, and the bank maintained one of the highest current account and savings account ratios in the industry at 37.5%.
The bank declared a total dividend of 19.1 sen per share, which translated into a 40% payout ratio.
Moving forward, Kam said it would remain upbeat in the future as he gave his FY27 guidance. “We project loan growth to be between 7% and 10%, while net interest margin will likely be between 2.28% and 2.35%. As for dividend payouts, we forecast it to be between 40% and 50%,” he said.
On a separate note, Alliance Bank’s four-year transformative strategy – Acceler8 2027 – has entered its final stage, but Kam said this doesn’t mean it is the end of its plans. He noted his team was already preparing for the next stage going into FY27.
“As we head into the final stretch of the transformation programme, total assets rose from RM61.8bil in FY22 to RM92.2bil, net profit from RM573mil to a record RM826.5mil. Market capitalisation went from RM5.8bil to RM8.34bil as at March 31, 2026, while overall loan market share expanded from 2.4% to 2.8%,” he shared.
“I am equally proud that, as we drive this financial momentum, we have achieved RM16bil in cumulative new sustainable banking business since FY22 and remain on track towards our RM17bil target, proving that responsible banking is good business. There is still more to do, but we now build from a fundamentally stronger position.”
