Alliance Bank records 9pc jump in FY19 earnings

In a filing with Bursa Malaysia, Alliance said the business banking segment improved its operating profit by 15.4 per cent to RM425.80 million. — AFP pic
In a filing with Bursa Malaysia, Alliance said the business banking segment improved its operating profit by 15.4 per cent to RM425.80 million. — AFP pic

KUALA LUMPUR, May 29 — Alliance Bank Malaysia Bhd lifted its net profit by 9 per cent to RM537.60 million in the financial year ended March 31, 2019 (FY19) largely due to the better performance of its business banking business.

In a filing with Bursa Malaysia, it said the business banking segment improved its operating profit by 15.4 per cent to RM425.80 million.

However, an 11 per cent growth in operating expenses weighed down its consumer banking business, which saw its operating profit drop 12.6 per cent to RM195.56 million although net income was 1.5 per cent stronger at RM562.96 million. The segment's profit was further eroded by a RM33.73 million rise in allowance for expected credit loans for loans, advances and financing.

Meanwhile, the group's revenue rose 3.2 per cent to RM1.62 billion in FY19 from RM1.57 billion previously, thanks to higher net interest income due to stronger volume growth and improved loan mix from better risk adjusted return loans.

On the better profitability, Alliance Bank said: “The group recorded strong financial performance as a result of the successful execution of its transformation initiatives to scale up its core businesses in the small and medium enterprises (SME) and consumer segments.”

Alliance Bank’s gross loans and advances grew six per cent year-on-year (y-o-y) to RM42.7 billion outpacing the industry loan growth of 4.9 per cent.

SME loan balances grew 11 per cent y-o-y to RM8.7 billion against a 1.1 per cent contraction in the industry's SME loans, it said in a press statement.

“The group's performance validated the impact of its transformation initiatives: SME Banking expansion, Alliance ONE Account and [email protected],” the bank said.

Going forward, group chief executive officer Joel Kornreich said it would continue to focus on accelerating the momentum of its transformation initiatives by leveraging on the strong collaborative culture across the group, and continuing to digitise its products and services.

“We remain confident that our continued focus on the strategic transformation initiatives will generate positive financial returns in the year ahead,” he added.

The board of directors has proposed a second interim dividend of 8.2 sen, bringing the total dividend for FY19 to 16.7 sen per share (FY18: 15.3 sen). — Bernama

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