Alliance Bank Malaysia Bhd’s net profit slipped 5.5% year-on-year (YoY) to RM122.55 million for the third quarter ended Dec 31 2017, due to the higher operating expenses.

 

The banking group saw operating costs rose RM41 million or 23.5% due to restructuring costs but the additional expenses were cushioned by a stronger revenue, increasing 2.5% at RM388 million. Turnover was helped by the higher net interest and other operating incomes.

 

For the quarter under review, the bank’s net interest margin (NIM) was recorded at 238 basis points (bps), up by six bps YoY. Other operating incomes grew 4%, helped by the higher fee and treasury income.

 

For the nine-month period, net profit was down by 3.67% YoY at RM380.36 million, while turnover rose 6.4% to RM1.17 billion.

 

The growth was supported by NIM improving 10bps to 2.36%, risk adjusted return (RAR) on loans increasing by 12.4% coupled with a lower RAR loan contraction of 6.6% and client-based fee income rising 4.1% to RM250.4 million.

 

Overall gross impaired loans ratio was below the industry average of 1.6% at 1.2% over the nine-month period.

 

The bank also increased its current account savings ratio by 4.3% YoY to 39.5% after focusing on customer-based funding, while improving its total capital ratio to 18.7%.

 

Liquidity coverage and loan-to-fund ration stood at 132% and 87.2% respectively. Return on equity was recorded at 9.8%.

 

Alliance Bank group CEO Joel Kornreich (picture) said the financial institution will focus on scaling up its core business over the next two years, namely Alliance One Account, SME business and Alliance@Work.

 

He said the bank will continue to introduce innovative propositions that are fast, simple, responsive, and aligned to customers’ needs.

 

“Our Transformation agenda, augmented by our digital banking strategy, will see us launching solutions with practical value propositions that ease our customers’ pain points,” he said in a statement.