by NUR HAZIQAH A MALEK / pic by TMR FILE
ALLIANCE Bank Malaysia Bhd has provided RM7 billion in targeted assistance to individuals and businesses, which accounts for 16.4% of its loan book for the financial year ended March 31, 2021 (FY21).
The bank has disbursed over RM600 million in Special Relief Fund and RM120 million in the Targeted Relief and Recovery Facility by Bank Negara Malaysia (BNM) for small and medium enterprises (SMEs).
Alliance Bank group CEO Joel Kornreich said the bank aspires to be a top four SME bank in Malaysia by FY25 by doubling its loan market share in the segment.
“We aim to be the preferred bank of business owners and maintain our top position in customer net promoter score by serving the financial needs of business owners and their stakeholders.
“We will apply the Alliance Way to deliver speed, simplicity, empathy and access to services and advice to our clients,” he said on the bank’s prospects moving forward.
According to the bank, the Covid-19 pandemic has changed consumer behaviour and resulted in a preference for remote and digitalised interactions.
The bank’s digitisation efforts include its Branch-in-a-Tablet initiative, allowing the speeding up of account opening process, and the digital Know-Your-Customer launched earlier in February 2021 to enable instant opening of savings accounts and application for a credit card or personal loan.
For its fourth quarter, the bank posted net profit of RM50.07 million against the previous RM98.06 million on higher operating expenses and credit cost, whereas its revenue was higher at RM445.81 million versus RM434.41 million in the previous year.
For FY21, the bank’s revenue grew to RM1.82 billion, while net interest income improved by 2.8% year-on-year (YoY) to RM1.36 billion despite the multiple Overnight Policy Rate cuts, largely driven by lower funding cost arising from deposit mix optimisation.
The bank’s net interest margin also stood at 2.3% for the year, which is top two in the industry, while non-interest income grew by 24.8% YoY to RM456.7 million on improved treasury and investment income, as well as higher wealth management and brokerage fees.
It reported pre-provision operating profit growth of 15.3% YoY to over RM1 billion from better revenue and disciplined expense management, while the cost-to-income ratio for the year improved to 44.1% YoY.
The bank’s 121.4-basis-point (bp) net credit cost in FY21 includes a management overlay of 71.2bps as provision for higher risks due to the impact of the pandemic.
Its current account savings account deposits grew by RM4.7 billion YoY on robust sign-ups, which resulted in an improved ratio of 47%, highest in the industry, while SME loans improved 6.4% YoY from BNM’s Special Relief Facility take-up.
During the year, the bank’s liquidity coverage ratio was above industry average at 150%, while common equity tier-1 ratio was at 16.2%, tier-1 capital ratio at 17.2% and total capital ratio at 21.6%.
For the year, the board of directors proposed an interim dividend of 5.79 sen, representing a dividend payout ratio of 25%.