By S BIRRUNTHA / Pic TMR
ALLIANCE Bank Malaysia Bhd’s subsidiary, Alliance Investment Bank Bhd, has agreed to sell its stockbroking business to Phillip Futures Sdn Bhd for a price to be determined.
The price of the cash deal will be based on the net asset value of the stockbroking business which had a net asset value of RM205.2 million as at Sept 30, 2021.
The disposal value will also include 60% of the aggregate brokerage fee in respect of all brokerage transactions over a 12-month period from the transfer of the business to Phillip Futures less any receivable shortfall.
In a filing to Bursa Malaysia yesterday, Alliance Bank noted that it will also enter into a strategic stockbroking partnership arrangement with PhillipCapital Group, which is the parent group of Phillip Futures.
“This will enable the bank’s customers to gain access to regional trading platforms and a broad range of global investment products.
“The excess capital from the sale of the stockbroking business will be re-deployed to accelerate growth in its consumer, small and medium enterprise (SME) and Islamic banking businesses,” it said in the statement.
PhillipCapital operates in 15 countries and in Malaysia, it is represented by Phillip Capital Management Sdn Bhd (PCM), Phillip Mutual Bhd, Phillip Wealth Planners Sdn Bhd, Phillip Futures Sdn Bhd and Phillip Research Sdn Bhd.
In Malaysia, PCM manages RM2.6 billion in client’s assets, according to its website.
The deal also sees Alliance Investment Bank’s capital markets business transferred to the bank’s other subsidiary, Alliance Islamic Bank Bhd.
As a result, Alliance Islamic Bank will be one of the few local Islamic banks with in-house capabilities to serve business clients with comprehensive corporate and capital markets solutions.
The bank expects to conclude the corporate exercise in the first half of 2022. Alliance Bank group CEO Joel Kornreich said the bank will invest in significantly scaling up its SME business.
“Our SME banking business has consistently outpaced the industry’s growth over the past five years.
“We aim to be among the top four banks in SME market share in Malaysia,” he added.
Kornreich stated that the bank’s actions will be guided by the Alliance Way, which is its unique approach to address the needs of our customers.
He said the bank’s relationship managers take the time to truly understand its customers’ financial situation so that they can provide the most relevant solutions in a fast and simple manner.
“Our goal is to serve the business and personal needs of business owners and the needs of their stakeholders,” he added.
Alliance Bank’s shares closed four sen or 1.39% lower at RM2.84 yesterday, valuing the bank at RM4.4 billion.