12 July 2017
Kuala Lumpur, 12 July 2017 - Alliance Financial Group Berhad (“AFG" or “the Group”), comprising Alliance Bank Malaysia Berhad (“the Bank”) and its subsidiaries, announced that it had delivered satisfactory financial performance despite challenging conditions for the banking industry for the financial year ended 31 March 2017 (“FY2017”).
“I am pleased that we have once again achieved sustainable progress for the year. This is due to our focus on optimising the business, improving balance sheet efficiency, as well as committing resources to building and strengthening our foundations for sustainable profit growth,” said Datuk Oh Chong Peng, Chairman of the Group.
Looking Back at FY2017
In FY2017, the Group recorded net profit after tax of RM512.1 million. Return on equity (ROE) remained in the top three in the industry, at 10.5%. Pre-provision operating profit improved 5.8% to RM777.5 million. Net assets per share grew to RM3.30 from RM3.13 in the previous year.
The Group’s net loans, including Islamic financing grew 1.5% to RM39.0 billion from a year ago, with focus on better risk adjusted return (“RAR”) loans within the SME, commercial and consumer lending segments, which grew at an annualised rate of 13.6% for the year.
The Group continues to strengthen its position in the SME sector, growing loans at 9.3% year-on-year (YOY) while maintaining a gross impaired ratio of 1.1%.
Overall asset quality remains healthy with a gross impaired loans ratio of 1%, while loan loss coverage (including regulatory reserve) rose to 136.7%. Core customer deposits (mainly comprising of CASA and fixed deposits) grew 6.1% year-on-year to RM40.5 billion, with the CASA ratio at 34.2%.
After the redemption of RM600 million of Tier-2 Subordinated Notes in April 2016, the Group’s Total Capital Ratio remained strong at 17.2%. Common Equity Tier 1 ratio stayed healthy at 12.5%.
The Group had earlier declared a second single tier interim dividend of 7.5 sen per share. Together with the first interim dividend of 8.5 sen per share paid out on 30 December 2016, the total dividend paid out for FY2017 amounts to 16.0 sen per share. This represents a total payout ratio of 48% of the Group’s net profit after tax or RM247.7 million.
In September 2016, the Group had announced a Proposed Corporate Reorganisation exercise whereby the listing status of AFG will be assumed by its wholly-owned core subsidiary, Alliance Bank Malaysia Berhad. The Proposed Corporate Reorganisation will involve, among others, the shareholders of AFG exchanging their existing AFG shares for the Bank’s shares on a 1-for-1 basis, where their number of shares held and percentage shareholdings in AFG will be the same in Alliance Bank.
The Group has received approvals for the Proposed Corporate Reorganisation from the Ministry of Finance Malaysia, Bank Negara Malaysia, and the Securities Commission Malaysia. At its Extraordinary General Meeting today, the Group obtained its shareholders’ approval on the exercise.
At present, the Group’s Proposed Corporate Reorganisation are pending approvals from Bursa Malaysia Securities Berhad (for the listing of Alliance Bank and withdrawal of AFG’s listing status from the Main Board), and the sanction of the High Court. The Corporate Reorganisation exercise is expected to complete in October 2017.
The Group continues to contribute meaningfully to the success of business owners. In recognition of its many contributions to the Malaysian SME scene, the Bank was honoured with a “Top SME Supporter Award” at the Platinum Business Awards 2017 organised by the SME Association of Malaysia. The Bank’s online banking solution for businesses, BizSmart Solutions, was Highly Commended for its “Excellence in Business Model Innovation” by the Retail Banker International at the Asia Trailblazer Awards 2017.
During the year, the Group continues to invest in its talent pool. These efforts resulted in numerous talent development awards and recognitions, including “Best Graduate Employment Scheme – Retail Banking” at the Asia Trailblazer Awards 2017, “Graduate Employment Programme of the Year – Malaysia” at the Retail Banking Awards 2016, and a Silver award for “Excellence in Graduate Recruitment & Development” at the HR Excellence Awards 2016. The Group was also one of the finalists of the “Best Management Trainee/Graduate Programme” at the Graduate Recruitment Awards 2016.
Moving Forward into FY2017
“The global economic conditions are likely to remain uncertain while the Malaysian economy is expected to grow between 4.3% and 4.8% in 2017 with a gradual economic recovery and resilient domestic demand. We now have to adapt to new realities, tapping into opportunities to strengthen relationships with customers by helping them navigate through the shifting landscape,” said Datuk Oh.
To do this, the Group will continue to leverage on its franchise strength to deliver sustainable profits and to fulfil the financial needs of our customers. In the coming financial year (FY2018), it will be launching and scaling up a number of new and differentiated value propositions to our customers.
“To support the Bank’s strategic initiatives, we will be investing in the required information technology enablers, and will continue to focus on streamlining initiatives to improve our operational efficiencies. We will set our sights on being a Bank that uses innovation to deliver simple, fast and responsive solutions that are always aligned with our customers’ needs. We will live out our brand by driving client excellence at key touch-points in alignment with our new brand architecture,” said Datuk Oh.
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About Alliance Financial Group
The Alliance Financial Group, comprising Alliance Bank Malaysia Berhad, Alliance Investment Bank Berhad and Alliance Islamic Bank Berhad, is a dynamic, integrated financial services group offering banking and financial solutions through its consumer banking, business banking, Islamic banking, investment banking and stockbroking.
It provides easy access to its broad base of customers throughout the country via multi-delivery channels which include retail branches, Privilege Banking Centres, Islamic Banking Centres, Business Centres, Investment Bank branches and direct marketing offices located nationwide, as well as mobile and Internet banking.
With over five decades of proud history in contributing to the financial community in Malaysia with its innovative and entrepreneurial business spirit through its principal subsidiaries, the Group is committed to delivering the best customer experience and creating long-term shareholder value.
For more information on this press release, please contact Agnes Ong, Tel : (03) 2604 3378, Fax : 03-2604 3399 or e-mail: firstname.lastname@example.org