Alliance Bank posts lower Q2 net profit

PETALING JAYA: Alliance Bank Malaysia Bhd posted a net profit of RM122.79mil in the second quarter ended Sept 30, down 7% from RM132.57mil as operating expenses rose during the quarter.

Its revenue for the quarter grew 9.5% to RM393.87mil against RM359.71mil in the same period last year mainly from net interest income and other operating income. Its operating expenses grew 14% year-on-year to RM190.15mil from RM167.34mil previously.

The bank’s net interest margin recorded at 238 basis points, an improvement of 15 basis points and other operating income increased by RM8.3mil or 10.8% mainly from higher treasury income by RM8mil, while and fee based income increase by RM2.2mil.

For the first half to Sept 30 (H1FY18), Alliance Bank posted a net profit of RM257.8mil, or 16.80 sen earnings per share on revenue of RM780.48mil.

The bank said its pre-provision operating profit for H1FY18 improved 6.9% year-onyear to RM413.9mil. Net profit after tax for H1FY18 business as usual activities in the same period increased 3.5% year-on-year to RM274.3mil.

It said the reported net profit after tax for H1FY18 declined 2.7% year-on-year to RM257.8mil was mainly due to expenses from its Transformation agenda.

Return on equity (ROE) for the first half of the year was at 10% while client-based fee income for H1FY18 improved 3.6% year-onyear to RM164.8mil.

Year-to-date, Alliance Bank’s net interest margin improved nine basis points to 2.35%. Its loans growth in the SME sector remained strong at 9.1% year-on-year, with excellent gross impaired loans ratio at 1.6%.

Alliance said its overall gross impaired loans ratio at 1.2%, better than industry average of 1.7% and the year-to-date credit cost at 32.5 basis points (annualised) was within management guidance.

Commenting on its results, Alliance Bank CEO Joel Kornreich said, “Our financial performance indicates a steady and stable growth, with a strong ROE of 10.0%, which is above industry average.”