Greetings, fellow investors and market enthusiasts! Today, we’re diving deep into the latest financial report from Alliance Bank Malaysia Berhad for the financial year ended March 31, 2025. This report offers a comprehensive look at the bank’s performance, strategic direction, and how it’s positioning itself in Malaysia’s dynamic economic landscape. From impressive profit growth to strategic partnerships, there’s plenty to unpack, so let’s get started!

Core Financial Highlights: A Year of Growth

Alliance Bank’s financial performance for the financial year ended March 31, 2025, showcases a commendable upward trajectory. Let’s break down the key figures:

The group’s total revenue expanded by 12.3% year-on-year to reach RM2.3 billion. This growth was primarily fueled by a significant 13.2% year-on-year increase in net interest income, driven largely by healthy loan growth. The net interest margin (NIM) for the period stood at 2.45%, a slight dip from 2.48% in the previous year, yet still indicative of strong core banking performance.

Other operating income also saw a positive surge, rising by 7.7% year-on-year to RM323.4 million. This was largely attributable to increased revenue from treasury and investment activities, alongside higher trade fees, despite a reported decrease in wealth management income and higher credit card fee expenses.

Fourth Quarter Performance: A Strong Finish

For the fourth quarter alone, the group reported a net profit after taxation of RM197.5 million, an 11.1% increase compared to the same quarter last year. This was a result of higher revenue and lower allowances for expected credit losses, partially offset by increased operating expenses. The net credit cost for the quarter significantly improved to 1.3 basis points, a notable reduction from 6.5 basis points in the prior year’s corresponding quarter.

Business Segment Performance: Driving Growth Across the Board

Alliance Bank’s strategic plan, ACCELER8, has evidently paid off, with significant expansion across all business lines:

• Consumer Banking: While profit before tax for this segment saw a slight decrease of RM18.0 million year-on-year, net income surged by 20.8% to RM792.2 million, primarily due to a rise in net interest income.
• Business Banking (Corporate, Commercial, and SME): This segment was a major growth engine, with profit before tax rising by 12.9% year-on-year to RM561.8 million. Net income increased by 6.7% to RM1.1 billion, driven by both net interest income and other operating income.
• Financial Markets: This segment also performed strongly, with profit before tax climbing 10.1% year-on-year to RM318.9 million, supported by higher net interest income and reduced other operating loss.
• Islamic Banking: The Islamic Banking segment reported a robust net profit after taxation of RM192.2 million, an impressive 18.8% increase year-on-year, with net income growing by 23.6%.

Financial Health: Strong Balance Sheet and Capital Position

The bank’s financial health remains robust. Total assets grew to RM85.2 billion as at March 31, 2025, up from RM76.9 billion last year. Net loans, advances, and financing expanded by 12.0% year-on-year to RM61.4 billion. Customer deposits also increased to RM65.8 billion, with a healthy current/savings account (CASA) ratio of 41.0%. The bank’s liquidity coverage ratio stood strong at 171.6%, and its loans-to-funds ratio was 85.6%, indicating a solid liquidity position.

Capital adequacy ratios comfortably exceeded regulatory thresholds, with the Common Equity Tier-1 (CET 1) ratio at 12.2%, Tier-1 Capital Ratio at 13.4%, and Total Capital Ratio at 16.7%. This strong capital buffer provides flexibility for future growth and resilience against potential economic headwinds.

Risks and Prospects: Navigating the Future

While the financial results paint a positive picture, Alliance Bank acknowledges the evolving global and domestic economic landscape. Malaysia’s Ministry of Finance forecasts a GDP growth of 4.5%–5.5% for 2025, driven by domestic demand and government initiatives. However, external global uncertainties, particularly the potential escalation of US-China trade tensions, remain a notable risk that could impact global trade and economic growth.

To navigate these dynamics, Alliance Bank is committed to its “ACCELER8 2027” strategic plan, focusing on eight key growth pillars:

1. SME Expansion: Continuing to optimize customer engagement and expand digital channels for small and medium-sized enterprises.
2. Lifecycle Support for Business Customers: Becoming the primary bank for businesses at all stages, offering tailored financial solutions to drive recurring transactional fee income.
3. Consumer Business Expansion: Deepening relationships with young professionals and high-net-worth clients, including scaling innovative digital propositions like virtual credit cards.
4. Ecosystem Partnerships: Offering holistic solutions, particularly in sustainability, through strategic collaborations.
5. Regional Leadership in Economic Corridors: Capturing growth opportunities in key economic corridors like Penang, Johor, and East Malaysia.
6. Corporate & Capital Markets: Enhancing client coverage and creating value through synergies.
7. Islamic Banking: Increasing market share with unique offerings such as “Halal in One” and sustainable financing.
8. Strategic Partnerships: Expanding product and distribution capabilities through various collaborations.

The bank plans to remain vigilant of global developments and continue upgrading its products, services, and technology to drive future growth. This includes prudently expanding lending, diversifying deposit sources, and strengthening risk management practices in the upcoming financial year.

Dividend Announcement: Returning Value to Shareholders

In a positive move for shareholders, Alliance Bank has declared a second interim dividend of 9.90 sen per share for the financial year ended March 31, 2025. This brings the total dividend declared for the current financial year to 19.40 sen. This dividend announcement reflects the bank’s commitment to returning value to its shareholders, a welcome sign of confidence in its ongoing performance and future prospects.