Alliance Bank FY2025: A Record-Breaking Year Fueled by Strategic Growth
Greetings, fellow investors and market enthusiasts! Today, we’re diving into the latest financial report from Alliance Bank Malaysia Berhad, specifically their full-year performance for the financial year ended 31 March 2025 (FY2025). This report isn’t just about numbers; it tells a compelling story of strategic execution and impressive growth, culminating in a record-breaking year for the Bank. Get ready to explore the key highlights that propelled Alliance Bank to new heights and what it means for its future trajectory.
A Year of Remarkable Growth
Alliance Bank has truly outdone itself in FY2025, delivering its strongest financial performance to date. Both revenue and net profit have hit all-time highs, showcasing the effectiveness of their operational strategies. Let’s look at the impressive figures:
FY2025 Performance
Revenue: RM2.3 billion
Net Profit After Tax: RM750.7 million
Net Interest Income (NII): RM1.95 billion
Non-Interest Income (NOII): RM323.4 million
Year-on-Year Growth
Revenue Growth: 12.3%
Net Profit Growth: 8.7%
NII Growth: 13.2%
NOII Growth: 7.7%
This robust revenue growth was a dual effort, with significant improvements seen in both Net Interest Income (NII) and Non-Interest Income (NOII). The NII surged primarily due to higher loan volumes, while the Bank maintained one of the industry’s highest net interest margins at 2.45%. NOII also saw a healthy increase, driven by higher foreign exchange sales, trade fees, wealth management income, and treasury and investment income. Despite continued investments in technology and human capital, the cost-to-income ratio remained manageable at 48%.
Driving Loan Momentum and Deposit Strength
One of the most striking aspects of Alliance Bank’s performance is its exceptional loan growth, significantly outpacing the industry average. This broad-based expansion across various segments underscores the Bank’s strategic market penetration.
Total Gross Loans: RM62.4 billion, a remarkable 12% year-on-year increase, more than double the industry’s growth rate of 5.2%.
The growth wasn’t confined to a single area but was well-distributed:
| Segment | Loan Growth (YOY) |
|---|---|
| SME | 10.6% |
| Commercial | 15.8% |
| Corporate | 8.4% |
| Consumer | 12.6% |
Complementing this loan growth, the Bank also strengthened its deposit base. Customer deposits increased by 14.7% year-on-year, contributing to a robust Current Account Savings Account (CASA) ratio of 41%, which remains among the highest in the industry. This high CASA ratio indicates a stable and cost-effective funding base, a key advantage for any financial institution.
Solid Financial Health and Shareholder Returns
Beyond profitability and growth, Alliance Bank has maintained a strong financial position, with robust capital and liquidity metrics, ensuring stability and resilience.
- Common Equity Tier-1 (CET1) Ratio: 12.2%
- Tier-1 Capital Ratio: 13.4%
- Total Capital Ratio: 16.7%
- Liquidity Coverage Ratio (LCR): 171.6%
- Loan-to-Fund Ratio: 85.6%
- Net Credit Cost: 31.9 basis points (including pre-emptive provisions)
Furthermore, the Bank has proposed a second interim dividend of 9.9 sen per share, bringing the total dividend for FY2025 to 19.4 sen per share. This translates to a healthy 40% total dividend payout ratio, amounting to RM300.3 million, reflecting the Bank’s commitment to returning value to its shareholders.
It’s also worth noting the proposed rights issue in July to raise RM600 million in fresh capital, which, subject to approvals, is set to further strengthen the Bank’s CET1 ratio. This proactive measure signals a forward-looking approach to capital management.
Acceler8ing Towards a Stronger Future
The stellar FY2025 results are a testament to the successful execution of Alliance Bank’s “Acceler8” transformation strategy. This strategy has not only strengthened its market presence but also broadened its product and service offerings across key segments:
- SME Banking: Market share increased to 5.39% from 5.19%, with fee income up 9% year-on-year.
- Consumer Loans: Grew at twice the industry rate, boosting market share to 2.27%.
- Geographic Expansion: Sarawak, Penang, and Johor saw impressive loan growth of 14% and deposit growth of 22%.
- Capital Markets: Revenue surged by an impressive 116% year-on-year, primarily driven by corporate finance deals.
- Islamic Banking: Revenue climbed 24% year-on-year, led by the growth in their “Halal in One” financing programme.
Beyond financial metrics, Alliance Bank is also making significant strides in its sustainability agenda. As of FY2025, they’ve achieved RM14.4 billion in new sustainable banking business, nearing their RM15 billion target by FY2027. Their collaborations with Bursa Malaysia on the Sustainability Enhancement Programme and the launch of the Sarawak SME ESG report demonstrate a strong commitment to environmental, social, and governance (ESG) principles.
Group Chief Executive Officer Mr. Kellee Kam encapsulated the sentiment, stating, “Our record-breaking results for FY2025 reflect the successful execution of our Acceler8 strategy and reinforces our longer-term growth trajectory. We remain focused on sustainable growth and creating long-term value for all our stakeholders.”
Summary and
Alliance Bank’s FY2025 report paints a picture of a financial institution firing on all cylinders. Record-breaking revenue and net profit, strong loan growth across all segments, robust capital and liquidity positions, and a healthy dividend payout are clear indicators of a well-executed strategy. The Acceler8 strategy is evidently yielding tangible results, expanding market share and diversifying income streams, while their commitment to sustainability adds another layer of long-term value creation.
While the report highlights significant achievements and a positive outlook, it’s always prudent for investors to consider broader economic and industry factors that could influence future performance. As with any financial institution, potential challenges could include:
- Interest Rate Fluctuations: Changes in the Overnight Policy Rate (OPR) can impact net interest margins.
- Economic Slowdown: A downturn in the broader economy could affect loan demand and asset quality.
- Competitive Landscape: Intense competition within the banking sector may put pressure on margins and market share.
- Regulatory Changes: Evolving financial regulations could introduce new compliance costs or operational adjustments.
- Digital Disruption: The rapid pace of technological change requires continuous investment to remain competitive.
Despite these general considerations, Alliance Bank’s strategic focus on high-growth segments, digital transformation, and sustainability initiatives positions it well for continued resilience and growth in the dynamic Malaysian banking landscape.
What are your thoughts on Alliance Bank’s FY2025 performance? Do you believe their Acceler8 strategy can maintain this impressive growth momentum in the coming years, especially with the proposed rights issue and ongoing sustainability efforts? Share your insights and perspectives in the comments section below!
Stay tuned for more deep dives into Malaysian company reports!
Disclaimer: This blog post is for informational purposes only and should not be construed as financial advice or an endorsement to buy or sell any securities. Always conduct your own due diligence or consult with a qualified financial advisor before making any investment decisions.
