Alliance Bank 3Q net profit down 10% on higher opex

Alliance Bank 3Q net profit down 10% on higher opex
-A +A

KUALA LUMPUR (Feb 28): Alliance Bank Malaysia Bhd’s net profit fell 10% to RM134 million in its third financial quarter ended Dec 31, 2019 (3QFY20), from RM148.93 million a year ago, on higher operating expenses (opex) which rose 7.3% year-on-year (y-o-y).

This resulted in a lower earnings per share of 8.7 sen for 3QFY20 compared with 9.6 sen for 3QFY19.

Revenue for the quarter rose by a marginal 1.4% to RM424.32 million, from RM418.4 million in 3QFY19.

The group's net profit for the cumulative nine months (9MFY20) was also down 23.4% to RM326.21 million from RM425.82 million a year ago, mainly due to credit losses stemming from the impairment of a few large accounts during 1QFY20 and increased credit costs in the mortgage portfolio.

However, revenue for 9MFY20 came in 3.4% higher at RM1.26 billion from RM1.22 billion in 9MFY19. 

In a statement today, Alliance Bank said net interest margin of 2.38% remains near the top of the industry. Its gross loans and advances grew 5.5% y-o-y to RM43.5 billion, outpacing industry’s loan growth of 3.9%.

“Our key transformation initiatives, supported by meaningful partnerships and digitisation efforts, continue to yield good results. We remained focused in building up capabilities and investing in technology to deliver fast, simple, and responsive customer experience. In turn, this has strengthened our position in the small and medium enterprise (SME) and consumer segments,” said the bank's group CEO Joel Kornreich.

He added that in the coming months, the bank will launch several additional digital solutions to improve its customers’ experience with us. This includes the mobile BizSmart app for business owners.

"We will continue to form meaningful collaborations to expand our reach and serve our customers better,” said Kornreich.

“We are confident that our Key Transformation initiatives, complemented by our digital innovations, will enable us to deliver sustainable growth,” he added.

At 3.25pm, shares in Alliance Bank were unchanged at RM2.28, with 1.74 million shares done, bringing a market capitalisation of RM3.53 billion.