KUALA LUMPUR (June 5): Alliance Bank Malaysia Bhd, backed by Singapore’s Temasek Holdings Pte, is counting on small and medium-sized enterprises to jump-start its loan growth this financial year, a top executive said.

The bank, Malaysia’s smallest by assets, is targeting loan growth of more than 10 percent in the fiscal year through March 31, 2019, compared to the 2.6 percent it achieved in the previous 12 months, its Chief Executive Officer Joel Kornreich said. With interest margins expected to hold steady, he predicts a 10 percent increase in net income this year.

“As a small bank, we want to grow robustly,” said Kornreich, 52, who took over as CEO in 2015. “We decided to play to our strength, which is SMEs,” he added in an interview last week.

The new government of Prime Minister Mahathir Mohamad has pledged to develop the country’s SMEs, which account for about 40 percent of gross domestic product. Some 25 percent of Alliance Bank’s loan book has been extended to SMEs.

Alliance Bank shares have risen 6.9 percent so far this year, based on Monday’s closing price, outperforming the benchmark FTSE Bursa Malaysia KLCI Index, which dropped 2.3 percent over the same period.

Alliance reported net income of RM493.2 million for the financial year ended March 31, down from RM512.3 million a year earlier, according to a stock exchange filing.

The group has total assets of RM53.9 billion as of March compared with RM54.1 billion a year earlier.

State-owned investment firm Temasek’s interest in Alliance is held through Duxton Investments Pte. The latter owns 49 percent of Vertical Theme Sdn., which in turns controls 29.1 percent of the Malaysian bank.