Friday 29 Mar 2024
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KUALA LUMPUR (Nov 27): Alliance Bank Malaysia Bhd’s net profit for the second quarter ended Sept 30, 2020 (2QFY21) fell 10.02% to RM103.94 million from RM115.52 million a year ago, due to higher reserves.

The group’s revenue for 2QFY21, however, rose 11% to RM474.45 million from RM427.44 million a year ago, its filing to Bursa Malaysia showed.

On a quarter-on-quarter basis, the group’s net profit slipped 0.35% from RM104.31 million in 1QFY21 due to higher reserves. Its revenue, however, expanded 12.53% from RM421.61 million.

The bank said in a statement that it did not declare a first interim dividend in the second quarter of FY21 and will consider future dividend proposals once the full economic impact of the Covid-19 pandemic is clearer.

For the half year ended Sept 30, 2020 (1HFY21), the group’s net profit grew 8.35% to RM208.26 million from RM192.21 million a year earlier.

The group’s revenue for the period also climbed 7.64% to RM896.05 million from RM832.44 million a year earlier.

The group said its revenue growth was due to the improvement in non-interest income, which rose 28.4% year on year to RM229.5 million mainly due to higher treasury income, and improvements in wealth management and brokerage income.

The bank also reported a pre-provision operating profit growth of 17.8% year on year to RM518.7 million stemming from better revenue growth and prudent cost control.

For 1HFY21, the group’s net interest income (including the Islamic Banking segment) improved by 2% year on year to RM666.5 million due to lower funding cost arising from better deposit mix.

Net interest margin was at 2.2% due to the Overnight Policy Rate (OPR) cut.

The bank’s net credit cost stood at 56.3 basis points for 1HFY21, of which 48 basis points (amounting to RM209 million) is a management overlay to buffer against the uncertainty of the pandemic’s impact.

Meanwhile, its liquidity and capital positions remain strong, with common equity tier-1 (CET 1) ratio at 15.4%, tier-1 capital ratio at 16.3%, and total capital ratio at 20.7%.

It added that the challenging economic environment for 2020 and the impact of the Covid-19 pandemic to the Malaysian economy will likely lead to a slower overall financing growth and increased credit stress for the group. Moreover, its net interest margin was also compressed due to lower OPR.

“We continue to focus on our two key priorities of helping our customers stay resilient during the pandemic and accelerating our digitisation initiatives to scale up and reach more customers, improve client engagement, and drive better cost efficiency,” its group chief executive officer Joel Kornreich said.

At noon break, Alliance Bank fell 1 sen or 0.39% to RM2.58, valuing the group at RM3.98 billion.

Edited ByLam Jian Wyn
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