Revenue rose 6% to RM480.57 million in the quarter from RM452.98 million a year earlier. The bank declared a first interim dividend of 12 sen per share, representing a total dividend payout ratio of 50%.
Net profit increased 16.3% to RM370.6 million for the first half ended Sept 30, 2022 (H1 FY2023) from RM318.8 million in the previous corresponding period. Revenue jumped 2% to RM954.6 million from RM935.9 million a year earlier.
This positive effect was due to the bank’s growth and strategic priorities progressing well. Acquiring more customers, deepening customer engagement and gaining efficiencies were all part of Alliance Bank’s plans, according to its press release.
Net interest income grew 12.4% year-on-year (y-o-y) to RM813 million in the first half due to higher loan volumes and impact of overnight policy rate (OPR) hikes. Its net interest margin improved 11 basis points (bps) to 2.64%.
Client-based fee income (excluding brokerage) was up 5.7% y-o-y to RM141.6 million, driven by higher wealth management, foreign exchange sales and trade fees. Cost-to-income ratio remained stable at 43.9%.
With business activities improving, this contributed favourably towards loan growth. Overall, loans grew by 6.7%, making it 0.3% higher than the industry average. Strong growth in SME banking and commercial banking rose 14% and 16.8% y-o-y respectively.
The bank’s H1 FY2023 net credit cost improved to 12.3 bps as customers successfully graduated from the payment relief programmes. The loans under relief reduced to RM1.97 billion, representing 4.2% of its total loan book.
The bank has also doubled its new-to-bank (NTB) customer acquisition y-o-y, acquiring 44,000 customers through various digital solutions. They expect to acquire 80,000 NTB customers by end of FY2023.
Alliance Bank group CEO Kellee Kam said strategic priorities have guided the bank to achieve success and sustainable results within the SME sector.
“Going forward, we will focus on broadening our strategy and expanding into new areas beyond SMEs to accelerate our business growth.”
Apart from that, Alliance Bank will continue to position itself as a thought leader in sustainability, helping customers adopt sustainable practices and reducing the bank’s greenhouse gas emissions through its environmental, social and governance (ESG) commitments.
At the market close, the bank’s share price slid one sen to RM3.79 with a market capitalisation of RM5.87 billion.