KUALA LUMPUR (Aug 29): Alliance Bank Malaysia Bhd (KL:ABMB) reported a net profit of RM176.7 million in the first quarter ended June 30 (1QFY2025), up 17.3% from RM150.5 million a year ago, according to its filing to Bursa Malaysia.

Earnings per share improved to 11.41 sen from 9.72 sen as higher revenue was offset by higher operating expenses and allowances for expected credit losses.

It did not declare any dividends.

Revenue increased nearly 16% to RM539.8 million from RM466.3 million a year earlier.

The bank’s net interest income grew 15.8% to RM464.7 million, driven by higher loan volume while net interest margin was at 2.45%. This included net income from Islamic banking business of RM130.07 million.

The non-interest income rose 15.7% to RM75.1 million, primarily from higher wealth management income, foreign exchange sales and trade fees. Cost-to-income ratio stood at 48.0%.

In a separate statement, the banking group said overall loan momentum continued with a 14.8% year-on-year (y-o-y) growth, representing almost double that of the 7.9% growth recorded in 1QFY2024.

The positive performance was led by the bank’s small and medium enterprise (SME) (17.1% y-o-y), commercial (17.5% y-o-y), corporate (9.7% y-o-y) and consumer (14.0% y-o-y) banking growth.

Meanwhile, Alliance Bank’s customer deposits grew 11.6% year-on-year, and its current accounts savings accounts (Casa) ratio remains one of the industry’s highest at 41.5%, it added.

The 1QFY2025 net credit cost was 8.1 basis points while the bank’s loan loss coverage ratio stood at 111.6%.

The bank remains well-capitalised with a Common Equity Tier-1 ratio (CET 1) of 12.2% and a total capital ratio of 16.4%.

In terms of liquidity position, Alliance Bank is resilient with a liquidity coverage ratio of 163.0% and loan-to-fund ratio of 88.2%.

SME loan growth gains traction

The bank’s SME loan growth continued to gain market share to 5.2% (May 2024: 5.0%) and outperformed industry growth.

Alliance Bank acquired 2,500 new-to-bank (NTB) business customers during the quarter.

"Alliance Bank’s emphasis on delivering personalised solutions and service excellence to support business customers through their life cycle has enabled the bank to grow its business banking client fee income by 13%. Consumer loans grew by 14% y-o-y and outpaced the industry average. This enabled the bank to continue gaining ground in loan market share with 29,000 NTB customers acquired in 1QFY2025," it added.

The bank’s focus on being an environmental, social and governance (ESG)-focused organisation has resulted in positive impact through its Sustainability Impact Programme.

"With 35% or RM195 million cumulative loans approved under this programme in 1QFY2025, the bank is en route towards achieving the FY2025 full-year target of RM560 million," it said.

The corporate and capital market segment achieved 16% y-o-y revenue growth, while the Islamic banking financing business outpaced FY2024 with its 13% y-o-y growth.

It said Johor, Sarawak and Penang recorded strong y-o-y performance, and cumulatively, these states recorded 16% for both loan and deposit growth respectively.

Alliance Bank shares gained two sen or 0.5% to settle at RM4.47 at noon break, valuing the group at RM6.92 billion.