Alliance Finance aims to outshine industry growth

KUALA LUMPUR — Alliance Financial Group Bhd said they expect an industry growth rate of between 6% to 7% due to better outlook for the current financial year.

However, its group chief executive officer Joel Kornreich said the company itself is looking to outdo this figure.

The group recorded net profit after tax of RM522 million and return on equity of 11.2%.

Kornreich said although there is no additional catalyst to drive the sluggish economic activities, the group was aiming to perform slightly higher than their industry performance outlook.

“The global economic environment is slower than last year, and the pressure spillover from last year is evident, but we are optimistic especially with our many new value added propositions that are in the pipeline,” Kornreich said.

“Our loan growth for last year stands at 4.9% and we believe that despite the sluggish economy, we can increase our share in our small and medium enterprise (SME) segment as well secure consumer lending segments.”

Kornreich said their Islamic finance segment is also one of their key driver as this segment has the potential to differentiate itself.

The group net loans, including Islamic finance, grew by 5% or RM38.4 billion driven by focus on risk adjusted return loans within their SME, commercial and consumer lending segments.

Another segment they intend to develop further is retail space, where they have a strong partnership with the Mydin Group.

“We will further work to develop more partnerships in the retail space segment.”

Kornreich said the overnight policy rate cut made by Bank Negara Malaysia took them by surprise but the company remains positive about it.

Kornreich said the group will be adjusting their rates and an announcement is expected soon.

“We have already reduced our rates in the recent months and we have not, in the past week raised, our base rates,” Kornreich said.

Group chairman Datuk Oh Chong Peng said the group was considering to merge both their holding arm and their banks in the near future.

“We are looking into it and we might do it within a year,” Oh said.

The group continues to strengthen their position in the SME sector loans growing 19.7% year-on-year while maintaining their gross impaired ratio at 1%.

The group also recorded healthy levels of overall asset quality, with a gross impaired loan ratio of 1.3% while their loan loss coverage rose to 109.1%.

Total deposit grew by RM1.4 billion or 3.2% with its CASA ratio at 32.1%.

The group common equity tier-1 ratio remains healthy at 11.8% while total capital ratio rose by 17.4%, making the group as among the highest performer in the industry.

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