Published on 31 December 2012
RAM Ratings has reaffirmed
Alliance Bank Malaysia Berhad’s (“Alliance Bank” or “the Group”) long- and
short-term financial institution ratings at A1 and P1, respectively.
Concurrently, the A2 rating of the Group’s RM1.5 billion Subordinated
Medium-Term Notes Issuance Programme (2011/2026) (“Subordinated Notes”) has
also been reaffirmed. Both long-term ratings have a stable outlook. The 1-notch
difference between the rating of the Subordinated Notes and Alliance Bank’s
long-term financial institution rating reflects the subordinated nature of the
debt facility to the Group’s senior creditors.
Alliance Bank is the smallest
domestic banking group in Malaysia. It holds about 2% of the outstanding loans
and deposits in the banking system, and has a notable presence in consumer
banking and also among small and medium-sized enterprises. On the other hand,
the Group’s Islamic and investment-banking franchises are viewed to be
relatively weak. On the whole, the Group’s asset quality is perceived to be
healthy. Its gross impaired-loan ratio had eased further to 2.3% as at
end-September 2012 (end-March 2011: 3.3%) while its credit-cost ratio has been
clocking in at a low 0.1% for the past 2 fiscal years, thanks to commendable
recoveries.
Alliance Bank benefits from a
relatively large pool of low-cost current- and savings-account deposits, which
are generally more stable; these made up 34.4% of its deposit base as at
end-September 2012, well ahead of the banking system’s 24.9% average. With the
momentum of loan growth picking up, its loans-to-deposits ratio had edged up to
81.2% as at the same date (end-March 2011: 75.2%) – a level still deemed sound.
Underpinned by stronger investment and fee incomes, the Group delivered a
better pre-tax profit of RM648.4 million in fiscal 2012 (fiscal 2011: RM559.8
million). For 1H fiscal 2013, Alliance Bank posted a pre-tax profit of RM358.0
million. Meanwhile, Alliance Bank’s capitalisation levels remained solid, with
its tier-1 risk-weighted capital-adequacy ratio coming in at 12.1% as at
end-September 2012.
Media contact
Peter Kong
(603) 7628 1029
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