KUALA LUMPUR: Alliance Bank Malaysia Bhd (ABMB) will continue expanding its business presence in fast-growing economic corridors and strengthen its footprint in the northern peninsula, Sabah and Sarawak.

In a filing with Bursa Malaysia, the bank said with prudent loan growth above the industry average, the group aims to meet its performance guidance for the year.

ABMB’s net profit rose to RM185.33mil for the second quarter ended Sept 30, 2023 from RM158.42mil in the same period last year, mainly due to higher revenue and lower expected credit losses.

Revenue grew to RM528.10mil from RM480.57mil a year earlier.

Basic earnings per share stood at 11.97 sen versus 10.23 sen previously.

ABMB said its net interest income (NII) recorded RM429.8mil for the quarter under review, higher by RM8.9mil or 2.1%, mainly due to higher loan growth and the overnight policy rate hike.

“Other operating income increased by RM38.6mil or 64.7%, mainly due to higher wealth management income and lower hedging cost, while the net credit cost stood at 7.7 basis points (bps) against 16 bps in the previous corresponding period,” it said.

Separately, ABMB said its net interest margin (NIM) was lower at 2.53% in the second quarter versus 2.7% a year earlier.

Operating expenses, meanwhile, rose by RM38.6mil or 18.6% during the quarter under review, mainly from higher personnel cost, marketing cost, administrative and establishment cost.

For the six-month period of financial year 2024 (1H24), ABMB’s net profit dropped to RM335.87mil from RM370.58mil previously.

Revenue for the period was higher at RM994.36mil against RM954.65mil a year earlier.

In a separate statement, the bank said its NII rose 2.2% year-on-year (y-o-y) in 1H24.

This was attributable to higher loan growth. NIM, meanwhile, improved 10 bps quarter-on-quarter (q-o-q) to 2.53%.

It said overall loans accelerated 10% y-o-y to RM51.5bil with small and medium enterprises (SMEs), commercial and consumer banking loans growing 15%, 12.2% and 8.8% y-o-y, respectively.

ABMB also declared a first interim dividend of 10.85 sen per share, representing a total dividend payout ratio of 50%, payable on Dec 28, 2023.

Going forward, ABMB said that although Malaysia’s economic growth trajectory is expected to be supported by sustained domestic demand, it remained cautious and mindful of downside risks to growth stemming from external uncertainties.

This is especially in relation to escalating geopolitical tensions and tightening financial conditions.

The group continues its strides towards achieving its ACCELER8 strategy targets in the second quarter, further evolving as a bank for the community.

The results from the ACCELER8 strategy remain on the uptrend, with positive momentum seen in the acquisition of new-to-bank business customers and the continued growth y-o-y in SME loans.