Alliance Bank Malaysia Berhad
ANALYST UPDATES ON ALLIANCE BANK MALAYSIA BERHAD (ALLIANCE BANK)
UOB Kay Hian
Date: 16 Apr, 2025
Company Update
Analysts:
Philip Wong
Share Price: RM4.35
Target Price: RM4.84
Rating: Hold
FY2025 Forecast:
Net Profit: RM747m
EPS: RM0.48
DPS: RM0.191
Target Price: RM4.84
Rating: Hold
FY2025 Forecast:
Net Profit: RM747m
EPS: RM0.48
DPS: RM0.191
Report Summary & Comments
Alliance’s loan book is largely insulated against export shocks. Medium-term loans growth is expected to outpace the industry. A proposed RM600m rights issue could lift CET1 to 13.6%, fuelling future growth and providing sufficient capital buffer. While NIMs may compress slightly due to deposit competition, they should remain stable in FY26. Net credit cost rose to 30.6bp but remains prudent. Maintain HOLD and target price of RM4.84, as valuation reflects limited near-term upside after the rights dilution.
Public Bank Investment Bank
Date: 26 Mar, 2025
Company Update
Analysts:
Wong Ling Ling
Date: 26 Mar, 2025
Company Update
Analysts:
Wong Ling Ling
Share Price: RM4.61
Target Price: RM4.90
Rating: Neutral
FY2025 Forecast:
Net Profit: RM725.8m
EPS: RM0.469
DPS: RM0.225
Target Price: RM4.90
Rating: Neutral
FY2025 Forecast:
Net Profit: RM725.8m
EPS: RM0.469
DPS: RM0.225
Report Summary & Comments
Alliance Bank Malaysia (ABMB) hosted a briefing yesterday, providing further clarity on the proposed rights issue. The proposed rights issue is expected to raise c.RM600m, which will be allocated to enhance working capital, mainly to support ABMB’s double-digit loan growth target. Meanwhile, the rights issue is expected to raise its CET1 ratio by 1.1% to 13.5%. Following the capital raise, ABMB aims to achieve a credit re-rating to AA, which would help reduce its cost of funds (COF). The issuance will result in a 9.5% increase the number of shares outstanding to c.1.69bn. We estimate an 8.5% dilution on both FY26-27F EPS. PIB is keeping its earnings estimates unchanged, pending finalisation of the rights issue proposal. Neutral call and TP of RM4.90 maintained.
Alliance Bank Malaysia (ABMB) hosted a briefing yesterday, providing further clarity on the proposed rights issue. The proposed rights issue is expected to raise c.RM600m, which will be allocated to enhance working capital, mainly to support ABMB’s double-digit loan growth target. Meanwhile, the rights issue is expected to raise its CET1 ratio by 1.1% to 13.5%. Following the capital raise, ABMB aims to achieve a credit re-rating to AA, which would help reduce its cost of funds (COF). The issuance will result in a 9.5% increase the number of shares outstanding to c.1.69bn. We estimate an 8.5% dilution on both FY26-27F EPS. PIB is keeping its earnings estimates unchanged, pending finalisation of the rights issue proposal. Neutral call and TP of RM4.90 maintained.
RHB Investment Bank
Date: 28 Feb, 2025
Results Update
Q4 Ending: 31/3/24
Analysts:
Nabil Thoo
David Chong CFA
Date: 28 Feb, 2025
Results Update
Q4 Ending: 31/3/24
Analysts:
Nabil Thoo
David Chong CFA
Share Price: RM5.32
Target Price: RM5.90
Rating: Buy
FY2025 Forecast:
Net Profit: RM741m
EPS: RM0.48
DPS: RM0.19
Target Price: RM5.90
Rating: Buy
FY2025 Forecast:
Net Profit: RM741m
EPS: RM0.48
DPS: RM0.19
Report Summary & Comments
Alliance Bank Malaysia’s 9MFY25 results are in line, and management is optimistic on achieving if not exceeding all its guidance items. With the group almost halfway through its ACCELER8 2027 strategy, it sees scope for opex growth to moderate and income growth to accelerate moving forward. Expanding ROE would be supportive of further re-rating.
Alliance Bank Malaysia’s 9MFY25 results are in line, and management is optimistic on achieving if not exceeding all its guidance items. With the group almost halfway through its ACCELER8 2027 strategy, it sees scope for opex growth to moderate and income growth to accelerate moving forward. Expanding ROE would be supportive of further re-rating.
Affin Hwang Investment Bank
Date: 28 Feb, 2025
Results Update
Q4 Ending: 31/3/24
Analysts:
Tan Ei Leen
Date: 28 Feb, 2025
Results Update
Q4 Ending: 31/3/24
Analysts:
Tan Ei Leen
Share Price: RM5.32
Target Price: RM5.20
Rating: Hold
FY2025 Forecast:
Net Profit: RM740.8m
EPS: RM0.479
DPS: RM0.24
Target Price: RM5.20
Rating: Hold
FY2025 Forecast:
Net Profit: RM740.8m
EPS: RM0.479
DPS: RM0.24
Report Summary & Comments
Alliance reported a 3Q FY25 net profit of RM186.7 with 9MFY25 results at RM553.2m (+7.9% yoy). Expansion in operating income was underpinned by fund-based income (+13.9% yoy) and non-interest income expansion (+10.9% yoy), which was largely driven by wealth management fees, FX sales & trade (+16.2% yoy) and higher treasury and investment income. Alliance’s CIR ratio remained steady at 46.8% for 9MFY25. 9MFY25 net credit charge has remained elevated at an annualized 40bps as compared to management’s FY25 target of between 30-35bps and was also higher than the assumption of 33bps.
Alliance reported a 3Q FY25 net profit of RM186.7 with 9MFY25 results at RM553.2m (+7.9% yoy). Expansion in operating income was underpinned by fund-based income (+13.9% yoy) and non-interest income expansion (+10.9% yoy), which was largely driven by wealth management fees, FX sales & trade (+16.2% yoy) and higher treasury and investment income. Alliance’s CIR ratio remained steady at 46.8% for 9MFY25. 9MFY25 net credit charge has remained elevated at an annualized 40bps as compared to management’s FY25 target of between 30-35bps and was also higher than the assumption of 33bps.
Maybank Investment Bank
Date: 27 Feb, 2025
Results Update
Q4 Ending: 31/3/24
Analysts:
Desmond Ch’ng, BFP, FCA
Date: 27 Feb, 2025
Results Update
Q4 Ending: 31/3/24
Analysts:
Desmond Ch’ng, BFP, FCA
Share Price: RM5.32
Target Price: RM5.30
Rating: Hold
FY2025 Forecast:
Net Profit: RM738m
EPS: RM0.48
DPS: RM0.19
Target Price: RM5.30
Rating: Hold
FY2025 Forecast:
Net Profit: RM738m
EPS: RM0.48
DPS: RM0.19
Report Summary & Comments
ABMB’s 9MFY25 earnings were within expectations and tracking closely to management’s guidance. Forecasts maintained, but with the share price having performed well (+20% over past 6 months), the upside to TP is limited. MIB maintained TP of MYR5.30 based on a CY25E PBV target of 1.0x (ROE: 10%).
ABMB’s 9MFY25 earnings were within expectations and tracking closely to management’s guidance. Forecasts maintained, but with the share price having performed well (+20% over past 6 months), the upside to TP is limited. MIB maintained TP of MYR5.30 based on a CY25E PBV target of 1.0x (ROE: 10%).
Public Bank Investment Bank
Date: 28 Feb, 2025
Results Update
Q4 Ending: 31/3/24
Analysts:
Wong Ling Ling
Date: 28 Feb, 2025
Results Update
Q4 Ending: 31/3/24
Analysts:
Wong Ling Ling
Share Price: RM5.32
Target Price: RM4.90
Rating: Neutral
FY2025 Forecast:
Net Profit: RM725.8m
EPS: RM0.469
DPS: RM0.225
Target Price: RM4.90
Rating: Neutral
FY2025 Forecast:
Net Profit: RM725.8m
EPS: RM0.469
DPS: RM0.225
Report Summary & Comments
Net interest income rose 11.7% YoY to RM1.0.8bn, on continued strong loans growth of 14.2% YoY, outpacing management’s FY25 loans growth target of 8-10%. ABMB’s loans growth was driven by all key segments, especially in the SME (+14.1% YoY) and Consumer Banking (13.8% YoY). ABMB continued to see strong growth momentum from selected economic corridors in Sarawak, Penang and Johor (eg: semi-conductor manufacturing and power industry). Meanwhile, non-interest income grew 4.4% YoY, underpinned by higher wealth management, FX sales and treasury income, which helped to offset a lower banking services fee income.
Net interest income rose 11.7% YoY to RM1.0.8bn, on continued strong loans growth of 14.2% YoY, outpacing management’s FY25 loans growth target of 8-10%. ABMB’s loans growth was driven by all key segments, especially in the SME (+14.1% YoY) and Consumer Banking (13.8% YoY). ABMB continued to see strong growth momentum from selected economic corridors in Sarawak, Penang and Johor (eg: semi-conductor manufacturing and power industry). Meanwhile, non-interest income grew 4.4% YoY, underpinned by higher wealth management, FX sales and treasury income, which helped to offset a lower banking services fee income.
Hong Leong Bank Investment Bank
Date: 28 Feb, 2025
Results Update
Q4 Ending: 31/3/24
Analysts:
Chan Jit Hoong, CFA, CPA
Date: 28 Feb, 2025
Results Update
Q4 Ending: 31/3/24
Analysts:
Chan Jit Hoong, CFA, CPA
Share Price: RM5.32
Target Price: RM5.55
Rating: Buy
FY2025 Forecast:
Net Profit: RM739m
EPS: RM0.477
DPS: RM0.205
Target Price: RM5.55
Rating: Buy
FY2025 Forecast:
Net Profit: RM739m
EPS: RM0.477
DPS: RM0.205
Report Summary & Comments
Alliance posted in 3QFY25 net profit of RM187m (-2% QoQ, +6% YoY), bringing 9MFY25 sum to RM553m (+8% YoY). This came in above HLIB’s expectations but in line with consensus (at 75%) with the deviation arising from stronger-than-expected total income.
Alliance posted in 3QFY25 net profit of RM187m (-2% QoQ, +6% YoY), bringing 9MFY25 sum to RM553m (+8% YoY). This came in above HLIB’s expectations but in line with consensus (at 75%) with the deviation arising from stronger-than-expected total income.
CORPORATE DEVELOPMENTS
24 Mar 2025
Alliance Bank is seeking to raise as much as RM600 million in fresh capital via a rights issue of new shares to fund its general banking, financing and investing activities. Alliance Bank’s share price closed at RM5.09 on 21/3/25, gaining around 50% over the past 12 months and giving it a market capitalisation of RM7.87 billion. The rights issue is expected to be completed by the third quarter of 2025 and is subject to regulatory and shareholder approvals.
Source: TheEdge