News Column

AFG posts RM136.5m net profit in Q3

February 13, 2014

KUALA LUMPUR: Alliance Financial Group Bhd (AFG) posted a net profit of RM136.5 million in the third quarter ended December 31 2013, compared with RM132.7 million a year ago.

Group revenue rose to RM328.6 million from RM319.7 million previously, it said in a statement yesterday.

The firm attributed the increase in net profit to higher net interest income. Earnings per share was nine sen compared with 8.7 sen.

For the nine-month period, AFG's net profit rose to RM405.5 million from RM399.2 million in the previous corresponding period, while revenue rose to RM1 billion from RM978 billion.

Its group chief executive officer Sng Seow Wah said the group recorded a return on equity of 13.4 per cent and earnings per share of 26.7 sen for the first nine months of financial year 2014 (FY2014).

"The improved financial performance in the first nine months of FY2014 compared with the corresponding period of FY2013 was mainly attributed to the growth in interest income and recurring non-interest income," Sng added.

Net interest income grew by 6.4 per cent to RM577.6 million, driven by net loans expansion, particularly in the consumer and business banking segments.

Sng said interest margins, however, continued to remain under pressure due to the increased competition in the industry for both loans and deposits.

He said non-interest income registered moderate growth of 8.6 per cent to RM271.6 million for the first nine month of FY2014, driven primarily by recurring income, particularly from transaction banking, wealth management and brokerage activities.

"Non-interest income ratio improved to 28 per cent from 27.2 per cent a year ago," he added.

The group's net loans, including Islamic financing, grew by 13.2 per cent to RM30.3 billion, mainly due to residential property and non-residential property financing growth of 15.9 per cent and 22.2 per cent on-year.

For SME lending, Sng said it grew by 8.3 per cent year-on-year to RM6.2 billion.

Business banking, comprising of lending to SMEs, commercial and corporate customers, now represents 42.2 per cent of total loan portfolio, and the rest of 57.8 per cent for consumer banking.

Sng said the financing of residential properties and non-residential property continue to register above industry growth rates.

"Growth has also been encouraging in the hire purchase financing and the share margin financing segments as part of our initiative to rebalance our portfolio to higher yielding loans," he said.

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Source: Business Times (Malaysia)

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