Alliance Bank projects 7.5%-10% loan growth

KUALA LUMPUR: Alliance Bank Malaysia Bhd is expecting loan growth between 7.5% and 10% for FY27, including unrated bonds, despite the current domestic economic landscape and global geopolitical tensions.
Group CEO Kellee Kam said the bank also expects margins to stand at 2.28% and 2.35%, credit costs to be between 27% and 32%, while return on equity (ROE) is targeted to be at 10% to 10.5% (10.6% – 11.1% on pre-dilution basis).
“We have guided a dividend payout of between 40% and 50% for FY27, subject to how the year unfolds. Our shareholders raised questions about the macroeconomic outlook, our margins and business pipeline, but our guidance remains unchanged. We expect the business to continue growing and deliver solid results.
“There were also broader concerns about macroeconomic conditions, supply chain disruptions and higher oil prices, particularly their impact on our SME and mid-market customer base.
“While we remain confident in our performance, our priority is to continue supporting our customers through any challenges they may face,” he told reporters after the bank’s 44th annual general meeting (AGM) yesterday.
At the AGM, Kam said shareholders’ questions during the session centred on macroeconomic conditions, business performance and the broader operating environment.
Kam said Alliance Bank remained well contained, largely attributed to the banking industry’s proactive support for SMEs and mid-market businesses through government-backed financing schemes such as CGC and SJPP before any financial stress emerged.
He also noted that Malaysia’s strong GDP growth had also provided a supportive economic backdrop for businesses.
Kam said Alliance Bank also remains cautiously optimistic about the operating environment, noting that the group’s asset quality was supported by a prudent provisioning approach.
The banking group also pointed to Malaysia’s latest advance GDP estimates, which showed broad-based growth across key sectors, including energy, tourism, services, manufacturing and oil and gas.
Kam said the economy remained supportive of business activity, providing a favourable backdrop for its operations.
When asked about future risks, Kam said Alliance Bank remained well positioned to manage potential challenges and that the bank had taken a proactive approach by identifying and addressing risks early, leaving it in a position of strength should economic conditions remain broadly stable.
“The strategy was to stay close to customers and engage with them regularly to better understand their businesses and any emerging challenges.
“Where necessary, we would provide liquidity support or restructuring assistance, particularly for fundamentally sound businesses facing temporary cash flow pressures.
“Further, the wider banking industry remained committed to supporting businesses through government-backed initiatives and other relief measures.
“While these measures should help cushion the impact of supply chain disruptions and higher oil prices, management acknowledged that much would depend on how severe and prolonged geopolitical tensions prove to be.
“A prolonged period of elevated oil prices and economic uncertainty would require greater vigilance.
“To prepare for such scenarios, the bank has already adopted a more prudent stance by setting aside pre-emptive provisions rather than waiting for asset quality to deteriorate,” Kam said.
Moving on, Alliance Bank’s four-year transformation strategy, ‘Acceler8 2027’, is in its final phase, continuing to deliver disciplined and scalable growth across all business segments.
Since embarking on Acceler8 in January 2023, Alliance Bank has grown while reinvesting its stronger earnings back into the franchise – across people, technology, brand, infrastructure and capital.
As the bank heads into the final stretch of the transformation programme, total assets rose from RM61.8 billion in FY22 to RM92.2 billion, net profit from RM573 million to a record RM826.5 million, and market capitalisation from RM5.8 billion to RM8.34 billion as of March 31, 2026, while overall loan market share expanded from 2.4% to 2.8%.
This reflects not a one-off performance uplift, but the building of a stronger and more sustainable platform for future growth.
Alliance Bank registered a solid financial performance for FY26, registering its 4th consecutive year of record net profit after tax of RM826.5 million.
In tandem, the bank also achieved a record revenue of RM2.5 billion, marking an increase of RM196.3 million from the previous year.
Kam said the bank navigated margin pressures, driven in part by a declining Overnight Policy Rate (OPR), by innovating around customers and decisively scaling its small and medium enterprise (SME) and Islamic banking franchises.
“We did so against a demanding external backdrop of tariff-related uncertainties, geopolitical tensions and broader macroeconomic volatility that continued to test the resilience of businesses and consumers alike.
“As we drive this financial momentum, we have achieved RM16 billion in cumulative new sustainable banking business since FY22 and remain on track towards our RM17 billion target, proving that responsible banking is good business.
“There is still more to do, but we now build from a fundamentally stronger position,” he said.