KUALA LUMPUR (April 16): Alliance Bank Malaysia Bhd’s (ABMB) net profit is expected to jump by 37.3% year-on-year (y-o-y) to RM179 million for the fourth quarter ended March 31, 2024 (4QFY2024), according to AmInvestment Bank Research.
This would bring ABMB’s full FY2024 earnings to RM691 million, marking a 2% increase from the previous year, the research house wrote in a note on Tuesday.
It is anticipated that a second dividend of 11.5 sen per share will be declared, bringing the total dividend for the full year to 22.3 sen per share. The bank is scheduled to unveil its 4Q results on May 30.
Net interest margin (NIM) for ABMB, the smallest banking group by asset size in Malaysia is projected to be stable quarter-on-quarter (q-o-q) with cost of funds and asset yield holding up. For FY2024, the group’s NIM is likely to come in within the guided range of 2.45% to 2.50%.
According to AmInvestment, ABMB’s strong loan momentum is expected to continue in 4QFY2024 after posting stronger loan growth of 5.8% y-o-y in February and 5.7% y-o-y in January.
“Credit growth will be supported by expansion of loans in Penang (technology sector) and Sarawak (infrastructure sector and renewable energy projects),” it said.
On non-interest income, client-based fee income — which includes wealth management, FX, trade and banking services — is anticipated to be stable q-o-q between RM80 million to RM90 million. However, investment and trading income is likely to be softer amidst an increase in the 10-year Malaysian government bond (MGS) yield q-o-q.
For the third quarter ended Dec 31, 2023, ABMB’s net profit dipped 0.13% y-o-y to RM176.86 million on higher operating expenses that partially offset its gains from higher net interest and other operating income.
According to Bloomberg, 11 analysts have “buy” calls on ABMB while three rated “hold”, with a 12-month target price of RM4.02.
ABMB’s share price was unchanged at RM3.70 as of 10.49am on Tuesday, with some 543,300 shares traded. This gave the group a market capitalisation of RM5.73 billion.