KUALA LUMPUR (Nov 9): RAM Rating Services Bhd says Alliance Bank Malaysia Bhd's pre-tax profit to be on track towards a better showing in fiscal 2012 after recording healthier pre-tax profit of RM596.10 million in FY ending March 30, 2011.
It said on Wednesday the ongoing progress in its asset quality had aligned Alliance Bank's gross impaired-loan ratio - 3.0% at end-June 2011 - with the industry average.
RAM Ratings said the banking group's credit-cost ratio is forecast to come in at a healthy 0.30% in FY March 2012, with full provisions made on its exposure to collateralised loan obligations.
'In the absence of such impairment losses, the group recorded a healthier pre-tax profit of RM596.1 million in FY March 2011, and appears on track towards a better showing in fiscal 2012,' it said.
RAM Ratings reaffirmed the bank's long- and short-term financial institution ratings at A1 and P1, respectively.
Concurrently, the A2 rating of the group's RM1.5 billion subordinated medium-term notes issuance programme (2011/2026) (subordinated notes) had also been reaffirmed. Both long-term ratings have a stable outlook.
The ratings agency said the one-notch difference between the rating of the subordinated notes and Alliance Bank's long-term financial institution rating mirrors the subordinated nature of the former to the Group's senior unsecured obligations.
Alliance Bank is the smallest among the 8 domestic banking groups in Malaysia, with about 2% of the system's outstanding loans and deposits. Nevertheless, it maintains a notable presence in consumer loans and lending to small and medium-sized enterprises, which together account for 76% of Alliance Bank's loan book. The latter was one of the key drivers of its 4.8% loan growth in FYE 31 March 2011 ('FY Mar 2011').
Notably, ongoing progress in its asset quality has aligned Alliance Bank's gross impaired-loan ratio - 3.0% at end-June 2011 - with the industry average. Meanwhile, its credit-cost ratio is forecast to come in at a healthy 0.30% in FY March 2012, with full provisions made on its exposure to collateralised loan obligations.
In the absence of such impairment losses, the group recorded a healthier pre-tax profit of RM596.1 million in FY March 2011, and appears on track towards a better showing in fiscal 2012.
Alliance Bank's strong deposit growth in FY March 2011, in contrast to its relatively modest loan expansion, had resulted in an improved loans-to-deposits ratio of 76.1% as at end-June 2011 (end-March 2010: 85.31%). However, this is expected to trend upwards as its lending momentum gathers pace.
The group's tier-1 risk-weighted capital-adequacy ratio remained healthy at 11.3% as at end-June 2011 (end-March 2010: 11.1%).
It said on Wednesday the ongoing progress in its asset quality had aligned Alliance Bank's gross impaired-loan ratio - 3.0% at end-June 2011 - with the industry average.
RAM Ratings said the banking group's credit-cost ratio is forecast to come in at a healthy 0.30% in FY March 2012, with full provisions made on its exposure to collateralised loan obligations.
'In the absence of such impairment losses, the group recorded a healthier pre-tax profit of RM596.1 million in FY March 2011, and appears on track towards a better showing in fiscal 2012,' it said.
RAM Ratings reaffirmed the bank's long- and short-term financial institution ratings at A1 and P1, respectively.
Concurrently, the A2 rating of the group's RM1.5 billion subordinated medium-term notes issuance programme (2011/2026) (subordinated notes) had also been reaffirmed. Both long-term ratings have a stable outlook.
The ratings agency said the one-notch difference between the rating of the subordinated notes and Alliance Bank's long-term financial institution rating mirrors the subordinated nature of the former to the Group's senior unsecured obligations.
Alliance Bank is the smallest among the 8 domestic banking groups in Malaysia, with about 2% of the system's outstanding loans and deposits. Nevertheless, it maintains a notable presence in consumer loans and lending to small and medium-sized enterprises, which together account for 76% of Alliance Bank's loan book. The latter was one of the key drivers of its 4.8% loan growth in FYE 31 March 2011 ('FY Mar 2011').
Notably, ongoing progress in its asset quality has aligned Alliance Bank's gross impaired-loan ratio - 3.0% at end-June 2011 - with the industry average. Meanwhile, its credit-cost ratio is forecast to come in at a healthy 0.30% in FY March 2012, with full provisions made on its exposure to collateralised loan obligations.
In the absence of such impairment losses, the group recorded a healthier pre-tax profit of RM596.1 million in FY March 2011, and appears on track towards a better showing in fiscal 2012.
Alliance Bank's strong deposit growth in FY March 2011, in contrast to its relatively modest loan expansion, had resulted in an improved loans-to-deposits ratio of 76.1% as at end-June 2011 (end-March 2010: 85.31%). However, this is expected to trend upwards as its lending momentum gathers pace.
The group's tier-1 risk-weighted capital-adequacy ratio remained healthy at 11.3% as at end-June 2011 (end-March 2010: 11.1%).
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