Maybank IB Research said the bank’s loan growth should average about 8% for financial year 2025.
PETALING JAYA: Alliance Bank Malaysia Bhd
’s (ABMB) loan growth is expected to remain resilient, underpinned by small and medium enterprises’ (SME) loans and personal financing.
In its latest research report on ABMB, Maybank Investment Bank (Maybank IB) Research said the bank’s loan growth continues to be robust and should average about 8% for financial year 2025 (FY25), driven predominantly by lending to SMEs and personal financing.
“Lending to mortgages is expected to be measured, given the price war in that segment, while lending to corporates is selective. Net interest margins (NIMs) are expected to be stable in the first quarter of FY25 (1Q25), while non-interest income is expected to hold up, after expanding 14% year-on-year in FY24.
“Expenses are likely to track revenue growth, with a stable cost to income ratio of around 48%,” it added.
ABMB’s NIM averaged 2.48% in FY24 and management had guided for NIMs to marginally compress to 2.4 to 2.45% in FY25.
For 1Q25, NIMs are holding up within this range currently, as the bank has not been aggressive in pursuing deposits, Maybank IB Research said, noting that its FY25 forecast assumes a NIM of 2.41%, which is at the lower end of the targeted range.
NIM, a measure of profitability, is the spread a bank earns between borrowing and lending. A wider NIM indicates higher earnings for banks.
ABMB’s common equity tier-one ratio stood at 12.5% at end-March 2024, which Maybank IB Research believes is comfortable for a domestic-focused bank.
With an expected dividend payout of 50%, yields are attractive at over 6%, the research house said.
