KUALA LUMPUR: Alliance Bank Malaysia Bhd is deepening its focus on small and medium enterprises and consumer banking moving forward, with the bank targeting seven per cent loan growth in the financial year 2020 (FY20).
The smallest lender in Malaysia neither confirmed nor denied whether it was looking to pare down its stake in its investment banking arm despite the intensely competitive capital market environment.
Group chief executive officer Joel Kornreich said the bank would focus on SMEs and consumer banking to optimise returns for the group, recognising that investment banking business is not “easy”.
“We continue to work to optimise returns for the group. And evidently, our focus is on SMEs and consumer banking.
“We recognise that investment banking is not an easy business to be in. It is so because the stock market is a bit subdued and opportunities in capital market are so limited. Having said that, our investment banking continues to perform reasonably well,” Kornreich told reporters after Alliance Bank’s annual general meeting here today.

Although the loan growth target for FY20 was lower than the previous year at 10 per cent, he said the target was higher than the six per cent achieved in FY19.
“The banking industry’s lackluster outlook prompts us to be even more vigilant in managing our credit portfolios and conservative in our provisioning practice,” he said.
Affin Hwang Capital, in its last report, expected Alliance Bank’s loan growth to exceed the industry average.
“We believe Alliance Bank still makes a difference against its peers amid a more cautious market through key products, such as the Alliance ONE Account (AOA), SME banking and Alliance@Work, and in an enhanced digital ecosystem,” the research firm said in a note.
Although the net interest margin may see a pullback to 2.45 per cent to 2.48 per cent in FY20 to FY22 versus 2.5 per cent in FY19, due to the overnight policy rate cut’s impact, Alliance Bank’s loan growth is expected to outperform the industry’s growth, at 6.5 per cent in FY20, it added.
For FY20, Kornreich said the bank aims to grow its AOA portfolio further by 70 per cent to RM5 billion by improving its sales channels.
He said Alliance Bank had set RM50 million allocation for digitalisation, its continuous effort to provide faster, simpler and more responsive service to clients.