KENANGA INVESTMENT BANK PROJECTS ALLIANCE BANK'S OUTLOOK TO REMAIN CONSERVATIVE
KUALA LUMPUR, Nov 30 -- Kenanga Investment Bank Bhd expects Alliance Bank Malaysia Bhd's outlook to remain conservative despite a better financial year (FY) performance in the first half.
The investment bank said this is after the bank’s net interest margin (NIM) came under pressure due to OPR cuts but mitigated by better deposits mix and higher yielding assets mix.
It said the better results was driven by gains from sale of financial assets which is unlikely to be sustainable in the coming quarters.
“As expected, no dividend is declared due to the current economic uncertainties,” it said in a research note today.
Kenanga Investment Bank said although credit charge remained within expectations, the outlook is still cautious, thus, elevated credit charge guidance remained.
It said Alliance Bank’s management remained cautious ahead despite the latest vaccine development with sectors such as tourism and hospitality are likely to be more vulnerable.
“A total of RM5 billion of loans or 12 per cent of gross loans have opted for the targeted assistance programme with 42 per cent of this under the extended moratorium.
“So far, there has been no significant uptick in take-up for the Payment Relief Assistance, including the expanded programme to the B40 segment since October, but much will still depend on the impact of the current conditional movement control order period,” it added.
-- BERNAMA
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