Alliance Bank Malaysia Berhad has reported a strong start to its financial year, posting a 12.5% year-on-year (YOY) growth in net profit after tax to RM198.7 million for the first quarter of FY2026 (1QFY2026), compared to RM176.5 million in 1QFY2025. Revenue also climbed by 14% to RM615.3 million, up from RM539.8 million a year earlier, driven by healthy loan momentum, improved cost efficiency, and stronger contributions from non-interest income.
The performance underscores Alliance Bank’s ability to maintain growth despite a challenging operating environment, while advancing its transformation goals under the Acceler8 2027 strategy.
Alliance Bank’s first-quarter results highlight broad-based improvements across both interest and non-interest income streams. Net interest income rose by 7.4% YOY, reaching RM499.0 million, supported by higher loan volumes. The bank’s net interest margin (NIM) remained steady at 2.42%, reflecting disciplined asset-liability management.
A standout factor was the 54.9% surge in non-interest income, which rose to RM116.3 million. This growth was fueled by stronger foreign exchange sales, trade fees, treasury and investment income, as well as increased banking service fees. Cost discipline also played a role, with the cost-to-income ratio improving to 45.1%, down from 48.0% in the same quarter last year and 51.6% in the preceding quarter.
Overall loans continued to expand, recording 9.9% YOY growth. The increase was broad-based across multiple segments: SME loans grew 9.6%, consumer loans rose 11.2%, commercial loans were up 10.9%, and corporate loans increased 3.3%. Customer deposits also strengthened by 12.5% YOY, with the bank maintaining one of the industry’s highest CASA ratios at 38.0%.
Prudent risk management remained a focus. Net credit cost stood at 14.4 basis points, reflecting careful provisioning, while loan loss coverage stayed healthy at 113.3%. Capitalisation levels also remained robust, with a CET1 ratio of 12.4%, a total capital ratio of 16.9%, and a liquidity coverage ratio of 162.6%.
Alliance Bank is now at the midpoint of its five-year Acceler8 2027 transformation journey, launched in January 2023 to reposition the bank as “The Bank for Life.” The strategy has already begun to pay off, with performance tracking ahead of expectations in several areas.
During 1QFY2026, the bank sustained double-digit loan growth and expanded its overall loan market share to 2.73%, up from 2.61% in June 2024. Its SME market share advanced to 5.32%, while business banking client fee income grew 17% YOY. Consumer loans also recorded double-digit growth, rising 11.2% YOY, with market share climbing to 2.29%, supported by stronger demand for mortgages and credit cards.
The bank is also making headway regionally, strengthening its presence in economic corridors such as Johor, Penang, Sarawak, and Sabah. Loans and deposits in these regions rose by 11% and 14% YOY, respectively. Sarawak led in loan growth at 13% YOY, while Penang recorded an impressive 33% YOY increase in deposits, signaling expanding customer trust beyond the Klang Valley.
On the investment banking front, Alliance Bank’s capital markets revenue surged 86% YOY, supported by strong corporate finance deals. Meanwhile, its Islamic banking arm recorded a 10% YOY revenue increase, boosted by the continued expansion of its Halal in One programme, designed to support Malaysia’s halal ecosystem.
Advancing Sustainability Commitments
Beyond financial performance, Alliance Bank continued to deliver on its environmental, social, and governance (ESG) agenda. As of 1QFY2026, the bank had achieved RM14.9 billion in new sustainable banking business, putting it on track to exceed its RM15 billion target by FY2027 one year ahead of schedule.
The bank’s Sustainability Impact Programme (SIP) approved RM207 million in loans during the quarter, supporting projects aligned with low-carbon transition goals. It also expanded its Low Carbon Transition Facility (LCTF) to finance a broader range of green initiatives, moving beyond solar projects into energy efficiency, green buildings, and electric vehicles.
Alliance Bank further provided RM88.4 million in financing under the Corporate Green Power Purchase Programme in collaboration with LBS Bina Holdings, strengthening its role in supporting Malaysia’s renewable energy ambitions.
These efforts underline the bank’s commitment to embedding sustainability across its business model and enabling clients to transition towards greener, more resilient operations.
Alliance Bank’s strong first-quarter results highlight more than just numbers. They showcase how the bank is positioning itself for long-term relevance in a rapidly evolving financial landscape. By maintaining a healthy balance between traditional lending, fee-based income, and sustainability-driven financing, the bank is carving a competitive edge in Malaysia’s financial services sector.
Its steady expansion in SME lending demonstrates commitment to supporting Malaysia’s entrepreneurial economy, while its growing presence in key regional markets ensures that growth is not overly concentrated in the Klang Valley. Meanwhile, achieving sustainability targets ahead of schedule sets Alliance Bank apart as one of the leaders in ESG-driven banking in the country.
Alliance Bank’s 12.5% YOY net profit growth in 1QFY2026 reflects a strong and balanced performance across lending, deposits, fee income, and sustainability initiatives. With the Acceler8 2027 strategy delivering ahead of plan, the bank is strengthening its position as a trusted financial partner for SMEs, consumers, and corporate clients alike.
As Malaysia’s economy continues to expand, Alliance Bank’s dual focus on financial growth and sustainability places it in a strong position to capture opportunities while driving long-term value for its stakeholders.
Shahriena Shukri is a journalist covering business and economic news in Malaysia, providing insights on market trends, corporate developments, and financial policies. More about Shahriena Shukri.
