ABMB-Qtr report 311211(Website) - Alliance Bank Malaysia Berhad

ALLIANCE BANK MALAYSIA BERHAD
(88103-W)
(Incorporated in Malaysia)
B1
Review of Performance (contd.)
Financial Markets
Financial Markets provides foreign exchange, money market, hedging, wealth management and investment
(capital market instruments) solutions for banking customers. For the current quarter three months ended 31
December 2011, Financial Markets reported a profit before taxation of RM79.5 million, or an increase of 120.3%
over the corresponding quarter. For the nine months period, Financial Markets reported a profit before taxation
of RM192.8 million, representing a year-on-year increase of 126.0%. The increase was mainly due to higher net
income and capital gains from active portfolio management.
Investment Banking
Investment Banking encompasses stockbroking activities and corporate advisory. In line with business
expansion, Investment Banking’s other operating expenses increased substantially compared to last year. As a
result of this, it reported loss before taxation of RM3.7 million and RM6.5 million for the current quarter and nine
months ended 31 December 2011 respectively. Net income has also declined compared to last year, a result of
lower brokerage income due to the drop in trading volumes on Bursa Malaysia.
Others
The “Others” segment comprises business operations such as unit trust, assets management, alternative
distribution channels and trustee. Profit before taxation for this segment was RM7.3 million for 9 months ended
31 December 2011, an increase of RM6.2 million compared to corresponding period last year. The increase was
contributed by higher profit from Alliance Direct Marketing, one of the distribution channels of the Group.
B2
Current Year Prospect
The global economic outlook remains challenging, with market pressures stemming from the eurozone crisis and
the sustainability of US growth. Arising from the global external environment, the Group expects economic
growth to moderate, and interest margins to compress further. Notwithstanding this, the Group is confident that
the business strategies that have been implemented will enable the Group to further diversify its revenue,
strengthen its operational and risk management infrastructure, service and human capital aspects of our
business in realising our long-term aspirations.
Consumer Banking
Consumer Banking expects growth in mortgage financing to sustain its loan books in the coming fourth quarter
and has in place strategies to grow personal loans, hire purchase and credit cards financing. This will be
supported by initiatives such as wealth management, share margin financing and investment lending offerings
which will diversify its revenues further.
Business Banking
Business Banking aims to sustain its strong segment assets expansion momentum with incoming loan
disbursements from negotiations held during the year, and will continue its efforts to work with existing
customers and to bring in new customers. To a lesser extent, the competitive pricing in the industry, which will
impact margins, is expected to mitigate improvements made in growing the segment’s interest income.
Financial Markets
Interest rates are expected to stay low in the coming fourth quarter; hence, Financial Markets expects stable
earnings of net interest income and will maintain the current strategy of actively managing its fixed income
portfolio to enhance returns.
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