Equity Analysis /
Malaysia

MY : Alliance Bank Malaysia Berhad - One of the highest CCORs in the sector

    Winson Ng
    Winson Ng

    Financial Services Analyst

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    CGS-CIMB
    30 August 2021
    Published byCGS-CIMB

    Although Alliance’s 1QFY22 net profit accounted for 33.4% of our full-year forecast, we regard it as in-line in anticipation of weaker quarters ahead. We think the high 1QFY22 net profit is not sustainable due to the risks of a high LLP (due to Covid-19) and loan contraction (negative for NII growth). We reiterate Reduce on Alliance due to its high credit costs, as reflected by its guidance for a CCOR of 90bp in FY22F (one of the highest in the sector).