Kuala Lumpur, 30 July 2008 - The Alliance Financial Group comprising Alliance Bank Malaysia Berhad (ABMB) and its subsidiaries, is banking on its strengthened position and focused strategy to drive the Group's three-year growth plan going forward.

Datuk Bridget Lai, Director of Alliance Financial Group Berhad (AFGB) who is also the Group Chief Executive Officer of ABMB, said this during the AFGB's 42nd Annual General Meeting today.

Its strategy encompasses key transformation initiatives that include its value proposition of Banking Made Personal, which entails driving its new business models, aggressive customer value management, branch expansion, value-added process improvements and deepening of relationship with all customers to achieve competitive positioning.

Datuk Lai said it is this focus and initiatives that helped the Group register a profit before taxation of RM502.0 million for the 12 months ended 31 March 2008, a significant 232.9 per cent increase, which was more than double the RM150.8 million recorded in its previous financial year (see enclosed Diagram 1: Key Financial Highlights).

The Group's net income improved by 10.3 per cent to RM1,017.5 million compared to the last financial year and this was attributed to improved interest income mainly from loans growth in Consumer and Commercial/SME banking and higher operating income.

It achieved a return on equity of 16.8 per cent compared to 5.8 per cent last year on the back of a return of asset of 1.4 per cent. Earnings per share improved from 9.1 sen per share to 25.4 sen per share.

A total gross dividend of 6.25 sen per share was paid by the Group for the financial year ended 31 March 2008 while ABMB, a wholly-owned subsidiary of AFGB, which contributed very significantly to the Group's profit, declared a final net dividend of RM42.0 million which funded the Group's first interim dividend of 2.5 sen per share for the financial year ending 31 March 2009 and payable on 27 August 2008.

The Group's asset quality continued to improve with net non-performing loans (NPL) ratio declining from 5.5 per cent as at 31 March 2007 to 3.3 per cent as at 31 March 2008. Gross NPLs provisioning coverage further improved to 80 per cent compared to 67 per cent as at 31 March 2007. The Group's NPLs declined from RM1.6 billion to RM1.1 billion year-on-year.

The improvement in the Group's performance was primarily due to higher operating profit contributed by higher net income, other operating income and better recoveries.

Datuk Lai said it had been a good year for the Group as it showed its adaptability and responsiveness to change in spite of the challenges.

"We now approach a new financial year with national and global economic realities that we cannot ignore and which we are not totally insulated against. In what is expected as an even more challenging environment, it is important that the Group remains committed to its business strategy and model.

"Our ongoing transformation journey and new business models as well as re-engineered business processes and systems have enabled us to generate higher productivity and enhance overall effectiveness to achieve such positive results.

"Our focus now is to build a competitive position and to ensure we become a leading integrated financial solutions provider, delivering the best customer experience and creating long-term shareholder value," said Datuk Lai.

In terms of the prospects and plans for the new financial year ending 31 March 2009, its Consumer Banking business is on track to accelerate growth and is better poised to take advantage of prevailing market opportunities. Some of the key initiatives for financial year ending 31 March 2009 will include the development of new and innovative products to increase existing customers share of wallet, leveraging on partnerships to enhance our customer experience and deliver higher value to customers. Extending our reach to customers through expansion of our branch network and alternative channels will continue to be a core focus and branch optimization initiatives will raise staff productivity and service levels.

The Bank's Commercial/SME Banking business is optimistic on delivering its value proposition to Commercial/SME customers. SME loans account for about 20 per cent of the bank's portfolio currently and it will continue with its growth plan to expand its market share whilst focusing on ensuring straight-through processing capabilities to further enhance cost efficiency.

In addition, the Group also plans to set up more Islamic banking centres, with dedicated staff handling the sales of Islamic products, at selected branches throughout the year while exploring opportunities for strategic tie-ups to introduce unique Islamic banking and financing products beyond conventional ones.

Meanwhile, its unit trust arm, Alliance Investment Management Berhad, is expected to launch more innovative products and next generation structured funds to fill the existing product gap and deliver consistent returns and performance.

"The Group today has strong businesses that are growing, expanding their national footprints, offering customer-centric products, services and solutions. We do that by offering our customers unrivalled convenience and expertise, high quality service, innovative products and services and a broad spectrum of financial solutions.

"Barring any unforeseen circumstances, we believe that the Alliance Financial Group will, at the end of the next financial year, emerge even stronger as we realise our goal of becoming the preferred consumer and small business bank for all Malaysians," Datuk Lai concluded.