Kuala Lumpur, 8 AUGUST 2008 - Alliance Financial Group achieved a profit before taxation of RM166.9 million for the first quarter ended 30 June 2008, an increase of RM35.4 million or 26.9 per cent compared to the corresponding period last year. The improvement was primarily due to higher operating profit contributed by higher net income.

Datuk Bridget Lai, Director of Alliance Financial Group Berhad and Group Chief Executive Officer of Alliance Bank said, "The Group's net income grew by RM35.9 million or 14.2 per cent attributable to improved interest income mainly from loans growth in Consumer and Commercial/SME banking together with a write-back of over-provision of RM10.8 million on the deposit insurance."

Other operating income increased marginally by 4.2 per cent compared to the corresponding period last year mainly due to higher foreign exchange profit and gain arising from the sale of investment securities. These gains were offset by a reduction in stock brokerage fees in view of the current weak stock market.

Asset quality continued to improve with net non-performing loans (NPL) ratio declining from 3.3 per cent as at 31 March 2008 to 2.7 per cent as at 30 June 2008. Gross loans loss provisioning coverage further improved to 85.5 per cent compared to 79.9 per cent as at 31 March 2008.

"Our continued improvement in asset quality as shown by our declining net NPL ratio is very encouraging and reflects the effectiveness of the Group's robust risk management," said Datuk Bridget Lai.

The Group's gross loans and advances increased by 4.6 per cent to RM17.3 billion compared to 31 March 2008. The Group's risk-weighted capital ratio was at 15.1 per cent.

The second half of the year is expected to be more challenging but the Group will continue building its competitive position. Barring any unforeseen circumstances, the Group expects to record satisfactory performance for the financial year ending 31 March 2009.