DR REDHWAN AHMED AL-DHAMARI BKAR 1013 GROUP A PREPARED FOR: NO NAME STUDENT ID

BKAR1013 FINANCIAL ACCOUNTING AND REPORTING 1
A211
ASSIGNMENT: FINANCIAL STATEMENT ANALYSIS
ALLIANCE BANK MALAYSIA BERHAD
DEADLINE: 20 JANUARY 2022
PREPARED FOR:
DR REDHWAN AHMED ALI AL-DHAMARI
BKAR 1013 GROUP A
PREPARED BY:
N
O
NAME STUDENT ID
1 Nur Adilah Binti Ramli 275315
2 Nor Shafiqah Binti Meor Fadzir 275806
3 Muhammad Nabil bin Ruslan 284487
4 Ahmad Afwan bin Binyamin 285623
5 Nur Atirah binti Zainuddin 287201
6 Mohd Shukri bin Mohammad Salleh 288773
7 Monoliza a/p Philips 288839
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Table of Contents
1.0 Overview of the company’s background...............................................................................3
2.0 HORIZONTAL ANALYSIS AND VERTICAL ANALYSIS..............................................4
2.1 HORIZONTAL ANALYSIS...............................................................................................4
2.1 VERTICAL ANALYSIS.....................................................................................................8
3.0 Financial Ratio.......................................................................................................................11
3.1 Operating Asset Management Analysis...........................................................................11
3.2 Profitability and Total Asset Management Analysis......................................................17
3.3 Financial Risk Analysis.....................................................................................................20
3.3.1 Credit Risk Management............................................................................................20
3.3.2 Credit Risk Management Best Practices...................................................................25
3.4 LIQUIDITY ANALYSIS...................................................................................................27
3.5 MARKET STRENGTH ANALYSIS...............................................................................29
4.0 Reference................................................................................................................................32
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1.0 Overview of the company’s background
Alliance Bank Malaysia Berhad is a competitive banking company that has been offering
top financial services to the financial community for over five decades through its consumer
banking, wholesale banking, Islamic banking, investment banking, SME banking, and
stockbroking divisions. The banking group provides financial services through its principal
subsidiaries, Alliance Bank Malaysia Berhad, Alliance Investment Bank Berhad, and Alliance
Islamic Bank Berhad. Through a network of retail branches, Alliance Personal branches,
Privilege Banking Centres, Islamic Banking Centres, Business Centres, Investment Bank
branches, and direct marketing offices located around the nation, it provides convenient access to
its broad client base.
Alliance Bank is committed to providing the best client experience, creating long-term
shareholder value and has a longstanding experience of contributing to Malaysia's financial
community through its key subsidiaries. Alliance Bank Malaysia Berhad's services to the
Malaysian society, as well as creative and innovative financial solutions, continue to be
recognised by its competitors. According to a poll conducted by the Association of Accredited
Advertising Agents in collaboration with Interbrand, one of the world's largest brand
consultancies, it was ranked 23rd out of the top 30 most valuable brands in Malaysia.
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2.0 HORIZONTAL ANALYSIS AND VERTICAL ANALYSIS
Financial analysis uses horizontal analysis, also known as trend analysis or time series
analysis, to examine financial trends over time—particularly quarters or years. Horizontal
analysis is typically performed before vertical analysis, and it is most effective for organisations
that have been in operation for a long time. Vertical analysis, also known as common-size
analysis, is similar to horizontal analysis in that it can be done on the same financial data.
Financial analysts, on the other hand, undertake vertical analysis vertically within a column
rather than horizontally across time periods. Vertical analysis converts financial statement values
to percentages of a base figure with a value of 100%. Using percentages might help to visualise
and understand the facts [ CITATION Ind21 \l 1033 ].
2.1 HORIZONTAL ANALYSIS
RM change = Analysis period amount – Base period amount
Percent change = RM change × 100
Base period amount
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Alliance Bank Malaysia Berhad
Comparative Balance Sheets
as at 31 March
2021 2020
RM
Change
Percent
Change
RM'000 RM'000 RM'000 %
ASSETS
Cash and short-term funds 1,779,243 2,488,527 (709,284) (28.50)
Deposits and placements with banks and other
financial institutions 41,477 41,477
Financial assets at fair value through profit or loss 167,728 585,722 (417,994) (71.36)
Financial investments at fair value through other
comprehensive income 7,303,866 8,426,778 (1,122,912) (13.33)
Financial investments at amortised cost 2,294,765 170,405 2,124,360 1,246.65
Derivative financial assets 153,735 436,910 (283,175) (64.81)
Loans, advances and financing 32,395,127 32,207,545 187,582 0.58
Other assets 349,416 266,770 82,646 30.98
Tax recoverable 9,600 38,789 (29,189) (75.25)
Statutory deposits 69,574 700,355 (630,781) (90.07)
Investments in subsidiaries 1,109,102 909,102 200,000 22.00
Right-of-use assets 120,439 129,077 (8,638) (6.69)
Property, plant and equipment 55,930 63,448 (7,518) (11.85)
Deferred tax assets 95,200 14,074 81,126 576.42
Intangible assets 329,004 332,680 (3,676) (1.10)
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TOTAL ASSETS 46,274,206 46,770,182 (495,976) (1.06)
LIABILITIES AND EQUITY
Deposits from customers 36,150,316 36,702,989 (552,673) (1.51)
Deposits and placements of banks and
other financial institutions 659,377 733,564 (74,187) (10.11)
Financial liabilities designated at fair value
through profit or loss 472,695 427,085 45,610 10.68
Obligations on securities sold under
repurchase agreements 221,387 (221,387) (100.00)
Derivative financial liabilities 149,410 348,877 (199,467)
Recourse obligations on loans and financing
sold to Cagamas 300,100 300,053 47 0.02
Lease liabilities 123,475 130,150 (6,675)
Other liabilities 1,322,169 1,253,186 68,983 5.50
Subordinated obligations 1,471,978 1,480,254 (8,276) (0.56)
TOTAL LIABILITIES 40,649,520 41,597,545 (948,025) (2.28)
Share capital 1,548,106 1,548,106 0 0.00
Reserves 4,076,580 3,624,531 452,049 12.47
TOTAL EQUITY 5,624,686 5,172,637 452,049 8.74
TOTAL LIABILITIES AND EQUITY 46,274,206 46,770,182 (495,976) (1.06)
COMMITMENTS AND CONTINGENCIES 27,636,885 34,144,629 (6,507,744) (19.06)
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Alliance Bank Malaysia Berhad
Comparative Income Statement
for the year ended 21 March
2021 2020
RM
Change Percent Change
RM'000 RM'000 RM'000 %
Interest income
1,743,87
1 2,019,369 (275,498) (13.64)
Interest expense (760,356)
(1,046,424
) 286,068 (27.34)
Net interest income 983,515 972,945 10,570 1.09
983,515 972,945 10,570 1.09
Fee and commission income 236,609 248,493 (11,884) (4.78)
Fee and commission expense (81,665) (78,700) (2,965) 3.77
Investment income 469,340 126,885 342,455 269.89
Other (expense)/income (28,545) 48,012 (76,557) (159.45)
Other operating income 595,739 344,690 251,049 72.83
Net income
1,579,25
4 1,317,635 261619 19.86
Other operating expenses -616,515 -621,229 4714 (0.76)
Operating profit before allowances 962,739 696,406 266,333 38.24
Allowance for expected credit losses on loans,
advances and financing and other financial
assets (319,409) (168,495) (150,914) 89.57
(Allowance for)/write-back of expected credit
losses on financial investments 53 (22,996) 23,049 (100.23)
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