AnnualReport2016.pdf

(6627-X)

(6627-X)

www.alliancefg.com

 AllianceBankMalaysia

 AllianceBankMY

Alliance Financial Group Berhad

(6627-X)

3rd Floor, Menara Multi-PurposeCapital SquareNo. 8, Jalan Munshi Abdullah

50100 Kuala Lumpur, Malaysia

Tel  : 03-2604 3333
Fax  : 03-2694 6200

2016ÊANNUAL REPORT

2016

 ANNUAL REPORT

CORPORATE PROFILE

Alliance Financial Group Berhad was incorporated in Malaysia on 7 April 1966 and was listed on the Main Market of Bursa Malaysia Securities Berhad on 6 July 1979. The Group is principally involved in the provision of banking and financial services through Alliance 

Bank Malaysia Berhad.

Alliance  Bank  Malaysia  Berhad,  together  with  its  subsidiaries, Alliance  Investment  Bank  Berhad  and  Alliance  Islamic  Bank Berhad, provide a wide range of financial products and services in commercial banking, financing, investment banking, investment advisory, stockbroking, Islamic banking and other related financial 

services.

CORPORATE SECTION

Corporate Profile

History of Alliance Financial Group

4  

Corporate Information

5  

Corporate Structure

6  

Products and Services

10   Financial Highlights

LEADERSHIP

12   Directors25   Chief Executive Officer

26   Key Senior Management

PERSPECTIVES

34   Statement by Chairman of 

  Alliance Financial Group Berhad

36   Statement by Chairman of 

  Alliance Bank Malaysia Berhad

40   Business and Operations Review by 

  Chief Executive Officer of 
  Alliance Financial Group Berhad

50   Awards and Recognition52   Calendar of Significant Events

60   Media Highlights

ACCOUNTABILITY

64   Statement on Corporate Governance72   Corporate Responsibility77   Audit Committee Report

81   Statement on Risk Management and 

  Internal Control

82   Risk Management
90   Additional Compliance Information

FINANCIAL SECTION

91   Financial Statements

•   Statement of Board of Directors’ 

  Responsibilities

•   Directors’ Report•   Statement by Directors•   Statutory Declaration•   Independent Auditors’ Report•   Statements of Financial Position

•   Statements of Comprehensive  

  Income

•   Consolidated Statements of 

  Changes in Equity

•   Statement of Changes in Equity
•   Consolidated Statements of  

  Cash Flows

•   Statement of Cash Flows
•   Notes to the Financial Statements

215   Basel II Pillar 3 Report Disclosure

ADDITIONAL INFORMATION

262   List of Properties265   Directory271   Analysis of Shareholdings273   Substantial Shareholders

273   Directors’ Shareholdings

NOTICE AND FORM

274   Notice of Annual General Meeting
 

Form of Proxy

CONTENTS

View our report online

Our Annual Report, Accounts and other information about Alliance 
Financial Group Berhad can be found at 

www.alliancefg.com

HISTORY OF 

ALLIANCE FINANCIAL GROUP

Banque de L’Indochine commenced operations in Malaya with its first branch in the Selangor Kwangtung Association Building, Jalan Pudu, Kuala Lumpur. This branch was subsequently relocated to Jalan Raja Chulan, 

Kuala Lumpur, in 1975.

Banque de L’Indochine opened a sub-branch at Jalan Batu, Kuala Lumpur (now known as 

Jalan Tunku Abdul Rahman).

The name of the Bank was changed to Banque de L’Indochine et de Suez (Banque Indosuez). In the same year, Banque Indosuez acquired a building in Jalan Raja Chulan, Kuala Lumpur, to serve as its 

headquarters.

Malaysian French Bank Berhad was incorporated to assume the banking business of the two local branches of Banque Indosuez. The incorporation was the result of the French government’s nationalisation of Banque Indosuez and also of the subsequent restructuring of the Bank’s businesses in Malaysia to comply with local 

banking regulations.

In January, Alliance Bank and AIA Berhad entered into a joint venture to form AIA AFG Takaful Berhad which offers a range of Takaful savings, protection and 

investment products.

Under the terms of agreement, Alliance Bank owns 30% equity 

stake in AIA AFG Takaful Berhad.

In March, Alliance Bank completed the sale of its  30% equity stake in AIA AFG 

Takaful Berhad.

In April, Alliance Bank completed the sale of its 70% shareholding in AIMB to KAF-Seagroatt Campbell Berhad. AIMB ceased to be part of the Group following the 

completion of the sale.

In June, Alliance Bank entered into a 10-year bancassurance partnership with Manulife Insurance Berhad. With this partnership, Alliance Bank is now able to provide a comprehensive bancassurance 

product suite to its customers.

In May, AIBB acquired a 51% equity stake in HwangDBS Vickers Research Sdn Bhd (HDBSV). HDBSV was later re-named AllianceDBS Research 

Sdn Bhd.

Multi-Purpose Bank Berhad was selected to be one of the anchor banks in the Malaysian government’s bank consolidation initiative. Multi-Purpose Bank Berhad successfully anchored the merger with International Bank Malaysia Berhad, Sabah Bank Berhad, Sabah Finance Berhad, Bolton Finance Berhad, Amanah Merchant Bank Berhad, and Bumiputra Merchant 

Bankers Berhad.

The Alliance Banking Group was established on 19 January with the successful merger of seven financial institutions. The newly-merged entity’s name and logo were unveiled to the public for the first time as the Alliance Banking Group comprising Alliance Bank Malaysia Berhad (Alliance Bank), Alliance Finance Berhad, Alliance Merchant Bank Berhad and Alliance Unit Trust 

Management Berhad.

On 1 August, Alliance Finance Berhad merged with Alliance Bank. Consequently, Hire Purchase is now offered at all Alliance Bank’s retail branches 

nationwide.

On 1 January, Alliance Merchant Bank Berhad acquired 100% equity interest in Kuala Lumpur 

City Securities (KLCS).

1958

1999

2011

2013

2014

2001

2004

2005

1959

1975

1982

2016 Annual Report     |     Alliance Financial Group Berhad

 (6627-X)

2

The Bank established its “first” branch in Taman Maluri, Kuala Lumpur. In the same year, eight more branches were 

opened throughout the country.

During this time, 16 branches 
were established nationwide.

Malaysian French Bank Berhad changed its name to 

Multi-Purpose Bank Berhad.

By February 1998, the Bank had a network of 34 branches nationwide, including Sabah 

and Sarawak.

In August, Alliance Merchant Bank Berhad changed its name to Alliance Investment Bank Berhad (AIBB). In December, KLCS merged with AIBB to offer a full suite of investment 

banking services.

In April, Alliance Unit Trust Management Berhad merged with Alliance Capital Asset Management Berhad to form Alliance Investment Management Berhad (AIMB). Under the terms of the agreement, Alliance Bank owns 70% equity stake in AIMB. In June, Alliance Islamic Bank Berhad (AIS) was incorporated as a wholly-owned subsidiary of 

Alliance Bank.

In conjunction with the change of name of its holding company from Malaysian Plantations Berhad to Alliance Financial Group Berhad on 31 August, Alliance Banking Group underwent a major rebranding exercise and was renamed Alliance Financial Group 

(the Group).

AIS commenced its Islamic banking business on 1 April after assuming the entire Islamic banking business 

portfolio of Alliance Bank.

The Alliance Financial Group, comprising Alliance Bank Malaysia Berhad, 

Alliance Investment Bank Berhad and Alliance Islamic Bank Berhad is 

a  dynamic,  integrated  financial  services  group  offering  banking  and 

financial  services  through  its  consumer  banking,  business  banking, 

Islamic banking, investment banking and stockbroking businesses.

It provides easy access to its broad base of customers throughout the country via multi delivery 

channels which include retail branches, Privilege Banking Centres, Islamic Banking Centres, 

Business Centres, Investment Bank branches and direct marketing offices located nationwide 

as well as mobile and Internet banking.

With over five decades of proud history in contributing to the financial community in Malaysia 

with  its  innovative  and  entrepreneurial  business  spirit  through  its  principal  subsidiaries, 

the Group is committed to delivering the best customer experience and creating long-term 

shareholder value.

Today

2006

2007

2008

1985

1986-95

1996

1998

2016 Annual Report     |     Alliance Financial Group Berhad

 (6627-X)

3

CORPORATE 

INFORMATION

Datuk Oh Chong Peng

Chairman, Independent Non-Executive Director

Stephen Geh Sim Whye

Independent Non-Executive Director

Kung Beng Hong

Non-Independent Non-Executive Director

Ou Shian Waei

Independent Non-Executive Director

Lee Ah Boon

Non-Independent Non-Executive Director

Shareworks Sdn Bhd
No. 2-1, Jalan Sri Hartamas 8Sri Hartamas

50480 Kuala Lumpur, Malaysia

Tel   :  03-6201 1120
Fax   :  03-6201 3121

PricewaterhouseCoopers
Chartered AccountantsLevel 10, 1 SentralJalan RakyatKuala Lumpur Sentral50470 Kuala Lumpur

Malaysia

Alliance Bank Malaysia Berhad

AFG/2488

MYL2488OO004

Joel Kornreich

Lee Wei Yen

 (MAICSA 7001798)

3rd Floor, Menara Multi-PurposeCapital SquareNo. 8, Jalan Munshi Abdullah

50100 Kuala Lumpur, Malaysia

Tel 

:  03-2604 3333

Fax 

:  03-2694 6200

Website  :  www.alliancefg.com
Email 

:  enquiry@alliancefg.com

DIRECTORS

REGISTRAR

AUDITORS

PRINCIPAL BANKER

BURSA MALAYSIA

STOCK NAME/CODE

INTERNATIONAL SECURITIES 

IDENTIFICATION NUMBER (ISIN)

CHIEF EXECUTIVE OFFICER

GROUP COMPANY SECRETARY

REGISTERED OFFICE

2016 Annual Report     |     Alliance Financial Group Berhad

 (6627-X)

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CORPORATE 

STRUCTURE

as at 31 May 2016

100%

Alliance Bank Malaysia Berhad

100%

 Alliance Investment Bank Berhad

100%

Alliance Islamic Bank Berhad

100%

 Alliance Direct Marketing 

              Sdn Bhd

100%

AllianceGroup Nominees 

              (Tempatan) Sdn Bhd

100%

AllianceGroup Nominees

              (Asing) Sdn Bhd

51%

 AllianceDBS Research 

           Sdn Bhd

This chart features the main operating companies and does not include inactive 
companies and companies that are under members’ voluntary liquidation.

2016 Annual Report     |     Alliance Financial Group Berhad

 (6627-X)

5

PRODUCTS 

AND SERVICES

ALLIANCE BANK MALAYSIA BERHAD

PERSONAL BANKING

Wealth Management

Deposits

•  Savings Account/ 

Basic Savings Account

•  AllianceSave Pendidikan•  Alliance Buddy•  Alliance Senior Savers•  Alliance My eSaving Account

•  Current Account/ 

Basic Current Account

•  AllianceSave•  Alliance Hybrid Account•  Fixed Deposit•  Alliance FDGold•  eFD (via allianceonline)•  Alliance XChange Account (via allianceonline)•  Alliance XChange FD (via allianceonline)

•  allianceonline Banking

Unit Trust 

•  Money Market Funds•  Bond Funds•  Balanced Funds

•  Equity Funds 

Retail Bond

•  MYR-denominated Retail Bond
•  Foreign Currency Retail Bond  

(available in all major currencies) 

Structured Investment 

•  Interest-rate Linked Structured Investment •  Equity Linked Structured Investment •  Equity Linked Convertible Structured Investment 

•  Dual Currency Investment 

Share Trading & Investment Lending

•  Alliance Share Margin Financing

−  Margin + Trading 2-in-1 Account−  External Margin Account

−  Foreign Share Margin Financing

•  Alliance Share Trading

−  Cash Trading Account−  Collaterised Trading Account

−  T+7 Trading Account

•  ESOS/IPO Placement Financing•  Portfolio Lending

•  Dedicated Omni-Channels to Serve  

Alliance Bank Customers
−  Call N Trade through Alliance Bank’s Share Trading 

Centre (STC) via Account Relationship Manager

−  Internet Trading via allianceonline Stockbanking
−  Mobile Trading via Alliance iStock Application

Bancassurance

•  Alliance Travel Protector•  Alliance Premier Protector•  Alliance Senior Protector•  Safe Assure•  Home Assure•  Mortgage Reducing Term Assurance•  Mortgage Level Term Assurance•  Mortgage Reducing Term Takaful•  Elite Wealth Saver Plus•  Elite Cash Saver•  Elite Smart Life•  Elite Smart Kids•  Fire/House Owner (Conventional & Takaful)•  Smart Protector•  Motor Insurance (Conventional & Takaful)•  Care Assure•  Business Reducing Term Takaful•  Elite Income Builder•  Elite Credit Shield

•  Elite Global Annuity 

Conventional Loans

•  Alliance Conventional Home Loan•  Alliance Conventional Commercial Property Loan•  Alliance Home Complete Personal Loan•  Alliance Home Complete Plus – Solar Panel Financing•  Alliance Conventional Oil Palm Plantation Financing•  Alliance CashFirst Personal Loan 

•  Alliance Hire Purchase

Cards

Credit Cards

•  Alliance Visa Infinite Credit Card•  Alliance Platinum Credit Card•  Alliance Gold and Classic Credit Cards•  Alliance You:nique Rates Credit Card•  Alliance You:nique Rewards Credit Card•  Alliance You:nique Rebates Credit Card•  Alliance Basic Credit Card •  Alliance Allianz Insurance Gold & Platinum Credit Cards•  Alliance Chinese Independent School (CIS) Credit Card•  Alliance CNI Gold Credit Card•  Alliance CPA Australia Gold Credit Card•  Alliance Business Platinum Credit Card 

•  Alliance Visa Infinite Business Credit Card 

Debit Cards

•  Alliance Hybrid Standard Debit Card•  Alliance Hybrid AP Platinum Debit Card•  Alliance Hybrid PB Platinum Debit Card•  Alliance My eSaving Debit Card

•  Alliance EcoWorld Debit Card

2016 Annual Report     |     Alliance Financial Group Berhad

 (6627-X)

6

BUSINESS BANKING

SME

•  Credit Facilities

−  Working Capital Financing

−  Equipment Financing

−  Business Premises Financing

−  Schemes promoted by CGC/BNM/Government

−  Foreign Exchange

−  SME Express Cash

•  Trade Facilities

−  Letter of Credits

−  Trust Receipts

−  Foreign Currency Trade Loan

−  Bankers Acceptances

−  Export Bills Purchased/Discounting

−  Export Credit Refinancing

−  Export LC Negotiation

−  Collection Bills

−  Shipping Guarantees

−  Export LC Advising/Confirmation

−  Bank Guarantees (BGs)

−  Promissory Notes

−  Supplier Credit Financing

•  Bancassurance

−  Commercial Line General Insurance

−  Keyman Credit-Life Insurance

−  Alliance Business Shield/Biz Assure

•  Business Credit Card

−  MyBusiness Platinum Credit Card 

−  Business Platinum Credit Card

−  Visa Infinite Business Credit Card

•  Cash Management

−  Account Management

−  Business Current Account

−  Business Fixed Deposit

−  Business Foreign Currency Current Account

−  Business Foreign Currency Fixed Deposit

−  Biz-Xpress Card: Deposit cum Withdrawal function 

via Self-Service Terminals (ATM, CDM and CES)

−  Collection Management

−  Payee Corporation Service

−  Auto Debit Service

−  iBayar Facility

−  Bulk Cheque Collection Service

−  Cash in Transit

−  Liquidity Management

−  Auto Sweeping Service

−  Bounce Cheque Protection Service

−  Business Rewards Services

−  Payment Management

−  Prepaid Reload

−  Payroll (Salary/EPF/SOCSO/Monthly Contribution/

PCB-LHDN Payment)

−  Bulk Payment

−  Bulk Payment with Remittance Advice

−  Remittances (CO/DD/FTT/FDD/IBG/RENTAS)

−  Fund Transfer (Own account transfer/Group 

account transfer/Designated 3rd Party Transfer)

−  Bills Payment

−  BizSmart Online Banking

Corporate & Commercial 

•  Credit Facilities

−  Working Capital Financing−  Term Loan−  Bridging Loan−  Syndicated Loan−  Business Premises Financing−  Supplier Financing−  Business Platinum Card−  Foreign Currency Loan

−  Visa Infinite Business Credit Card

•  Trade Facilities

−  Letter of Credits−  Trust Receipts−  Foreign Currency Trade Loan−  Bankers Acceptances−  Export Bills Purchased/Discounting−  Export Credit Refinancing−  Export LC Negotiation−  Collection Bills−  Shipping Guarantees−  Export LC Advising/Confirmation−  Bank Guarantees (BGs)−  Promissory Notes

−  Foreign Currency Trade Loan

•  Foreign Exchange
•  Cash Management

−  Account Management

−  Business Current Account−  Business Fixed Deposit−  Business Foreign Currency Current Account−  Business Foreign Currency Fixed Deposit

−  Business Internet Banking

−  Collection Management

−  Payee Corporation Service−  Auto Debit Service−  Bulk Cheque Collection Service−  Cash in Transit−  Cash Concentration Solution

−  Biz-Xpress Card: Deposit cum Withdrawal function 

via Self-Service Terminals (ATM, CDM and CES)

−  Liquidity Management

−  Auto Sweeping Service
−  Business Rewards Services

−  Payment Management

−  Prepaid Reload
−  Payroll (Salary/EPF/SOCSO/Monthly Contribution/

PCB-LHDN Payment)

−  Bulk Payment−  Bulk Payment with Remittance Advice−  Remittances (CO/DD/FTT/FDD/IBG/RENTAS)

−  Fund Transfer (Own account transfer/Group 

account transfer/Designated 3rd Party Transfer)

−  Bills Payment

−  BizSmart Online Banking−  Interest Rate Swap

−  Bancassurance

2016 Annual Report     |     Alliance Financial Group Berhad

 (6627-X)

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Products and Services (cont’d)

ALLIANCE BANK MALAYSIA BERHAD

ALLIANCE ISLAMIC BANK BERHAD

FINANCIAL MARKETS

•  Foreign Exchange Transactions
•  Hedging Solution

−  Currency Options−  Interest Rate Swap

−  Cross-currency Swap

•  Structured Investments•  Money Market Deposit•  Money Market Deposit – Islamic•  Negotiable Instrument of Deposit•  Negotiable Islamic Deposit Certificate•  Banker Acceptances

•  Islamic Acceptance of Bills

Deposits

•  Basic Savings Account-i

•  Basic Current Account-i

•  Savings Account-i

•  Current Account-i

•  Alliance My eSaving Account-i

•  Junior Smart Saver-i

•  Alliance Term Deposit-i

•  Junior Smart Term Deposit-i

•  Alliance Hybrid Account-i

•  eATD (via allianceonline)

•  allianceonline Banking

•  Elite Account-i

Consumer Financing

•  i-Wish Home Financing-i

•  Home Complete-i

•  Oil Palm Plantation Financing-i 

•  Cashline Facility-i

•  CashVantage Financing-i

•  Pension Financing-i

•  Alliance Hire Purchase-i

•  Bai’ Bithaman Ajil Home Financing-i 

•  Alliance Home Financing-i 

Business Financing

•  Revolving Credit Facility-i

•  Cashline Facility-i

•  Business Premises Term Financing-i

•  Industrial Hire Purchase-i

•  Term Financing-i

•  Contract Financing-i

•  Project Financing-i

•  Leasing-i

•  Schemes promoted by CGC/BNM/SME Corp/Government

•  SME A-Flex Premium-i

•  SME A-Flex (Plus & Premium-i)

•  Floating Rate Term Financing-i 

Trade Financing and Services 

•  Bank Guarantee-i 

•  Shipping Guarantee-i

•  Letter of Credit-i

•  Murabahah Trust Receipt-i

•  Murabahah Working Capital Financing-i

•  Accepted Bills-i

•  Export Credit Refinancing-i  

(Pre-shipment/Post-shipment) 

•  Inward Bills for Collection/Negotiation 

•  Export LC (Advising/Confirmation/Transferring)

•  Export Bills for Collection

•  Export Bills Purchased/Discounted

•  Export Bills Negotiated 

Cards

•  Alliance Hybrid Standard Debit Card-i

•  Alliance Hybrid AP Platinum Debit Card-i

•  Alliance Hybrid PB Platinum Debit Card-i

•  Alliance My eSaving Debit Card-i

•  Alliance Junior Debit Card-i

Unit Trust 

•  Islamic Money Market Funds 

•  Islamic Bond Funds

•  Islamic Balanced Funds

•  Islamic Equity Funds

Financial Markets

•  IPRS-Murabahah-i

•  Money Market Deposit-i

•  Negotiable Islamic Deposits Certificate

•  Accepted Bills-i 

2016 Annual Report     |     Alliance Financial Group Berhad

 (6627-X)

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Category: Financial group

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