KUALA LUMPUR: Alliance Financial Group Bhd (AFG), the country's smallest banking group by assets, expects its non-interest income to account for 30 per cent of revenue in three to five years' time, its chief said- At present, non-interest income - derived from activities like wealth management, bancassurance, asset management and treasury - accounts for just over 20 per cent of the group's revenue- Group chief executive officer Sng Seow Wah said it was part of AFG's five-year plan to start paying more attention to these activities- "What we need to do is go beyond just the lending business, of which mortgage loans have been a major activity," he told reporters after the opening of its latest Alliance Bank branch at GTower in Jalan Tun Razak here yesterday- Banking groups are looking to milk other sources of income as their traditional lending business becomes increasingly competitive and squeezes margins further, analysts said- "We have to be very discerning with what we lend for," Sng said, adding that loan growth at the bank would increasingly come from business banking- At present, 60 per cent of its loan book is in consumer loans, but the group wants to eventually have an equal mix of consumer and business loans, he said- Ronnie Lim, its new head of consumer banking, said consumer lending grew by 9 per cent in the financial year to March 31 this year, led by mortgages, and is likely to grow at the same rate this year- Bank Negara Malaysia (BNM)'s recent tightening of rules on property loans and credit cards had not impacted AFG's business, Sng said- The move has actually been good for the industry as "it draws all the banks back to healthy lending and business guidelines," he remarked- AFG is expected to be a net beneficiary of a recent industry-wide move to raise the base lending rate (BLR) to 6-6 per cent after BNM increased the key interest rate and statutory reserve requirement for banks- "For us, I think we're a net beneficiary because we're not aggressive with our fixed-rate consumer loans or on the corporate side as well," he said- It is understood that only 15 per cent of its total loans are fixed-rate loans- AFG currently has 106 bank branches, of which seven are investment banking ones- ...

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